Today, a coalition of New York employers are calling on the state Legislature to reject the 21st Century Antitrust Act. The bill will subject all New York businesses, regardless of size, to litigation and regulatory review. It will bury small business owners in legal fees and paperwork they are not equipped to handle and penalize businesses offering lower prices and discounts to customers. This new regulatory framework, unique to New York, will dull New York’s competitive edge as a global business hub.
The coalition includes the Brooklyn Chamber of Commerce, Business Council of Westchester, Bronx Chamber of Commerce, Buffalo Niagara Partnership, Greater Rochester Chamber, Long Island Association, Manhattan Chamber of Commerce, National Federation of Independent Businesses, Partnership for New York City, Queens Chamber of Commerce, Retail Council of New York State, Staten Island Chamber of Commerce, The Business Council of New York State and the Upstate New York Black Chamber of Commerce.
Below (and here) are the specific ways the proposed legislation would harm New York businesses and consumers:
- Members of the state Legislature are urged to reject the 21st Century Antitrust Act (S933A/A1812) because it is both anti-business and anti-consumer. If adopted, New York would be the only place in America where business transactions are subject to regulatory review by the Attorney General and private litigation based on foreign legal standards that are unfamiliar to U.S. businesses, courts, and regulators and are inconsistent with federal law.
- This legislation comes out of a national movement that intends to use New York as the stalking horse for federal antitrust reform. Advocates don’t seem to care what price New York state would pay, including higher costs of doing business and higher prices for consumers, if this bill were to be enacted. Adopting an antitrust standard that is unique to New York would discourage job creation, business investment, and economic growth in New York. It would also clog the New York courts with cases they are unprepared to handle. There is legislation and regulatory change that would tighten antitrust law currently under consideration in Washington, D.C., and that is where these major national policy concerns should be addressed.
- The state’s most respected legal experts have analyzed the New York bill and concluded that it would impact all industries and companies of every size. It would set a far lower and poorly defined standard of liability for businesses, known as the “abuse of dominance.” Under this standard, any business or nonprofit institution could be sued if it can be considered “dominant” in its markets, such as a local grocery store or hospital serving a community where they have no or few direct competitors, significantly discouraging small businesses from forming in smaller communities where the business could be deemed “dominant” in its local region. It could also be a violation of the law to offer discounted prices or other marketing incentives and the fact that the offering would be beneficial to consumers would not be a legal defense.
- Under the bill, any business merger, acquisition, or transaction over $10 million would be subject to review, delay, and litigation. (The federal threshold is $101 million, or ten times greater.) New York has more than 27,000 small and mid-sized businesses with 25-99 employees that have average annual receipts of over $11.2 million. All would be vulnerable to this law. Smaller businesses and nonprofits could also be affected if they are involved in a transaction valued at more than $10 million.
- The city’s financial industry, which is the largest contributor to the state economy and tax rolls, would also be impacted because the bill does not exempt investment activity from the set of transactions subject to a 60-day delay under the proposed legislation. Similarly, any sale of commercial real estate, farmland, or even a transfer of assets through a will would be subject to a delay if the transaction is valued at more than $10 million.
- There has been no impartial analysis by the legislature to assess the potential negative impact of this law on the state economy, on jobs, or on the tax base. In the absence of such analysis, it is irresponsible to even consider passage of this legislation.