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S00933 Text:

                STATE OF NEW YORK
                               2021-2022 Regular Sessions
                    IN SENATE
                                     January 6, 2021
        Introduced  by  Sens. GIANARIS, SALAZAR, 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

        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
    15  actions which seek to create a monopoly or monopsony are as  harmful  as
    16  contracts or agreements of multiple parties to do the same and should be
    17  treated  similarly  under  the law. After monopolies or monopsonies have
    18  been established, it is typically too late to  repair  or  mitigate  the
    19  damage which has been done. Accordingly, mere attempts to create monopo-
    20  lies  or  monopsonies  through  anti-competitive  conduct should also be
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

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

        S. 933--A                           3
     1  compete  clauses  or no-poach agreements, or the unilateral power to set
     2  wages.
     3    (2)  A  person's dominant position may also be established by indirect
     4  evidence such as the person's share of a relevant market. A  person  who
     5  has a share of forty percent or greater of a relevant market as a seller
     6  shall  be presumed to have a dominant position in that market under this
     7  paragraph. A person who has a share of thirty percent or  greater  of  a
     8  relevant market as a buyer shall be presumed to have a dominant position
     9  in that market under this paragraph.
    10    (3)  If direct evidence is sufficient to demonstrate that a person has
    11  a dominant position or has abused such a  dominant  position,  no  court
    12  shall  require  definition of a relevant market in order to evaluate the
    13  evidence, find liability, or find that a claim  has  been  stated  under
    14  this paragraph.
    15    (ii)  In  any action brought under this paragraph, abuse of a dominant
    16  position may include, but is not limited to, conduct that tends to fore-
    17  close or limit the ability or incentive of one or more actual or  poten-
    18  tial  competitors  to compete, such as leveraging a dominant position in
    19  one market to limit competition in a separate  market,  or  refusing  to
    20  deal  with  another person with the effect of unnecessarily excluding or
    21  handicapping actual or potential competitors. In  labor  markets,  abuse
    22  may  include,  but  is  not  limited to, imposing contracts by which any
    23  person is restrained from engaging in a  lawful  profession,  trade,  or
    24  business  of  any  kind, or restricting the freedom of workers and inde-
    25  pendent contractors to disclose wage and benefit information.
    26    (iii) Evidence of pro-competitive effects shall not be  a  defense  to
    27  abuse of dominance and shall not offset or cure competitive harm.
    28    (c) (i) The attorney general is hereby empowered to adopt, promulgate,
    29  amend,  and  repeal  rules,  as such term is defined in paragraph (a) of
    30  subdivision two of section one hundred two of the  state  administrative
    31  procedure act, to carry out the purposes of paragraph (b) of this subdi-
    32  vision,  including  those  considerations  specified in the findings and
    33  declarations of the legislature for this act.
    34    (ii) Before any such rule shall take effect, at  such  time  that  the
    35  attorney  general  is  prepared to file a notice of adoption pursuant to
    36  subdivision five of section two hundred two of the state  administrative
    37  procedure act, the attorney general shall transmit a copy of the rule in
    38  its  final form to the temporary president of the senate and the speaker
    39  of the assembly and, in addition, shall provide any relevant information
    40  regarding the need for such rule. Such proposed rule, or proposed repeal
    41  of a rule, is subject to the denial by either house of  the  legislature
    42  and  shall  take the form of a resolution. Each house of the legislature
    43  shall have sixty days following the transmission of such rule  to  issue
    44  denial  by resolution or take no action. Such rule shall not take effect
    45  if either house passes a resolution denying such  proposed  rule  within
    46  the time prescribed by this subparagraph.
    47    (iii)  The attorney general shall issue guidance on how it will inter-
    48  pret market shares and other relevant market conditions to  achieve  the
    49  purposes  of paragraph (b) of this subdivision while taking into account
    50  the important role of small and medium-sized businesses in  the  state's
    51  economy.   The attorney general may issue other guidance with respect to
    52  paragraph (b) of this subdivision.
    53    3. Subject to the exceptions hereinafter provided in this section, the
    54  provisions of this article shall apply to  licensed  insurers,  licensed
    55  insurance  agents,  licensed  insurance  brokers,  licensed  independent
    56  adjusters and other persons and organizations subject to the  provisions

        S. 933--A                           4
     1  of the insurance law, to the extent not regulated by provisions of arti-
     2  cle  twenty-three of the insurance law; and further provided, that noth-
     3  ing in this section shall apply  to  the  marine  insurances,  including
     4  marine  protection  and  indemnity  insurance  and  marine  reinsurance,
     5  exempted from the operation of article  twenty-three  of  the  insurance
     6  law.
     7    [3.]  4. The provisions of this article shall not apply to cooperative
     8  associations, corporate or otherwise, of farmers, gardeners,  or  dairy-
     9  men,  including  live stock farmers and fruit growers, nor to contracts,
    10  agreements or arrangements made by such associations, nor to  bona  fide
    11  labor unions.
    12    [4.]  5. The labor of human beings shall not be deemed or held to be a
    13  commodity or article of commerce as such terms are used in this  section
    14  and nothing herein contained shall be deemed to prohibit or restrict the
    15  right of workingmen, including employees and independent contractors, to
    16  combine in unions, organizations and associations, not organized for the
    17  purpose of profit, or to bargain collectively concerning their wages and
    18  the  terms  and  conditions  of their employment. A bona fide collective
    19  bargaining agreement, or any  term  therein,  shall  not  be  considered
    20  evidence of a violation or dominance under this section.
    21    [5.]  6.  An  action  to recover damages caused by a violation of this
    22  section must be commenced within four years after the  cause  of  action
    23  has accrued. The state, or any political subdivision or public authority
    24  of  the  state, or any person who shall sustain damages by reason of any
    25  violation of this section, shall recover three-fold the  actual  damages
    26  sustained  thereby, as well as costs not exceeding ten thousand dollars,
    27  and reasonable attorneys' fees. At or before  the  commencement  of  any
    28  civil  action by a party other than the attorney-general for a violation
    29  of this section, notice thereof shall be served upon the attorney-gener-
    30  al. Where the aggrieved party  is  a  political  subdivision  or  public
    31  authority  of the state, notice of intention to commence an action under
    32  this section must be served upon the attorney-general at least ten  days
    33  prior  to  the commencement of such action. This section shall not apply
    34  to any action commenced prior to the effective date of this act.
    35    [6.] 7. In any action pursuant to this  section,  the  fact  that  the
    36  state, or any political subdivision or public authority of the state, or
    37  any  person  who  has  sustained  damages by reason of violation of this
    38  section has not dealt directly with  the  defendant  shall  not  bar  or
    39  otherwise limit recovery; provided, however, that in any action in which
    40  claims  are  asserted  against  a  defendant by both direct and indirect
    41  purchasers, the court shall take all steps necessary to avoid  duplicate
    42  liability,  including  but not limited to the transfer and consolidation
    43  of all related actions.  In  actions  where  both  direct  and  indirect
    44  purchasers  are  involved,  a  defendant shall be entitled to prove as a
    45  partial or complete defense to a claim  for  damages  that  the  illegal
    46  overcharge  has  been passed on to others who are themselves entitled to
    47  recover so as to avoid duplication of recovery of damages.
    48    8. Any damages recoverable pursuant to this section may  be  recovered
    49  in  any  action  which  a  court  may authorize to be brought as a class
    50  action pursuant to article nine of the civil practice law and rules.
    51    9. An arrangement, as this term is used in this article, includes, but
    52  is not limited to, a contract, combination, agreement or conspiracy.
    53    10. Premerger notification.
    54    (a) Any person acquiring, directly or indirectly, any  voting  securi-
    55  ties  or  assets  of  any other person, shall file notification with the

        S. 933--A                           5
     1  attorney general pursuant to rules under paragraph (h) of this  subdivi-
     2  sion hereunder if:
     3    (i)  as  a result of such acquisition, the acquiring person would hold
     4  an aggregate total amount of the voting securities  and  assets  of  the
     5  acquired  person  in  excess of ten per centum of the current thresholds
     6  specified by the United States Federal Trade Commission pursuant  to  15
     7  U.S.C. § 18a(a)(2); and
     8    (ii)  the  acquiring or acquired person has assets or annual net sales
     9  within the state in excess of two and one-half per centum of the current
    10  thresholds specified by  the  United  States  Federal  Trade  Commission
    11  pursuant to 15 U.S.C. § 18a(a)(2)(A).
    12    (b)  The notification required under paragraph (a) of this subdivision
    13  shall be filed no later than sixty calendar days before the  closing  of
    14  the acquisition.
    15    (c)  The notification required under paragraph (a) of this subdivision
    16  shall identify:
    17    (i) All parties to the acquisition.
    18    (ii) The assets being transferred in the acquisition.
    19    (iii) The anticipated closing date of the acquisition.
    20    (iv) Persons subject to the requirements of this paragraph who file  a
    21  notification with the United States department of justice and the United
    22  States  federal  trade  commission  pursuant  to 15 U.S.C. § 18a et seq.
    23  shall comply with the requirements of this subdivision  by  filing  with
    24  the  attorney  general  the same materials filed with the aforementioned
    25  federal agencies, at the same time that they file those  materials  with
    26  those federal agencies.
    27    (d)    The  following  classes  of  transactions  are  exempt from the
    28  requirements of this section:
    29    (i) acquisitions of goods or realty transferred in the ordinary course
    30  of business;
    31    (ii) acquisitions of bonds, mortgages, deeds of trust, or other  obli-
    32  gations which are not voting securities;
    33    (iii)  transfers  to  or from a federal agency or a state or political
    34  subdivision thereof;
    35    (iv) transactions specifically exempted from the  provisions  of  this
    36  article; and
    37    (v)  such  other  acquisitions,  transfers, or transactions, as may be
    38  exempted under paragraph (h) of this subdivision hereunder.
    39    (e) Any information or documentary material filed  with  the  attorney
    40  general  pursuant  to  this  subdivision shall be exempt from disclosure
    41  under article six of the public officers law, and no such information or
    42  documentary material may be made public, except as may  be  relevant  to
    43  any administrative or judicial action or proceeding.
    44    (f)  Any  person,  or  any  officer, director, or partner thereof, who
    45  fails to comply with any provision of this subdivision shall  be  liable
    46  to  the  state for a civil penalty of not more than ten thousand dollars
    47  for each day during which such person is in violation of  this  section.
    48  Such  penalty may be recovered in a civil action brought by the attorney
    49  general.
    50    (g) In considering any transaction under this subdivision, the  attor-
    51  ney general shall consider such transaction's effects on labor markets.
    52    (h) The attorney general is hereby empowered to:
    53    (i) define the terms used in this subdivision;
    54    (ii)  exempt,  from  the  requirements of this subdivision, classes of
    55  persons, acquisitions, transfers, or transactions which are  not  likely
    56  to violate the provisions of this article; and

        S. 933--A                           6
     1    (iii)  adopt,  promulgate,  amend,  and  rescind other rules and regu-
     2  lations to carry out the purposes of this subdivision.
     3    §  4.  Section  341 of the general business law, as amended by chapter
     4  333 of the laws of 1975, is amended to read as follows:
     5    § 341. Penalty. Every person or corporation, or any officer  or  agent
     6  thereof,  who  shall  [make  or  attempt  to make or enter into any such
     7  contract, agreement, arrangement or combination or who within this state
     8  shall] do or attempt to do, within this state, any act [pursuant  there-
     9  to]  declared unlawful under subdivision one and paragraph (a) of subdi-
    10  vision two of section three hundred forty of this article, or in, toward
    11  or for the consummation thereof[, wherever the same may have been made],
    12  is guilty of a class [E] D felony, and on conviction thereof shall, if a
    13  natural person, be punished by a fine not exceeding one  [hundred  thou-
    14  sand]  million  dollars,  or  by  imprisonment  for not longer than four
    15  years, or by both such fine and imprisonment; and if a corporation, by a
    16  fine of not exceeding one hundred  million  dollars.  An  indictment  or
    17  information  based  on  a  violation  of  any  of the provisions of this
    18  section must be found within [three] five years after its commission. No
    19  criminal proceeding barred by prior limitation shall be revived by  this
    20  act.
    21    §  5. Section 342-a of the general business law, as amended by chapter
    22  275 of the laws of 1962, is amended to read as follows:
    23    § 342-a. Recovery of civil penalty by attorney-general. In lieu of any
    24  penalty otherwise prescribed for a violation  of  a  provision  of  this
    25  article  and  in addition to an action pursuant to section three hundred
    26  forty-two of this article, the attorney-general may bring an  action  in
    27  the  name  and  in behalf of the people of the state against any person,
    28  trustee, director, manager or other officer or agent of  a  corporation,
    29  or  against  a corporation, foreign or domestic, to recover a penalty in
    30  the sum specified in section three hundred forty-one of this article for
    31  the doing in this state of any act [herein] declared to  be  illegal  in
    32  this article, or any act in, toward or for the making or consummation of
    33  any  contract, agreement, arrangement or combination [herein] prohibited
    34  by this article, wherever the same may have been made. The  action  must
    35  be  brought  within  [three]  five years after the commission of the act
    36  upon which it is based.
    37    § 6. Section 342-b of the general business law, as amended by  chapter
    38  420 of the laws of 1975, is amended to read as follows:
    39    §  342-b.  Recovery  of  damages  by  attorney general. In addition to
    40  existing statutory and common law authority to  bring  such  actions  on
    41  behalf  of the state, [and] public authorities, and resident persons and
    42  entities, the attorney general may also bring action on  behalf  of  any
    43  political  subdivision or public authority of the state upon the request
    44  of such political subdivision or public authority, or in the name of the
    45  state, as parens patriae, on behalf of persons and other entities resid-
    46  ing in the state of New York,  to  recover  damages  for  violations  of
    47  section  three  hundred  forty  of  this  article, or to recover damages
    48  provided for by federal law for  violations  of  the  federal  antitrust
    49  laws.  In  any  class action the attorney general may bring on behalf of
    50  [these or other subordinate]  governmental  entities,  any  governmental
    51  entity  that does not affirmatively exclude itself from the action, upon
    52  due notice thereof, shall be deemed to have requested to be treated as a
    53  member of the class represented in that action.   The attorney  general,
    54  on behalf of the state of New York, shall be entitled to retain from any
    55  moneys  recovered  in  such  actions  the  costs  and  expenses  of such
    56  services.

        S. 933--A                           7
     1    § 7. The general business law is amended by adding a new section 342-d
     2  to read as follows:
     3    § 342-d. Recovery of expert witnesses' fees and costs by attorney-gen-
     4  eral  and  private  litigants.  In  any action alleging a violation of a
     5  provision of this article, including actions brought  under  subdivision
     6  twelve of section sixty-three of the executive law, the attorney general
     7  and  private  litigants  shall recover reasonable fees and costs for its
     8  expert witnesses and consultants if  the  attorney  general  or  private
     9  litigants prevail in such action.
    10    § 8. This act shall take effect immediately.
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