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S00933 Text:

                STATE OF NEW YORK
            Cal. No. 131
                               2021-2022 Regular Sessions
                    IN SENATE
                                     January 6, 2021
        Introduced   by  Sens.  GIANARIS,  SALAZAR,  BIAGGI,  HOYLMAN,  JACKSON,
          KAVANAGH, MAY -- read twice and ordered printed, and when  printed  to
          be  committed  to  the  Committee  on Consumer Protection -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to  said  committee  --  recommitted  to  the  Committee  on  Consumer
          Protection in accordance with Senate Rule 6, sec. 8 -- reported favor-
          ably  from said committee, ordered to first and second report, ordered
          to a third reading, amended and ordered reprinted, retaining its place
          in the order of third reading -- again amended and ordered  reprinted,
          retaining its place in the order of third reading
        AN  ACT  to  amend  the  general business law, in relation to actions or
          practices  that  establish  or  maintain  a  monopoly,  monopsony   or
          restraint  of  trade,  and  in  relation to authorizing a class action
          lawsuit in the state anti-trust law
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  This  act shall be known and may be cited as the "Twenty-
     2  First Century Anti-Trust Act".
     3    § 2. Legislative findings. The legislature hereby finds  and  declares
     4  that there is great concern for the growing accumulation of power in the
     5  hands  of large corporations. While technological advances have improved
     6  society, these companies possess great and  increasing  power  over  all
     7  aspects  of our lives. Over one hundred years ago, the state and federal
     8  governments identified these same problems as big  businesses  blossomed
     9  after  decades  of industrialization.   Seeing those problems, the state
    10  and federal governments enacted  transformative  legislation  to  combat
    11  cartels,  monopolies,  and other anti-competitive business practices. It
    12  is time to update, expand and clarify our  laws  to  ensure  that  these
    13  large  corporations  are  subject to strict and appropriate oversight by
    14  the state. The legislature further finds and  declares  that  unilateral
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 933--C                           2
     1  actions  which  seek to create a monopoly or monopsony are as harmful as
     2  contracts or agreements of multiple parties to do the same and should be
     3  treated similarly under the law. After monopolies  or  monopsonies  have
     4  been  established,  it  is  typically too late to repair or mitigate the
     5  damage which has been done. Accordingly, mere attempts to create monopo-
     6  lies or monopsonies through  anti-competitive  conduct  should  also  be
     7  treated  as actions contrary to the interests of the people of the state
     8  of New York and  should  be  penalized  accordingly.    The  legislature
     9  further finds and declares that effective enforcement against unilateral
    10  anti-competitive conduct has been impeded by courts, for example, apply-
    11  ing  narrow  definitions  of monopolies and monopolization, limiting the
    12  scope of unilateral conduct covered by the federal anti-trust laws,  and
    13  unreasonably heightening the legal standards that plaintiffs and govern-
    14  ment  enforcers must overcome to establish violations of those laws. The
    15  legislature further finds and declares that one of the purposes  of  the
    16  state's anti-trust laws is to ensure that our labor markets are open and
    17  fair.  The  legislature further finds and declares that anti-competitive
    18  practices harm great numbers of citizens and therefore must ensure  that
    19  class actions may be raised in anti-trust suits.
    20    § 3. Section 340 of the general business law, as amended by chapter 12
    21  of the laws of 1935, subdivision 1 as amended by chapter 893 of the laws
    22  of  1957,  subdivision  2 as amended by chapter 805 of the laws of 1984,
    23  subdivisions 3 and 4 as renumbered by chapter 502 of the laws  of  1948,
    24  subdivision 5 as amended by chapter 333 of the laws of 1975 and subdivi-
    25  sion  6 as amended by chapter 31 of the laws of 1999, is amended to read
    26  as follows:
    27    §  340.  Contracts  or  agreements  for  monopoly,  monopsony,  or  in
    28  restraint  of  trade  illegal  and  void.  1. Every contract, agreement,
    29  arrangement or combination whereby
    30    A monopoly or monopsony in the  conduct  of  any  business,  trade  or
    31  commerce or in the furnishing of any service in this state, is or may be
    32  established or maintained, or whereby
    33    Competition or the free exercise of any activity in the conduct of any
    34  business,  trade or commerce or in the furnishing of any service in this
    35  state is or may be restrained or whereby
    36    For the purpose of establishing  or  maintaining  any  such  monopoly,
    37  monopsony,  or  unlawfully  interfering  with  the  free exercise of any
    38  activity in the conduct of any business, trade or  commerce  or  in  the
    39  furnishing  of any service in this state any business, trade or commerce
    40  or the furnishing of any service is or  may  be  restrained,  is  hereby
    41  declared to be against public policy, illegal and void.
    42    2. (a) It shall be unlawful for any person or persons to monopolize or
    43  monopsonize,  or  attempt  to  monopolize  or monopsonize, or combine or
    44  conspire with any other person or persons to monopolize  or  monopsonize
    45  any business, trade or commerce or the furnishing of any service in this
    46  state.
    47    (b)  It  shall  be  unlawful for any person or persons with a dominant
    48  position in the conduct of any business, trade or commerce, in any labor
    49  market, or in the furnishing of any service in this state to abuse  that
    50  dominant position.
    51    (i)  In  any  action brought under this paragraph, a person's dominant
    52  position may be established by direct evidence, indirect evidence, or  a
    53  combination of the two.
    54    (1)  Examples  of direct evidence include, but are not limited to, the
    55  unilateral power to set prices, terms,  conditions,  or  standards;  the
    56  unilateral  power to dictate non-price contractual terms without compen-

        S. 933--C                           3
     1  sation; or other evidence that a person is not constrained by meaningful
     2  competitive pressures, such as the ability to  degrade  quality  without
     3  suffering  reduction  in  profitability.  In  labor markets, examples of
     4  direct  evidence include, but are not limited to, the use of non-compete
     5  clauses or no-poach agreements, or the unilateral power to set wages.
     6    (2) A person's dominant position may also be established  by  indirect
     7  evidence  such  as the person's share of a relevant market. A person who
     8  has a share of forty percent or greater of a relevant market as a seller
     9  shall be presumed to have a dominant position in that market under  this
    10  paragraph.  A  person  who has a share of thirty percent or greater of a
    11  relevant market as a buyer shall be presumed to have a dominant position
    12  in that market under this paragraph.
    13    (3) If direct evidence is sufficient to demonstrate that a person  has
    14  a  dominant  position  or  has abused such a dominant position, no court
    15  shall require definition of a relevant market in order to  evaluate  the
    16  evidence,  find  liability,  or  find that a claim has been stated under
    17  this paragraph.
    18    (ii) In any action brought under this paragraph, abuse of  a  dominant
    19  position may include, but is not limited to, conduct that tends to fore-
    20  close  or limit the ability or incentive of one or more actual or poten-
    21  tial competitors to compete, such as leveraging a dominant  position  in
    22  one  market  to  limit  competition in a separate market, or refusing to
    23  deal with another person with the effect of unnecessarily  excluding  or
    24  handicapping  actual  or  potential competitors. In labor markets, abuse
    25  may include, but is not limited to,  imposing  contracts  by  which  any
    26  person  is  restrained  from  engaging in a lawful profession, trade, or
    27  business of any kind, or by restricting the freedom of workers and inde-
    28  pendent contractors to disclose wage and benefit information.
    29    (iii) Evidence of pro-competitive effects shall not be  a  defense  to
    30  abuse of dominance and shall not offset or cure competitive harm.
    31    (c) (i) The attorney general is hereby empowered to adopt, promulgate,
    32  amend,  and  repeal  rules,  as such term is defined in paragraph (a) of
    33  subdivision two of section one hundred two of the  state  administrative
    34  procedure act, to carry out the purposes of paragraph (b) of this subdi-
    35  vision,  including  those  considerations  specified in the findings and
    36  declarations of the legislature for this act.
    37    (ii) Before any such rule shall take effect, at  such  time  that  the
    38  attorney  general  is  prepared to file a notice of adoption pursuant to
    39  subdivision five of section two hundred two of the state  administrative
    40  procedure act, the attorney general shall transmit a copy of the rule in
    41  its  final form to the temporary president of the senate and the speaker
    42  of the assembly and, in addition, shall provide any relevant information
    43  regarding the need for such rule. Such proposed rule, or proposed repeal
    44  of a rule, is subject to the denial by both houses  of  the  legislature
    45  and  shall  take the form of a resolution. Each house of the legislature
    46  shall have sixty days following the transmission of such rule  to  issue
    47  denial  by resolution or take no action. Such rule shall not take effect
    48  if both houses pass a resolution denying such proposed rule  within  the
    49  time prescribed by this subparagraph.
    50    (iii)  The attorney general shall issue guidance on how it will inter-
    51  pret market shares and other relevant market conditions to  achieve  the
    52  purposes  of paragraph (b) of this subdivision while taking into account
    53  the important role of small and medium-sized businesses in  the  state's
    54  economy.   The attorney general may issue other guidance with respect to
    55  paragraph (b) of this subdivision.

        S. 933--C                           4
     1    (iv) Nothing in this section shall be deemed to diminish the jurisdic-
     2  tion of the public service commission.
     3    3. Subject to the exceptions hereinafter provided in this section, the
     4  provisions  of  this  article shall apply to licensed insurers, licensed
     5  insurance  agents,  licensed  insurance  brokers,  licensed  independent
     6  adjusters  and other persons and organizations subject to the provisions
     7  of the insurance law, to the extent not regulated by provisions of arti-
     8  cle twenty-three of the insurance law; and further provided, that  noth-
     9  ing  in  this  section  shall  apply to the marine insurances, including
    10  marine  protection  and  indemnity  insurance  and  marine  reinsurance,
    11  exempted  from  the  operation  of article twenty-three of the insurance
    12  law.
    13    [3.] 4. The provisions of this article shall not apply to  cooperative
    14  associations,  corporate  or otherwise, of farmers, gardeners, or dairy-
    15  men, including live stock farmers and fruit growers, nor  to  contracts,
    16  agreements  or  arrangements made by such associations, nor to bona fide
    17  labor unions, nor to the creation, production, and  dissemination  of  a
    18  single  expressive  work  that is copyrighted, including but not limited
    19  to, a streaming series, television programs and or motion pictures.
    20    [4.] 5. The labor of human beings shall not be deemed or held to be  a
    21  commodity  or article of commerce as such terms are used in this section
    22  and nothing herein contained shall be deemed to prohibit or restrict the
    23  right of workingmen, including employees and independent contractors, to
    24  combine in unions, organizations and associations, not organized for the
    25  purpose of profit, to establish  or  maintain  union  apprenticeship  or
    26  training  programs that may lead to any government-issued trade license,
    27  or to bargain collectively concerning their  wages  and  the  terms  and
    28  conditions  of their employment. Nothing in this section shall be deemed
    29  to prevent or create liability with respect to  any  actions  to  comply
    30  with  article  eight  or  nine  of the labor law. A bona fide collective
    31  bargaining agreement, project labor agreement  or  any  other  agreement
    32  lawful  under  29  U.S.C. 158(f), as amended, or any term therein, shall
    33  not be considered evidence  of  a  violation  or  dominance  under  this
    34  section.    Project  labor agreement shall have the meaning specified in
    35  section  two hundred twenty-two of the labor law.
    36    [5.] 6. An action to recover damages caused by  a  violation  of  this
    37  section  must  be  commenced within four years after the cause of action
    38  has accrued. The state, or any political subdivision or public authority
    39  of the state, or any person who shall sustain damages by reason  of  any
    40  violation  of  this section, shall recover three-fold the actual damages
    41  sustained thereby, as well as costs not exceeding ten thousand  dollars,
    42  and  reasonable  attorneys'  fees.  At or before the commencement of any
    43  civil action by a party other than the attorney-general for a  violation
    44  of this section, notice thereof shall be served upon the attorney-gener-
    45  al.  Where  the  aggrieved  party  is  a political subdivision or public
    46  authority of the state, notice of intention to commence an action  under
    47  this  section must be served upon the attorney-general at least ten days
    48  prior to the commencement of such action. This section shall  not  apply
    49  to any action commenced prior to the effective date of this act.
    50    [6.]  7.  In  any  action  pursuant to this section, the fact that the
    51  state, or any political subdivision or public authority of the state, or
    52  any person who has sustained damages by  reason  of  violation  of  this
    53  section  has  not  dealt  directly  with  the defendant shall not bar or
    54  otherwise limit recovery; provided, however, that in any action in which
    55  claims are asserted against a defendant  by  both  direct  and  indirect
    56  purchasers,  the court shall take all steps necessary to avoid duplicate

        S. 933--C                           5
     1  liability, including but not limited to the transfer  and  consolidation
     2  of  all  related  actions.  In  actions  where  both direct and indirect
     3  purchasers are involved, a defendant shall be entitled  to  prove  as  a
     4  partial  or  complete  defense  to  a claim for damages that the illegal
     5  overcharge has been passed on to others who are themselves  entitled  to
     6  recover so as to avoid duplication of recovery of damages.
     7    8.  Any  damages recoverable pursuant to this section may be recovered
     8  in any action which a court may authorize  to  be  brought  as  a  class
     9  action pursuant to article nine of the civil practice law and rules.
    10    9. An arrangement, as this term is used in this article, includes, but
    11  is not limited to, a contract, combination, agreement or conspiracy.
    12    10.  (a) Any person conducting business in the state which is required
    13  to file the Notification and Report Form for Certain Mergers and  Acqui-
    14  sitions pursuant to the Hart-Scott-Rodino  Antitrust Improvements Act of
    15  1976, 15 U.S.C. s. 18a (a), shall provide the same notice and documenta-
    16  tion  in  its  entirety  to  the  attorney general at the same time that
    17  notice is filed with the federal government.
    18    (b)   The following  classes  of  transactions  are  exempt  from  the
    19  requirements of this section:
    20    (i) acquisitions of goods or realty transferred in the ordinary course
    21  of business;
    22    (ii)  the  creation, production, and dissemination of a single expres-
    23  sive work that is copyrighted, including but not limited to, a streaming
    24  series, television programs and or motion pictures;
    25    (iii) acquisitions of bonds, mortgages, deeds of trust, or other obli-
    26  gations which are not voting securities;
    27    (iv) transfers to or from a federal agency or  a  state  or  political
    28  subdivision thereof;
    29    (v)  transactions  specifically  exempted  from the provisions of this
    30  article; and
    31    (vi) such other acquisitions, transfers, or transactions,  as  may  be
    32  exempted under paragraph (f) of this subdivision hereunder.
    33    (c)  Any  information  or documentary material filed with the attorney
    34  general pursuant to this subdivision shall  be  exempt  from  disclosure
    35  under article six of the public officers law, and no such information or
    36  documentary  material  may  be made public, except as may be relevant to
    37  any administrative or judicial action or proceeding.
    38    (d) Any person, or any officer,  director,  or  partner  thereof,  who
    39  fails  to  comply with any provision of this subdivision shall be liable
    40  to the state for a civil penalty of not more than ten  thousand  dollars
    41  for  each  day during which such person is in violation of this section.
    42  Such penalty may be recovered in a civil action brought by the  attorney
    43  general.
    44    (e)  In considering any transaction under this subdivision, the attor-
    45  ney general shall consider such transaction's effects on labor markets.
    46    (f) The attorney general is hereby empowered to:
    47    (i) define the terms used in this subdivision;
    48    (ii) exempt, from the requirements of  this  subdivision,  classes  of
    49  persons,  acquisitions,  transfers, or transactions which are not likely
    50  to violate the provisions of this article; and
    51    (iii) adopt, promulgate, amend, and  rescind  other  rules  and  regu-
    52  lations to carry out the purposes of this subdivision.
    53    §  4.  Section  341 of the general business law, as amended by chapter
    54  333 of the laws of 1975, is amended to read as follows:
    55    § 341. Penalty. Every person or corporation, or any officer  or  agent
    56  thereof,  who  shall  [make  or  attempt  to make or enter into any such

        S. 933--C                           6

     1  contract, agreement, arrangement or combination or who within this state
     2  shall] do or attempt to do, within this state, any act [pursuant  there-
     3  to]  declared unlawful under subdivision one and paragraph (a) of subdi-
     4  vision two of section three hundred forty of this article, or in, toward
     5  or for the consummation thereof[, wherever the same may have been made],
     6  is guilty of a class [E] D felony, and on conviction thereof shall, if a
     7  natural  person,  be punished by a fine not exceeding one [hundred thou-
     8  sand] million dollars, or by  imprisonment  for  not  longer  than  four
     9  years, or by both such fine and imprisonment; and if a corporation, by a
    10  fine  of  not  exceeding  one  hundred million dollars. An indictment or
    11  information based on a violation  of  any  of  the  provisions  of  this
    12  section must be found within [three] five years after its commission. No
    13  criminal  proceeding barred by prior limitation shall be revived by this
    14  act.
    15    § 5. Section 342-a of the general business law, as amended by  chapter
    16  275 of the laws of 1962, is amended to read as follows:
    17    § 342-a. Recovery of civil penalty by attorney-general. In lieu of any
    18  penalty  otherwise  prescribed  for  a  violation of a provision of this
    19  article and in addition to an action pursuant to section  three  hundred
    20  forty-two  of  this article, the attorney-general may bring an action in
    21  the name and in behalf of the people of the state  against  any  person,
    22  trustee,  director,  manager or other officer or agent of a corporation,
    23  or against a corporation, foreign or domestic, to recover a  penalty  in
    24  the sum specified in section three hundred forty-one of this article for
    25  the  doing  in  this state of any act [herein] declared to be illegal in
    26  this article, or any act in, toward or for the making or consummation of
    27  any contract, agreement, arrangement or combination [herein]  prohibited
    28  by  this  article, wherever the same may have been made. The action must
    29  be brought within [three] five years after the  commission  of  the  act
    30  upon which it is based.
    31    §  6. Section 342-b of the general business law, as amended by chapter
    32  420 of the laws of 1975, is amended to read as follows:
    33    § 342-b. Recovery of damages  by  attorney  general.  In  addition  to
    34  existing  statutory  and  common  law authority to bring such actions on
    35  behalf of the state, [and] public authorities, and resident persons  and
    36  entities,  the  attorney  general may also bring action on behalf of any
    37  political subdivision or public authority of the state upon the  request
    38  of such political subdivision or public authority, or in the name of the
    39  state, as parens patriae, on behalf of persons and other entities resid-
    40  ing  in  the  state  of  New  York, to recover damages for violations of
    41  section three hundred forty of  this  article,  or  to  recover  damages
    42  provided  for  by  federal  law  for violations of the federal antitrust
    43  laws. In any class action the attorney general may bring  on  behalf  of
    44  [these  or  other  subordinate]  governmental entities, any governmental
    45  entity that does not affirmatively exclude itself from the action,  upon
    46  due notice thereof, shall be deemed to have requested to be treated as a
    47  member  of  the class represented in that action.  The attorney general,
    48  on behalf of the state of New York, shall be entitled to retain from any
    49  moneys recovered  in  such  actions  the  costs  and  expenses  of  such
    50  services.
    51    § 7. The general business law is amended by adding a new section 342-d
    52  to read as follows:
    53    § 342-d. Recovery of expert witnesses' fees and costs by attorney-gen-
    54  eral  and  private  litigants.  In  any action alleging a violation of a
    55  provision of this article, including actions brought  under  subdivision
    56  twelve of section sixty-three of the executive law, the attorney general

        S. 933--C                           7
     1  and  private  litigants  shall recover reasonable fees and costs for its
     2  expert witnesses and consultants if  the  attorney  general  or  private
     3  litigants prevail in such action.
     4    §  8.  Severability.  If any provision of this act, or the application
     5  thereof to any person or circumstances, is held invalid  or  unconstitu-
     6  tional,  that  invalidity  or unconstitutionality shall not affect other
     7  provisions or applications of this act that can be given effect  without
     8  the  invalid  or  unconstitutional provision or application, and to this
     9  end the provisions of this act are severable.
    10    § 9. This act shall take effect immediately.
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