Competitive Prices Act
This bill makes consciously parallel pricing coordination (i.e., a tacit agreement among two or more persons to raise, lower, change, maintain, or manipulate pricing for the purchase or sale of reasonably interchangeable products or services) a prohibited form of price fixing.
In a civil action for a claimed violation, the plaintiff may shift the burden of proof to the defendant by demonstrating that two or more persons (1) engaged in substantially similar conduct within a substantially similar time period with respect to the pricing of reasonably interchangeable products, and (2) had a similar motivation to coordinate their efforts to change or manipulate the pricing of those products or services.
The defendant may rebut such a presumption of a violation by demonstrating the action was motivated by business judgment that is economically rational in the absence of a tacit agreement, such as by showing the action was in response to, or in anticipation of, changing market conditions for the product or service.
If the defendant rebuts the presumption, the plaintiff must demonstrate by a preponderance of the evidence that the defendant entered a tacit agreement to change or manipulate the pricing for the product or service, such as by showing the business judgment of the defendant was not rational in the absence of such a tacit agreement.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2782 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 2782
To specify the standards governing claims of consciously parallel
pricing coordination in civil actions under the Sherman Act, and to
clarify the meaning of contract, combination in the form of trust or
otherwise, or conspiracy under the Sherman Act.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 20, 2023
Ms. Porter (for herself, Mr. Nadler, Mr. Cicilline, and Ms. Jayapal)
introduced the following bill; which was referred to the Committee on
the Judiciary
_______________________________________________________________________
A BILL
To specify the standards governing claims of consciously parallel
pricing coordination in civil actions under the Sherman Act, and to
clarify the meaning of contract, combination in the form of trust or
otherwise, or conspiracy under the Sherman Act.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Competitive Prices Act''.
SEC. 2. PURPOSE.
The purpose of this Act is to clarify and amend the law with
respect to--
(1) the illegality of consciously parallel pricing
coordination under sections 1 and 3(a) of the Sherman Act (15
U.S.C. 1, 3(a)); and
(2) the concerted-action requirement for claimed violations
of section 1 or 3(a) of the Sherman Act.
SEC. 3. FINDINGS.
(a) Consciously Parallel Pricing Coordination.--
(1) The American economy is built on the foundations of
open markets and fair competition. These core principles of
economic freedom are what stimulate innovation, improve the
quality of products and services, and ensure that prices are
competitive.
(2) The antitrust laws are designed to ensure American
consumers and businesses are afforded the benefits of
competition throughout the economy. The supreme evil of
antitrust law is, accordingly, collusion among market rivals.
Such collusion undermines competitive markets, stifles
innovation, and results in degraded quality and prices that are
dictated by competitors' agreement rather than competitors'
rivalry.
(3) Sections 1 and 3(a) of the Sherman Act (15 U.S.C. 1,
3(a)) categorically prohibit--as the most pernicious types of
contracts, combinations in the form of trust or otherwise, or
conspiracies, in restraint of trade or commerce--naked
agreements among actual or potential competitors to fix prices,
rig bids, or allocate markets. An agreement to fix the quantity
of products or services bought or sold is a form of agreement
to fix prices. These agreements are per se unlawful.
(4) Courts have been unduly hostile to claims of price
fixing that are based on tacit agreement among competitors.
They have, at times, declined to recognize tacit agreement as a
contract, combination in the form of trust or otherwise, or
conspiracy; they have held that allegations or evidence, taken
as a whole, that are as consistent with ``conscious
parallelism'' as with agreement are generally insufficient to
survive a motion to dismiss or motion for summary judgment; and
they have concluded a claimant must offer allegations or
evidence tending to exclude the possibility of independent
action. See, e.g., Brooke Grp. Ltd. v. Brown & Williamson
Tobacco Corp., 509 U.S. 209, 227 (1993); Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986);
Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764
(1984).
(5) Section 4 of this Act rejects the judicial decisions
that have prevented meritorious price-fixing cases from
advancing to trial and judgment. It does so by providing that,
in civil actions, consciously parallel pricing coordination--as
defined by this Act--is a ``contract, combination in the form
of trust or otherwise, or conspiracy, in restraint of trade or
commerce'' under sections 1 and 3(a) of the Sherman Act.
(6) Section 4 of this Act does not supersede the law
governing price fixing. It instead supplements and complements
that law. It does not apply to criminal prosecutions.
(b) Concerted Action.--
(1) The words ``contract, combination in the form of trust
or otherwise, or conspiracy'' in sections 1 and 3(a) of the
Sherman Act require some form of agreement between two or more
persons, but that agreement need not be expressly made. A tacit
agreement also qualifies. Accordingly, the words ``contract,
combination in the form of trust or otherwise, or conspiracy''
encompass both express and tacit agreements.
(2) Although consciously parallel behavior alone does not
constitute a contract, combination in the form of trust or
otherwise, or conspiracy under sections 1 and 3(a) of the
Sherman Act, consciously parallel behavior can be evidence of
an agreement. And once the consciously parallel behavior
crosses the line into consciously parallel coordination, the
behavior qualifies as tacit agreement--that is, a contract,
combination in the form of trust or otherwise, or conspiracy.
(3) In Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 548-
49, 553-57, 564-70 (2007), the Supreme Court held that a
complaint alleging that competitors engaged in parallel,
anticompetitive conduct did not do enough to exclude the
possibility that the competitors engaged in independent action
and therefore failed to plausibly plead the existence of a
conspiracy under section 1 of the Sherman Act. In so holding,
the Court understated the significance of consciously parallel
behavior as evidence of agreement and left little or no room
for tacit agreements in the meaning of ``contract, combination
in the form of trust or otherwise, or conspiracy''.
(4) Section 5 of this Act rejects the Twombly Court's
cramped reading of the Sherman Act's language, clarifies that
the words ``contract, combination in the form of trust or
otherwise, or conspiracy'' encompass tacit agreements, and
specifies the standards for pleading and proving a contract,
combination in the form of trust or otherwise, or conspiracy
under sections 1 and 3(a) of the Sherman Act.
SEC. 4. CONSCIOUSLY PARALLEL PRICING COORDINATION.
(a) Definitions.--
(1) The term ``consciously parallel pricing coordination''
means a tacit agreement among two or more persons to raise,
lower, change, maintain, or manipulate pricing for the purchase
or sale of reasonably interchangeable products or services.
(2) The term ``person'' has the meaning given the term in
subsection (a) of the first section of the Clayton Act (15
U.S.C. 12(a)).
(b) Consciously Parallel Pricing Coordination.--In a civil action,
including an action brought by the United States or by a State attorney
general, or by the Federal Trade Commission under section 5 of the
Federal Trade Commission Act (15 U.S.C. 45), consciously parallel
pricing coordination is a ``contract, combination in the form of trust
or otherwise, or conspiracy, in restraint of trade or commerce'' under
sections 1 and 3(a) of the Sherman Act (15 U.S.C. 1, 3(a)).
(c) Prima Facie Case.--
(1) A claimant establishes a prima facie case of
consciously parallel pricing coordination by demonstrating that
two or more persons--
(A) engaged in substantially similar action, within
a substantially similar time period, with respect to
pricing for reasonably interchangeable products or
services; and
(B) had a substantially similar motivation to
coordinate their efforts to raise, lower, change,
maintain, or manipulate pricing for the purchase or
sale of reasonably interchangeable products or
services.
(2) A claimant asserting a claim of consciously parallel
pricing coordination in violation of section 1 or 3(a) of the
Sherman Act bears the burden of proving the prima facie case
described in paragraph (1) by a preponderance of evidence, at
which point the burden of production shifts to the defending
party as set forth in subsection (d).
(d) Burden of Rebutting Prima Facie Case.--The defending party
bears the burden of rebutting a prima facie case of consciously
parallel pricing coordination by producing evidence, sufficient to
raise a genuine dispute of material fact, that the defending party's
action described in paragraph (1)(A) of subsection (c) was motivated by
business judgment that is economically rational in the absence of any
consciously parallel pricing coordination. Evidence of this nature may
include, but is not limited to, evidence that the defending party acted
rationally in response to or in anticipation of changing conditions
affecting the market for or the marketability of the products or
services concerned.
(e) Ultimate Burden.--If the defending party rebuts the prima facie
case, the burden shifts back to the claimant to prove, by a
preponderance of the evidence, that the defending party entered a tacit
agreement among two or more persons to raise, lower, change, maintain,
or manipulate pricing for the purchase or sale of reasonably
interchangeable products or services. The claimant may do so by means
that include, but are not limited to, proving that--
(1) the business judgment described in subsection (d) was
not--
(A) economically rational in the absence of
consciously parallel pricing coordination; or
(B) the predominant motivating factor for the
defending party's action described in paragraph (1)(A)
of subsection (c);
(2) the defending party, knowing that coordinated action to
raise, lower, change, maintain, or manipulate pricing for the
purchase or sale of reasonably interchangeable products or
services was contemplated and invited by a competitor, adhered
to the scheme and participated in it; or
(3) based on circumstantial evidence implying a traditional
conspiracy, it is more likely than not that the defending party
entered an agreement among two or more persons to raise, lower,
change, maintain, or manipulate pricing for the purchase or
sale of reasonably interchangeable products or services.
(f) Affirmative Defense.--It is an affirmative defense to a claim
of consciously parallel pricing coordination, on which the defending
party bears the burden of proof by a preponderance of the evidence,
that any affirmative defense to price fixing applies.
SEC. 5. CLARIFYING THE MEANING OF CONTRACT, COMBINATION IN THE FORM OF
TRUST OR OTHERWISE, OR CONSPIRACY.
(a) Meaning of Contract, Combination in the Form of Trust or
Otherwise, or Conspiracy.--A tacit agreement is a form of ``contract,
combination in the form of trust or otherwise, or conspiracy'' under
sections 1 and 3(a) of the Sherman Act (15 U.S.C. 1, 3(a)).
(b) Standards of Pleading and Proof.--In a civil action, including
an action brought by the United States or by a State attorney general,
or by the Federal Trade Commission under section 5 of the Federal Trade
Commission Act (15 U.S.C. 45)--
(1) a complaint--
(A) plausibly pleads a ``contract, combination in
the form of trust or otherwise, or conspiracy'' under
sections 1 and 3(a) of the Sherman Act if the complaint
contains factual allegations, which may consist of
allegations of consciously parallel conduct,
demonstrating that the existence of the alleged
contract, combination in the form of trust or
otherwise, or conspiracy is among the realm of
plausible possibilities; and
(B) need not allege facts tending to exclude the
possibility of independent action to plausibly plead
the existence of a ``contract, combination in the form
of trust or otherwise, or conspiracy'' under sections 1
and 3(a) of the Sherman Act; and
(2) a claimant--
(A) demonstrates a genuine dispute of material fact
that a defending party entered a ``contract,
combination in the form of trust or otherwise, or
conspiracy'' under sections 1 and 3(a) of the Sherman
Act by offering evidence, which may be direct or
circumstantial, that is sufficient to allow a trier of
fact to reasonably conclude that the defending party
entered the contract, combination in the form of trust
or otherwise, or conspiracy; and
(B) need not offer evidence tending to exclude the
possibility of independent action to demonstrate a
genuine dispute of material fact that a defending party
entered a ``contract, combination in the form of trust
or otherwise, or conspiracy'' under sections 1 and 3(a)
of the Sherman Act; although, at trial, the trier of
fact may consider the existence or absence of evidence
tending to exclude the possibility of independent
action when determining whether a defending party
entered the contract, combination in the form of trust
or otherwise, or conspiracy.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on the Judiciary.
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