Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: AAI founder tells House committee SMARTER Act not so smart, (Jun 17, 2015)

By Greg Hammond, J.D.

American Antitrust Institute (AAI) founder Albert Foer testified yesterday before the House of Representatives Judiciary Committee, Subcommittee on Regulatory Reform, Commercial and Antitrust Law, offering the AAI’s opinion that the Standard Merger and Acquisition Reviews Through Equal Rules Act of 2015 (SMARTER Act) is unnecessary.

The bill, H.R. 2745, was introduced by Regulatory Reform Subcommittee Vice-Chairman, Rep. Blake Farenthold (R-Tex). It attempts to amend the Clayton and FTC Acts to provide that the FTC shall exercise authority with respect to mergers only under the Clayton Act and only in the same procedural manner as the Attorney General exercises such authority.

“When our businesses have to deal with the federal government, they should be treated as fairly, consistently, and transparently as possible,” stated Rep. Farenthold. “As it stands, federal review of the merger and acquisition process can often violate that principle by subjecting folks to different standards depending on which agency they have to deal with—the DOJ or the FTC. The SMARTER Act restores fairness and predictability by putting in place the recommendations of the bi-partisan Antitrust Modernization Commission to ensure equal treatment regardless of the agency involved.”

The AAI disagrees with the need for such legislation, according to Foer. “[I]f Congress takes away the FTC’s administrative adjudication for mergers, it could be starting down one of those slippery slopes where brakes are likely to fail,” Foer’s prepared testimony stated. Noting that the Clayton Act Congress and the FTC Congress were one and the same, Foer testified that, “Those farsighted legislators valued a competitive marketplace, which they saw endangered by ever-growing commercial establishments with ever-growing economic and political power. After experiencing a generation of what they saw as inadequate enforcement up to that time by the Justice Department alone, working with a law that they realized was too inflexible to accomplish what was needed, they became convinced that having two agencies with different structures share the responsibility would best assure the competitive economy they wanted to maintain.”

Foer also suggests that if a single standard is considered “so important,” it would make more sense to modify the Justice Department’s standard to conform to the FTC’s standard, such that the Justice Department would share the same presumption of expertise that is implicit in the FTC standard.

“[I]n general we believe both the DOJ and the FTC have contributed importantly to the evolution of merger law and policy, both as cooperators in a joint enterprise, and as occasional rivals motivated by the desire to outshine the other in the public’s eye,” Foer stated. “With little to be gained by this reform, we should weigh the inevitable disruption and potential diminution of overall enforcement that may accompany the fixing of a wheel that ‘ain’t broke.’”

News: AcquisitionsMergers Antitrust