Washington, D.C. – House Judiciary Committee Chairman Bob Goodlatte (R-Va) today issued the following remarks in support of the “Standard Merger and Acquisition Reviews Through Equal Rules Act,” or the “SMARTER Act,” which increases transparency and predictability for merging companies.
Chairman Goodlatte: In 1914, Congress passed the Federal Trade Commission Act, marking the beginning of a dual antitrust enforcement regime in the United States.
Because both the Department of Justice (DOJ) and the Federal Trade Commission (FTC) enforce our nation’s antitrust laws, companies may, and often do, have different experiences when interacting with one agency relative to the other. One area in which the disparity can be the most striking, and troubling, is in the merger review process.
When a company wishes to merge with, or purchase, another company, it must notify both antitrust enforcement agencies of the proposed transaction. DOJ and the FTC then determine which agency will be responsible for reviewing the transaction. As there are no fixed rules for making this determination, it can appear that the decision is made on the basis of a “flip of a coin.”
There are two substantial differences that companies face based on the identity of the antitrust enforcement agency that reviews the companies’ proposed transaction.
The first difference arises if the agency seeks to prevent the transaction by pursuing a preliminary injunction in federal court. A different legal standard is applied to a preliminary injunction request based solely on the identity of the requesting antitrust enforcement agency.
The second difference lies in the process available to each antitrust enforcement agency to prevent a transaction from proceeding. The FTC may pursue administrative litigation against a proposed transaction, even after a court denies its preliminary injunction request. In contrast, DOJ cannot pursue administrative litigation.
There is no justification for these disparities in the merger review processes and standards. The bipartisan Antitrust Modernization Commission recommended that Congress remove these disparities, and the bill before us today, the “Standard Merger and Acquisition Reviews Through Equal Rules Act,” or the “SMARTER Act,” does just that. I applaud Representative Handel for introducing this important legislation that will enhance the transparency, predictability and credibility of the antitrust merger review process.
By enacting the SMARTER Act into law, Congress will ensure that companies no longer will be subjected to fundamentally different processes and standards based on the flip of a coin. Notably, the legislation has garnered the support of former and current FTC Commissioners, including former Chairman David Clanton, former Commissioner Josh Wright, and current Commissioner Maureen Ohlhausen.
The SMARTER Act is an important step toward assuring that our nation’s antitrust laws are enforced in a manner that is fair, consistent and predictable.
I urge my colleagues to vote in favor of this good-government bill, and reserve the balance of my time.