[House Report 115-412]
[From the U.S. Government Publishing Office]
115th Congress } { REPORT
HOUSE OF REPRESENTATIVES
1st Session } { 115-412
======================================================================
STANDARD MERGER AND ACQUISITION REVIEWS THROUGH EQUAL RULES ACT OF 2017
_______
November 15, 2017.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Goodlatte, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 659]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 659) to amend the Clayton Act and the Federal Trade
Commission Act to provide that the Federal Trade Commission
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, having considered
the same, report favorably thereon without amendment and
recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 2
Hearings......................................................... 6
Committee Consideration.......................................... 6
Committee Votes.................................................. 6
Committee Oversight Findings..................................... 7
New Budget Authority and Tax Expenditures........................ 8
Congressional Budget Office Cost Estimate........................ 8
Duplication of Federal Programs.................................. 9
Disclosure of Directed Rule Makings.............................. 9
Performance Goals and Objectives................................. 9
Advisory on Earmarks............................................. 9
Section-by-Section Analysis...................................... 9
Changes in Existing Law Made by the Bill, as Reported............ 11
Dissenting Views................................................. 34
Purpose and Summary
H.R. 659, the ``Standard Merger and Acquisition Reviews
Through Equal Rules Act of 2017,'' or the ``SMARTER Act,''
harmonizes the standards applied to the Department of Justice
(DOJ) and the Federal Trade Commission (FTC) when each agency
seeks a preliminary injunction to a proposed merger or
acquisition. Additionally, the SMARTER Act amends the Clayton
Act to provide the FTC with the same authority DOJ already
possesses to seek an injunction against a proposed merger, and,
in doing so, removes the ability of the FTC to pursue internal
administrative litigation following a court's denial of an FTC
preliminary injunction request. The SMARTER Act would preserve
each agency's authority to challenge monopolistic transactions
or ones that would substantially lessen competition and not
affect the judicial remedies available to address such
transactions.
Background and Need for the Legislation
A. Brief Overview of Antitrust Enforcement by DOJ and the FTC of
Proposed Mergers and Acquisitions
Two federal agencies, the Antitrust Division of DOJ and the
FTC, share responsibility for government enforcement of the
federal antitrust laws.\1\ The position of Assistant Attorney
General for Antitrust was created in 1903, and the Antitrust
Division became a separate operating unit within DOJ thirty
years later.\2\ In 1914, Congress passed the Federal Trade
Commission Act (the FTC Act),\3\ which created the FTC and
conferred to the independent agency antitrust enforcement
authority that would, in part, supplement DOJ's antitrust
enforcement authority.
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\1\Antitrust Modernization Commission, Report and Recommendations,
at 129 (Apr. 2007), http://govinfo.library.unt.edu/amc/
report_recommendation/amc_final_report.pdf [hereinafter, the ``AMC
Report''].
\2\Id.
\3\15 U.S.C. Sec. Sec. 41-58 (1914).
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Section 7 of the Clayton Act (Section 7) prohibits mergers
and acquisitions that would ``substantially lessen
competition'' or ``tend to create a monopoly.''\4\ The
Antitrust Division and the FTC have essentially identical
authority to enforce Section 7. The manner in which they review
and enforce their Section 7 authority largely is prescribed by
the Hart-Scott-Rodino Antitrust Improvements Act (the HSR
Act).\5\ Under the HSR Act, each of the antitrust enforcement
agencies is notified in advance of a proposed transaction and
afforded a period of time to review the effects of such a
transaction.\6\ Only one agency takes responsibility for the
review of a proposed transaction.\7\ For the vast majority of
transactions, the antitrust enforcement agencies will grant an
early termination of the statutory waiting period or simply
allow the waiting period to expire without taking any formal
action, both of which have the effect of allowing the
transaction to proceed to consummation.
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\4\15 U.S.C. Sec. 18 (2013).
\5\15 U.S.C. Sec. 18a (2013), as amended.
\6\As a practical matter, virtually every transaction includes a
period of time between the execution of the initial transaction
documents that outline the intent of parties to enter into a deal and
the manner in which they intend to consummate the deal, and the
``closing'' of the transaction when the deal is consummated. Depending
on the size and complexity of the transaction, that period of time
could be anywhere between a matter of weeks to over a year.
\7\AMC Report, at 132 (explaining that there is not a governing
document or policy that determines which agency reviews each proposed
transaction; however, there are some historical practices that can
influence which agency reviews the transaction. For example, DOJ
typically reviews telecommunications transactions and the FTC typically
reviews health care transactions. These historical practices, however,
are not hard and fast rules and are not always followed.).
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When the antitrust enforcement agencies conclude that the
consummation of a proposed transaction would violate Section 7,
the agencies pursue an injunction of the transaction in federal
court. Generally speaking, if the court grants the injunction,
the parties abandon the merger; if the court denies the
injunction, the parties consummate the transaction shortly
thereafter.
B. Disparate Preliminary Injunction Standards
The FTC and DOJ confront different standards when seeking a
preliminary injunction of a proposed transaction in court. When
reviewing the FTC's request for a preliminary injunction,
courts apply the standard explicitly set forth in Section 13(b)
of the FTC Act, which states that ``[u]pon a proper showing
that, weighing the equities and considering the Commission's
likelihood of ultimate success, such action would be in the
public interest, and after notice to the defendant, a temporary
restraining order or a preliminary injunction may be granted
without bond.''\8\ By comparison, Section 15 of the Clayton
Act, pursuant to which DOJ seeks injunctions, does not specify
a standard of review for courts when they determine whether to
grant preliminary injunctive relief. Consequently, DOJ must
meet the traditional preliminary injunction standard as applied
by the presiding circuit court, which generally requires ``a
reasonable likelihood of success on the merits'' and ``the
balance of equities'' favoring DOJ.\9\
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\8\15 U.S.C. Sec. 53(b) (2013).
\9\ See, e.g., United States v. Siemens Corp., 621 F.2d 499, 505-06
(2d Cir. 1980) (citations omitted). Although courts generally also
require a showing of irreparable injury or substantial harm to the
public to grant a preliminary injunction, many courts have held that
irreparable harm to the public should be presumed once the government
establishes a reasonable probability of success. See, e.g., id. at 506.
See also the American Bar Association, Section of Antitrust Law, Public
Comments Submitted to the Antitrust Modernization Commission Regarding
Differential Merger Enforcement Standards, at 3 (Oct. 28, 2005).
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It is difficult to quantify the degree to which the
disparate preliminary injunction standards yield different
results. At a minimum, there is a perception that a disparate
preliminary injunction standard exists.\10\ Some commentators
go so far as to suggest that the FTC may even be subject to a
more lenient standard than DOJ.\11\
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\10\AMC Report, at 141.
\11\AMC Report, at 142. But see AMC Report at 142 n.90 statement of
William Blumenthal (stating that the perception continually changes,
and that it is not invariably the case that people would rather be
before DOJ).
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C. Disparate Processes To Prevent a Proposed Transaction
Generally, DOJ agrees with the transaction parties to
combine the proceedings for both a preliminary injunction and
permanent injunction before the district court.\12\ In
contrast, the FTC's practice is to seek only a preliminary
injunction, despite the fact that they have the authority to
consolidate the proceedings in the same fashion as DOJ. In
fact, the FTC has affirmatively fought against efforts to
consolidate the preliminary injunction and permanent injunction
proceedings.\13\
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\12\AMC Report, at 138.
\13\See Pl. FTC's Mem. in Opp'n to Defs.' Mot. Seeking
Consolidation of Prelim. & Permanent Injs., FTC v. Arch Coal, Inc.,
Case No. 1:04-CV-00534, at 3, 4 (Apr. 22, 2004) (arguing against
consolidation).
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One of the primary reasons behind the FTC's practice to
pursue only a preliminary injunction is it preserves the FTC's
ability to pursue administrative litigation following the
denial of a preliminary injunction request. When the FTC seeks
to prevent the consummation of a proposed transaction, it will
file simultaneously an administrative complaint that initiates
the administrative litigation process and, because the
administrative complaint does not by itself prevent the
consummation of the transaction, a preliminary injunction
request in Federal court. Ostensibly, the preliminary
injunction is to preclude the parties from closing the
transaction while the administrative litigation is pending.
Absent such a request, the parties to the transaction
theoretically could consummate the transaction and continue
with their administrative litigation at the FTC. If the parties
lose their case, they would face the prospect of having their
transaction unwound. In contrast, the DOJ does not have the
authority to conduct administrative litigation.
D. The Antitrust Modernization Commission and Its Recommendations
In early 2003, the bi-partisan Antitrust Modernization
Commission (AMC) was formed pursuant to the Antitrust
Modernization Act.\14\ The AMC was charged with examining the
antitrust laws, soliciting the opinions of experts on the
operation of such laws, and publishing a report with the AMC's
recommendations for any improvement to the antitrust laws. On
April 2, 2007, the AMC issued a 540-page report that detailed
the issues it examined and provided a number of recommendations
for legislative, administrative, and judicial action.
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\14\Antitrust Modernization Commission Act of 2002, Pub. L. No.
107-273, Sec. 11054(h), 116 Stat. 1856, 1857.
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Included in the AMC report was an examination of the issues
attendant to the existing disparities in the preliminary
injunction standards applied to DOJ and the FTC, and the
disparate processes available to DOJ and the FTC when each
agency seeks to prevent a proposed transaction. As stated
within the AMC report:
Parties to a proposed merger should receive
comparable treatment and face similar burdens
regardless of whether the FTC or the DOJ reviews their
merger. A divergence undermines the public's trust that
the antitrust agencies will review transactions
efficiently and fairly. More important, it creates the
impression that the ultimate decision as to whether a
merger may proceed depends in substantial part on which
agency reviews the transaction.\15\
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\15\AMC Report, at 138-9. The importance of removing any potential
divergence is underscored by the fact that it often is mere chance or,
the ``flip of a coin,'' that determines which agency reviews the
proposed transaction.
The AMC report further explains that even the perception of
a difference between the standards applied to, and processes
used by, the agencies could impact how parties interact with
the agencies. For example, the FTC may be perceived as having
greater leverage when negotiating a consensual consent decree
with the proposed transaction parties.\16\ Again, ``just the
perception that the applicable rules depend on the happenstance
of which agency is reviewing the transaction can undermine
confidence in the fairness of a dual merger enforcement
regime.''\17\
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\16\AMC Report, at 142.
\17\Id.
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E. Recent FTC Actions
On March 13, 2015, the FTC announced that it was re-
adopting a rule created in 1995, often referred to as the
``Pitofsky Rule'' after the FTC Chairman at the time.\18\ In
brief, the Pitofsky Rule provides that if the FTC is
unsuccessful in obtaining a preliminary injunction against a
proposed transaction in Federal court, it will not
automatically proceed to continue to block the transaction
through administrative litigation. Rather, the FTC will review
each matter on a case-by-case basis and determine whether
proceeding to administrative litigation is warranted.
Additionally, the Pitofsky Rule provides for the automatic stay
of the pending administrative litigation following the denial
of the preliminary injunction request in Federal court.
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\18\FTC, Commission Approves Revisions to Its Rules of Practice
(Mar. 13, 2015), https://www.ftc.gov/newsevents/press-releases/2015/03/
commission-approves-revisions-its-rules-practice; Administrative
Litigation Following the Denial of a Preliminary Injunction: Policy
Statement, 60 Fed. Reg. 39,741 (1995).
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In 2009, the FTC repealed the component of the Pitofsky
Rule that provided for the automatic stay of the administrative
litigation.\19\ The latest FTC action reinstates the automatic
stay component of the Pitofsky Rule. To be clear, the FTC still
retains the ability to continue administrative litigation
following the denial of a preliminary injunction request, and,
the Pitofsky Rule may be repealed in whole, or in part, by a
Commission vote. Notably, the Pitofsky Rule predates the AMC
Report.
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\19\Debbie Feinstein, Changes to Commission Rule 3.26 re: Part 3
Proceedings Following Federal Court Denial of a Preliminary Injunction,
FTC (Mar. 16, 2015), https://www.ftc.gov/news-events/blogs/
competitionmatters/2015/03/changes-commission-rule-326-re-part-3-
proceedings.
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F. The SMARTER Act
The SMARTER Act incorporates a number of the
recommendations made by the AMC, and provides the antitrust
enforcement agencies with consistent authority and processes
when seeking to prevent a proposed transaction. Specifically,
the SMARTER Act confers to the FTC the same authority that DOJ
presently possesses under the Clayton Act. In doing so, the
SMARTER Act also requires the FTC to petition the district
court to seek an injunction of a proposed transaction rather
than using an internal administrative process. The FTC will
retain administrative litigation capabilities in other
contexts. As the AMC report highlights:
Elimination of administrative litigation in HSR Act
merger cases will not deprive the FTC of an important
enforcement option. Although administrative litigation
may provide a valuable avenue to develop antitrust law
in general, it appears unlikely to add significant
value beyond that developed in federal court
proceedings for injunctive relief in HSR Act merger
cases. Whatever the value, it is significantly
outweighed by the costs it imposes on merging parties
in uncertainty and litigation costs.\20\
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\20\AMC Report, at 141 (citations omitted).
Accordingly, under the SMARTER Act, both DOJ and the FTC
remain able to pursue both preliminary and permanent
injunctions, and the standards applied by courts to both
agencies will be identical. Consequently, while there will
continue to be a dual antitrust enforcement regime, the
standards and processes applied to parties who undergo a
transaction review will be harmonized.
Hearings
H.R. 659 is identical to H.R. 2745, which was introduced
during the 114th Congress. On June 16, 2015, the Subcommittee
on Regulatory Reform, Commercial and Antitrust Law conducted a
hearing on H.R. 2745. The witnesses at the hearing were:
Deborah Garza, Esq., Partner, Covington & Burling LLP, former
Chairwoman of the Antitrust Modernization Commission, and
former Acting Assistant Attorney General of the Department of
Justice; David Clanton, Esq., Senior Counsel, Baker & McKenzie
LLP, former Commissioner, and former acting Chairman of the
Federal Trade Commission; Abbott (Tad) B. Lipsky, Jr., Esq.,
Partner, Latham & Watkins LLP, former Deputy Assistant to the
Assistant Attorney General of the Department of Justice; and,
Albert A. Foer, Esq., founder and former president of the
American Antitrust Institute.
Three of the four witnesses testified in support of the
same preliminary injunction standard being applied to both
antitrust enforcement agencies. Additionally, these same three
witnesses testified in support of removing the FTC's ability to
pursue administrative litigation solely in the context of
merger reviews. These witnesses testified that such a change
would promote transparency, fairness, and predictability to the
merger review process as well as allow the United States to
continue its leadership role in global antitrust enforcement
policy. The Minority witness testified that he believed there
was not significant cause to amend the law.
During the 113th Congress, the Subcommittee on Regulatory
Reform, Commercial and Antitrust Law conducted a hearing on a
discussion draft of the SMARTER Act. The testimony provided at
this hearing similarly supported harmonizing the preliminary
injunction standard and removing the FTC's ability to pursue
administrative litigation solely in the context of merger
reviews.
Committee Consideration
On April 5, 2017, the Committee met in open session and
ordered the bill, H.R. 659, favorably reported, without
amendment, by a vote of 16-10, a quorum being present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following rollcall votes occurred during the Committee's
consideration of H.R. 659:
1. Motion to report H.R. 2745 favorably to the House of
Representatives. Agreed to by a vote of 16 ayes to 10 nays.
ROLLCALL NO. 1
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman................... X ...... .......
Mr. Sensenbrenner, Jr. (WI).................... X ...... .......
Mr. Smith (TX)................................. X ...... .......
Mr. Chabot (OH)................................ ...... ...... .......
Mr. Issa (CA).................................. X ...... .......
Mr. King (IA).................................. X ...... .......
Mr. Franks (AZ)................................ ...... ...... .......
Mr. Gohmert (TX)............................... ...... ...... .......
Mr. Jordan (OH)................................ X ...... .......
Mr. Poe (TX)................................... X ...... .......
Mr. Chaffetz (UT).............................. X ...... .......
Mr. Marino (PA)................................ X ...... .......
Mr. Gowdy (SC)................................. ...... ...... .......
Mr. Labrador (ID).............................. ...... ...... .......
Mr. Farenthold (TX)............................ X ...... .......
Mr. Collins (GA)............................... ...... ...... .......
Mr. DeSantis (FL).............................. X ...... .......
Mr. Buck (CO).................................. X ...... .......
Mr. Ratcliffe (TX)............................. X ...... .......
Ms. Roby (AL).................................. X ...... .......
Mr. Gaetz (FL)................................. X ...... .......
Mr. Johnson (LA)............................... ...... ...... .......
Mr. Biggs (AZ)................................. X ...... .......
Mr. Conyers, Jr. (MI), Ranking Member.......... ...... X .......
Mr. Nadler (NY)................................ ...... X .......
Ms. Lofgren (CA)............................... ...... X .......
Ms. Jackson Lee (TX)........................... ...... ...... .......
Mr. Cohen (TN)................................. ...... X .......
Mr. Johnson (GA)............................... ...... ...... .......
Mr. Deutch (FL)................................ ...... X .......
Mr. Gutierrez (IL)............................. ...... ...... .......
Ms. Bass (CA).................................. ...... ...... .......
Mr. Richmond (LA).............................. ...... ...... .......
Mr. Jeffries (NY).............................. ...... ...... .......
Mr. Cicilline (RI)............................. ...... X .......
Mr. Swalwell (CA).............................. ...... ...... .......
Mr. Lieu (CA).................................. ...... X .......
Mr. Raskin (MD)................................ ...... X .......
Ms. Jayapal (WA)............................... ...... X .......
Mr. Schneider (IL)............................. ...... X .......
------------------------
Total...................................... 16 10 .......
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Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 659, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 2, 2017.
Hon. Bob Goodlatte, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 659, the Standard
Merger and Acquisition Reviews Through Equal Rules Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Stephen
Rabent, who can be reached at 226-2860.
Sincerely,
Keith Hall.
Enclosure
cc:
Honorable John Conyers Jr.
Ranking Member
H.R. 659--Standard Merger and Acquisition Reviews Through Equal Rules
Act of 2017
As ordered reported by the House Committee on the Judiciary on April 5,
2017
H.R. 659 would amend federal laws governing mergers and
acquisitions to align procedures followed by the Federal Trade
Commission (FTC) with those followed by the Department of
Justice (DOJ). Under current law, both the FTC and DOJ enforce
federal antitrust laws, though in some instances, the manner in
which the two agencies exercise that authority is different.
H.R. 659 would amend the Clayton Act and the Federal Trade
Commission Act to align certain procedures followed by the FTC
when it reviews and litigates a proposed merger or acquisition
with procedures followed by DOJ. Among other changes, the bill
would require the FTC to resolve certain contested mergers or
acquisitions through a federal court instead of an
administrative proceeding. The bill also would harmonize the
standard that the FTC must meet before a federal court can
issue a preliminary injunction against a proposed transaction
with the standard that DOJ is required to use.
Based on an analysis of information from the FTC on the
agency's current procedures for handling contested mergers and
acquisitions, CBO estimates that the increased workloads of the
FTC and the federal courts under the bill would cost less than
$500,000 over the 2018-2022 period because only a small number
of cases are not settled or are abandoned and because the FTC
already follows procedures similar to those required in
H.R.659; such spending would be subject to the availability of
appropriated funds.
Enacting H.R. 659 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply. CBO
estimates that enacting H.R. 659 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2028.
H.R. 659 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Stephen Rabent.
The estimate was approved by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Duplication of Federal Programs
No provision of H.R. 659 establishes or reauthorizes a
program of the Federal government known to be duplicative of
another Federal program, a program that was included in any
report from GAO to Congress pursuant to section 21 of Public
Law 111--139, or a program related to a program identified in
the most recent Catalog of Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that H.R. 659 specifically directs
to be completed no specific rule makings within the meaning of
5 U.S.C. Sec. 551.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
659 amends the Clayton Act and the Federal Trade Commission Act
to provide the Federal Trade Commission with the same authority
as the Department of Justice with respect to mergers under the
Clayton Act.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 659 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f) or 9(g) of Rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Section 1. Short Title.
Sets forth the short title of the legislation as the
``Standard Merger and Acquisition Reviews Through Equal Rules
Act of 2017.''
Section 2. Amendments to the Clayton Act.
Sec. 2(1): Section 4F of the Clayton Act provides that the
Attorney General must notify state attorneys general of any
antitrust action in which the Attorney General believes the
state could bring an action based on substantially similar
facts and share related files with such state attorneys
general. The SMARTER Act amends this section to subject the FTC
to these same requirements.
Sec. 2(2)(A): Section 5(a) of the Clayton Act provides
that, in cases brought by the United States that result in
final judgments against a defendant, those judgments can be
used as prima facie evidence (i.e., unless rebutted, sufficient
to prove the allegation) of antitrust violations under
substantially similar facts brought by other parties. The
SMARTER Act amends this section to clarify that actions brought
by the United States include actions brought by the FTC under
Section 7.
Section 2(2)(B): Section 5(i) of the Clayton Act suspends
the statute of limitations for private and state rights of
action based on the conduct in question during a United States'
proceeding and for one year thereafter, except that claims
brought under section 4 or 4C of the Clayton Act only may be
brought during the United States' proceeding or within four
years after the cause of action accrued. The SMARTER Act amends
this section to clarify that the statute of limitations is also
tolled for actions brought by the FTC under Section 7.
Section 2(3): Section 11 of the Clayton Act authorizes the
enforcement of compliance with certain sections of the Clayton
Act by Federal agencies with specific expertise and provides
for procedures for such enforcement. For example, section 11
authorizes the Federal Reserve Board to enforce compliance of
these sections of the Clayton Act against banks, banking
associations, and trust companies. Section 11 also provides the
FTC with the authority to prosecute violations of the Clayton
Act through the FTC administrative litigation process. The
SMARTER Act amends the Clayton Act to exclude the FTC's
enforcement of Section 7 from these separate procedures, which
ensures that the FTC's Section 7 enforcement procedures will be
identical to the procedures applicable to the Attorney General.
Additionally, the SMARTER Act includes clarifying language that
the FTC may still enter into Section 7 consent decrees with
parties to the proposed transaction.
Section 2(4): Section 13 of the Clayton Act allows the
United States to issue subpoenas that will be effective in any
judicial district. The SMARTER Act amends this section to
clarify that the term United States includes the FTC when it is
prosecuting Section 7 cases.
Section 2(5): Section 15 of the Clayton Act provides that
it is the duty of the United States district attorneys, under
the direction of the Attorney General, to institute antitrust
lawsuits whereby they may seek temporary restraining orders or
other remedies against the offensive conduct. The SMARTER Act
amends this section to extend the duty to initiate lawsuits to
the FTC.
Section 3. Amendments to the FTC Act.
Section 3(1): Section 5 of the FTC Act allows the FTC to
initiate an administrative proceeding to evaluate an ``unfair
method of competition,'' which could include a proposed merger.
The SMARTER Act amends this section to preclude the FTC from
initiating an administrative proceeding against a proposed
transaction.
Section 3(2): Section 9 of the FTC Act, in the paragraph to
be amended, provides jurisdiction to the Federal courts to
issue writs of mandamus that command compliance with the FTC
Act. The process for obtaining such a writ of mandamus requires
the FTC to request the Attorney General to submit an
application to the courts for the writ. The SMARTER Act amends
this section to allow the FTC to submit independently an
application to the courts for such a writ for merger review
cases in which the FTC finds that the activity in question
constitutes an ``unfair method of competition.''
Section 3(3): Section 13(b) of the FTC Act provides
authority to the FTC to seek a preliminary injunction for a
violation of the FTC Act. The SMARTER Act amends this section
specifically to exclude the FTC from seeking a preliminary
injunction in a case brought under Section 7 because the FTC
now has this authority separately under the Clayton Act.
Section 3(4): Section 20(c)(1) of the FTC Act provides
authority to the FTC to issue subpoenas and take depositions.
The SMARTER Act amends this section to clarify that the FTC
also has this authority when prosecuting Section 7 cases.
Section 4. Effective Date; Application of Amendments.
Subsection 4(a): Provides that the effective date of the
SMARTER Act will be the day that it is signed into law.
Subsection 4(b): Provides that the SMARTER Act will not
apply to violations of Section7 that occurred prior to the
enactment of the SMARTER Act, transactions that are in
compliance with Section 7A of the Clayton Act (i.e.,
transactions for which the parties have filed a Hart-Scott-
Rodino merger review notice), and consummated mergers.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
CLAYTON ACT
* * * * * * *
[actions by attorney general of the united states
[Sec. 4F. (a) Whenever the Attorney General of the United
States has brought an action under the antitrust laws, and he
has reason to believe that any State attorney general would be
entitled to bring an action under this Act based substantially
on the same alleged violation of the antitrust laws, he shall
promptly give written notification thereof to such State
attorney general.
[(b) To assist a State attorney general in evaluating the
notice or in bringing any action under this Act, the Attorney
General of the United States shall, upon request by such State
attorney general, make available to him, to the extent
permitted by law, any investigative files or other materials
which are or may be relevant or material to the actual or
potential cause of action under this Act.]
SEC. 4F. ACTIONS BY ATTORNEY GENERAL OF THE UNITED STATES OR THE
FEDERAL TRADE COMMISSION.
(a) Whenever the Attorney General of the United States has
brought an action under the antitrust laws or the Federal Trade
Commission has brought an action under section 7, and the
Attorney General or Federal Trade Commission, as applicable,
has reason to believe that any State attorney general would be
entitled to bring an action under this Act based substantially
on the same alleged violation of the antitrust laws or section
7, the Attorney General or Federal Trade Commission, as
applicable, shall promptly give written notification thereof to
such State attorney general.
(b) To assist a State attorney general in evaluating the
notice described in subsection (a) or in bringing any action
under this Act, the Attorney General of the United States or
Federal Trade Commission, as applicable, shall, upon request by
such State attorney general, make available to the State
attorney general, to the extent permitted by law, any
investigative files or other materials which are or may be
relevant or material to the actual or potential cause of action
under this Act.
* * * * * * *
Sec. 5. (a) A final judgment or decree heretofore or
hereafter rendered in any civil or criminal proceeding brought
by or on behalf of the United States under the antitrust laws
(including a proceeding brought by the Federal Trade Commission
with respect to a violation of section 7) to the effect that a
defendant has violated said laws shall be prima facie evidence
against such defendant in any action or proceeding brought by
any other party against such defendant under said laws as to
all matters respecting which said judgment or decree would be
an estoppel as between the parties thereto: Provided, That this
section shall not apply to consent judgments or decrees entered
before any testimony has been taken. Nothing contained in this
section shall be construed to impose any limitation on the
application of collateral estoppel, except that, in any action
or proceeding brought under the antitrust laws, collateral
estoppel effect shall not be given to any finding made by the
Federal Trade Commission under the antitrust laws or under
section 5 of the Federal Trade Commission Act which could give
rise to a claim for relief under the antitrust laws.
(b) Any proposal for a consent judgment submitted by the
United States for entry in any civil proceeding brought by or
on behalf of the United States under the antitrust laws shall
be filed with the district court before which such proceeding
in pending and published by the United States in the Federal
Register at least 60 days prior to the effective date of such
judgment. Any written comments relating to such proposal and
any responses by the United States thereto, shall also be filed
with such district court and published by the United States in
the Federal Register within such sixty-day period. Copies of
such proposal and any other materials and documents which the
United States considered determinative in formulating such
proposal, shall also be made available to the public at the
district court and in such other districts as the court may
subsequently direct. Simultaneously with the filing of such
proposal, unless otherwise instructed by the court, the United
States shall file with the district court, publish in the
Federal Register, and thereafter furnish to any person upon
request, a competitive impact statement which shall recite--
(1) the nature and purpose of the proceeding;
(2) a description of the practices or events giving
rise to the alleged violation of the antitrust laws;
(3) an explanation of the proposal for a consent
judgment, including an explanation of any unusual
circumstances giving rise to such proposal or any
provision contained therein, relief to be obtained
thereby, and the anticipated effects on competition of
such relief;
(4) the remedies available to potential private
plaintiffs damaged by the alleged violation in the
event that such proposal for the consent judgment is
entered in such proceeding;
(5) a description of the procedures available for
modification of such proposal; and
(6) a description and evaluation of alternatives to
such proposal actually considered by the United States.
(c) the United States shall also cause to be published,
commencing at least 60 days prior to the effective date of the
judgment described in subsection (b) of this section, for 7
days over a period of 2 weeks in newspapers of general
circulation of the district in which the case has been filed,
in the District of Columbia, and in such other districts as the
court may direct--
(i) a summary of the terms of the proposal for the
consent judgment,
(ii) a summary of the competitive impact statement
filed under subsection (b),
(iii) and a list of the materials and documents under
subsection (b) which the United States shall make
available for purposes of meaningful public comment,
and the place where such materials and documents are
available for public inspection.
(d) during the 60-day period as specified in subsection (b)
of this section, and such additional time as the United States
may request and the court may grant, the United States shall
receive and consider any written comments relating to the
proposal for the consent judgment submitted under subsection
(b). the Attorney General or his designee shall establish
procedures to carry out the provisions of this subsection, but
such 60-day time period shall not be shortened except by order
of the district court upon a showing that (1) extraordinary
circumstances require such shortening and (2) such shortening
is not adverse to the public interest. At the close of the
period during which such comments may be received, the United
States shall file with the district court and cause to be
published in the Federal Register a response to such comments.
Upon application by the United States, the district court may,
for good cause (based on a finding that the expense of
publication in the Federal Register exceeds the public interest
benefits to be gained from such publication), authorize an
alternative method of public dissemination of the public
comments received and the response to those comments.
(e)(1) Before entering any consent judgment proposed by the
United States under this section, the court shall determine
that entry of such judgment is in the public interest. For the
purpose of such determination, the court shall consider--
(A) the competitive impact of such judgment,
including termination of alleged violations, provisions
for enforcement and modification, duration of relief
sought, anticipated effects of alternative remedies
actually considered, whether its terms are ambiguous,
and any other competitive considerations bearing upon
the adequacy of such judgment that the court deems
necessary to a determination of whether the consent
judgment is in the public interest; and
(B) the impact of entry of such judgment upon
competition in the relevant market or markets, upon the
public generally and individuals alleging specific
injury from the violations set forth in the complaint
including consideration of the public benefit, if any,
to be derived from a determination of the issues at
trial.
(2) Nothing in this section shall be construed to require the
court to conduct an evidentiary hearing or to require the court
to permit anyone to intervene.
(f) In making its determination under subsection (e), the
court may--
(1) take testimony of Government officials or experts
or such other expert witnesses, upon motion of any
party or participant or upon its own motion, as the
court may deem appropriate;
(2) appoint a special master and such outside
consultants or expert witnesses as the court may deem
appropriate; and request and obtain the views,
evaluations, or advice of any individual, group or
agency of government with respect to any aspects of the
proposed judgment or the effect of such judgment, in
such manner as the court deems appropriate;
(3) authorize full or limited participation in
proceedings before the court by interested persons or
agencies, including appearance amicus curiae,
intervention as a party pursuant to the Federal Rules
of Civil Procedure, examination of witnesses or
documentary materials, or participation in any other
manner and extent which serves the public interest as
the court may deem appropriate.
(4) review any comments including any objections
filed with the United States under subsection (d)
concerning the proposed judgment and the responses of
the United States to such comments and objections; and
(5) take such other action in the public interest as
the court may deem appropriate.
(g) Not later than 10 days following the date of the filing
of any proposal for a consent judgment under subsection (b),
each defendant shall file with the district court a description
of any and all written or oral communications by or on behalf
of such defendant, including any and all written or oral
communications on behalf of such defendant by any officer,
director, employee, or agent of such defendant, or other
person, with any officer or employee of the United States
concerning or relevant to such proposal, except that any such
communications made by counsel of record alone with the
Attorney General or the employees of the Department of Justice
alone shall be excluded from the requirements of this
subsection. Prior to the entry of any consent judgment pursuant
to the antitrust laws, each defendant shall certify to the
district court that the requirements of this subsection have
been complied with and that such filing is a true and complete
description of such communications known to the defendant or
which the defendant reasonably should have known.
(h) Proceedings before the district court under subsections
(e) and (f) of this section, and the competitive impact
statement filed under subsection (b) of this section, shall not
be admissible against any defendant in any action or proceeding
brought by any other party against such defendant under the
antitrust laws or by the United States under section 4A of this
Act nor constitute a basis for the introduction of the consent
judgment as prima facie evidence against such defendant in any
such action or proceeding.
(i) Whenever any civil or criminal proceeding is instituted
by the United States to prevent, restrain, or punish violations
of any of the antitrust laws (including a proceeding instituted
by the Federal Trade Commission with respect to a violation of
section 7), but not including an action under section 4A, the
running of the statute of limitations in respect of every
private or State right of action arising under said laws and
based in whole or in part on any matter complained of in said
proceeding shall be suspended during the pendency thereof and
for one year thereafter: Provided, however, That whenever the
running of the statute of limitations in respect of a cause of
action arising under section 4 or 4C is suspended hereunder,
any action to enforce such cause of action shall be forever
barred unless commenced either within the period of suspension
or within four years after the cause of action accrued.
* * * * * * *
Sec. 11. (a) That authority to enforce compliance with
sections 2, 3, 7, and 8 of this Act by the persons respectively
subject thereto is hereby vested in the Surface Transportation
Board where applicable to common carriers subject to
jurisdiction under subtitle IV of title 49, United States Code;
in the Federal Communications Commission where applicable to
common carriers engaged in wire or radio communication or radio
transmission of energy; in the Secretary of Transportation
where applicable to air carriers and foreign air carriers
subject to the Federal Aviation Act of 1958; in the Federal
Reserve Board where applicable to banks, banking associations,
and trust companies; and in the Federal Trade Commission where
applicable to all other character of commerce to be exercised
as follows:
(b) Whenever the Commission, Board, or Secretary vested with
jurisdiction thereof shall have reason to believe that any
person is violating or has violated any of the provisions of
sections 2, 3, 7, and 8 of this Act, it shall issue and serve
upon such person and the Attorney General a complaint stating
its charges in that respect, and containing a notice of a
hearing upon a day and at a place therein fixed at least thirty
days after the service of said complaint. The person so
complained of shall have the right to appear at the place and
time so fixed and show cause why an order should not be entered
by the Commission, Board, or Secretary requiring such person to
cease and desist from the violation of the law so charged in
said complaint. The Attorney General shall have the right to
intervene and appear in said proceeding and any person may make
application, and upon good cause shown may be allowed by the
Commission, Board, or Secretary, to intervene and appear in
said proceeding by counsel or in person. The testimony in any
such proceeding shall be reduced to writing and filed in the
office of the Commission, Board, or Secretary. If upon such
hearing the Commission, Board, or Secretary, as the case may
be, shall be of the opinion that any of the provisions of said
sections have been or are being violated, it shall make a
report in writing, in which it shall state its findings as to
the facts, and shall issue and cause to be served on such
person an order requiring such person to cease and desist from
such violations, and divest itself of the stock, or other share
capital, or assets, held or rid itself of the directors chosen
contrary to the provisions of sections 7 and 8 of this Act, if
any there be, in the manner and within the time fixed by said
order. Until the expiration of the time allowed for filing a
petition for review, if no such petition has been duly filed
within such time, or, if a petition for review has been filed
within such time then until the record in the proceeding has
been filed in a court of appeals of the United States, as
hereinafter provided, the Commission, Board, or Secretary may
at any time, upon such notice and in such manner as it shall
deem proper, modify or set aside, in whole or in part, any
report or any order made or issued by it under this section.
After the expiration of the time allowed for filing a petition
for review, if no such petition has been duly filed within such
time, the Commission, Board, or Secretary may at any time,
after notice and opportunity for hearing, reopen and alter,
modify, or set aside, in whole or in part, any report or order
made or issued by it under this section, whenever in the
opinion of the Commission, Board, or Secretary conditions of
fact or of law have so changed as to require such action or if
the public interest shall so require: Provided, however, That
the said person may, within sixty days after service upon him
or it of said report or order entered after such a reopening,
obtain a review thereof in the appropriate court of appeals of
the United States, in the manner provided in subsection (c) of
this section.
(c) Any person required by such order of the commission,
board, or Secretary to cease and desist from any such violation
may obtain a review of such order in the court of appeals of
the United States for any circuit within which such violation
occurred or within which such person resides or carries on
business, by filing in the court, within sixty days after the
date of the service of such order, a written petition praying
that the order of the commission, board, or Secretary be set
aside. A copy of such petition shall be forthwith transmitted
by the clerk of the court to the commission, board, or
Secretary, and thereupon the commission, board, or Secretary
shall file in the court the record in the proceeding, as
provided in section 2112 of title 28, United States Code. Upon
such filing of the petition the court shall have jurisdiction
of the proceeding and of the question determined therein
concurrently with the commission, board, or Secretary until the
filing of the record, and shall have power to make and enter a
decree affirming, modifying, or setting aside the order of the
commission, board, or Secretary, and enforcing the same to the
extent that such order is affirmed, and to issue such writs as
are ancillary to its jurisdiction or are necessary in its
judgment to prevent injury to the public or to competitors
pendente lite. The findings of the commission, board, or
Secretary as to the facts, if supported by substantial
evidence, shall be conclusive. To the extent that the order of
the commission, board, or Secretary is affirmed, the court
shall issue its own order commanding obedience to the terms of
such order of the commission, board, or Secretary. If either
party shall apply to the court for leave to adduce additional
evidence, and shall show to the satisfaction of the court that
such additional evidence is material and that there were
reasonable grounds for the failure to adduce such evidence in
the proceeding before the commission, board, or Secretary, the
court may order such additional evidence to be taken before the
commission, board, or Secretary, and to be adduced upon the
hearing in such manner and upon such terms and conditions as to
the court may seem proper. The commission, board, or Secretary
may modify its findings as to the facts, or make new findings,
by reason of the additional evidence so taken, and shall file
such modified or new findings, which, if supported by
substantial evidence, shall be conclusive, and its
recommendation, if any, for the modification or setting aside
of its original order, with the return of such additional
evidence. The judgment and decree of the court shall be final,
except that the same shall be subject to review by the Supreme
Court upon certiorari, as provided in section 1254 of title 28
of the United States Code.
(d) Upon the filing of the record with it the jurisdiction of
the court of appeals to affirm, enforce, modify, or set aside
orders of the commission, board, or Secretary shall be
exclusive.
(e) No order of the commission, board, or Secretary or
judgment of the court to enforce the same shall in anywise
relieve or absolve any person from any liability under the
antitrust laws.
(f) Complaints, orders, and other processes of the
commission, board, or Secretary under this section may be
served by anyone duly authorized by the commission, board, or
Secretary, either (1) by delivering a copy thereof to the
person to be served, or to a member of the partnership to be
served, or to the president, secretary, or other executive
officer or a director of the corporation to be served; or (2)
by leaving a copy thereof at the residence or the principal
office or place of business of such person; or (3) by mailing
by registered or certified mail a copy thereof addressed to
such person at his or its residence or principal office or
place of business. The verified return by the person so serving
said complaint, order, or other process setting forth the
manner of said service shall be proof of the same, and the
return post office receipt for said complaint, order, or other
process mailed by registered or certified mail as aforesaid
shall be proof of the service of the same.
(g) Any order issued under subsection (b) shall become
final--
(1) upon the expiration of the time allowed for
filing a petition for review, if no such petition has
been duly filed within such time; but the commission,
board, or Secretary may thereafter modify or set aside
its order to the extent provided in the last sentence
of subsection (b); or
(2) upon the expiration of the time allowed for
filing a petition for certiorari, if the order of the
commission, board, or Secretary has been affirmed, or
the petition for review has been dismissed by the court
of appeals, and no petition for certiorari has been
duly filed; or
(3) upon the denial of a petition for certiorari, if
the order of the commission, board, or Secretary has
been affirmed or the petition for review has been
dismissed by the court of appeals; or
(4) upon the expiration of thirty days from the date
of issuance of the mandate of the Supreme Court, if
such Court directs that the order of the commission,
board, or Secretary be affirmed or the petition for
review be dismissed.
(h) If the Supreme Court directs that the order of the
commission, board, or Secretary be modified or set aside, the
order of the commission, board, or Secretary rendered in
accordance with the mandate of the Supreme Court shall become
final upon the expiration of thirty days from the time it was
rendered, unless within such thirty days either party has
instituted proceedings to have such order corrected to accord
with the mandate, in which event the order of the commission,
board, or Secretary shall become final when so corrected.
(i) If the order of the commission, board, or Secretary is
modified or set aside by the court of appeals, and if (1) the
time allowed for filing a petition for certiorari has expired
and no such petition has been duly filed, or (2) the petition
for certiorari has been denied, or (3) the decision of the
court has been affirmed by the Supreme Court, then the order of
the commission, board, or Secretary rendered in accordance with
the mandate of the court of appeals shall become final on the
expiration of thirty days from the time such order of the
commission, board, or Secretary was rendered, unless within
such thirty days either party has instituted proceedings to
have such order corrected so that it will accord with the
mandate, in which event the order of the commission, board, or
Secretary shall become final when so corrected.
(j) If the Supreme Court orders a rehearing; or if the case
is remanded by the court of appeals to the commission, board,
or Secretary for a rehearing, and if (1) the time allowed for
filing a petition for certiorari has expired, and no such
petition has been duly filed, or (2) the petition for
certiorari has been denied, or (3) the decision of the court
has been affirmed by the Supreme Court, then the order of the
commission, board, or Secretary rendered upon such rehearing
shall become final in the same manner as though no prior order
of the commission, board, or Secretary had been rendered.
(k) As used in this section the term ``mandate'', in case a
mandate has been recalled prior to the expiration of thirty
days from the date of issuance thereof, means the final
mandate.
(l) Any person who violates any order issued by the
commission, board, or Secretary under subsection (b) after such
order has become final, and while such order is in effect,
shall forfeit and pay to the United States a civil penalty of
not more than $5,000 for each violation, which shall accrue to
the United States and may be recovered in a civil action
brought by the United States. Each separate violation of any
such order shall be a separate offense, except that in the case
of a violation through continuing failure or neglect to obey a
final order of the commission, board, or Secretary each day of
continuance of such failure or neglect shall be deemed a
separate offense.
(m)(1) Except as provided in paragraph (2), in enforcing
compliance with section 7, the Federal Trade Commission shall
enforce compliance with that section in the same manner as the
Attorney General in accordance with section 15.
(2) If the Federal Trade Commission approves an agreement
with the parties to the transaction that contains a consent
order with respect to a violation of section 7, the Commission
shall enforce compliance with that section in accordance with
this section.
* * * * * * *
Sec. 13. That in any suit, action, or proceeding brought by
or on behalf of the United States (including a suit, action, or
proceeding brought by the Federal Trade Commission with respect
to a violation of section 7) subpoenas for witnesses who are
required to attend a court of the United States in any judicial
district in any case, civil or criminal, arising under the
antitrust laws may run into any other district: Provided, That
in civil cases no writ of supoena shall issue for witnesses
living out of the district in which the court is held at a
greater distance than one hundred miles from the place of
holding the same without the permission of the trial court
being first had upon proper application and cause shown.
* * * * * * *
Sec. 15. That the several district courts of the United
States are hereby invested with jurisdiction to prevent and
restrain violations of this Act, and it shall be the duty of
the several district attorneys of the United States, in their
respective districts, under the direction of the Attorney
General, and the duty of the Federal Trade Commission with
respect to a violation of section 7, to institute proceedings
in equity to prevent and restrain such violations. Such
proceedings may be by way of petition setting forth the case
and praying that such violation shall be enjoined or otherwise
prohibited. When the parties complained of shall have been duly
notified of such petition, the court shall proceed, as soon as
may be, to the hearing and determination of the case; and
pending such petition, and before final decree, the court may
at any time make such temporary restraining order or
prohibition as shall be deemed just in the premises. Whenever
it shall appear to the court before which any such proceeding
may be pending that the ends of justice require that other
parties should be brought before the court, the court may cause
them to be summoned, whether they reside in the district in
which the court is held or not, and subpoenas to that end may
be served in any district by the marshal thereof.
* * * * * * *
----------
FEDERAL TRADE COMMISSION ACT
* * * * * * *
Sec. 5. (a)(1) Unfair methods of competition in or affecting
commerce, and unfair or deceptive acts or practices in or
affecting commerce, are hereby declared unlawful.
(2) The Commission is hereby empowered and directed to
prevent persons, partnerships, or corporations, except banks,
savings and loan institutions described in section 18(f)(3),
Federal credit unions described in section 18(f)(4), common
carriers subject to the Acts to regulate commerce, air carriers
and foreign air carriers subject to the Federal Aviation Act of
1958, and persons, partnerships, or corporations insofar as
they are subject to the Packers and Stockyards Act, 1921, as
amended, except as provided in section 406(b) of said Act, from
using unfair methods of competition in or affecting commerce
and unfair or deceptive acts or practices in or affecting
commerce.
(3) This subsection shall not apply to unfair methods of
competition involving commerce with foreign nations (other than
import commerce) unless--
(A) such methods of competition have a direct,
substantial, and reasonably foreseeable effect--
(i) on commerce which is not commerce with
foreign nations, or on import commerce with
foreign nations; or
(ii) on export commerce with foreign nations,
of a person engaged in such commerce in the
United States; and
(B) such effect gives rise to a claim under the
provisions of this subsection, other than this
paragraph.
If this subsection applies to such methods of competition only
because of the operation of subparagraph (A)(ii), this
subsection shall apply to such conduct only for injury to
export business in the United States.
(4)(A) For purposes of subsection (a), the term
``unfair or deceptive acts or practices'' includes such
acts or practices involving foreign commerce that--
(i) cause or are likely to cause reasonably
foreseeable injury within the United States; or
(ii) involve material conduct occurring
within the United States.
(B) All remedies available to the Commission with
respect to unfair and deceptive acts or practices shall
be available for acts and practices described in this
paragraph, including restitution to domestic or foreign
victims.
(b) Whenever the Commission shall have reason to believe that
any such person, partnership, or corporation has been or is
using any unfair method of competition (excluding the
consummation of a proposed merger, acquisition, joint venture,
or similar transaction that is subject to section 7 of the
Clayton Act (15 U.S.C. 18), except in cases where the
Commission approves an agreement with the parties to the
transaction that contains a consent order) or unfair or
deceptive act or practice in or affecting commerce, and if it
shall appear to the Commission that a proceeding by it in
respect thereof would be to the interest of the public, it
shall issue and serve upon such person, partnership, or
corporation a complaint stating its charges in that respect and
containing a notice of a hearing upon a day and at a place
therein fixed at least thirty days after the service of said
complaint. The person, partnership, or corporation so
complained of shall have the right to appear at the place and
time so fixed and show cause why an order should not be entered
by the Commission requiring such person, partnership, or
corporation to cease and desist from the violation of the law
so charged in said complaint. Any person, partnership, or
corporation may make application, and upon good cause shown may
be allowed by the Commission to intervene and appear in said
proceeding by counsel or in person. The testimony in any such
proceeding shall be reduced to writing and filed in the office
of the Commission. If upon such hearing the Commission shall be
of the opinion that the method of competition or the act or
practice in question is prohibited by this Act, it shall make a
report in writing in which it shall state its findings as to
the facts and shall issue and cause to be served on such
person, partnership, or corporation an order requiring such
person, partnership, or corporation to cease and desist from
using such method of competition or such act or practice. Until
the expiration of the time allowed for filing a petition for
review, if no such petition has been duly filed within such
time, or, if a petition for review has been filed within such
time then until the record in the proceeding has been filed in
a court of appeals of the United States, as hereinafter
provided, the Commission may at any time, upon such notice and
in such manner as it shall deem proper, modify or set aside, in
whole or in part, any report or any order made or issued by it
under this section. After the expiration of the time allowed
for filing a petition for review, if no such petition has been
duly filed within such time, the Commission may at any time,
after notice and opportunity for hearing, reopen and alter,
modify, or set aside, in whole or in part, any report or order
made or issued by it under this section, whenever in the
opinion of the Commission conditions of fact or of law have so
changed as to require such action or if the public interest
shall so require, except that (1) the said person, partnership,
or corporation may, within sixty days after service upon him or
it of said report or order entered after such a reopening,
obtain a review thereof in the appropriate circuit court of
appeals of the United States, in the manner provided in
subsection (c) of this section; and (2) in the case of an
order, the Commission shall reopen any such order to consider
whether such order (including any affirmative relief provision
contained in such order) should be altered, modified, or set
aside, in whole or in part, if the person, partnership, or
corporation involved files a request with the Commission which
makes a satisfactory showing that changed conditions of law or
fact require such order to be altered, modified, or set aside,
in whole or in part. The Commission shall determine whether to
alter, modify, or set aside any order of the Commission in
response to a request made by a person, partnership, or
corporation under paragraph (2) not later than 120 days after
the date of the filing of such request.
(c) Any person, partnership, or corporation required by an
order of the Commission to cease and desist from using any
method of competition or act or practice may obtain a review of
such order in the circuit court of appeals of the United
States, within any circuit where the method of competition or
the act or practice in question was used or where such person,
partnership, or corporation resides or carries on business, by
filing in the court, within sixty days from the date of the
service of such order, a written petition praying that the
order of the Commission be set aside. A copy of such petition
shall be forthwith transmitted by the clerk of the court to the
Commission, and thereupon the Commission shall file in the
court the record in the proceeding, as provided in section 2112
of title 28, United States Code. Upon such filing of the
petition the court shall have jurisdiction of the proceeding
and of the question determined therein concurrently with the
Commission until the filing of the record and shall have power
to make and enter a decree affirming, modifying, or setting
aside the order of the Commission, and enforcing the same to
the extent that such order is affirmed and to issue such writs
as are ancillary to its jurisdiction or are necessary in its
judgment to prevent injury to the public or to competitors
pendente lite. The findings of the Commission as to the facts,
if supported by evidence, shall be conclusive. To the extent
that the order of the Commission is affirmed, the court shall
thereupon issue its own order commanding obedience to the terms
of such order of the Commission. If either party shall apply to
the court for leave to adduce additional evidence, and shall
show to the satisfaction of the court that such additional
evidence is material and that there were reasonable grounds for
the failure to adduce such evidence in the proceeding before
the Commission, the court may order such additional evidence to
be taken before the Commission and to be adduced upon the
hearing in such manner and upon such terms and conditions as to
the court may seem proper. The Commission may modify its
findings as to the facts, or make new findings, by reason of
the additional evidence so taken, and it shall file such
modified or new findings, which if supported by evidence, shall
be conclusive, and its recommendation, if any, for the
modification or setting aside of its original order, with the
return of such additional evidence. The judgment and decree of
the court shall be final, except that the same shall be subject
to review by the Supreme Court upon certiorari, as provided in
section 240 of the Judicial Code.
(d) Upon the filing of the record with it the jurisdiction of
the court of appeals of the United States to affirm, enforce,
modify, or set aside orders of the Commission shall be
exclusive.
(e) No order of the Commission or judgment of court to
enforce the same shall in anywise relieve or absolve any
person, partnership, or corporation from any liability under
the Antitrust Acts.
(f) Complaints, orders, and other processes of the Commission
under this section may be served by anyone duly authorized by
the Commission, either (a) by delivering a copy thereof to the
person to be served, or to a member of the partnership to be
served, or the president, secretary, or other executive officer
or a director of the corporation to be served; or (b) by
leaving a copy thereof at the residence or the principal office
or place of business of such person, partnership, or
corporation; or (c) by mailing a copy thereof by registered
mail or by certified mail addressed to such person,
partnership, or corporation at his or its residence or
principal office or place of business. The verified return by
the person so serving said complaint, order, or other process
setting forth the manner of said service shall be proof of the
same, and the return post office receipt for said complaint,
order, or other process mailed by registered mail or certified
mail as aforesaid shall be proof of the service of the same.
(g) An order of the Commission to cease and desist shall
become final--
(1) Upon the expiration of the time allowed for
filing a petition for review, if no such petition has
been duly filed within such time; but the Commission
may thereafter modify or set aside its order to the
extent provided in the last sentence of subsection (b).
(2) Except as to any order provision subject to
paragraph (4), upon the sixtieth day after such order
is served, if a petition for review has been duly
filed; except that any such order may be stayed, in
whole or in part and subject to such conditions as may
be appropriate, by--
(A) the Commission;
(B) an appropriate court of appeals of the
United States, if (i) a petition for review of
such order is pending in such court, and (ii)
an application for such a stay was previously
submitted to the Commission and the Commission,
within the 30-day period beginning on the date
the application was received by the Commission,
either denied the application or did not grant
or deny the application; or
(C) the Supreme Court, if an applicable
petition for certiorari is pending.
(3) For purposes of subsection (m)(1)(B) and of
section 19(a)(2), if a petition for review of the order
of the Commission has been filed--
(A) upon the expiration of the time allowed
for filing a petition for certiorari, if the
order of the Commission has been affirmed or
the petition for review has been dismissed by
the court of appeals and no petition for
certiorari has been duly filed;
(B) upon the denial of a petition for
certiorari, if the order of the Commission has
been affirmed or the petition for review has
been dismissed by the court of appeals; or
(C) upon the expiration of 30 days from the
date of issuance of a mandate of the Supreme
Court directing that the order of the
Commission be affirmed or the petition for
review be dismissed.
(4) In the case of an order provision requiring a
person, partnership, or corporation to divest itself of
stock, other share capital, or assets, if a petition
for review of such order of the Commission has been
filed--
(A) upon the expiration of the time allowed
for filing a petition for certiorari, if the
order of the Commission has been affirmed or
the petition for review has been dismissed by
the court of appeals and no petition for
certiorari has been duly filed;
(B) upon the denial of a petition for
certiorari, if the order of the Commission has
been affirmed or the petition for review has
been dismissed by the court of appeals; or
(C) upon the expiration of 30 days from the
date of issuance of a mandate of the Supreme
Court directing that the order of the
Commission be affirmed or the petition for
review be dismissed.
(h) If the Supreme Court directs that the order of the
Commission be modified or set aside, the order of the
Commission rendered in accordance with the mandate of the
Supreme Court shall become final upon the expiration of thirty
days from the time it was rendered, unless within such thirty
days either party has instituted proceedings to have such order
corrected to accord with the mandate, in which event the order
of the Commission shall become final when so corrected.
(i) If the order of the Commission is modified or set aside
by the circuit court of appeals, and if (1) the time allowed
for filing a petition for certiorari has expired and no such
petition has been duly filed, or (2) the petition for
certiorari has been denied, or (3) the decision of the court
has been affirmed by the Supreme Court, then the order of the
Commission rendered in accordance with the mandate of the
circuit court of appeals shall become final on the expiration
of thirty days from the time such order of the Commission was
rendered, unless within such thirty days either party has
instituted proceedings to have such order corrected so that it
will accord with the mandate, in which event the order of the
Commission shall become final when so corrected.
(j) If the Supreme Court orders a rehearing; or if the case
is remanded by the circuit court of appeals to the Commission
for a rehearing, and if (1) the time allowed for filing a
petition for certiorari has expired, and no such petition has
been duly filed, or (2) the petition for certiorari has been
denied, or (3) the decision of the court has been affirmed by
the Supreme Court, then the order of the Commission rendered
upon such rehearing shall become final in the same manner as
though no prior order of the Commission had been rendered.
(k) As used in this section the term ``mandate'', in case a
mandate has been recalled prior to the expiration of thirty
days from the date of issuance thereof, means the final
mandate.
(l) Any person, partnership, or corporation who violates an
order of the Commission after it has become final, and while
such order is in effect, shall forfeit and pay to the United
States a civil penalty of not more than $10,000 for each
violation, which shall accrue to the United States and may be
recovered in a civil action brought by the Attorney General of
the United States. Each separate violation of such an order
shall be a separate offense, except that in the case of a
violation through continuing failure to obey or neglect to obey
a final order of the Commission, each day of continuance of
such failure or neglect shall be deemed a separate offense. In
such actions, the United States district courts are empowered
to grant mandatory injunctions and such other and further
equitable relief as they deem appropriate in the enforcement of
such final orders of the Commission.
(m)(1)(A) The Commission may commence a civil action to
recover a civil penalty in a district court of the United
States against any person, partnership, or corporation which
violates any rule under this Act respecting unfair or deceptive
acts or practices (other than an interpretive rule or a rule
violation of which the Commission has provided is not an unfair
or deceptive act or practice in violation of subsection (a)(1))
with actual knowledge or knowledge fairly implied on the basis
of objective circumstances that such act is unfair or deceptive
and is prohibited by such rule. In such action, such person,
partnership, or corporation shall be liable for a civil penalty
of not more than $10,000 for each violation.
(B) If the Commission determines in a proceeding under
subsection (b) that any act or practice is unfair or deceptive,
and issues a final cease and desist order, other than a consent
order, with respect to such act or practice, then the
Commission may commence a civil action to obtain a civil
penalty in a district court of the United States against any
person, partnership, or corporation which engages in such act
or practice--
(1) after such cease and desist order becomes final
(whether or not such person, partnership, or
corporation was subject to such cease and desist
order), and
(2) with actual knowledge that such act or practice
is unfair or deceptive and is unlawful under subsection
(a)(1) of this section.
In such action, such person, partnership, or
corporation shall be liable for a civil penalty
of not more than $10,000 for each violation.
(C)(1) In the case of a violation through continuing failure
to comply with a rule or with section 5(a)(1), each day of
continuance of such failure shall be treated as a separate
violation, for purposes of subparagraphs (A) and (B). In
determining the amount of such a civil penalty, the court shall
take into account the degree of culpability, any history of
prior such conduct, ability to pay, effect on ability to
continue to do business, and such other matters as justice may
require.
(2) If the cease and desist order establishing that the act
or practice is unfair or deceptive was not issued against the
defendant in a civil penalty action under paragraph (1)(B) the
issues of fact in such action against such defendant shall be
tried de novo. Upon request of any party to such an action
against such defendant, the court shall also review the
determination of law made by the Commission in the proceeding
under subsection (b) that the act or practice which was the
subject of such proceeding constituted an unfair or deceptive
act or practice in violation of subsection (a).
(3) The Commission may compromise or settle any action for a
civil penalty if such compromise or settlement is accompanied
by a public statement of its reasons and is approved by the
court.
(n) The Commission shall have no authority under this section
or section 18 to declare unlawful an act or practice on the
grounds that such act or practice is unfair unless the act or
practice causes or is likely to cause substantial injury to
consumers which is not reasonably avoidable by consumers
themselves and not outweighed by countervailing benefits to
consumers or to competition. In determining whether an act or
practice is unfair, the Commission may consider established
public policies as evidence to be considered with all other
evidence. Such public policy considerations may not serve as a
primary basis for such determination.
* * * * * * *
Sec. 9. That for the purposes of this Act the commission, or
its duly authorized agent or agents, shall at all reasonable
times have access to, for the purpose of examination, and the
right to copy any documentary evidence of any corporation being
investigated or proceeded against; and the commission shall
have power to require by subpoena the attendance and testimony
of witnesses and the production of all such documentary
evidence relating to any matter under investigation. Any member
of the commission may sign subpoenas, and members and examiners
of the commission may administer oaths and affirmations,
examine witnesses, and receive evidence.
Such attendance of witnesses, and the production of such
documentary evidence, may be required from any place in the
United States, at any designated place of hearing. And in case
of disobedience to a subpoena the commission may invoke the aid
of any court of the United States in requiring the attendance
and testimony of witnesses and the production of documentary
evidence.
Any of the district courts of the United States within the
jurisdiction of which such inquiry is carried on may, in case
of contumacy or refusal to obey a subpoena issued to any
corporation or other person, issue an order requiring such
corporation or other person to appear before the commission, or
to produce documentary evidence if so ordered, or to give
evidence touching the matter in question; and any failure to
obey such order of the court may be punished by such court as a
contempt thereof.
Upon the application of the Attorney General of the United
States, at the request of the commission, the district courts
of the United States shall have jurisdiction to issue writs of
mandamus commanding any person or corporation to comply with
the provisions of this Act or any order of the commission made
in pursuance thereof.
Upon the application of the commission with respect to any
activity related to the consummation of a proposed merger,
acquisition, joint venture, or similar transaction that is
subject to section 7 of the Clayton Act (15 U.S.C. 18) that may
result in any unfair method of competition, the district courts
of the United States shall have jurisdiction to issue writs of
mandamus commanding any person or corporation to comply with
the provisions of this Act or any order of the commission made
in pursuance thereof.
The commission may order testimony to be taken by deposition
in any proceeding or investigation pending under this Act at
any stage of such proceeding or investigation. Such depositions
may be taken before any person designated by the commission and
having power to administer oaths. Such testimony shall be
reduced to writing by the person taking the deposition, or
under his direction, and shall then be subscribed by the
deponent. Any person may be compelled to appear and depose and
to produce documentary evidence in the same manner as witnesses
may be compelled to appear and testify and produce documentary
evidence before the commission as hereinbefore provided.
Witnesses summoned before the commission shall be paid the
same fees and mileage that are paid witnesses in the courts of
the United States, and witnesses whose depositions are taken
and the persons taking the same shall severally be entitled to
the same fees as are paid for like services in the courts of
the United States.
* * * * * * *
Sec. 13. (a) Whenever the Commission has reason to believe--
(1) that any person, partnership, or corporation is
engaged in, or is about to engage in, the dissemination
or the causing of the dissemination of any
advertisement in violation of section 12, and
(2) that the enjoining thereof pending the issuance
of a complaint by the Commission under section 5, and
until such complaint is dismissed by the Commission or
set aside by the court on review, or the order of the
Commission to cease and desist made thereon has become
final within the meaning of section 5, would be to the
interest of the public,
the Commission by any of its attorneys designated by it for
such purpose may bring suit in a district court of the United
States or in the United States court of any Territory, to
enjoin the dissemination or the causing of the dissemination of
such advertisement. Upon proper showing a temporary injunction
or restraining order shall be granted without bond. Any suit
may be brought where such person, partnership, or corporation
resides or transacts business, or wherever venue is proper
under section 1391 of title 28, United States Code. In
addition, the court may, if the court determines that the
interests of justice require that any other person,
partnership, or corporation should be a party in such suit,
cause such other person, partnership, or corporation to be
added as a party without regard to whether venue is otherwise
proper in the district in which the suit is brought. In any
suit under this section, process may be served on any person,
partnership, or corporation wherever it may be found.
(b) Whenever the Commission has reason to believe--
(1) that any person, partnership, or corporation is
violating, or is about to violate, any provision of law
enforced by the Federal Trade Commission (excluding
section 7 of the Clayton Act (15 U.S.C. 18) and section
5(a)(1) with respect to the consummation of a proposed
merger, acquisition, joint venture, or similar
transaction that is subject to section 7 of the Clayton
Act (15 U.S.C. 18)), and
(2) that the enjoining thereof pending the issuance
of a complaint by the Commission and until such
complaint is dismissed by the Commission or set aside
by the court on review, or until the order of the
Commission made thereon has become final, would be in
the interest of the public--
the Commission by any of its attorneys designated by it for
such purpose may bring suit in a district court of the United
States to enjoin any such act or practice. Upon a proper
showing that, weighing the equities and considering the
Commission's likelihood of ultimate success, such action would
be in the public interest, and after notice to the defendant, a
temporary restraining order or a preliminary injunction may be
granted without bond: Provided, however, That if a complaint is
not filed within such period (not exceeding 20 days) as may be
specified by the court after issuance of the temporary
restraining order or preliminary injunction, the order or
injunction shall be dissolved by the court and be of no further
force and effect: Provided further, That in proper cases the
Commission may seek, and after proper proof, the court may
issue, a permanent injunction. Any suit may be brought where
such person, partnership, or corporation resides or transacts
business, or wherever venue is proper under section 1391 of
title 28, United States Code. In addition, the court may, if
the court determines that the interests of justice require that
any other person, partnership, or corporation should be a party
in such suit, cause such other person, partnership, or
corporation to be added as a party without regard to whether
venue is otherwise proper in the district in which the suit is
brought. In any suit under this section, process may be served
on any person, partnership, or corporation wherever it may be
found.
(c) Any process of the Commission under this section may be
served by any person duly authorized by the Commission--
(1) by delivering a copy of such process to the
person to be served, to a member of the partnership to
be served, or to the president, secretary, or other
executive officer or a director of the corporation to
be served;
(2) by leaving a copy of such process at the
residence or the principal office or place of business
of such person, partnership, or corporation; or
(3) by mailing a copy of such process by registered
mail or certified mail addressed to such person,
partnership, or corporation at his, or her, or its
residence, principal office, or principal place or
business.
The verified return by the person serving such process setting
forth the manner of such service shall be proof of the same.
(d) Whenever it appears to the satisfaction of the court in
the case of a newspaper, magazine, periodical, or other
publication, published at regular intervals--
(1) that restraining the dissemination of a false
advertisement in any particular issue of such
publication would delay the delivery of such issue
after the regular time therefor, and
(2) that such delay would be due to the method by
which the manufacture and distribution of such
publication is customarily conducted by the publisher
in accordance with sound business practice, and not to
any method or device adopted for the evasion of this
section or to prevent or delay the issuance of an
injunction or restraining order with respect to such
false advertisement or any other advertisement,
the court shall exclude such issue from the operation of the
restraining order or injunction.
* * * * * * *
Sec. 20. (a) For purposes of this section:
(1) The terms ``civil investigative demand'' and
``demand'' mean any demand issued by the Commission
under subsection (c)(1).
(2) The term ``Commission investigation'' means any
inquiry conducted by a Commission investigator for the
purpose of ascertaining whether any person is or has
been engaged in any unfair or deceptive acts or
practices in or affecting commerce (within the meaning
of section 5(a)(1)) or in any antitrust violations.
(3) The term ``Commission investigator'' means any
attorney or investigator employed by the Commission who
is charged with the duty of enforcing or carrying into
effect any provisions relating to unfair or deceptive
acts or practices in or affecting commerce (within the
meaning of section 5(a)(1)) or any provisions relating
to antitrust violations.
(4) The term ``custodian'' means the custodian or any
deputy custodian designated under section 21(b)(2)(A).
(5) The term ``documentary material'' includes the
original or any copy of any book, record, report,
memorandum, paper, communication, tabulation, chart, or
other document.
(6) The term ``person'' means any natural person,
partnership, corporation, association, or other legal
entity, including any person acting under color or
authority of State law.
(7) The term ``violation'' means any act or omission
constituting an unfair or deceptive act or practice in
or affecting commerce (within the meaning of section
5(a)(1)) or any antitrust violation.
(8) The term ``antitrust violation'' means--
(A) any unfair method of competition (within
the meaning of section 5(a)(1));
(B) any violation of the Clayton Act or of
any other Federal statute that prohibits, or
makes available to the Commission a civil
remedy with respect to, any restraint upon or
monopolization of interstate or foreign trade
or commerce;
(C) with respect to the International
Antitrust Enforcement Assistance Act of 1994,
any violation of any of the foreign antitrust
laws (as defined in section 12 of such Act)
with respect to which a request is made under
section 3 of such Act; or
(D) any activity in preparation for a merger,
acquisition, joint venture, or similar
transaction, which if consummated, may result
in any such unfair method of competition or in
any such violation.
(b) For the purpose of investigations performed pursuant to
this section with respect to unfair or deceptive acts or
practices in or affecting commerce (within the meaning of
section 5(a)(1)), all actions of the Commission taken under
section 6 and section 9 shall be conducted pursuant to
subsection (c).
(c)(1) Whenever the Commission has reason to believe that any
person may be in possession, custody, or control of any
documentary material or tangible things, or may have any
information, relevant to unfair or deceptive acts or practices
in or affecting commerce (within the meaning of section
5(a)(1)), or to antitrust violations, the Commission may,
before the institution of any proceedings under this Act, or
under section 7 of the Clayton Act (15 U.S.C. 18), where
applicable, issue in writing, and cause to be served upon such
person, a civil investigative demand requiring such person to
produce such documentary material for inspection and copying or
reproduction, to submit such tangible things, to file written
reports or answers to questions, to give oral testimony
concerning documentary material or other information, or to
furnish any combination of such material, answers, or
testimony.
(2) Each civil investigative demand shall state the nature of
the conduct constituting the alleged violation which is under
investigation and the provision of law applicable to such
violation.
(3) Each civil investigative demand for the production of
documentary material shall--
(A) describe each class of documentary material to be
produced under the demand with such definiteness and
certainty as to permit such material to be fairly
identified;
(B) prescribe a return date or dates which will
provide a reasonable period of time within which the
material so demanded may be assembled and made
available for inspection and copying or reproduction;
and
(C) identify the custodian to whom such material
shall be made available.
(4) Each civil investigative demand for the submission of
tangible things shall--
(A) describe each class of tangible things to be
submitted under the demand with such definiteness and
certainty as to permit such things to be fairly
identified;
(B) prescribe a return date or dates which will
provide a reasonable period of time within which the
things so demanded may be assembled and submitted; and
(C) identify the custodian to whom such things shall
be submitted.
(5) Each civil investigative demand for written reports or
answers to questions shall--
(A) propound with definiteness and certainty the
reports to be produced or the questions to be answered;
(B) prescribe a date or dates at which time written
reports or answers to questions shall be submitted; and
(C) identify the custodian to whom such reports or
answers shall be submitted.
(6) Each civil investigative demand for the giving of oral
testimony shall--
(A) prescribe a date, time, and place at which oral
testimony shall be commenced; and
(B) identify a Commission investigator who shall
conduct the investigation and the custodian to whom the
transcript of such investigation shall be submitted.
(7)(A) Any civil investigative demand may be served by any
Commission investigator at any place within the territorial
jurisdiction of any court of the United States.
(B) Any such demand or any enforcement petition filed under
this section may be served upon any person who is not found
within the territorial jurisdiction of any court of the United
States, in such manner as the Federal Rules of Civil Procedure
prescribe for service in a foreign nation.
(C) To the extent that the courts of the United States have
authority to assert jurisdiction over such person consistent
with due process, the United States District Court for the
District of Columbia shall have the same jurisdiction to take
any action respecting compliance with this section by such
person that such district court would have if such person were
personally within the jurisdiction of such district court.
(8) Service of any civil investigative demand or any
enforcement petition filed under this section may be made upon
a partnership, corporation, association, or other legal entity
by--
(A) delivering a duly executed copy of such demand or
petition to any partner, executive officer, managing
agent, or general agent of such partnership,
corporation, association, or other legal entity, or to
any agent of such partnership, corporation,
association, or other legal entity authorized by
appointment or by law to receive service of process on
behalf of such partnership, corporation, association,
or other legal entity;
(B) delivering a duly executed copy of such demand or
petition to the principal office or place of business
of the partnership, corporation, association, or other
legal entity to be served; or
(C) depositing a duly executed copy in the United
States mails, by registered or certified mail, return
receipt requested, duly addressed to such partnership,
corporation, association, or other legal entity at its
principal office or place of business.
(9) Service of any civil investigative demand or of any
enforcement petition filed under this section may be made upon
any natural person by--
(A) delivering a duly executed copy of such demand or
petition to the person to be served; or
(B) depositing a duly executed copy in the United
States mails by registered or certified mail, return
receipt requested, duly addressed to such person at his
residence or principal office or place of business.
(10) A verified return by the individual serving any civil
investigative demand or any enforcement petition filed under
this section setting forth the manner of such service shall be
proof of such service. In the case of service by registered or
certified mail, such return shall be accompanied by the return
post office receipt of delivery of such demand or enforcement
petition.
(11) The production of documentary material in response to a
civil investigative demand shall be made under a sworn
certificate, in such form as the demand designates, by the
person, if a natural person, to whom the demand is directed or,
if not a natural person, by any person having knowledge of the
facts and circumstances relating to such production, to the
effect that all of the documentary material required by the
demand and in the possession, custody, or control of the person
to whom the demand is directed has been produced and made
available to the custodian.
(12) The submission of tangible things in response to a civil
investigative demand shall be made under a sworn certificate,
in such form as the demand designates, by the person to whom
the demand is directed or, if not a natural person, by any
person having knowledge of the facts and circumstances relating
to such production, to the effect that all of the tangible
things required by the demand and in the possession, custody,
or control of the person to whom the demand is directed have
been submitted to the custodian.
(13) Each reporting requirement or question in a civil
investigative demand shall be answered separately and fully in
writing under oath, unless it is objected to, in which event
the reasons for the objection shall be stated in lieu of an
answer, and it shall be submitted under a sworn certificate, in
such form as the demand designates, by the person, if a natural
person, to whom the demand is directed or, if not a natural
person, by any person responsible for answering each reporting
requirement or question, to the effect that all information
required by the demand and in the possession, custody, control,
or knowledge of the person to whom the demand is directed has
been submitted.
(14)(A) Any Commission investigator before whom oral
testimony is to be taken shall put the witness on oath or
affirmation and shall personally, or by any individual acting
under his direction and in his presence, record the testimony
of the witness. The testimony shall be taken stenographically
and transcribed. After the testimony is fully transcribed, the
Commission investigator before whom the testimony is taken
shall promptly transmit a copy of the transcript of the
testimony to the custodian.
(B) Any Commission investigator before whom oral testimony is
to be taken shall exclude from the place where the testimony is
to be taken all other persons except the person giving the
testimony, his attorney, the officer before whom the testimony
is to be taken, and any stenographer taking such testimony.
(C) The oral testimony of any person taken pursuant to a
civil investigative demand shall be taken in the judicial
district of the United States in which such person resides, is
found, or transacts business, or in such other place as may be
agreed upon by the Commission investigator before whom the oral
testimony of such person is to be taken and such person.
(D)(i) Any person compelled to appear under a civil
investigative demand for oral testimony pursuant to this
section may be accompanied, represented, and advised by an
attorney. The attorney may advise such person, in confidence,
either upon the request of such person or upon the initiative
of the attorney, with respect to any question asked of such
person.
(ii) Such person or attorney may object on the record to any
question, in whole or in part, and shall briefly state for the
record the reason for the objection. An objection may properly
be made, received, and entered upon the record when it is
claimed that such person is entitled to refuse to answer the
question on grounds of any constitutional or other legal right
or privilege, including the privilege against self-
incrimination. Such person shall not otherwise object to or
refuse to answer any question, and shall not himself or through
his attorney otherwise interrupt the oral examination. If such
person refuses to answer any question, the Commission may
petition the district court of the United States pursuant to
this section for an order compelling such person to answer such
question.
(iii) If such person refuses to answer any question on
grounds of the privilege against self-incrimination, the
testimony of such person may be compelled in accordance with
the provisions of section 6004 of title 18, United States Code.
(E)(i) After the testimony of any witness is fully
transcribed, the Commission investigator shall afford the
witness (who may be accompanied by an attorney) a reasonable
opportunity to examine the transcript. The transcript shall be
read to or by the witness, unless such examination and reading
are waived by the witness. Any changes in form or substance
which the witness desires to make shall be entered and
identified upon the transcript by the Commission investigator
with a statement of the reasons given by the witness for making
such changes. The transcript shall then be signed by the
witness, unless the witness in writing waives the signing, is
ill, cannot be found, or refuses to sign.
(ii) If the transcript is not signed by the witness during
the 30-day period following the date upon which the witness is
first afforded a reasonable opportunity to examine it, the
Commission investigator shall sign the transcript and state on
the record the fact of the waiver, illness, absence of the
witness, or the refusal to sign, together with any reasons
given for the failure to sign.
(F) The Commission investigator shall certify on the
transcript that the witness was duly sworn by him and that the
transcript is a true record of the testimony given by the
witness, and the Commission investigator shall promptly deliver
the transcript or send it by registered or certified mail to
the custodian.
(G) The Commission investigator shall furnish a copy of the
transcript (upon payment of reasonable charges for the
transcript) to the witness only, except that the Commission may
for good cause limit such witness to inspection of the official
transcript of his testimony.
(H) Any witness appearing for the taking of oral testimony
pursuant to a civil investigative demand shall be entitled to
the same fees and mileage which are paid to witnesses in the
district courts of the United States.
(d) Materials received as a result of a civil investigative
demand shall be subject to the procedures established in
section 21.
(e) Whenever any person fails to comply with any civil
investigative demand duly served upon him under this section,
or whenever satisfactory copying or reproduction of material
requested pursuant to the demand cannot be accomplished and
such person refuses to surrender such material, the Commission,
through such officers or attorneys as it may designate, may
file, in the district court of the United States for any
judicial district in which such person resides, is found, or
transacts business, and serve upon such person, a petition for
an order of such court for the enforcement of this section. All
process of any court to which application may be made as
provided in this subsection may be served in any judicial
district.
(f)(1) Not later than 20 days after the service of any civil
investigative demand upon any person under subsection (c), or
at any time before the return date specified in the demand,
whichever period is shorter, or within such period exceeding 20
days after service or in excess of such return date as may be
prescribed in writing, subsequent to service, by any Commission
investigator named in the demand, such person may file with the
Commission a petition for an order by the Commission modifying
or setting aside the demand.
(2) The time permitted for compliance with the demand in
whole or in part, as deemed proper and ordered by the
Commission, shall not run during the pendency of such petition
at the Commission, except that such person shall comply with
any portions of the demand not sought to be modified or set
aside. Such petition shall specify each ground upon which the
petitioner relies in seeking such relief, and may be based upon
any failure of the demand to comply with the provisions of this
section, or upon any constitutional or other legal right or
privilege of such person.
(g) At any time during which any custodian is in custody or
control of any documentary material, tangible things, reports,
answers to questions, or transcripts of oral testimony given by
any person in compliance with any civil investigative demand,
such person may file, in the district court of the United
States for the judicial district within which the office of
such custodian is situated, and serve upon such custodian, a
petition for an order of such court requiring the performance
by such custodian of any duty imposed upon him by this section
or section 21.
(h) Whenever any petition is filed in any district court of
the United States under this section, such court shall have
jurisdiction to hear and determine the matter so presented, and
to enter such order or orders as may be required to carry into
effect the provisions of this section. Any final order so
entered shall be subject to appeal pursuant to section 1291 of
title 28, United States Code. Any disobedience of any final
order entered under this section by any court shall be punished
as a contempt of such court.
(i) Notwithstanding any other provision of law, the
Commission shall have no authority to issue a subpoena or make
a demand for information, under authority of this Act or any
other provision of law, unless such subpoena or demand for
information is signed by a Commissioner acting pursuant to a
Commission resolution. The Commission shall not delegate the
power conferred by this section to sign subpoenas or demands
for information to any other person.
(j) The provisions of this section shall not--
(1) apply to any proceeding under section 5(b), any
proceeding under section 11(b) of the Clayton Act (15
U.S.C. 21(b)), or any adjudicative proceeding under any
other provision of law; or
(2) apply to or affect the jurisdiction, duties, or
powers of any agency of the Federal Government, other
than the Commission.
* * * * * * *
Dissenting Views
To Accompany H.R. 659, the ``Standard Merger and Acquisition Through
Equal Rules Act of 2017'' or ``SMARTER Act''
H.R. 659, the ``Standard Merger and Acquisition Reviews
Through Equal Rules Act of 2017'' or ``SMARTER Act,''
undermines the independence of the Federal Trade Commission
(FTC) in direct contravention of Congress' original intent in
establishing this agency more than 100 years ago. Although
Congress created the FTC as an independent and bipartisan
antitrust enforcement and policy agency, H.R. 659 undoes this
goal by eliminating the FTC's ability to use procedures
pursuant to the Federal Trade Commission Act (FTC Act)\1\ to
enforce antitrust law in merger cases, and, in particular, its
ability to use administrative adjudication. Moreover, while
this bill purports to implement recommendations of the
Antitrust Modernization Commission (AMC), it goes far beyond
the AMC's recommendations by curtailing the FTC's ability to
address consummated mergers and non-merger activity. Finally,
in seeking to harmonize the preliminary injunction standard for
proposed mergers, H.R. 659 either addresses a non-existent
problem or may, in fact, impose a less consumer-friendly
standard.
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\1\Federal Trade Commission Act of 1914, Pub. L. No. 63-203, 38
Stat. 717 (1914), codified at 15 U.S.C. Sec. Sec. 41-58 (2017).
---------------------------------------------------------------------------
H.R. 659 is not a modest measure. Rather, it represents a
seismic change to the status quo by altering the FTC's
fundamental nature as an independent administrative agency
charged with enforcing antitrust laws and developing antitrust
policy while being relatively shielded from political, and
particularly Executive Branch, interference. Such loss of
independence and distinctiveness threatens the FTC's role in
creating antitrust policy in a stable, long-term manner without
being subject to the changing political ideologies from one
Presidential administration to the next. The elimination of
distinctions between the FTC and the Department of Justice
(DOJ) in merger enforcement potentially opens the door to the
elimination of the FTC's antitrust enforcement role by chipping
away at the various differences that justify its separate
existence.
We share the views expressed by former FTC Chair Edith
Ramirez, who served during the Obama Administration, regarding
a Senate bill substantively identical to H.R. 659. She warned
that the measure ``would fundamentally alter a critical aspect
of the agency's institutional role and risks impeding its
ability to protect American consumers and the public
interest.''\2\ In addition, the American Antitrust Institute, a
consumer-oriented antitrust organization, strongly opposes H.R.
659, particularly with respect to its elimination of the FTC's
ability to use administrative adjudication in merger cases.\3\
Consumers Union, the policy and advocacy arm of Consumer
Reports, echoes these concerns, observing that that ``we do not
believe the case has been made . . . that there is a material
problem here that warrants making alterations to the FTC's
fundamental enforcement structure.''\4\
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\2\The Standard Merger and Acquisition Reviews Through Equal Rules
Act of 2015: Hearing on S. 2102 Before the Subcomm. on Antitrust,
Competition Policy & Consumer Rights of the S. Comm on the Judiciary,
114th Cong. 47 (2015) (statement of Edith Ramirez, Chairwoman, Federal
Trade Commission), https://www.judiciary.senate.gov/imo/media/doc/10-
07-15%20Ramirez%20Testimony.pdf [hereinafter Senate Hearing]. Former
FTC Chairwoman Ramirez expressed similar concerns with an earlier, but
substantially similar, draft of the SMARTER Act, which she said would
have ``far-reaching immediate effects'' and the ``potential for
significant unintended consequences.'' Letter from Edith Ramirez,
Chair, Federal Trade Comm'n, to Spencer Bachus (R-AL), Chair, & Henry
C. Johnson, Jr. (D-GA), Ranking Member, Subcomm. on Regulatory Reform,
Commercial & Antitrust Law of the H. Comm. on the Judiciary (Apr. 2,
2014) (on file with H. Comm. on the Judiciary Democratic staff)
[hereinafter Ramirez Letter].
\3\See, e.g., Letter from Albert A. Foer, President, American
Antitrust Institute, to Spencer Bachus (R-AL), Chair, & Henry C.
Johnson, Jr. (D-GA), Ranking Member, Subcomm. on Regulatory Reform,
Commercial & Antitrust Law of the H. Comm. on the Judiciary (Apr. 9,
2014) (on file with H. Comm. on the Judiciary Democratic staff )
[hereinafter ``Foer Letter'']; The Standard Merger and Acquisition
Reviews Through Equal Rules Act of 2015: Hearing on H.R. 2745 Before
the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the
H. Comm. on the Judiciary, 114th Cong. 47 (2015), http://
judiciary.house.gov/_cache/files/9f77f8c3-6b40-4b22-b337-51ddbedab9b6/
114-32-95119.pdf (statement of Bert Foer, senior fellow, American
Antitrust Institute).
\4\Letter from George P. Slover, Senior Policy Counsel, Consumers
Union, to Bob Goodlatte (R-VA), Chair, H. Comm. on the Judiciary, et
al. (Apr. 4, 2017) (on file with H. Comm. on the Judiciary Democratic
staff). We also note that the Obama Administration strongly opposed a
substantively identical bill in the 114th Congress, stating that the
legislation ``would eliminate the [FTC's] ability to use critical
administrative and procedural tools to promote competition and protect
consumers.'' Exec. Office of the President, Office of Mgm't & Budget,
Statement of Administration Policy on H.R. 2745--Standard Merger and
Acquisition Reviews Through Equal Rules Act of 2015, Mar. 21, 2016,
available at http://www.presidency.ucsb.edu/ws/index.php?pid=117357.
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For these reasons and those described below, we
respectfully urge our colleagues to oppose H.R. 659.
DESCRIPTION AND BACKGROUND
DESCRIPTION
H.R. 659 eliminates the ability of the FTC to use the
procedures of the FTC Act in merger enforcement cases and with
respect to certain types of non-merger activity. In its stead,
the bill requires the FTC to use the procedures available to
the DOJ under the Clayton Antitrust Act (Clayton Act) in such
circumstances.\5\ The following is a description of the most
relevant provisions of the bill.
---------------------------------------------------------------------------
\5\Clayton Antitrust Act of 1914, Pub. L. No. 63-212, 38 Stat. 730
(1914), codified at 15 U.S.C. Sec. Sec. 12-27, 29 U.S.C. Sec. Sec. 52-
53 (2017).
---------------------------------------------------------------------------
Section 2 of the bill amends the Clayton Act to bring the
FTC's merger enforcement authority under the Act. Under current
law, the DOJ's Antitrust Division and the FTC's Bureau of
Competition enforce the Nation's antitrust laws jointly.
Nevertheless, while the DOJ enforces the antitrust laws through
civil actions under the Clayton Act and Sherman Act, the FTC
enforces the antitrust laws through section 5 of the FTC Act,
which prohibits unfair methods of competition. As amended, H.R.
659 would align the procedural requirements applicable to the
DOJ and FTC for merger enforcement under the Clayton Act.
Section 3 of the bill makes several amendments to the FTC
Act that effectively eliminate the FTC's authority to act
pursuant to the Act's provisions. Of particular concern,
section 3(1) of the bill amends section 5(b) of the FTC Act,
which provides the FTC with the authority to institute
administrative proceedings against a person, partnership, or
corporation whenever the FTC determines that such a party has
been or is using ``any unfair method of competition,'' among
other things. If the FTC determines after a notice and hearing
that the target of the complaint has engaged in the ``unfair
method of competition'' and prepares a report to that effect,
the FTC may issue a cease and desist order. A party may appeal
an FTC decision to a federal court of appeals.
Section 3(1) of the bill would exclude from the definition
of ``unfair method of competition'' any ``unfair method of
competition that would result from the consummation of a
merger, acquisition, joint venture, or similar transaction.''
Notably, section 3(1) excludes mergers from the FTC's
administrative process as well as pre-merger activity,
acquisitions, joint ventures, or other similar transactions
from the definition of ``method of competition'' as used in the
portion of section 5(b) of the FTC Act giving the FTC the
authority to issue reports and cease-and-desist orders. The
inclusion of pre-merger activity suggests that the bill's
elimination of the FTC's administrative authority extends
beyond mergers to include arguably non-merger anticompetitive
conduct.
Section 3(3) of the bill amends section 13(b) of the FTC
Act, which provides the FTC with the authority to bring suit in
a federal district court to enjoin any conduct that violates
any provision of law enforced by the FTC and also articulates
the standard for granting a preliminary injunction. This
standard requires a showing that, ``weighing the equities and
considering the [FTC's] likelihood of ultimate success, such
action would be in the public interest.'' It further provides
that if the FTC does not file a complaint within a time period
specified by the court not to exceed 20 days, the preliminary
injunction is dissolved. Section 3(3) of the bill excludes from
section 13(b) any actions that violate section 7 of the Clayton
Act and section 5(a)(1) of the FTC Act--which declares, in
part, that unfair methods of competition are unlawful--with
respect to an unfair method of competition that would result
from the consummation of a merger, acquisition, joint venture,
or similar transaction.
BACKGROUND
In 1914, Congress passed the FTC Act,\6\ which created the
FTC, because of its belief that the Sherman Antitrust Act of
1890\7\ failed to stop the merger wave and corporate abuses.\8\
In addition to establishing the FTC, the FTC Act made unlawful,
inter alia, ``unfair methods of competition.''\9\ Given
Congress's view that the Sherman Act, and enforcement of that
Act by the DOJ, was insufficient, it created the FTC to
encourage development of antitrust policy by antitrust experts
through an independent administrative agency that would share
enforcement authority with the DOJ\10\ and have the exclusive
authority to enforce the FTC Act.\11\ Additionally, Congress
gave the FTC broad investigative and reporting powers and
authorized its Commissioners to use an administrative
adjudication process to enforce the antitrust laws rather than
try cases before a generalist federal judge, though the FTC's
decisions may be appealed to a federal court of appeals.\12\
Congressional advocates for the creation of the FTC disclaimed
any intent to amend the Sherman Act or to undermine DOJ's
enforcement role.\13\ Rather, they sought to enhance existing
antitrust law and enforcement, and in particular, to establish
``a new agency that would prosecute if the [DOJ] faltered,
enforcing a flexible new standard where the Sherman Act might
not.''\14\
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\6\Federal Trade Commission Act of 1914, Pub. L. No. 63-203, 38
Stat. 717 (1914) (codified at 15 U.S.C. Sec. Sec. 41-58 (2017)).
\7\Sherman Antitrust Act of 1890, 26 Stat. 209 (1890) (codified at
15 U.S.C. Sec. Sec. 1-7 (2017)).
\8\Marc Winerman, The Origins of the FTC: Concentration,
Cooperation, Control, and Competition, 71 Antitrust L. J. 74 (2003),
http://www.ftc.gov/sites/default/files/attachments/federal-trade-
commission-history/origins.pdf.
\9\15 U.S.C. Sec. 45(a) (2017); Marc Winerman, A Brief History of
the Federal Trade Commission: Federal Trade Commission 90th Anniversary
Symposium, 6 (Sept. 22, 2004), http://www.ftc.gov/sites/default/files/
attachments/ftc-90-symposium/90thanniv_program.pdf [hereinafter FTC
History].
\10\An ``independent'' agency is one that has some measure of
independence from the President. The principal evidence of such
independence is that the President cannot remove the head of such an
agency without cause. Independent agencies are often styled
``commissions'' or ``boards.'' Stephen G. Breyer, et al.,
Administrative Law And Regulatory Policy, at 100 (4th ed. 1999).
\11\While the FTC has no authority to enforce the Sherman Act, the
Supreme Court has held that any conduct that violates section 1 of the
Sherman Act would also violate section 5(a) of the FTC Act. Federal
Trade Comm'n v. California Dental Ass'n, 526 U.S. 756, 763 n.3 (1999)
(``The FTC Act's prohibition of unfair competition and deceptive acts
or practices . . . overlaps the scope of Sec. 1 of the Sherman Act.'').
\12\15 U.S.C. Sec. 45(b) (2017).
\13\Id.
\14\Id.
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Since the establishment of the FTC, Congress has
historically granted the agency broad authority to prohibit
unfair methods of competition. In fact, every time the Supreme
Court has restricted the FTC's authority through statutory
interpretation, Congress has responded by amending the FTC Act
to expand its authority.\15\
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\15\FTC History, supra note 9, at 7-9 (outlining instances in the
1920's and 1930's in which Congress expanded the FTC's authority in
response to restrictive Supreme Court decisions, and also highlighting
further expansions of the FTC's authority by Congress in the 1950's and
1970's).
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In the exceedingly rare instances where the government and
the merging parties do not reach a consent agreement at the
moment the government has filed suit to block a merger, the
government may seek a temporary restraining order and a
preliminary injunction to stop consummation of the merger while
the government pursues its complaint. Nominally, FTC and DOJ
are subject to different standards for the grant of preliminary
injunctions. While the dominant view is that in practice both
standards essentially are the same, there are some who believe
that the FTC standard is more favorable to the enforcement
agency.\16\
---------------------------------------------------------------------------
\16\See, e.g., Antitrust Modernization Commission, Report And
Recommendations 142 (2007) [hereinafter AMC Report] (``[A]gencies face
nominally different standards governing whether a federal district
court will issue a preliminary injunction,'' but ``the magnitude of the
difference between the two standards is not clear.'').
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CONCERNS WITH H.R. 659
I. H.R. 659 Undermines the FTC's Independence and Mission To Promote
Competition
H.R. 659 fundamentally changes the FTC's more than century-
old organizational structure and lessens the agency's
independence. By eliminating the agency's authority to pursue
administrative litigation in merger cases and other
circumstances, the bill undermines the FTC's independence and
turns it into another executive enforcement agency in large
merger cases. This fundamental change violates Congress's
purpose in establishing the FTC in the first place.
Congress created the FTC as an independent agency, i.e.,
one with a considerable measure of independence from the
President. Congress's intent in doing so was not only to
supplement the DOJ's enforcement activity where it may be
lacking, but to also develop antitrust policy with a body of
antitrust experts not subject to swings in political ideology
that the DOJ, as an arm of the Executive Branch, may
experience.\17\
---------------------------------------------------------------------------
\17\Id. at 129 (noting that Congress ``also believed that an
administrative agency--conducting administrative adjudication of
antitrust cases, and vested with broad information-gather powers--would
be a better vehicle for developing more flexible standards of antitrust
law than were the courts.'').
---------------------------------------------------------------------------
This explains why the bill's elimination of the FTC's
authority to use administrative adjudication in merger
enforcement matters is particularly concerning. Such authority
is essential to the FTC's ability to promote competition and
challenge anticompetitive conduct,\18\ a view shared by both
Republican and Democratic FTC Chairs. For example, FTC Chair
Edith Ramirez, who served during the Obama Administration,
observed that ``Congress created the Commission in 1914 as an
independent, bipartisan agency to augment then-existing
antitrust enforcement efforts'' because Congress recognized
that ``American consumers would benefit from an expert agency
with the means to develop competition law and policy over
time,'' Chair Ramirez added.\19\ She explained:
---------------------------------------------------------------------------
\18\Maureen K. Ohlhausen, Administrative Litigation at the FTC:
Effective Tool for Developing the Law or Rubber Stamp? 12 J.
Competition L. & Econ. 623, 624 (2016) [hereinafter Administrative
Litigation], https://academic.oup.com/jcle/article/12/4/623/2547756/
ADMINISTRATIVE-LITIGATION-AT-THE-FTCEFFECTIVE.
\19\Senate Hearing, supra note 2, at 2 (statement of Edith Ramirez,
Chair, Federal Trade Commission).
The FTC plays an essential role in protecting
consumers from anticompetitive mergers. By seeking to
alter the Commission's adjudicative function, the
proposed legislation risks eroding a fundamental
institutional attribute of the FTC. This quasi-judicial
role is a defining characteristic of the agency--
authority Congress very deliberately granted to the FTC
when the agency was created to serve as a complement to
enforcement by DOJ. The current system has worked well
for over one hundred years, and all indications are
that it will continue to do so to the benefit of
---------------------------------------------------------------------------
competition and consumers.\20\
\20\Senate Hearing, supra note 2, at 14 (statement of Edith
Ramirez, Chairwoman, Federal Trade Commission).
The current Acting FTC Chair, Maureen Ohlhausen, likewise
supports the use of administrative litigation as a ``unique
asset in enforcing our antitrust laws.''\21\ In the past
decade, she notes, the FTC has relied on administrative
litigation to promote competition in healthcare markets, the
pharmaceutical industry, and in occupational licensing, as well
as other areas.\22\ As Chair Ohlhausen observed earlier this
year, the agency has an exemplary record when using this
authority reflected by the fact that it has won six of the
seven cases appealed to the Supreme Court in the past 30 years,
and five of these were brought through administrative
litigation.\23\ Congress has trusted the FTC with this
authority because the FTC ``is well placed to resolve difficult
questions of competition and consumer-protection law.''\24\
Committee reports from both houses of Congress during the
establishment of the FTC bolster this view.\25\ By weakening
the FTC's independence, H.R. 659 undermines these benefits for
American consumers.
---------------------------------------------------------------------------
\21\Maureen K. Ohlhausen, Acting Chair, Federal Trade Comm'n,
Address at Global Competition Review 6th Annual Antitrust Law Leaders
Forum 10 (Feb. 3, 2017), https://www.ftc.gov/system/files/documents/
public_statements/1070123/gcr_the-ftc_path_ahead.pdf;
\22\Administrative Litigation, supra note 18, at 624.
\23\Maureen K. Ohlhausen, Acting Chair, Federal Trade Comm'n,
Address at Global Competition Review 6th Annual Antitrust Law Leaders
Forum 10 (Feb. 3, 2017), https://www.ftc.gov/system/files/documents/
public_statements/1070123/gcr_the-ftc_path--ahead.pdf;
\24\Administrative Litigation, supra note 18, at 623.
\25\Humphrey's Ex'r v. United States, 295 U.S. 602, 624 (1935)
(quoting S. Rep. No. 63-597, at 10-11 (1914)).
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Beyond the specific changes proposed by H.R. 659, we are
wary of any measure to alter, and possibly diminish, the FTC's
authority. Opponents of the FTC's enforcement activities have
engaged in a longstanding campaign to undermine the agency,
both because of its role as an antitrust enforcer and also
because of its work in the consumer protection arena. Any
proposal to alter the FTC's authority, and particularly one
that would eliminate its distinctiveness from the DOJ, should
be viewed with skepticism.\26\ Although H.R. 659 is ostensibly
limited to HSR merger cases, eliminating distinctions between
the DOJ and the FTC may later be used to justify ultimately
eliminating the FTC as an antitrust enforcement and
policymaking agency.
---------------------------------------------------------------------------
\26\See, e.g., U.S. Chamber of Commerce, Unfair Methods of
Competition Under Section 5 of the FTC Act: Does the U.S. Need Rules
``Above and Beyond Antitrust''?, GCP: The Antitrust Chronicle (Sept.
2009), http://www.uschamber.com/sites/default/files/reports/
0909antrust_0.pdf.
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In discussing the value of administrative adjudication,
Bert Foer, the former President of the American Antitrust
Institute (AAI), stated in a letter to the Committee:
[P]rudence compels caution in any tinkering with a
system of dual enforcement including administrative
adjudication that emerged out of robust debate in the
course of the 1912 Presidential election campaign and
that Congress adopted two years later in the face of
grave concern over the fate of antitrust enforcement
generally when left exclusively in the hands of
generalist judges. . . . AAI believes that eliminating
FTC administrative adjudication would almost surely be
counterproductive. We would thereby (a) lose the
considerable benefits of expert agency policy
evolution, the original Wilson/Brandeis vision giving
rise to the FTC's creation a hundred years ago and more
important than ever for sound evolution of merger
policy in the 21st Century; and (b) exacerbate any
inefficiency of dual enforcement generally since we
would then have two enforcement agencies applying the
same merger law standards and procedures to different
companies in different industries in cases brought
exclusively to generalist courts. A more logical course
would be channeling all merger enforcement to the FTC
and its expert administrative processes.\27\
---------------------------------------------------------------------------
\27\Foer Letter, supra note 3, at para.para.3, 5.
Similarly, at a 2014 hearing before the Subcommittee on
Regulatory Reform, Commercial, and Antitrust Law examining
draft legislation substantially similar to H.R. 659, Professor
John Kirkwood of the Seattle University School of Law expressed
great concern about the removal of the FTC's administrative
adjudication authority because the purpose of having this
authority was to allow the FTC to develop antitrust law in a
less partisan, more expert way than generalist courts or the
DOJ under the control of one political party may be able to
do.\28\ Professor Kirkwood's concerns were twofold: (1)
removing the FTC's administrative adjudication authority in
merger cases might lead to a ``slippery slope'' whereby such
authority would eventually be removed in other areas of
antitrust enforcement;\29\ and (2) administrative adjudication
supports the FTC's congressionally-mandated mission of
developing administrative expertise through sustained
attention, information-gathering, and vigorous enforcement.\30\
Professor Kirkwood highlighted administrative adjudication's
particular importance in those cases when an industry is
changing rapidly or when an agency has not developed much
expertise in it.\31\
---------------------------------------------------------------------------
\28\Hearing on the Standard Merger and Acquisition Reviews Through
Equal Rules Act of 2014 Before the S. Comm. On Regulatory Reform,
Commercial and Antitrust Law, 113th Cong. 13 (2014) (statement of John
B. Kirkwood, Professor of Law & Associate Dean for Strategic Planning
and Mission, Seattle University School of Law), http://
judiciary.house.gov/_cache/files/4b07b175-6ca6-400e-b218-2e42b3ffa0d0/
113-83-87424.pdf [hereinafter Kirkwood Statement].
\29\Id. at 5.
\30\Id.
\31\Id.
---------------------------------------------------------------------------
Similarly, Jonathan Jacobson, a former commissioner of the
Antitrust Modernization Commission, echoed many of these
concerns in his 2015 testimony:
Part III administrative litigation--both for
anticompetitive conduct matters and mergers--is core to
the FTC's basic mission. Prior to 1976 (when Hart-
Scott-Rodino was passed), administrative litigation of
FTC merger matters was the only type of FTC merger
review, and retaining discretion to pursue
administrative litigation where appropriate is
consistent with the FTC's assignment to develop and
apply expertise on competition law issues in an
administrative context. If the FTC finds it appropriate
to develop the law through follow-on administrative
proceedings where it could, for example, perform a more
rigorous analysis of new economic theories and evidence
than a generalist district court might be able to
perform, it should have discretion to do so. That is
precisely what Congress intended when creating the FTC
101 years ago.\32\
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\32\Senate Hearing, supra note 2, at 7 (statement of Jonathan
Jacobson, former commissioner of the Antitrust Modernization
Commission), https://www.judiciary.senate.gov/imo/media/doc/10-07-
15%20Jacobson%20Testimony.pdf.
Concurring in these views, Ranking Member John Conyers, Jr.
(D-MI) observed that rather than strengthening Commission's
authority, H.R. 659 ``does the opposite.''\33\
---------------------------------------------------------------------------
\33\Unofficial Tr. of the Markup of: H.R. 659, the ``Standard
Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act of
2017'' by the H. Comm. on the Judiciary, 115th Cong. 8 (2017), https://
judiciary.house.gov/wp-content/uploads/2017/04/4.5.17-markup-
transcript.pdf [hereinafter Markup Tr.].
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II. H.R. 659 Does Not Comport With the Antitrust Modernization
Commission Recommendations
Although H.R. 659 supporters claim that the bill simply
implements the recommendations of the bipartisan Antitrust
Modernization Commission (AMC), the measure, in fact, exceeds
what the AMC contemplated. Congress created the AMC in 2002 to
examine whether antitrust laws, policies, and procedures should
be amended in light of changes to the economy, and in 2007, it
issued a 449-page report outlining 80 recommendations for
revisions to antitrust law and policy. Only two of these 80
recommendations--advocating the elimination of FTC's
administrative adjudication authority for merger cases and the
adoption of a uniform preliminary injunction standard--are
relevant to consideration of the SMARTER Act.
The scope of these two AMC recommendations, however, is
narrower than what is proposed in H.R. 659. With respect to
administrative litigation, the AMC recommended that Congress
eliminate the FTC's authority to pursue administrative
litigation in large merger cases and that it should ensure the
same standard that DOJ is subject to when seeking a preliminary
injunction in such cases.\34\ H.R. 659, however, differs in in
several respects. First, rather than limiting its provisions to
these two recommendations, the bill would make the FTC
functionally equivalent to the DOJ in large merger cases,
which, arguably, is a step towards eliminating the dual
enforcement regime, an option the AMC specifically
rejected.\35\ Second, the bill's carve-out for the FTC's
administrative adjudication authority would reach beyond merger
cases to also include ``joint ventures'' and ``similar
transactions'' as well as pre-merger activity, meaning that the
loss of the FTC administrative adjudication authority would
extend beyond the scope of section 7 of the Clayton Act to
potentially include non-merger activity. Finally, the FTC's
loss of administrative litigation authority could reach
already-consummated mergers, which is well beyond the AMC
recommendation. As Mr. Jacobson noted in his testimony in
opposition to the SMARTER Act, ``to the extent that the
legislation is intended to implement the AMC's recommendation,
it is drafted too broadly.'' He explained:
---------------------------------------------------------------------------
\34\AMC Report, supra note 16, at 140-41.
\35\Id. at 129 (recommending ``no comprehensive change to the
existing system in which both the FTC and the DOJ enforce the antitrust
laws'').
The AMC recommended that Congress implement
legislation ``to prohibit the Federal Trade Commission
from pursuing administrative litigation in Hart-Scott-
Rodino Act merger cases.'' Its proposal ``would not
preclude the FTC from pursuing an administrative
complaint after the consummation of a merger, based on
evidence that the merger has had actual, as opposed to
predicted, anticompetitive effects.'' But the proposed
legislation could be construed as prohibiting a
challenge to the ``consummation'' of any merger in
administrative proceedings, even a post-merger
challenge, notwithstanding the term ``proposed.'' If
enacted at all, I strongly recommend clarifying that
the exclusion would only apply to ``the consummation of
a proposed merger, acquisition, joint venture, or
similar transaction that is subject to section 7 of the
Clayton Act (15 U.S.C. 18) where the merger,
acquisition, joint venture, or similar transaction has
not yet been consummated'' for avoidance of doubt.
There is no justification for eliminating
administrative litigation in post-consummation
challenges, for those are not undertaken with the time
sensitivity attendant on a challenge to a merger
occurring prior to the closing of the transaction.\36\
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\36\Senate Hearing, supra note 2, at 3-4 (emphasis in original)
(internal citations omitted) (statement of Jonathan Jacobson, former
commissioner of the Antitrust Modernization Commission), https://
www.judiciary.senate.gov/imo/media/doc/10-07-
15%20Jacobson%20Testimony.pdf.
Mr. Jacobson further noted that the FTC's success in post-
consummation merger challenges is held in high regard by the
antitrust bar and has been upheld on appeal.\37\
---------------------------------------------------------------------------
\37\Id.
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III. H.R. 659 Addresses a Non-Existent Problem
H.R. 659 does not address an actual problem. First, there
is no evidence of procedural bias in the FTC's use of
administrative litigation. Rather, this system has produced a
string of important victories by the Commission before the
Supreme Court that reduce anticompetitive conduct. Second, the
changes that H.R. 659 contemplates would apply in the
exceedingly rare instances where: (1) a transaction is large
enough to merit more detailed review; (2) after the review, the
reviewing agency determines that it would challenge the
transaction through litigation; (3) the parties do not agree to
any settlement, including divestures and other commitments; and
(4) the parties choose to continue with their transaction
despite the filing of a complaint by the reviewing agency
rather than abandoning the transaction. Instances where the FTC
would seek a preliminary injunction and use its administrative
process are rare, and instances when the FTC seeks to use its
administrative process after losing a preliminary injunction
proceeding in court are even rarer.
A. THERE IS NO EVIDENCE OF PROCEDURAL BIAS IN THE FTC'S ENFORCEMENT
RECORD
Although proponents of H.R. 659 argue that differing
processes and standards in merger enforcement by the FTC and
DOJ causes ``unnecessary uncertainty,''\38\ even supporters of
the bill acknowledge that claims of due-process deficiencies or
procedural bias are misplaced. In 2016, Acting FTC Chair
Ohlhausen, who supports the bill, concluded that procedural
concerns with administrative litigation are ``misplaced.''\39\
In ``the most comprehensive study to date'' of the FTC's
administrative litigation authority, she noted that despite
criticism, ``administrative adjudication is a useful tool for
advancing competition policy.''\40\ This study, which reviewed
every available case since 1977 that produced decision through
administrative litigation, expressly rejected the assertion
that the Commission's process is biased or unfair,\41\
referring to claims about the shortcomings of the FTC's
administrative litigation process as ``mostly anecdotal or
theoretical.''\42\
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\38\Markup Tr.at 5 (statement of Representative Bob Goodlatte (R-
VA), Chair, H. Comm. on the Judiciary).
\39\Maureen K. Ohlhausen, Acting Chairwoman, Federal Trade Comm'n,
Address at Global Competition Review 6th Annual Antitrust Law Leaders
Forum 9, 10 (Feb. 3, 2017), https://www.ftc.gov/system/files/documents/
public_statements/1070123/gcr_the-ftc_path--ahead.pdf; Administrative
Litigation, supra note 18.
\40\Administrative Litigation, supra note 18, at 656.
\41\Id. at 645.
\42\Id.
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Acting FTC Chairwoman Ohlhausen's study also refuted the
proposition that the FTC ``always wins.'' In 145 administrative
cases over the past four decades, the ``Commission does not
always rule for complaint counsel,'' she notes.\43\ Indeed, it
dismisses nearly a third of cases it has previously
authorized.\44\ Importantly, this data also indicate that the
FTC has become more selective regarding the cases it
administratively litigates, bringing fewer of these cases over
time.\45\ This trend evidences ``improved case selection,
likely in response to changes in antitrust law that demanded
more economic rigor.''\46\
---------------------------------------------------------------------------
\43\Id. at 657.
\44\Id.
\45\Id.
\46\Id.
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In response to the claim that H.R. 659 would reduce costs
and uncertainty by promoting uniformity in merger reviews, it
should be noted that FTC and DOJ already analyze mergers in
exactly the same way, following the same substantive policy in
conducting pre-merger reviews (i.e., the joint Merger
Guidelines). Mr. Jacobson underscored this similarity, arguing
that in his experience the outcome of a merger has never turned
on the perceived differences in merger enforcement addressed by
H.R. 659:
In my 39 years of practice, the firms in which I have
been a partner have shepherded many dozens of mergers
through the agencies. In each one, the planning process
has included a prediction as to which agency would be
cleared to evaluate the transaction. In none has there
been any consideration of abandoning or revising the
transaction because of the possibility that, after
prevailing in an FTC-brought preliminary injunction
proceeding, the Commission might later unwind the
merger through an administrative proceeding. The
potential for such an outcome occasionally appears as a
single sub-bullet point in a long PowerPoint, but never
affects planning or evaluation of the transaction's
prospects.\47\
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\47\Senate Hearing, supra note 2 (response to questions for the
record from Jonathan Jacobson, former commissioner, Antitrust
Modernization Commission) (emphasis in original), https://
www.judiciary.senate.gov/imo/media/doc/
Jacobson%20Responses%20to%20Klobuchar.pdf.
Additionally, the FTC's internal procedures already make it
highly unlikely that the agency would ever seek such a ``second
bite at the apple.''\48\ In 2015, the FTC set forth new
procedures for the administrative adjudication process
following a federal court's denial of a preliminary injunction
under section 13(b) of the FTC Act.\49\ Under the revised rule,
parties have two options to end administrative adjudication
following a preliminary injunction.\50\ First, a party may move
to have an administrative adjudication withdrawn, which will
automatically occur within two days of the filing unless there
is an objection by the complaint counsel.\51\ Previously,
administrative cases were only withdrawn from adjudication
pursuant to the Commission's direction.\52\ Second, a party may
file a motion to dismiss the administrative complaint on the
basis that ``the public interest does not warrant further
litigation,'' which results in an automatic stay of the
proceeding for seven days until Commission rules on the
motion.\53\ Formerly, absent the Commission's direction, filing
a motion to dismiss did not result in an automatic stay of the
proceeding.\54\ Deborah Feinstein, the Director of the FTC's
Bureau of Competition noted that this change creates ``a new
and improved process that aims to be quicker, more predictable,
and more transparent.''\55\
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\48\H.R. 659's proponents may cite the FTC's actions in the Whole
Foods-Wild Oats merger as an example of the agency's problematic use of
administrative proceedings after losing a preliminary injunction matter
in court. In that case, however, the U.S. Court of Appeals for the D.C.
Circuit ultimately vindicated the FTC's pursuit of administrative
litigation after losing the preliminary injunction proceeding in court
when the appeals court reversed the district court's denial of the
FTC's request for a preliminary injunction. FTC v. Whole Foods Market,
Inc., 548 F.3d 1028 (D.C. Cir. 2008). Additionally, as both the AMC and
AAI have pointed out, the FTC's own internal practice and procedures
make the ``second bite'' scenario unlikely. AMC Report, supra note 16,
at 141; Foer Letter, supra note 3.
\49\15 U.S.C. Sec. 53(b) (2017); Fed. Trade Commission, Commission
Approves Revisions to Its Rules of Practice (Mar. 13, 2015), https://
www.ftc.gov/news-events/press-releases/2015/03/commission-approves-
revisions-its-rules-practice.
\50\A party may also utilize this process following the denial of
the Commission's motion for relief pending appeal by a federal court of
appeals. 16 C.F.R. Sec. 3.26(b)(2) (2017).
\51\16 C.F.R. Sec. 3.26(c) (2017) (``The Secretary shall issue an
order withdrawing the matter from adjudication 2 days after such a
motion is filed, except that, if complaint counsel file an objection
asserting that the conditions of paragraph (b) of this section have not
been met, the Commission shall decide the motion within 10 days after
the objection is filed.'').
\52\16 C.F.R. Sec. 3.26(c) (2017) (``The matter will not be
withdrawn from adjudication unless the Commission so directs.'').
\53\16 C.F.R. Sec. 3.26(d)(2), (4) (2017).
\54\16 C.F.R. Sec. 3.26(d) (2017) (``The filing of a motion to
dismiss shall not stay the proceeding unless the Commission so
directs.'').
\55\Deborah Feinstein, Changes to Commission Rule 3.26 Re: Part 3
Proceedings following Federal Court Denial of a Preliminary Injunction,
Fed. Trade Commission (Mar. 16, 2015), https://www.ftc.gov/news-events/
blogs/competition-matters/2015/03/changes-commission-rule-326-re-part-
3-proceedings.
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The FTC's revision to Rule 3.26 does not, however, displace
the Commission's longstanding policies of determining whether
to forego administrative adjudication solely because a federal
court does not grant a preliminary injunction.\56\ In 1995, the
FTC clarified that this determination is made on a case-by-case
basis, guided by five factors to determine whether continuing
administrative adjudication is in the public interest as
follows:
---------------------------------------------------------------------------
\56\Administrative Litigation Following the Denial of a Preliminary
Injunction: Policy Statement, 60 Fed. Reg. 39742 (Aug. 3, 1995),
https://www.ftc.gov/sites/default/files/attachments/merger-review/
950803administrativelitigation.pdf.
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(1) the factual findings and legal conclusions of the
district court or any appellate court;
(2) any new evidence developed during the preliminary
injunction proceeding;
(3) whether the transaction raises important issues
of fact, law, or merger policy that need resolution in
administrative litigation;
(4) an overall assessment of the costs and benefits
of further proceedings; and
(5) any other matter that bears on whether it would
be in the public interest to proceed with the merger
challenge.\57\
---------------------------------------------------------------------------
\57\Id.
---------------------------------------------------------------------------
While there may be rare instances where there may be a
``second bite'' scenario, Mr. Jacobson notes that the FTC has
refrained from using this authority since 1995, but that its
use has historically served the public interest.\58\
---------------------------------------------------------------------------
\58\Senate Hearing, supra note 2, at 2 (response to questions for
the record from Jonathan Jacobson, former commissioner of the Antitrust
Modernization Commission) (``[T]here has not been a single merger since
then challenged in Part 3 after a preliminary injunction has been
denied.''), https://www.judiciary.senate.gov/imo/media/doc/
Jacobson%20Responses%20to%20Klobuchar.pdf.
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B. THERE IS NO EFFECTIVE DIFFERENCE BETWEEN THE ANTITRUST AGENCIES'
PRELIMINARY INJUNCTION STANDARDS
To the extent that H.R. 659 seeks to harmonize the
preliminary injunction standards applicable in DOJ merger
cases\59\ and FTC merger cases,\60\ doing so does not appear to
solve a real problem. The dominant opinion among courts,
academics, and the antitrust bar is that the standards, while
nominally different, are the same in practice.\61\ Former FTC
Chair Ramirez and former Assistant Attorney General for
Antitrust William Baer have underscored this point, arguing
that regardless of which agency seeks a preliminary injunction
in merger cases, both are required ``to make a robust
evidentiary and legal showing that the transaction would likely
be anticompetitive.''\62\ Far from providing differential
treatment, federal district courts ``closely scrutinize cases
brought by both agencies,''\63\ with one court recently
observing that the FTC's preliminary injunction standard
``demands rigorous proof to block a proposed merger or
acquisition.''\64\
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\59\When DOJ seeks a preliminary injunction, it acts pursuant to
section 15 of the Clayton Act, which provides, in part, that a court
hearing a case under the Act ``may at any time make such temporary
restraining order or prohibition as shall be deemed just in the
premises.'' 15 U.S.C. Sec. 25 (2017). Section 15, however, does not
specify a standard for determining when to grant a preliminary
injunction. Therefore, a modified version of the general test for
preliminary injunctions applies. The test is usually articulated as
requiring that the government show a reasonable likelihood of success
on the merits and that the balance of equities tips in its favor. U.S.
v. Siemens Corp., 621 F.2d 499, 505 (2d Cir. 1980).
\60\FTC Act section 13(b) requires a court to grant a preliminary
injunction to the FTC upon ``a proper showing that, weighing the
equities and considering the Commission's likelihood of ultimate
success, such action would be in the public interest.'' 15 U.S.C.
Sec. 53(b) (2017). Courts have interpreted this standard to mean that
the FTC must raise questions that are ``so serious, substantial,
difficult and doubtful as to make them fair ground for thorough
investigation.'' FTC v. H.J. Heinz Co., 246 F.3d 708, 714-15 (D.C. Cir.
2001).
\61\See, e.g., AMC Report, supra note 16, at 141 (noting the view
of Commissioners Garza, Jacobson, and Kempf that the standard is the
same and that such legislation is not truly necessary).
\62\Senate Hearing, supra note 2, at 13 (statement of Edith
Ramirez, Chairwoman, Federal Trade Commission).
\63\Id.
\64\Fed. Trade Comm'n v. Sysco Corp., 113 F. Supp. 3d 1, 23 (D.D.C.
2015).
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Assuming there is a substantive difference between the
injunction standards, however, attempting to unify them raises
the concern that the bill simply seeks to undermine the FTC's
independence and distinctiveness, contrary to Congress's intent
in creating an independent antitrust enforcement agency in the
first place. Instead, Congress should default to a standard
that is deferential to agency expertise, as Mr. Foer of AAI
suggests:
SMARTER Act supporters prematurely jump to the
conclusion that the correct solution to this
``unfairness'' is to subject FTC challenges to the
tougher standard applicable to DOJ. Why is it not
better from a public policy standpoint to address the
anomaly by extending the benefit of the Section 13(b)
standard to DOJ challenges? A deferential standard for
both agencies is warranted by the expertise and
sophistication of the merger review process at both
agencies.\65\
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\65\The Standard Merger and Acquisition Reviews Through Equal Rules
Act of 2015: Hearing on H.R. 2745 Before the Subcomm. on Regulatory
Reform, Commercial & Antitrust Law of the H. Comm. on the Judiciary,
114th Cong. 47 (2015), http://judiciary.house.gov/_cache/files/
9f77f8c3-6b40-4b22-b337-51ddbedab9b6/114-32-95119.pdf.
Similarly, Professor Kirkwood testified that equalizing the
FTC and DOJ preliminary injunction standards was not necessary
because both standards function the same way as a practical
matter.\66\ He was, however, concerned that changing the
preliminary injunction standard applicable to the FTC in merger
cases could have unintended consequences, such as causing
courts to apply the non-FTC standard in non-merger cases as
well. He also noted that the FTC Act standard, to the extent
that it really was substantively more favorable to the
government than the one applicable to the DOJ, was designed to
allow the FTC to use its administrative proceedings.\67\
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\66\The Standard Merger and Acquisition Reviews Through Equal Rules
Act of 2014: Hearing on H.R. 5402 Before the H. Comm. on the Judiciary,
113th Cong. 3 (2014), http://www.appliedantitrust.com/
14_merger_litigation/legislation/smarter_act/kirkwood-testimony.pdf.
\67\Id at 4-5.
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CONCLUSION
For over a century, the FTC, as an independent agency, has
strengthened the enforcement of antitrust laws to protect
American consumers. Congress intended the agency to be a
vigorous enforcer of the law and to develop antitrust policy in
a bipartisan and expert manner while being comparatively
insulated from the changing political and economic priorities
that occur with each new presidential administration. A
hallmark of this independence is the FTC's ability to pursue
administrative adjudication, including in merger enforcement
cases. By prohibiting the agency from exercising this authority
in merger cases, H.R. 659 ultimately strikes at the very heart
of the rationale for the FTC's existence and directly
contravenes Congress' intent in establishing the FTC more than
100 years ago. Whatever speculative benefits for business in
terms of purported reduced costs and uncertainty, undermining
the FTC's independence and distinctiveness is simply too high a
price to pay.
We are additionally concerned that H.R. 659 goes well-
beyond the recommendations of the AMC. In particular, the
elimination of administrative adjudication authority would also
apply to certain non-merger conduct, including joint ventures
and pre-merger activity, as well as consummated transaction.
Finally, the bill's uniform preliminary injunction standard
for merger cases appears to be a solution in search of a
problem. Nonetheless, to the extent that there is a material
difference and to the extent that the FTC Act standard is, in
fact, more favorable to enforcement authorities, as the bill's
proponents contend, H.R. 659 chooses the less consumer-
protective standard.
For the foregoing reasons, we dissent and urge our
colleagues to oppose H.R. 659.
Mr. Conyers, Jr.
Mr. Nadler.
Ms. Lofgren.
Ms. Jackson Lee.
Mr. Cohen.
Mr. Johnson, Jr.
Mr. Deutch.
Mr. Gutierrez.
Ms. Bass.
Mr. Richmond.
Mr. Jeffries.
Mr. Cicilline.
Mr. Swalwell.
Mr. Lieu.
Ms. Jayapal.
Mr. Raskin.
[all]