WASHINGTON - U.S. Senator Herb Kohl (D-WI), Chairman of the Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights, has announced an active agenda for the new session of Congress.

“Millions of consumers rely every day on competitive markets to keep prices low, and quality of goods and services high. On the Antitrust Subcommittee we have found, in industry after industry, that the best way to ensure full and fair competition is through the vigorous enforcement of antitrust law. We will continue to work on the Subcommittee to ensure that antitrust law is strongly applied. We will also pursue several vital reforms to antitrust law to ensure that anti-consumer obstacles to competition are removed,”  Senator Kohl said.  

In the 112^th Congress, the Subcommittee plans to address the following issues:

* Freight Railroad Competition

The Subcommittee will examine the competitiveness of the freight railroad industry and how shippers, communities, and small businesses who depend on rail transportation have been the victims of anti-competitive practices when dealing with dominant railroad shippers. These practices raise the cost of rail shipping, costs which are ultimately passed on to consumers in the form of higher electric rates, higher food prices, and higher prices for manufactured goods.   Senators Kohl intends to seek passage of the Railroad Antitrust Enforcement Act (S. 49), his legislation to remove obsolete antitrust exemptions protecting the freight railroad industry, exemptions that eliminate the ability of those aggrieved by anti-competitive practices or transactions to obtain antitrust remedies.

* Prescription Drugs

In this era of ever rising health care and prescription drug costs, the Subcommittee will make competition in the pharmaceutical industry a priority. A particular focus will be eliminating barriers to the entry of generic competition to brand name drugs.  We intend to pursue legislation to combat anticompetitive "pay for delay" patent settlements in which brand name drug manufacturers pay off generic drug manufacturers to delay the entry of generic competition (the Preserve Access to Affordable Generics Act, S. 27).  These pay for delay settlements have been found by the FTC to cost consumers $ 35 billion over the next decade in higher drug costs, and have been projected by the CBO to cost the federal government over $ 2.6 billion in higher drug reimbursement costs.  The Subcommittee will also closely scrutinize the the pharmaceutical benefits management (PBM) business to ensure that prior consolidation does not create any anti-competitive bottlenecks. 

* Gasoline, Natural Gas, and Oil Markets/Energy

As gasoline and energy prices once again rise, the Subcommittee will focus on bringing increased competition to the oil industry as a means of restraining energy price increases. Our efforts will include monitoring and oversight of the Federal Trade Commission's investigations into allegations of anti-competitive behavior as well as its continuing project to observe and track changes in gasoline prices in order to uncover any potentially anticompetitive behavior. The Subcommittee will also continue to engage in oversight to ensure that the FTC and the Justice Department take all necessary action to prosecute those who attempt to engage in anti-competitive conduct, price gouging or market manipulation. Senator Kohl also intends to pursue his legislation to bring the actions of the OPEC oil cartel under the jurisdiction of U.S. antitrust law (the No Oil Producing and Exporting Cartels Act [“NOPEC”], S. 394).

*  Discount Pricing of Consumer Goods

The Subcommittee will continue its examination of the effects on consumer prices of the elimination of the nearly century-old ban against manufacturers setting a minimum retail price as a result of the 2007 Supreme Court decision in the Leegin case.  Allowing retail price maintenance has the potential to seriously harm discount pricing and retail competition.  Senator Kohl intends to seek passage of the Discount Pricing Consumer Protection Act (S. 75), his bill to restore the ban on vertical price fixing.

* Agriculture

The Subcommittee will continue to examine competition in agricultural markets, an issue of vital importance to farmers, ranchers and consumers alike. Issues to be examined include consolidation in agricultural sector, dairy market concentration, and competition in the market for genetically modified seeds.  Last year the Justice Department and Department of Agriculture concluded a series of joint workshops on competition in agriculture.   As part of the Subcommittee’s ongoing oversight of the Justice Department, we will examine what the Department learned from these workshops and how their conclusions will affect antitrust enforcement in the agricultural sector.

* Media/Cable/Satellite Issues

In this era of continued consolidation in the media sector, the Subcommittee will continue to focus on competitive conditions in the media, cable and satellite industry. We will continue to examine the effects of media consolidation on the marketplace of ideas, including issuessuch as diversity of ownership in the media and on the ability of independent content producers to distribute their products. As cable television rates continue to rise, we will also continue to emphasize bringing increased competition to the cable and satellite television market.  In this connection, we will pay particular attention to new, emerging forms of video competition via Internet distribution to traditional cable and satellite services.   Internet video holds the promise of providing consumers, for the first time, an alternative to expensive pay TV subscriptions and the ability to purchase only the programming they want.  We will examine challenges that video programmers face in distributing their programming over the Internet, challenges that online video distributors face in obtaining programming, and whether  Internet service providers are placing undue barriers to the video delivered over the Internet.   We also will examine the implementation of the merger conditions imposed on the Comcast/NBC Universal merger to ensure that these conditions are being properly applied to foster competition, including competition from new forms of Internet delivery of video content.    

*  Broadband Issues

We also plan to continue to closely examine competition in the broadband industry in the year ahead. Maintaining competitive choices in this industry is crucial to consumers and the health of the national economy. We will also examine the issue of network neutrality principles and monitor whether consumers continue to have the freedom to access the internet content they wish without interference from their internet service provider.

 * Competition in Online Markets/Internet Search Issues

Access to the wealth of information and e-commerce on the Internet is essential for consumers and business alike.  As the Internet continues to grow in importance to the national economy, businesses and consumers, the Subcommittee will strive to ensure that this sector remains competitive, that Internet search is fair to its users and customers,   advertisers have sufficient choices, and that consumers’ privacy is guarded.  In recent years, the dominance over Internet search of the world’s largest search engine, Google, has increased and Google has increasingly sought to acquire e-commerce sites in myriad businesses.  In this regard, we will closely examine allegations raised by e-commerce websites that compete with Google that they are being treated unfairly in search ranking, and in their ability to purchase search advertising.   We also will continue to closely examine the impact of further acquisitions in this sector.

* Accountable Care Organizations

Health care competition continues to be central to reducing costs in the vital health care sector.  As part of the new health care reform law, hospitals, medical clinics, and physicians’ offices are encouraged to combine into new “accountable care organizations”  (ACOs), in an effort to increase the efficiency of the health care delivery system and bring health care costs down.   These organizations hold the promise of integrated health care delivery networks which can better serve patients and bargain for lower prices and insurance rates.    Questions have arisen regarding the antitrust treatment of these new ACOs.   Health care providers have argued for broad guidance from antitrust enforcement agencies to exempt them from antitrust scrutiny.   However, others are concerned that a too broad antitrust immunity could shield anticompetitive conduct.    The Subcommittee will examine this issue regarding the proper treatment of ACOs under antitrust law and whether additional guidance is needed from antitrust enforcement officials to ensure that consumers realize the full benefits of ACOs.

* Airline Competition

Another important issue the Subcommittee expects to continue to scrutinize will be ensuring full and robust competition in the airline industry. Airline consolidation will be a particular focus in the wake of two major mergers in the last three years – Delta/Northwest and United/Continental.  We will continue our examination of the proposed Southwest/AirTran merger, including its impact on the Milwaukee market.   We also will examine the likely effects on competition of non-merger conduct of airlines that raises competition concerns. We are also concerned with consolidation in the international market and the effect of international airline alliances on competition.The Subcommittee has always been wary of exceptions to antitrust laws that have been granted to certain industries.  For example, the Department of Transportation, rather than the Department of Justice and the Federal Trade Commission, is responsible for devising and implementing regulations regarding antitrust immunities for airlines seeking to enter into code-sharing arrangements.  Therefore, the Subcommittee will explore various policy initiatives to ensure that all industries are regulated by a uniform set of laws and regulations, and deference is given to the antitrust experts at the Justice Department.

* Hospital Purchasing of Medical Products

The Subcommittee will continue its work on hospital group purchasing organizations ("GPOs").  The Subcommittee's hearings, investigations and oversight efforts into this issue over the past several years have resulted in the nation's leading GPOs agreeing to voluntary reforms to their business practices, including the creation of a new self-regulatory organization, the Healthcare Group Purchasing Industry Initiative. The Subcommittee will continue its examination of whether the Initiative is adequate and ifthe industry's voluntary reforms are permanent and enforceable.

* Oversight of the Antitrust Enforcement Agencies

The Subcommittee expects to continue to engage in close scrutiny of the government's antitrust enforcement activities at both the Department of Justice and the Federal Trade Commission. Issues to be examined will be merger enforcement, the government's pursuit of civil non-merger cases, such as monopolization and unilateral anti-competitive practices, criminal antitrust enforcement.

Today, the United States has two separate agencies, the Department of Justice’s Antitrust Division and the Federal Trade Commission, that are responsible for enforcing our antitrust laws.  Therefore, the Subcommittee will explore various policy options to ensure that corporate matters before these agencies are handled in an even more efficient and effective manner.  

*  International Enforcement of Antitrust 

The Subcommittee will continue to examine closely how U.S. multinational companies have been affected by different antitrust regimes in various countries.  Complying with the antitrust laws of different countries, which often have differing substantive and procedural rules, is increasingly becoming a burden on U.S. businesses.  Over the past several years, foreign and in particular European regulators have been aggressive in their review of American companies’ business practices.  Some have argued that these same foreign regulators have unfairly used their power to discriminate and hinder American corporations.  On the other hand, many times those bringing complaints regarding the business practices of American companies to foreign antitrust enforcement agencies have been other American companies.   Further, advocates of aggressive international enforcement argue that this enforcement is warranted.   Exploring the validity of these claims will be an important priority for the Subcommittee.