Will Standardized Anti-trust Laws Help Prevent Monopolies in the Private Sector? (H.R. 2745)

What is H.R. 2745?

(Updated May 9, 2018)

This bill would standardize procedures used by the Federal Trade Commission (FTC) and the Dept. of Justice (DOJ) when reviewing proposed mergers or acquisitions that may lessen competition or lead to monopolies. Both the FTC and DOJ are responsible for enforcing antitrust laws, but the way they exercise that authority under current law is different.

Specifically, this bill would harmonize the standard each agency must meet before a federal court can issue a preliminary injunction against a proposed merger or acquisition. It also directs the FTC to resolve contested mergers or acquisitions through a federal court rather than through administrative litigation.

Argument in favor

The Federal Trade Commission and Dept. of Justice will be more effective at reviewing proposed mergers and acquisitions for antitrust violations if they use the same procedures with similar standards.

Argument opposed

There’s no need to standardize procedures used by the FTC and DOJ in reviews to determine if a merger or acquisition weakens competition or creates a monopoly.

Impact

Businesses involved in a proposed merger or acquisition; the Federal Trade Commission; and the Dept. of Justice.

Cost of H.R. 2745

The CBO estimates that implementing this legislation would not increase spending.

Additional Info

In-Depth: Several members of the House Judiciary Committee, including Chairman Bob Goodlatte (R-VA), Rep. Tom Marino (R-PA), and sponsoring Rep. Blake Farenthold (R-TX) released a joint statement on this bill’s introduction:

“Under existing law, the rules for reviewing a merger or acquisition differ depending on whether the FTC or the Justice Department reviews the merger… One of the responsibilities of the Judiciary Committee is to ensure fairness and consistency in the enforcement of our nation’s antitrust laws. We plan to soon reintroduce the SMARTER Act to permanently reduce the disparities in the merger review process and ensure that companies face the same standards and processes regardless of whether the FTC or Justice Department reviews the merger.”

This legislation was passed by the House Judiciary Committee on a vote of 18-10, and it currently enjoys the support of five Republican cosponsors.

Media:

• Sponsoring Rep. Blake Farenthold (R-TX) Press Release
• CBO Cost Estimate
• American Hospital Association (In Favor - PDF)
• Heartland Institute (In Favor)

Summary by Eric Revell
(Photo Credit: Flicker user Christopher Dombres)