RANKING MEMBER NADLER FLOOR STATEMENT IN OPPOSITION TO H.R. 5645, THE “STANDARD MERGER AND ACQUISITION REVIEWS THROUGH EQUAL RULES (SMARTER) ACT OF 2018”
Washington, D.C. – Today, Congressman Jerrold Nadler (D-NY), Ranking Member of the House Judiciary Committee, delivered the following remarks on the House floor in opposition to H.R. 5645, the “Standard Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act of 2018.”
“I rise in strong opposition to H.R. 5645, the ‘Standard Merger and Acquisition Reviews Through Equal Rules Act.’
“This bill would significantly undermine the Federal Trade Commission’s ability to enforce the nation’s antitrust laws, which help protect Americans from anti-competitive behavior in the marketplace. In the guise of ‘harmonization’ with the Department of Justice, it would eliminate the FTC’s administrative litigation enforcement authority with respect to corporate mergers and other transactions. It would also change—and potentially increase—the burden the FTC must demonstrate in court when seeking a preliminary injunction of a proposed merger.
“In doing so, the bill would undercut a critical tool that the FTC relies on to promote competition. It also risks sacrificing the fundamental nature of the FTC as an independent administrative agency, rather than an executive department, subject to the political whims of the President.
“This blatant attack on the FTC’s congressionally-mandated independence contravenes more than a century of legislative intent. In 1914, Congress responded to a wave of mergers and corporate abuses by establishing the FTC as an independent body of experts tasked with developing and advancing competition policy free from political pressure. In doing so, Congress specifically gave the Commission broad enforcement and investigatory authorities—including the power to challenge anticompetitive mergers and other conduct through administrative litigation.
“This broad grant of statutory authority was not accidental. Louis Brandeis—a visionary architect of our Nation’s competition system—advocated for the embrace of administrative litigation during Congress’ consideration of the FTC Act and President Woodrow Wilson said such authority was critical to the FTC’s mission “to warn where things were going wrong and assist instead of check.”
“As former Republican FTC Chairman William Kovacic warned, “Without a substantial, effective administrative litigation program, the aim of making the Commission an influential competition policy tribunal could not be accomplished.”
“Nevertheless, H.R. 5645 would eliminate this critical tool for promoting competition, and in the process, would erode the Commission’s unique qualities and independence. To further undermine the Commission’s independence, the bill would also require the FTC to meet the same standard in court that the Justice Department meets when seeking a preliminary injunction of a proposed merger. But, the FTC and the DOJ are two different agencies, with different missions and different traditions.
“Under current law, the Commission, by statute, must show that a preliminary injunction ‘would be in the public interest.’ The Justice Department, on the other hand, has no statutory standard, and it must simply meet the traditional preliminary injunction standard, such as the balance of equities and the risk of irreparable harm.
“As our Nation’s leading antitrust enforcers have previously testified, there is no practical difference between the standards—or evidence that the Commission has abused its authority—so it is entirely unclear what problem the bill is attempting to solve.
“But, in making this change, this legislation could cause unnecessary confusion for the courts, or could signal a desire to increase the burden on the agency to demonstrate the harms of an anticompetitive merger.
“That result alone is unacceptable.
“But even more fundamentally, this legislation is a step in the wrong direction for our economy and for the prosperity and security of all Americans.
“The decline of antitrust enforcement over the past several decades has been an economic catastrophe for millions of workers who have lost their jobs or have seen their wages lowered. And, it has resulted in fewer choices and higher prices for consumers, including increased costs for healthcare, prescription drugs, and other essential goods and services.
“The importance of robust antitrust enforcement is not simply a question of preventing higher prices for consumers. In the absence of competition, employers have the power to suppress the wages and mobility of American workers through anticompetitive contracting practices, such as non-compete clauses and no-poach agreements.
“And when large corporations run amok, locally owned businesses—the economic lifeblood of our communities—wither on the vine.
“Concentrated economic power is also a serious threat to our vibrant democracy. Large corporations with an outsized role in the policymaking process are able to further entrench their dominance through favorable rules and enforcement decisions.
“And when a large corporation with market power has the ability to control the flow of information, it also has the power to shape public opinion in ways that erode democratic values and undermine the voice of the many in favor of the outsized profits of the few.
“By further weakening our antitrust laws, H.R. 5645 would accelerate this disturbing trend. Accordingly, I must oppose this legislation and I reserve the balance of my time.”
“The nonpartisan Open Markets Institute, in its opposition to H.R. 5645, states: ‘Given the severity of the concentration problem in America today, and its economic and political consequences, Congress should be looking to enhance the powers of all of America’s antimonopoly agencies.’
“I strongly agree: Congress should strengthen, not weaken, our competition system to protect economic opportunity, innovation, and choice.
“That is why I joined several of my Democratic colleagues—Representatives Joe Crowley, David Cicilline, and Keith Ellison—to introduce a package of bold economic measures to strengthen protections that will help ensure hardworking Americans have more economic opportunity by ending anticompetitive employment practices.
“This package includes H.R. 5642, the ‘Restoring and Improving Merger Enforcement Act,’ legislation that I introduced to prohibit the consideration of false economic efficiencies—like corporate layoffs—to justify anticompetitive mergers.
“But rather than address these important measures which would actually help American workers and consumers —or give the antitrust agencies the resources they need to promote competition—H.R. 5645 would do the opposite by undermining the FTC’s ability to vigorously enforce antitrust laws under the guise of attempting to solve a problem that does not exist.
“I urge my colleague to oppose this deeply flawed measure and I yield back the balance of my time.”