Week Ending June 4

TheWeekInCongress.com

Week Ending June 4, 2004

HR 1086 Standards Development Relief

BRIEF

If you have ever wondered why the same light bulb easily screws into lamps made by different manufacturers or why one part fits into on machine and not another then this bill will explain.

The bill goes back to 1993 when the National Cooperative Research Act revitalized 1984 legislation aimed to relax antitrust laws and allow for cooperative research by a consortium of private industry and government agencies.

The bill primarily centers on the development of technical standards for products that would allow more universal use of the products. Those standards come mostly from Standards Development Organizations (SDO), private, non-profit organizations that make it their business to create standards such as the uniform size of light bulb screws, or technological standards that allow numerous performance and safety products to work despite different manufacturers. The SDOs fill a gap that would otherwise be filled by government regulations and the guidelines from SDOs are often adopted by government.

Over the ensuing years Congress has worked towards having the same technical standards used by Federal agencies and by the private sector permitting the Government to avoid the cost of developing duplicative Government standards and to more readily use products and components designed for the commercial marketplace, thereby enhancing quality and safety and reducing costs.

Due to what was described in the debate as “a natural tension between the antitrust laws that prohibit businesses from colluding and the development of technical standards, lawsuits against the SDOs are not uncommon. And decisions against the SDO can be expensive.

Under the bill SDOs could seek review of their standards by the Department of Justice or Federal Trade Commission prior to implementation. If these agencies do not object to the standard during the review, but the organization is later sued by a private plaintiff, the SDO would be limited to single damages, rather than the treble damages under existing law.

The Rule of Reason, a relevant element in the 1993 legislation, would be applied by the courts when determining if an anticompetitive standard nevertheless benefits the consumers in ways including safety.

The bill would increase penalties for antitrust violations ranging to $1,000,000 for individuals and $100,000,000 for corporations and ten years imprisonment. Monopolizing trade violations and other restraints of trade could face the same fines.

The bill would also define further the Tunney Act, a 1974 law designed to review antitrust court decisions at the lower district court level to see if the decision plays out well in reality or, in other words, is in the public interest.

Sponsor: Representative F. James Sensenbrenner, Jr. (R-WI)

Vote: Passed House by voice vote. Passed Senate by unanimous consent.

Cost to the taxpayer: No discernible cost..##