Standard Merger and Acquisition Reviews Through Equal Rules Act of 2018

Floor Speech

Mr. Speaker, I rise in opposition to H.R. 5645, the Standard Merger and Acquisition Reviews Through Equal Rules Act. This bill would significantly undermine the Federal Trade Commission's ability to enforce the Nation's antitrust laws, which help protect Americans from anticompetitive behavior in the marketplace. In the guise of harmonization with the Department of Justice, it would eliminate the FTC's administrative litigation enforcement authority with respect to corporate mergers and other transactions. It would also change and potentially increase the burden the FTC must demonstrate in court when seeking a preliminary injunction against the proposed merger.

In doing so, the bill would undercut a critical tool that the FTC relies on to promote competition. It also risks sacrificing the fundamental nature of the FTC as an independent administrative agency, rather than an executive department, subject to the political whims of the President. This blatant attack on the FTC's congressionally mandated independence contravenes more than a century of legislative intent.

In 1914, Congress responded to a wave of mergers and corporate abuses by establishing the FTC as an independent body of experts tasked with developing and advancing competition policy free from political pressure. In doing so, Congress specifically gave the Commission broad enforcement and investigatory authorities, including the power to challenge anticompetitive mergers and other conduct through administrative litigation.

This broad grant of statutory authority was not accidental. Louis Brandeis, a visionary architect of our Nation's competition system, advocated for the embrace of administrative litigation during Congress' consideration of the FTC Act, and President Woodrow Wilson said such authority was critical to the FTC's mission ``to warn where things were going wrong and assist instead of check.''

As former Republican FTC Chairman William Kovacic warned: ``Without a substantial, effective administrative litigation program, the aim of making the Commission an influential competition policy tribunal could not be accomplished.''

Nevertheless, this bill would eliminate this critical tool for promoting competition and, in the process, would erode the Commission's unique qualities and independence.

To further undermine the Commission's independence, the bill would also require the FTC to meet the same standard in court that the Justice Department meets when seeking a preliminary injunction against the proposed merger. But the FTC and the DOJ are two different agencies with different missions and different traditions.

Under current law, the Commission, by statute, must show that a preliminary injunction ``would be in the public interest.'' The Justice Department, on the other hand, has no statutory standard and must simply meet the common law preliminary injunction standard, such as the balance of equities and the risk of irreparable harm.

As our Nation's leading antitrust enforcers have previously testified, there is no practical difference between the standards or evidence that the Commission has abused its authority. So it is entirely unclear what problem the bill is attempting to solve. But in making this change, this bill could cause unnecessary confusion for the courts or could signal a desire to increase the burden on the agency to demonstrate the harms of an anticompetitive merger. That result alone is unacceptable.

But even more fundamentally, this legislation is a step in the wrong direction for our economy and for the prosperity and security of all Americans. The decline of antitrust enforcement over the past several decades has been an economic catastrophe for millions of workers who have lost their jobs or seen their wages lowered. It has resulted in fewer choices and higher prices for consumers, including increased costs for healthcare, prescription drugs, and other essential goods and services.

The importance of robust antitrust enforcement is not simply a question of preventing higher prices for consumers. In the absence of competition, employers have the power to suppress the wages and mobility of American workers through anticompetitive contracting practices, such as noncompete clauses and no-poach agreements.

And when large corporations run amok, locally owned businesses, the economic lifeblood of our communities, wither on the vine. Concentrated economic power is also a serious threat to our vibrant democracy. Large corporations with an outsized role in the policymaking process are able to further entrench their dominance through favorable rules and enforcement decisions.

And when a large corporation with market power has the ability to control the flow of information, it also has the power to shape public opinion in ways that erode democratic values and undermine the voice of the many in favor of the outsized profits of the few.

By further weakening our antitrust laws, H.R. 5645 would accelerate this disturbing trend. Accordingly, I must oppose this legislation and urge my colleagues to vote against this very bad bill.

Mr. Speaker, the nonpartisan Open Markets Institute, in its opposition to H.R. 5645 states: ``Given the severity of the concentration problem in America today, and its economic and political consequences, Congress should be looking to enhance the powers of all of America's antimonopoly agencies.''

I strongly agree: Congress should be strengthening, not weakening, our competition system to protect economic opportunity, innovation, and choice. That is why I have joined several of my Democratic colleagues-- Representatives Joe Crowley, David Cicilline, and Keith Ellison--in introducing a package of bold economic measures to strengthen protections that will help ensure that hardworking Americans have more economic opportunity by ending anticompetitive employment practices.

This package includes H.R. 5642, the Restoring and Improving Merger Enforcement Act, legislation that I introduced to prohibit the consideration of false economic efficiencies--like corporate layoffs, actually costing employment--to justify anticompetitive mergers.

But rather than address these important measures, which would actually help American workers and consumers, or give the antitrust agencies the resources they need to really promote competition, this bill would do the opposite by undermining the FTC's ability to vigorously enforce antitrust laws under the guise of attempting to solve a problem that does not exist.

I would submit that an economy in which we are down to four major airlines and two major railroads, and going in the same direction in almost every other segment of the economy, we should not be weakening our antitrust laws and our antitrust enforcement, we should be strengthening them. This bill goes in exactly the wrong direction and is guaranteed to further increase the concentration of economic power in our economy, and to further decrease the bargaining power that workers have to get decent wages and working conditions.

Mr. Speaker, this is a deeply anti-employee bill, it is a pro- monopoly bill, and it is a very anti-economic growth bill. I urge my colleagues to oppose this deeply flawed measure, and I yield back the balance of my time.

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Mr. NADLER. Mr. Speaker, I claim the time in opposition to the gentleman's amendment.

This amendment makes several technical revisions to clarify that the bill does not apply to consummated mergers and other transactions. While this change marginally addresses one concern with the bill, it does nothing to change the most fundamental flaw with the bill, which is that it eliminates the Federal Trade Commission's administrative litigation authority in merger cases.

As we noted during consideration of this bill in the Judiciary Committee last year, and in prior Congresses, the SMARTER Act is overbroad as currently drafted and applies to both unconsummated and consummated transactions.

According to John Jacobson, a leading antitrust attorney, who served as commissioner of the Antitrust Modernization Commission, this bill could easily be ``construed as prohibiting a challenge to the consummation of any merger in administrative proceedings, even a post- merger challenge, notwithstanding the term `proposed.' ''

Technical feedback by senior staff at the FTC, under both Democratic and Republican administrations, confirmed this view.

While the amendment makes the useful clarification that H.R. 5645 would not apply to already consummated transactions, the bill would still eliminate the FTC's ability to use administrative litigation in proposed mergers, striking at the core of the Commission's independence and congressionally mandated design, without any evidence that such a change is warranted or desirable.

As Mr. Jacobson has also noted in his testimony in opposition to a similar version of this legislation considered by the Senate, eliminating the ``FTC's ability to conduct administrative proceedings in pre- consummation merger challenges is harmful to the sound administration of the antitrust laws.''

At a time when there is an increasing desire across the ideological spectrum to strengthen antitrust enforcement in the face of extreme concentrations of corporate power in industry after industry, the SMARTER Act proposes to go in the opposite direction. Congress was wise to establish an independent agency in 1914 to ensure strong antitrust enforcement, and we would be wise today not to undermine that choice.

Mr. Speaker, this amendment essentially puts lipstick on a pig. It does not change my basic opposition to a bill that is fundamentally flawed in its conception.

Mr. Speaker, as a practical matter, the FTC only challenges a handful of proposed mergers, on average, per year. These transactions present some of the largest, most complex, and potentially most concerning issues. But in most of these cases, the parties either abandon the transaction or negotiate a settlement.

Nonetheless, in those few instances where the FTC does challenge a transaction, it is in a position to answer novel questions of law and, thereby, develop expertise and guidance for future applications. Indeed, that is the whole point of having an FTC, and that is the whole point of administrative adjudication authority.

As the Antitrust Institute has noted in its opposition to the SMARTER Act to this bill, ``the FTC's use of administrative powers should be carefully safeguarded, because it has contributed critically to the effective shaping of U.S. merger policy without detracting from the speed or effectiveness of merger review.''

In addition, Republican FTC Commissioner Maureen Ohlhausen's 2016 study on administrative litigation debunks the claim of procedural bias against merging parties. Her study found that the FTC's appellate success and case work ``do not support a narrative that the Commission blindly supports ill-conceived cases because of systemic bias. To the contrary, they show a recent history of solid, well-supported enforcement actions.''

Even where the FTC does not use administrative adjudication, the potential use of this tool is invaluable in the agency's ability to successfully get emerging parties to agree to structural remedies, such as divestitures, to address concerns with a proposed merger.

It is unthinkable to remove the FTC's administrative litigation authority, as this amendment would continue to do, when such authority is only used to protect against the most anticompetitive mergers that are certain to substantially lessen competition, harm consumers, raise prices, and hurt workers.

For these reasons, I urge my colleagues to oppose this amendment.

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