Standard Merger and Acquisition Reviews Through Equal Rules Act of 2015

Floor Speech

Mr. Speaker, I rise in strong opposition to the so-called SMARTER Act, the Standard Merger and Acquisition Reviews Through Equal Rules Act, which really should--I mean, it is a misnomer.

We should rename this bill. Instead of that, we should rename it the Sadly More Acronyms for Really Terrible and Esoteric Requirements Act.

I know a lot of people around the country are wondering: Well, what is this all about? It must be important that they are doing this.

I will tell you what is important about it. It is a piece of legislation that would impact the largest and most consequential of corporate mergers, of multinational corporate mergers. Those things have to go through a review process with our Federal Trade Commission. Also, the Department of Justice has an antitrust division.

What this piece of legislation would do would be to gut one of the agency's--the FTC's--ability to oversee and deal with merger review issues that affect the largest and most consequential of their mergers, of these big corporate mergers.

Does this piece of legislation benefit the people? Or does it benefit the 1 percent of large multinational corporations that, I guess, need help avoiding regulatory authority by our government?

Well, it looks like that is what it is. It is something that is going to help out big business at a time when people in this country are very angry about the fact that the playing field is not level. The corporations and the wealthy have been doing pretty well over the last couple of generations, but people are seeing their wages stand right there where they were. They are working harder, they are more productive, but yet they can't even take a vacation. They can't even afford to take a day off to see about a sick child.

This is why people are so angry. It is because they look at Congress and they see us doing this kind of work benefiting 1 percent of the largest multinational corporations when there are other things like passing a budget, dealing with the Zika crisis which is unfolding, dealing with the Flint water crisis, dealing with the opioid addiction crisis in this country.

We can't even pass a budget. Here we are going to pass the so-called SMARTER Act today, and then we are going to go home for almost 3 weeks. They call it a district work period, but it is actually a period where folks are out campaigning, trying to retain their seats. People are angry about that.

Congress first established the Federal Trade Commission in 1914 to safeguard consumers against anticompetitive behavior by empowering the Commission with the authority to enforce, clarify, and develop antitrust law. President Woodrow Wilson later described the creation of the Commission as specifically providing for tribunals that would ``determine what was fair and what was unfair competition; and to supply the business community not merely with lawyers in the Department of Justice who could cry, `Stop!', but with men in such tribunals as the Federal Trade Commission who could say, `Go on,' who could warn where things were going wrong and assist instead of check.''

Today, under the process of administrative litigation, also known as part 3 litigation, the Commission does just that. Under this authority, it may seek permanent injunctions in its own administrative court in addition to its ability to seek preliminary injunctions in Federal District Court. This authority is a unique mechanism that takes advantage of the Commission's longstanding expertise to develop some of the most complex issues in antitrust law.

But the SMARTER Act would upend this century of precedent and expertise by creating a uniform standard for preliminary injunctions in cases involving significant mergers and other transactions and, alarmingly, eliminating the Commission's ability to administratively litigate antitrust cases.

Proponents of the SMARTER Act argue that divergent standards for enjoining mergers may undermine the public's trust in the efficient and fair outcome of merger cases. They also state that the outcome of a transaction comes down to a coin flip between the agencies to determine which will review a transaction. That claim is ridiculous and it is not borne out by the evidence.

The American Antitrust Institute, a consumer-oriented antitrust organization, conducted a lengthy study of workload statistics compiled by both antitrust agencies and found that the concerns of the bill's sponsors are without foundation.

Jonathan Jacobson, a leading antitrust attorney who served on the Antitrust Modernization Commission, testified that in his 39 years of practice, the outcome of a merger has never turned on the differences that the SMARTER Act seeks to address in antitrust law.

Indeed, of the 3 percent of transactions requiring second requests for information from the antitrust agencies, only about 1.5 percent of those cases are stopped or modified. An even smaller percentage of these cases go to trial for an administrative hearing. We should hesitate before making wholesale changes to the law based on theoretical concerns involving about 1 percent of mergers, which also happen to be some of the largest and most consequential.

In the absence of any meaningful evidence suggesting a material difference in the enforcement of the antitrust laws, it is difficult to upending longstanding antitrust practices at the FTC for consistency's sake alone based on speculative harms. But even assuming that there are material differences in cases brought under these standards, we should strike a balance in favor of competition by lowering the burden of proof in cases brought by the Justice Department, not by raising the Commission's burden for obtaining preliminary injunctions.

Courts already require a lower burden of proof in cases brought by the Commission and Justice Department precisely because both are expert agencies equipped with large staffs of economists who analyze numerous mergers on a regular basis and who may only bring cases that are in the public interest. To the extent that we should address perceived differences in the standard for preliminary injunctions in merger cases, legislation should favor increased competition, not the interests of merging parties.

The SMARTER Act would eliminate the FTC's authority to administratively litigate mergers and other transactions under section 5(b) of the FTC Act. Leading authorities in antitrust across party lines have expressed serious reservations with eliminating the Commission's administrative litigation authority.

For instance, Bill Kovacic, a former Republican chair of the Commission, has referred to this aspect of the bill as ``rubbish,'' noting that the Commission has used administrative litigation to win a string of novel antitrust cases that courts have ultimately upheld where the ``Commission has had to fight for every single foot along the way.''

Edith Ramirez, the chairwoman of the FTC, likewise wrote last Congress that eliminating the FTC's administrative litigation authority would ``fundamentally alter the nature and function of the FTC.''

Mr. Speaker, 2015 was the year of the merger, megamergers, mergermania. There was over $3.8 trillion in merger spending, a record that far exceeded expectations. While fewer than 20 percent of mergers raise competition concerns, it is clear that a vote for H.R. 2745 is a vote for concentrated, private economic power. At a time of increased consolidation in key industries, we can't afford more Republican attacks on government, which is what H.R. 2745 is, plain and simple.

I urge my colleagues to oppose this legislation.

BREAK IN TRANSCRIPT

Mr. JOHNSON of Georgia. Mr. Speaker, before I recognize the Honorable Bill Pascrell from New Jersey, who serves on, by the way, the Budget and the Ways and Means Committees here in Congress, I would like to point out that we have got a severe problem that we are confronting this morning. It is the big, bad FTC, which is treating the big multinational corporations unfairly. It is abusing them, and something needs to be done. The American people are demanding it.

BREAK IN TRANSCRIPT

Mr. JOHNSON of Georgia. I yield the gentleman an additional 1\1/2\ minutes.

I am anguished in listening to the pleas of my friend from Texas to help these megamergers, to help these big, multinational corporations. They need us so badly because the big, bad FTC is treating them too tough. It is too rough on them. Therefore, we have to make the law fairer for them. They have all of these silk stocking lawyers off of Wall Street, but we need to help them. We are not doing anything else here in Congress other than helping multinational corporations, hearing the plea that these folks need help when it is the folks in Flint, Michigan, who need help, who are crying out for help, but their voices can't be heard in this Congress because we are too busy trying to protect these big, multinational corporations.

The only thing we want to do, according to my friends, is to harmonize the standard of proof between the DOJ and the FTC so that the big, bad corporations which need our help only have to deal with one standard of proof. They are not telling you what they are really wanting to do, which is to gut administrative review by the FTC, under section 5(b) of the FTC Act. That is where the real harm comes in, but they don't want to tell you about that. They don't want to let you know what kind of impact that has when a prescription drug company seeks to merge again with another large company and make a humongous company that is too big to fail and, also, too big to regulate your drug prices out there.

Why are your drug prices going up? What kind of policies are we implementing here in Congress to protect them? Absolutely none. We are making it easier for prices to go up with insurance, in the travel industry, in trying to get a hotel. In trying to book a hotel room on the Internet, they have got it all rigged up because there are only a couple of companies you can go through to get the room.

These are the policies that are affecting the lives of the people whom we represent. I don't represent many big, multinational corporations. I don't think I have any, as a matter of fact, in my district, but I guess there are some folks around here who have a bunch of them.

Mr. Speaker, may I inquire how much time remains on both sides?

BREAK IN TRANSCRIPT

Mr. JOHNSON of Georgia. Mr. Speaker, I reserve the balance of my time.

BREAK IN TRANSCRIPT

Mr. JOHNSON of Georgia. Jackson Lee).

It is not often that I come to the floor to argue a bill and to debate and nobody on the other side shows up to participate in the debate. I have been feeling kind of lonely over here.

I guess that people are too embarrassed on the other side to come here and defend this legislation at this particular time, as we get ready to depart for what will be just about 3 weeks, while we are leaving dangling and hanging important issues, like a budget for this country that was promised to us back at the beginning of the year. It was supposed to be regular order. It was supposed to be that we are going to do a budget.

After the budget is done and we have our top lines and bottom lines in place, then we will embark upon the appropriations process and we will pass all of the 12 appropriations bills for the first time in years and we will get back to regular order around here. They can't even produce enough votes to pass a budget.

So what do we do then? We revert to trying to protect and coddle and make things easy for big multinational corporations that want to get bigger. They want to get bigger so that they can get a lock on the market, they have no competition, and then they can set whatever price they want to set and the American people are left having to pay.

What can you do when you need your prescription medication and there is no competition, no other similar drug, and you only have one player in the room; therefore, you have to pay whatever they are holding you over the barrel for.

The American people are sick and tired and they are angry about having been held over a barrel year after year after year as this Congress continues to coddle and protect and make things good for big business.

Well, what about the working people of this country? When are we going to do something about making sure that they don't have to pay these increased bills that they would have to pay for things like hotel rooms, insurance, medical care, prescription drugs, nursing homes, and food?

I don't even want to talk about the price of gas that is going to go up this summer. Despite the fact that we have a glut in the oil market, you are going to be seeing your gas prices rise. Why? Because you are getting out on the road and trying to go on vacation. It is getting more and more difficult to do that because wages haven't gone up.

So this Congress continues to make it easy for big corporations to increase their profits while doing nothing to raise wages for the regular working people of this country.

Now we are getting ready to go on another 3-week district work period. I have a lot of work to do in the district trying to explain to the people of my district why we are not getting down to business and doing the things that they expect this Congress to do.

Mr. Speaker, I would ask that my colleagues in this body oppose the SMARTER Act and do what is right for the American people.

I yield back the balance of my time.

BREAK IN TRANSCRIPT

Source