Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Obama Administration ‘strongly opposes’ House passage of SMARTER Act, (Mar 22, 2016)

By Greg Hammond, J.D.

The Obama Administration issued a statement yesterday, announcing that it strongly opposes House passage of H.R. 2745, the Standard Merger and Acquisitions Reviews Through Equal Rules Act of 2015 (SMARTER Act), because it would eliminate the FTC’s ability to “use critical administrative and procedural tools to promote competition and protect consumers.”

The proposed SMARTER Act is intended to address concerns that parties to a proposed merger or acquisition currently face different preliminary injunction standards in court challenges, as well as different processes, depending on whether the FTC or the U.S. Department of Justice reviews the transaction. The legislation has two main objectives: (1) equalize the standards for the two federal antitrust agencies for obtaining a preliminary injunction against a proposed merger or acquisition and (2) eliminate the FTC’s ability to pursue administrative adjudication to challenge a proposed transaction.

The House Committee on the Judiciary filed a report with dissenting views on March 14, recommending that H.R. 2745 pass without amendment.

“The changes proposed in H.R. 2745 are unnecessary and threaten to undermine the FTC’s important role in protecting competition and consumers,” according to the Administration’s statement. “The FTC’s administrative adjudication process has proven to be valuable in advancing and clarifying antitrust law in complex cases. Furthermore, the bill’s provisions to eliminate the FTC’s ability to use its administrative adjudications for unconsummated mergers are unwarranted.”

The Obama Administration noted that, although the FTC’s merger challenging process differs from the Justice Department’s process, “there is no evidence that it affects outcomes or prejudices the parties.” Moreover, the Administration commented that the two antitrust agencies share joint guidelines that have a common analytical framework for reviewing mergers; both agencies must present a convincing factual and legal basis that the proposed merger would likely be anticompetitive, in order to secure injunctive relief; and parties have the option of seeking federal appellate review.

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