S3778

An Act concerning the “New Jersey Antitrust Act” and amending P.L.1970, c.73.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 4 of P.L.1970, c.73 (C.56:9-4) is amended to read as follows:

4. a. It shall be unlawful for any person to monopolize or monopsonize, or attempt to monopolize or monopsonize, or to combine or conspire with any person or persons, to monopolize or monopsonize trade or commerce in any relevant market, or the furnishing of any service within this State.

b. No corporation engaged in commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital of another corporation engaged also in commerce, where the effect of such acquisition may be to substantially lessen competition within this State between the corporation whose stock is so acquired and the corporation making the acquisition, or to restrain such commerce in any section or community of this State, or tend to create a monopoly of any line of commerce within this State.

c. No corporation shall acquire, directly or indirectly, the whole or any part of the stock or other share capital of two or more corporations engaged in commerce where the effect of such acquisition, or the use of such stock by the voting or granting of proxies or otherwise, may be to substantially lessen competition within this State between such corporations, or any of them, or to restrain such commerce in any section or community of this State, or tend to create a monopoly of any line of commerce within this State.

d. It shall be unlawful for any person with a dominant position in the conduct of any business, trade or commerce, in any labor market, or in the furnishing of any service in this State to abuse that dominant position.

(1) In any action brought due to a violation of this subsection, a person's dominant position may be established by direct evidence, indirect evidence, or a combination of the two.

(a) Examples of direct evidence include, but are not limited to, the unilateral power to set prices, terms, conditions, or standards; the unilateral power to dictate non-price contractual terms without compensation; or other evidence that a person is not constrained by meaningful competitive pressures, such as the ability to degrade quality without suffering reduction in profitability. In labor markets, examples of direct evidence include, but are not limited to, the use of non-compete clauses or no-poach agreements, or the unilateral power to set wages.

(b) A person's dominant position may also be established by indirect evidence such as the person's share of a relevant market. A person who has a share of forty percent or greater of a relevant market as a seller shall be presumed to have a dominant position in that market under this subsection. A person who has a share of thirty percent or greater of a relevant market as a buyer shall be presumed to have a dominant position in that market under this subsection.

(c) If direct evidence is sufficient to demonstrate that a person has a dominant position or has abused such a dominant position, no court shall require definition of a relevant market in order to evaluate the evidence, find liability, or find that a claim has been stated under this subsection.

(2) In any action brought due to a violation of this subsection, abuse of a dominant position may include, but is not limited to, conduct that tends to foreclose or limit the ability or incentive of one or more actual or potential competitors to compete, such as leveraging a dominant position in one market to limit competition in a separate market, or refusing to deal with another person with the effect of unnecessarily excluding or handicapping actual or potential competitors. In labor markets, abuse may include, but is not limited to, imposing contracts by which any person is restrained from engaging in a lawful profession, trade, or business of any kind, or by restricting the freedom of workers and independent contractors to disclose wage and benefit information.

(3) Evidence of pro-competitive effects shall not be a defense to abuse of dominance and shall not offset or cure competitive harm.

e. (1) The Attorney General shall promulgate rules and regulations pursuant to the "Administrative Procedure Act," P.L. 1968, c. 410 (C. 52:14B-1 et seq.) to implement the provisions of P.L. , c. (C.56:9-4 et seq.) (pending before the Legislature as this act).

(2) The Attorney General shall issue guidance on how it will interpret market shares and other relevant market conditions to achieve the purposes of subsection d. of this section while taking into account the important role of small and medium-sized businesses in the State's economy. The Attorney General may issue other guidance with respect to subsection d. of this section.

f. This section shall not apply to corporations purchasing such stock solely for investment and not using the same by voting or otherwise to bring about, or in attempting to bring about, the substantial lessening of competition. Nor shall anything contained in this section prevent a corporation engaged in commerce from causing the formation of subsidiary corporations for the actual carrying on of their immediate lawful business, or the natural and legitimate branches or extensions thereof, or from owning and holding all or a part of the stock of such subsidiary corporations, when the effect of such formation is not to substantially lessen competition.

[e.] g. Nothing contained in this section shall be held to affect or impair any right heretofore legally acquired.

(cf: P.L.1970, c.73, s.4)

2. Section 5 of P.L.1970, c.73 (C.56:9-5) is amended to read as follows:

5. a. [This act] P.L.1970, c.73 (C.56:9-4 et seq.) shall not forbid the existence of trade and professional organizations created for the purpose of mutual help, and not having capital stock, nor forbid or restrain members of such organizations from lawfully carrying out the legitimate objects thereof not otherwise in violation of [this act] P.L.1970, c.73 (C.56:9-4 et seq.); nor shall those organizations or members per se be illegal combinations or conspiracies in restraint of trade under the provisions of [this act] P.L.1970, c.73 (C.56:9-4 et seq.).

b. No provisions of [this act] P.L.1970, c.73 (C.56:9-4 et seq.) shall be construed to make illegal:

(1) The activities of any labor organization or of individual members thereof which are directed solely to labor objectives which are legitimate under the laws of either the State of New Jersey or the United States, or activities of individuals to establish or maintain union apprenticeship or training programs that may lead to any government-issued trade license, to bargain collectively concerning wages and the terms and conditions of employment;

(2) The activities of any agricultural or horticultural cooperative organization, whether incorporated or unincorporated, or of individual members thereof, which are directed solely to objectives of such cooperative organizations which are legitimate under the laws of either the State of New Jersey or the United States;

(3) The activities of any public utility, as defined in R.S.48:2-13 to the extent that such activities are subject to the jurisdiction of the Board of Public Utilities, the Department of Transportation, the Federal Energy Regulatory Commission, the Federal Communications Commission, the Federal Department of Transportation or the Interstate Commerce Commission, except that this exemption, and that of subsection c. of this section, shall apply to the activities of any electric public utility or gas public utility or any related competitive business segment of an electric public utility or related competitive business segment of a gas public utility, or any public utility holding company or related competitive business segment of a public utility holding company as those terms are defined in section 3 of P.L.1999, c.23 (C.48:3-51), only to the extent such activities are expressly required by and supervised pursuant to State regulation or are required by federal or State law;

(4) The activities, including, but not limited to, the making of or participating in joint underwriting or joint reinsurance arrangements, of any insurer, insurance agent, insurance broker, independent insurance adjuster or rating organization to the extent that such activities are subject to regulation by the Commissioner of Banking and Insurance of this State under, or are permitted, or are authorized by, the "Department of Banking and Insurance Act of 1948," P.L.1948, c.88 (C.17:1-1.1 et al.) and the "Department of Insurance Act of 1970," P.L.1970, c.12 (C.17:1C-1 et seq.), provided, however, the provisions of this paragraph (4) shall not apply to private passenger automobile insurance business, except as provided in section 69 of P.L.1990, c.8 (C.17:33B-31);

(5) The bona fide religious and charitable activities of any not for profit corporation, trust or organization established exclusively for religious or charitable purposes, or for both purposes;

(6) The activities engaged in by securities dealers, issuers or agents who are (i) a. licensed by the State of New Jersey under the "Uniform Securities Law (1967)," P.L.1967, c.93 (C.49:3-47 et seq.); or (ii) members of the National Association of Securities Dealers, or (iii) members of any National Securities Exchange registered with the Securities and Exchange Commission under the "Securities Exchange Act of 1934," as amended, in the course of their business of offering, selling, buying and selling, or otherwise trading in or underwriting securities, as agent, broker, or principal, and activities of any National Securities Exchange so registered, including the establishment of commission rates and schedules of charges;

(7) The activities of any State or national banking institution to the extent that such activities are regulated or supervised by officers of the State government under the "Department of Banking and Insurance Act of 1948," P.L.1948, c.88 (C.17:1-1.1 et al.) or P.L.1970, c.11 (C.17:1B-1 et seq.), or the federal government under the banking laws of the United States;

(8) The activities of any state or federal savings and loan association to the extent that such activities are regulated or supervised by officers of the State government under the "Department of Banking and Insurance Act of 1948," P.L.1948, c.88 (C.17:1-1.1 et al.) or P.L.1970, c.11 (C.17:1B-1 et seq.), or the federal government under the banking laws of the United States;

(9) The activities of any bona fide not for profit professional association, society or board, licensed and regulated by the courts or any other agency of this State, in recommending schedules of suggested fees, rates or commissions for use solely as guidelines in determining charges for professional and technical services; [or]

(10) The activities permitted under the provisions of chapter 4 of Title 56 of the Revised Statutes, "An act to regulate the retail sale of motor fuels," P.L.1938, c.163 (C.56:6-1 et seq.), the "Unfair Motor Fuels Practices Act," P.L.1953, c.413 (C.56:6-19 et seq.) and the "Unfair Cigarette Sales Act of 1952," P.L.1952, c.247 (C.56:7-18 et seq.);

(11) The creation, production, and dissemination of a single expressive work that is copyrighted, including but not limited to, a streaming series, television programs or motion pictures; or

(12) A bona fide collective bargaining agreement, project labor agreement or any other agreement which is lawful under 29 U.S.C. s.158(f), as amended.

c. [This act] P.L.1970, c.73 (C.56:9-4 et seq.) shall not apply to any activity directed, authorized or permitted by any law of this State that is in conflict or inconsistent with the provisions of this act, and the enactment of this act shall not be deemed to repeal, either expressly or by implication, any such other law in effect on the date of its enactment.

(cf: P.L.1999, c.23, s.61)

3. Section 5 of P.L.1970, c.73 (C.56:9-10) is amended to read as follows:

5. a. The Superior Court shall have jurisdiction to prevent and restrain violations of this act. The Attorney General may institute proceedings to prevent and restrain violations. In addition to granting prohibitory injunctions and other restraints for a period and upon terms and conditions necessary to deter the defendant from, and insure against, the committing of a future violation of this act, the court may grant mandatory injunctions reasonably necessary to restore and preserve competition in the trade or commerce affected by the violation. The court may issue temporary restraining orders or prohibitions and the court may proceed in a summary manner.

b. Any person may institute proceedings for injunctive relief, temporary or permanent in the Superior Court against threatened loss or damage to his property or business by a violation of this act, when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity, under the rules governing such proceedings, and upon the execution of proper bond against damages for an injunction improvidently granted and a showing that the danger of irreparable loss or damage is immediate, a preliminary injunction may issue. If the court issues a permanent injunction, the plaintiff shall be awarded reasonable attorneys' fees, filing fees and reasonable costs of suit. Reasonable costs of suit may include, but shall not be limited to the expenses of discovery and document reproduction and expert fees.

c. In addition to injunctive relief authorized pursuant to subsection a of this section, any person who violates the provisions of this act shall be liable to a penalty of not more than the greater of $100,000.00 or $500.00 per day for each and every day of said violation.

(cf: P.L.1970, c.73, s.10)

4. This act shall take effect immediately.

STATEMENT

This bill amends the “New Jersey Antritrust Act” to make monopsonies illegal. A monopsony refers to a market situation in which there is only one buyer. Under current law, the “New Jersey Antritrust Act” makes only a monopoly illegal, which refers to a market situation in which a single seller controls or dominates the supply of goods and services.

Additionally, the bill makes it unlawful for any person with a dominant position in the conduct of any business, trade or commerce, in any labor market, or in the furnishing of any service in the State to abuse that dominant position. The bill establishes various ways in which a person's unlawful dominant position may be demonstrated:

(1) the unilateral power to set prices, terms, conditions, or standards;

(2) the unilateral power to dictate non-price contractual terms without compensation;

(3) other evidence that a person is not constrained by meaningful competitive pressures, such as the ability to degrade quality without suffering reduction in profitability;

(4) in labor markets, examples of direct evidence include, but are not limited to, the use of non-compete clauses or no-poach agreements, or the unilateral power to set wages; or

(5) the person's share of a relevant market. A person who has a share of forty percent or greater of a relevant market as a seller will be presumed to have a dominant position in that market under the bill. A person who has a share of thirty percent or greater of a relevant market as a buyer will be presumed to have a dominant position in that market under the bill.

The bill adds the following activities to the list of exemption under current law from the provisions of the “New Jersey Antitrust Act:”

(1) Activities of individuals to establish or maintain union apprenticeship or training programs that may lead to any government-issued trade license, to bargain collectively concerning wages and the terms and conditions of employment;

(2) The creation, production, and dissemination of a single expressive work that is copyrighted, including but not limited to, a streaming series, television programs or motion pictures; or

(3) A bona fide collective bargaining agreement, project labor agreement or any other agreement which is lawful under 29 U.S.C. s.158(f) (details unfair labor practices).