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U.S. Senate Judiciary Committee Discusses Anti-Competitiveness of ‘Most Favored Nation’ Clauses

The U.S. Senate Subcommittee on Antitrust, Competition Policy & Consumer Rights held a hearing on “Oversight of the Enforcement of the Antitrust Laws.”

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The U.S. Senate Subcommittee on Antitrust, Competition Policy & Consumer Rights held a hearing on “Oversight of the Enforcement of the Antitrust Laws.”

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U.S. Sen. Richard Blumenthal (D-CT) questioned Joseph Simmons, chairman of the Federal Trade Commission, and Makan Delrahim, assistant attorney general at the Antitrust Division at the U.S. Department of Justice, about the anti-competitive nature surrounding Most Favored Nation (MFN) clauses.

Sen. Blumenthal, in his series of questioning, specifically highlighted Amazon’s use of MFN stating that “a dominant internet platform can both raise prices to consumers and prevent entry and stop competitors.” Sen. Blumenthal, this past year and in the 115th Congress, wrote to both the FTC and Delrahim to investigate Amazon’s use of MFN clauses.

MFN clauses, when used by a dominant buyer of goods, raise other buyers’ costs or foreclose would-be competitors from accessing the market. Collision repair facilities have raised issue with insurer-repairer DRP agreements and the use of MFN clauses. For a majority of collision repairers, not participating in insurer DRPs is not an option and the anti-competitive nature of these clauses poses as a disadvantage to small businesses and consumers.

ASA supports the elimination of MFN clauses in direct repair agreements.

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