Standards Development Organization Advancement Act of 2003

STANDARDS DEVELOPMENT ORGANIZATION ADVANCEMENT ACT OF 2003 -- (House of Representatives - June 02, 2004)

Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and concur in the Senate amendment to the bill (H.R. 1086) to encourage the development and promulgation of voluntary consensus standards by providing relief under the antitrust laws to standards development organizations with respect to conduct engaged in for the purpose of developing voluntary consensus standards, and for other purposes.

BREAK IN TRANSCRIPT

Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 1086, the Standards Development Organization Advancement Act of 2003. This measure has strong bipartisan support in the Committee on the Judiciary, the House and the Senate, as is evidenced by its cosponsors. It provides important and significant improvements to our antitrust laws. We passed the bill last year, and it passed the Senate more recently with amendments, and we are here today to approve the identical version of the bill.

Title I of the bill recognizes that organizations set thousands of standards that keep us safe and provide uniformity for everything from fire protections to computer systems to building construction. When all DVDs are the same size, competitors can manufacture to the standard and compete. When all plugs are the same size, anybody can sell a lamp without having to insist on a particular brand name because they know all lamps have the standard plugs. Without the relief in this bill, industries may be reluctant to agree on a standard out of fear that treble antitrust damages may be available.

So this title provides a common sense safe harbor for standards development organizations. Those who voluntarily disclose their activities to Federal antitrust authorities will only be subject to single damages should a successful antitrust suit arise. Those who refuse to disclose their activities or those who take actions beyond their disclosures will be subject to the treble damages under the antitrust statutes.

The bill does not exempt anyone from antitrust laws but applies the rule of reason to standards development organizations that are acting in an open and forthright manner. If a violation is found, the organizations are still liable for damages, but single damages, rather than treble damages, which would now apply. However, organizations that commit specific serious antitrust violations, such as conspiring about standards on price, market share or territory division, will still be fully liable for their actions.

The rationale for the more favorable treatment of standards development organizations under these circumstances is that standards development organizations, as nonprofits that serve a cross-section of an industry, are unlikely themselves to engage in anticompetitive activities; and, without the risk of treble damages, they can be more innovative in their effort to develop standards which enhance product quality and safety while reducing costs.

Title II of the bill, the Antitrust Criminal Penalty Enhancement and Reform Act of 2003, increases the maximum criminal penalties for antitrust violations so that the disparity is eliminated between the treatment of criminal white collar offenses and antitrust criminal offenses.

This title also incorporates a leniency provision that encourages participants in an illegal conspiracy to turn in their co-conspirators. This provision allows the Department of Justice to limit the damages of the cooperating company's civil liability to actual, rather than treble, damages. The Department of Justice will only grant such leniency if the company provides adequate and timely cooperation to both the government and any subsequent private plaintiffs in civil suits.
And because the remaining conspirators remain jointly and severally liable to treble damages, the victims' potential recovery is not reduced by leniency in this situation.

Finally, Title II of the bill reforms the Tunney Act to strengthen the Act's requirements that courts review antitrust consent decrees in a meaningful manner, not simply as a rubber stamp to such decrees.

H.R. 1086 is an important bill that modernizes and enhances enforcement of U.S. antitrust laws. I would like to commend the gentleman from Wisconsin (Chairman Sensenbrenner) and the gentleman from Michigan (Ranking Member CONYERS) for their leadership and cooperative efforts on this bill, and I urge my colleagues to support it.

BREAK IN TRANSCRIPT

Mr. SCOTT of Virginia. Mr. Speaker, I yield back the balance of my time.