By Jody Coultas, J.D.
Representative Karen Handel (R-GA) has reintroduced a bill that would amend the Clayton Act and the FTC Act to provide that the FTC shall review mergers only under the Clayton Act and only in the same procedural manner as the Attorney General exercises such authority. The Standard Merger and Acquisition Reviews Through Equal Rules Act of 2018 (H.R. 5645) is substantially similar to a bill that stalled in Congress last year that would have eliminated the differences in the procedures used by the FTC and the Department of Justice Antitrust Division in challenging unconsummated acquisitions and mergers. The House Rules Committee voted in favor of a rule to allow H.R. 5645 to advance, and is scheduled to be taken up by the full House on Wednesday.
The measure was introduced to address concerns that parties to a proposed merger or acquisition currently face different preliminary injunction standards in court challenges, as well as different processes, depending upon which federal antitrust agency reviews the transaction. The bill would equalize the standards for the two federal antitrust agencies for obtaining a preliminary injunction against a proposed merger or acquisition and eliminate the FTC’s ability to pursue administrative adjudication or Part 3 litigation to challenge a proposed transaction.
"The SMARTER Act is a commonsense measure that ensures that companies face the same standards and processes regardless of whether the Federal Trade Commission or the Department of Justice reviews the proposed merger," House Judiciary Committee Chairman Bob Goodlatte (R-Va.), Regulatory Reform, Commercial and Antitrust Law Subcommittee Chairman Tom Marino (R-Pa.), and Regulatory Reform, Commercial and Antitrust Law Subcommittee Vice-Chairman Blake Farenthold (R-Texas), said last year. "When the federal government looks at a proposed merger, it needs to be done in a fair, transparent, and predictable manner and not by the flip of the coin."
The 2017 bill (H.R. 659) was introduced by Congressman Blake Farenthold (R-TX). Identical legislation was passed by the House in 2016.
FTC views. In 2015, former acting chairman of the FTC Maureen K. Ohlhausen expressed her general support for the measure. In a speech entitled "A SMARTER Section 5," Ohlhausen noted her support for harmonization of standards for seeking a preliminary injunction by the FTC and Department of Justice against a planned merger. At that time, Ohlhausen did, however, caution against making the FTC subordinate to the Justice Department in challenging unconsummated mergers or otherwise impinging on the independence of the FTC. In 2015, FTC Chairman Edith Ramirez called the measure "unnecessary" and said that it risked "undermining the beneficial role the Commission plays in merger enforcement." The Obama Administration also opposed the measure.
MainStory: TopStory AcquisitionsMergers Antitrust AntitrustDivisionNews FederalTradeCommissionNews FedTracker
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