House Judiciary Committee Approves SMARTER Act to Deliver Predictability to the Merger Review Process

Washington, D.C. –Today the House Judiciary Committee approved the Standard Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act (H.R. 2745) by a bipartisan vote of 18-10. The SMARTER Act was introduced in June by Regulatory Reform, Commercial and Antitrust Law Subcommittee Vice-Chairman Blake Farenthold (R-Texas), and co-sponsored by Regulatory Reform, Commercial and Antitrust Law Subcommittee Chairman Tom Marino (R-Pa.) and House Judiciary Committee Chairman Bob Goodlatte (R-Va.). The House Judiciary Committee held a legislative hearing on the bill on June 16, 2015, and approved similar legislation last Congress. Under existing law, the Federal Trade Commission and the Department of Justice can review proposed mergers and acquisitions. However, the two antitrust agencies face different standards in court and utilize different processes when reviewing these transactions. The way a reviewing agency is chosen can appear random, as if it is decided by the flip of a coin. The SMARTER Act eliminates the existing disparities between the two antitrust enforcement agencies and ensures that companies face the same standards and processes regardless of which federal agency reviews the merger. House Judiciary Committee Chairman Bob Goodlatte, Regulatory Reform, Commercial and Antitrust Law Subcommittee Chairman Tom Marino and Regulatory Reform, Commercial and Antitrust Law Subcommittee Vice-Chairman Blake Farenthold issued the following statements on the bill’s approval by the Committee: Chairman Goodlatte:  “Mergers have the potential to significantly impact our nation’s economy and millions of Americans. The stakes are high – and the review process for proposed mergers should be transparent, fair and predictable. Under existing law, proposed mergers can appear to be assigned by the ‘flip of a coin’ to either the Federal Trade Commission or the Justice Department, which utilize different standards and processes. The SMARTER Act standardizes the merger review process to ensure that companies face the same standards and processes regardless of whether the Federal Trade Commission or the Justice Department reviews the merger.” Subcommittee Chairman Marino: “Recently we have seen an increase in the number of proposed mergers across a wide variety of industries. Mergers are extremely complex and so is the process by which they are reviewed. Our economy, however, needs certainty to ensure that it functions smoothly. This bill is about simplifying and standardizing review processes between the two agencies responsible for merger reviews. This is another big step forward by this committee to compliment some of what the FTC has put forth in order to harmonize merger reviews by both antitrust agencies. This is simple, reasonable and smart.” Subcommittee Vice-Chairman Farenthold: “When businesses have to deal with the federal government, we have to make sure that their treatment by the government is fair, consistent, and transparent. Unfortunately, merger reviews today can go against that principle, and instead come down to a coin flip of whether the Department of Justice or the Federal Trade Commission reviews the transaction. The SMARTER Act would implement the recommendations of the bi-partisan Antitrust Modernization Commission, fix uncertainty in the marketplace, and restore fairness in the review process regardless of which agency is completing the review.” Click here to learn more about the SMARTER Act.