A proposed amendment to New York’s Donnelly Act, introduced earlier this month, would significantly broaden the scope of the antitrust statute enacted in 1899. New York Senate Bill 335, titled the “Twenty-First Century Anti-Trust Act” seeks to modernize the State’s antitrust laws to address “New York’s great concern with the growing accumulation of power in the hands of dominant corporations that undermines the power of workers, consumers, and small businesses.” If passed, it would be one of, if not the most, aggressive set of state antitrust laws to date, and arguably more akin to antitrust jurisprudence in the European Union than the United States under the Sherman Act.
Yet it is not the first (or even second) attempt by the New York Senate to be an antitrust trailblazer. Indeed, substantially similar versions of the bill have been introduced in the New York Senate since at least the 2019-2020 Legislative Session. State Senator Michael Gianaris (of the 12th Senate District), together with other democrats, have introduced some version of this bill each year, and each year, it has passed the State Senate but failed to come up for a vote in the Assembly before the end of each session.[1] It is currently before the Senate Consumer Affairs and Protection Committee and proposes the following additions to the Donnelly Act.
Single-firm conduct and the “abuse of dominance” standard. For the past 125 years, the Donnelly Act has prohibited coordinated conduct or agreements between two or more parties to unreasonably restrain trade; it did not reach unilateral, single-firm conduct. SB 335 seeks to change that, not only by including a state law equivalent to Section 2 of the Sherman Act, but going beyond Section 2’s ban on monopolization (and attempted monopolization) to also address “abuse of dominance.”
Abuse of dominance, a standard applied for many years by the European Union in its competition laws, makes it unlawful for any single corporation or entity with a “dominant position” in a relevant market to “abuse” that dominant position. For example, leveraging a dominant position in one market to limit competition in a separate market, refusing to deal, requiring exclusive dealing, or tying two separate products may constitute “abuse of dominance” under SB 335 if that entity’s market share exceeds 40% as a seller or 30% as a buyer. The bill also expressly prohibits abuse of dominance in labor markets, including restraints on workers’ mobility, freedom to disclose wage and benefit information, and wage discrimination based on undisclosed considerations.
Premerger notification and labor considerations. SB 335 also seeks to put in place the most comprehensive premerger notification program of any US state. Specifically, any transaction by a person doing business in the State which is reportable under the Hart-Scott-Rondino Antitrust Improvements (HSR) Act to federal antitrust agencies must simultaneously be submitted for review by the State attorney general.[2] SB 335 also requires the attorney general to consider each transaction’s effect on labor markets and workers, a consideration also expressly incorporated for the first time in the Department of Justice (DOJ) and Federal Trade Commission’s (FTC) most recent 2023 Merger Guidelines.
Expert witness fees. Finally, SB 335 encourages private and public enforcement of the Donnelly Act by allowing prevailing plaintiffs to recover expert witness fees and costs, a substantial portion of the high cost of litigating most antitrust claims.
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It will be interesting to see if SB 335 progresses any further than prior iterations to become state law (or even come up for vote in the Assembly), particularly now with President Trump’s agenda guiding federal antitrust enforcement priorities. Stay tuned here while we monitor developments on SB 335.
FOOTNOTES
[1] E.g., Senate Bill 8700 (2019-2020 Legislative Session), available at NY S08700 | 2019-2020 | General Assembly | LegiScan; Senate Bill 6748 (2023-2024 Legislative Session), available at NY S06748 | 2023-2024 | General Assembly | LegiScan.
[2] Since August 2023, healthcare transactions affecting New York must be reported to the State’s Department of Health under existing laws, N.Y. Pub. Health Law § 4550 et seq., but SB 335 seeks to reach all qualifying transactions, not just in healthcare.