AAI Transition Report to the 45th President of the United States

AAI tapped the antitrust expertise of our prestigious Advisory Board to prepare a comprehensive report for the next president’s transition team, journalists, and the public.

The 2016 Presidential Transition Report on Competition Policy makes policy recommendations based on the AAI’s mission of promoting competition that protects consumers, businesses, and society.  The Report is one way the AAI serves the public through education, research, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy.

Explore the available chapters below.


The cartel chapter of the AAI Presidential Transition Report is entitled American Cartel Enforcement in Our Global Era. Read the chapter for a bullet-point summary and detailed discussion of the following recommendations, and many more:

  • The U.S. Sentencing Commission should revisit the assumption in its Organizational Guidelines that cartel overcharges are typically 10% of affected sales or, indeed, total market sales. The presumption should be raised to at least 20% for North American cartels and 30% for international cartels.
  • Congress should raise the Sherman Act maximum corporate fine for criminal price fixing to $1 billion and the Sherman Act maximum fine for individuals to $10 million.
  • Congress, or the Antitrust Division of its own accord, should institute whistleblower rewards in cartel cases akin to those made available in qui tam civil suits under the False Claims Act, and the administration should support legislation protecting cartel whistleblowers from retaliation from their employers for reporting wrongdoing.
  • After securing criminal convictions, the Antitrust Division should routinely inquire about, and publicly report on, details concerning how cartels were able to collude and sustain their collusion. It should also consider requiring, in sentencing agreements, that defendants turn over simple post-conviction reports for five years on their production costs, sales, and prices in the affected market.
  • The Division should receive a budget increase earmarked for its program to help educate foreign antitrust authorities in how to design effective leniency programs, impose appropriate monetary sanctions, implement criminal provisions in their antitrust laws, and improve their anti-cartel enforcement generally.

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The merger chapter of the AAI Presidential Transition Report, Mergers, Market Power, and the Need for More Vigorous Enforcement, takes stock of current merger control practice by the antitrust agencies and offers recommendations for improvement.

Read the chapter for a bullet-point summary and discussion of following recommendations and many more:

  • The agencies must aggressively, and more consistently, enforce the Horizontal Merger Guidelines . . . [and] not be so concerned about reducing errors of commission that they commit large errors of omission.
  • The agencies should conduct a detailed study of past mergers to determine the extent to which mergers resulted in efficiencies, what types of efficiencies, and of what magnitude.
  • The agencies should be prepared to litigate cases that would more firmly establish the structural presumption, signal renewed attention to mergers in moderately concentrated markets, and secure structural relief as opposed to conduct remedies wherever possible.
  • The agencies should issue new or updated merger commentaries that explain their legal and economic treatment of  potential competition cases, mergers involving network effects and two-sided markets, and vertical mergers or mergers that create or enhance the opportunity for merging parties to exercise market power through exclusionary practices, foreclosure of rivals, and the evasion of regulation.

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The monopolization chapter of the AAI Presidential Transition Report is titled Restoring Monopolization and Exclusion as Core Competition Concerns. Read the chapter for a bullet-point summary and detailed discussion of the following recommendations, and many more:

  • Take a more aggressive enforcement posture towards exclusionary conduct by dominant firms, and renew antitrust’s historic skepticism of durable monopolies.
  • Oppose efforts to promote a single proxy for exclusionary conduct under Section 2, such as the profit-sacrifice test, the no-economic sense test, or the equally efficient competitor test. The default framework should be the consumer-welfare balancing test articulated by the D.C. Circuit in Microsoft.
  • Treat a monopolist’s exclusive dealing that reasonably appears capable of making a significant contribution to maintaining its monopoly power as presumptively anticompetitive.
  • Reject cost-based safe harbors for conditional pricing practices (loyalty and bundled “discounts”), and treat such practices as presumptively anti-competitive when they help preserve, extend, or exploit a monopolist’s market power.
  • Look for opportunities to bring predatory-pricing cases and encourage courts to develop a structured rule of reason that is more consistent with modern economic thinking about predatory pricing strategies than is current law.

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The patent chapter of the AAI Presidential Transition Report is entitled Challenging Anticompetitive Acquisitions and Enforcement of Patents. Read the chapter for a bullet-point summary and detailed discussion of the following recommendations, and many more:

  • The Federal Trade Commission and Antitrust Division (the “Agencies”) should continue and expand their advocacy on patent policy to ensure that it promotes competition, innovation, and consumer welfare.
  • The Agencies should act on AAI’s Request for Joint Enforcement Guidelines on the Patent Policies of Standard Setting Organizations (“SSOs”), adopting the principle that SSOs should be liable for the anticompetitive effects of holdup conduct enabled by inadequate SSO patent policies.
  • The Agencies should challenge PAEs’ patent portfolio aggregations and disaggregations that create and enable the exercise of market power under Section 7 of the Clayton Act and Sections 1 and 2 of the Sherman Act.
  • The Agencies should support legislation that requires more transparency by PAEs regarding patent ownership and assignments, grounds for assertions of patent infringement, and related matters.
  • The Agencies should look for opportunities to clarify and develop the law to restrict the application of Noerr-Pennington immunity when SEP owners and PAEs engage in abusive patent enforcement conduct.

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The entrepreneurship and innovation chapter of the AAI Presidential Transition Report is entitled Entrepreneurship, Innovation, and Antitrust. Read the chapter for a bullet-point summary and detailed discussion of the following recommendations, and many more:

  • Devote greater scrutiny to claims of efficiencies or synergies between merging parties (but be mindful of counter-incentive effects where startups are being bought by larger competitors).
  • Implement, through legislation or through judicial action, various procedural reforms that promise to speed up antitrust litigation, Section 2 monopolization cases in particular. Restoring legislation allowing for expedited Supreme Court review of Section 2 cases should be considered, and judges and government litigators should explore the expanded use of certain expediting procedures used in the Microsoft case.

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The banking and financial services chapter of the AAI Presidential Transition Report is entitled Banking & Financial Services: Globalization, Regulation, and Consolidation in a Troubled Industry. Read the chapter for a bullet-point summary and detailed discussion of the following recommendations, and many more:

  • Antitrust enforcement agencies should pay closer attention to the adverse effects—including the increased potential for collusion—produced by rising levels of concentration in national and international markets for financial products and services, such as investment banking services. Investigations should reflect awareness that important segments of these markets are highly concentrated, now have a track record for collusion, and should therefore be presumed to be particularly susceptible to collusive and manipulative behavior.
  • Congress should require regulators to consult in a timely manner with DOJ on the economic and competitive implications of major structural changes in the banking and financial services industry, including issues associated with increased concentration of financial and economic power, following standards that are clearly stated and administrable.  DOJ should be given a statutory consultative role in a number of important instances that invoke regulatory oversight under Dodd-Frank, the Bank Merger Act, and the BHC Act.
  • Competition policy considerations should inform regulatory solutions to the Too Big to Fail problem. Regulatory efforts should focus on creating incentives for company-by-company decisions to divest activities and assets, including progressively higher capital requirements and taxes based on considerations of systemic risk, especially where size is likely to confer competitive advantages based on investor and lender beliefs that the government will prevent a disorderly failure of the company.
  • The enforcement agencies should continue to monitor the activities of the dominant payment card networks as the industry migrates into digital commerce and mobile payments.

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