Rail Antitrust Enforcement Supported

June 3, 2009
National Industrial Transportation League supports Senate Bill 146 to remove antitrust exemptions from US railroads.

The Railroad Antitrust Enforcement Act (S.146) would “remove current exemptions and subject the American freight railroad industry to all the provisions of the Nation's antitrust laws.” The board of directors of the National Industrial Transportation League (NITL) has voted to support the bill. In offering its support, NITL also urged the Senate to coordinate any changes in the applicability of antitrust laws to the rail industry with the forthcoming Surface Transportation Board reauthorization bill being drafted in the Commerce, Science and Transportation committee. This, suggested NITL, would achieve a coherent, rational and comprehensive national policy that would enable US railroads to be in the best position to serve customers.

The legislation was expected to face a filibuster and a cloture motion on the motion to proceed June 1st was withdrawn.

According to the bill summary, the legislation will ensure that interested parties suffering from anti-competitive railroad practices that would otherwise be actionable under US antitrust law will have access to those causes of action in federal district court. In addition, government enforcement agencies, including the United States Dept. of Justice and the Federal Trade Commission, as well as state attorneys general acting on behalf of their citizens, will be able to fully enforce the antitrust laws to prevent anti-competitive mergers and anti-competitive business practices.

Under current law, the railroad industry is exempted from antitrust law in most respects. However, Sen. Herb Kohl's (D-WI) bill states there is no basis for this broad antitrust immunity since the railroad industry was deregulated with the passage of the Staggers Rail Act in 1980.

S. 146 empowers the Federal Trade Commission (FTC) to regulate, and engage in antitrust enforcement regarding, collective rate agreements and certain transactions, including railroad mergers and acquisitions.

It also amends federal transportation law to terminate the exemptions from antitrust laws for collective ratemaking agreements.

And it requires the Surface Transportation Board, when reviewing a proposed agreement, to take into account its impact upon shippers, consumers, and affected communities.

The Railroad Antitrust Enforcement Act was introduced in the Senate on January 6, 2009.

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