(The Center Square) – Democrats in the New York state Senate want to update the state’s antitrust laws, in particular to address issues related to the tech economy. However, while some in the business community understand the need for changes, they fear the legislation could create some unintended consequences.
The Senate Consumer Protection Committee on Monday heard testimony on S8700, the Twenty-First Century Antitrust Act. The bill’s sponsor, state Sen. Michael Gianaris, said the new economy has brought benefitted customers in many ways. However, a handful of companies dominate that realm, and laws written more than a century ago cannot properly regulate them.
“They were intended to deal with an economy that no longer exists, and many of the abuses that we see today were not even contemplated back then,” said Gianaris, the deputy majority leader.
Committee Chairman Kevin Thomas, D-Garden City, said a few companies “which I don’t even need to identify” have such influence on the economy that they can exploit that by dictating rate structures as well as imposing harsh terms and conditions on the consumers and businesses that need their services.
Gianaris’ bill has the support of Attorney General Letitia James, who testified before the committee. In her remarks, she noted the bill’s abuse of dominance provision is controversial but necessary since litigation has chipped away at regulatory authority.
“A firm does not need to be a monopoly to have enough power to stifle competition, raise prices and hamper innovation or degree of product quality,” James said.
European governments have such provisions, she said, but no other state does. However, New York’s been a leader before as it implemented antitrust laws before Congress passed the Sherman Act 130 years ago.
Critics of the bill say its treatment of violators, which would face criminal and not civil penalties, would significantly deter business growth in the state as business owners or executives could face hefty fines or face prison time as the bill considers violations a felony offense.
Kathy Wylde, president and CEO of the Partnership for New York City, said enforcement could tax an already overstressed commercial court system in the state. In addition, while tech companies are the targets for the bill, it could be used against a number of small and growing businesses, especially those in emerging industries.
Wylde added that consumers do need proper protections, but at the same time, businesses across city and state are still dealing with issues related to COVID-19.
“We recognize the challenges and the importance of the issues that are raised by the Attorney General and by the legislation, and we welcome the opportunity to further work with the legislature to make sure that such legislation does not negatively impact new York's necessary recovery and future job creation,” she added.