By Jeffrey May, J.D.
"Now more than ever, we need vigorous antitrust enforcement," Senator Amy Klobuchar (D.-Minn.), ranking member of the Senate Judiciary Committee’s antitrust subcommittee, told attendees of a Center for American Progress program on the concentration of economic power held yesterday in Washington, D.C. In her remarks, Klobuchar laid out a package of proposed legislation intended to assist federal antitrust enforcers in their efforts to combat anticompetitive concentration.
The proposals would raise costs for U.S. businesses and impose new reporting requirements. However, Klobuchar contended that there was a need in light of the dramatic increase in merger filings in recent years and the flat budgets for the antitrust agencies.
The senator noted that U.S. firms have engaged in $10 trillion in acquisitions since 2008. "Over the last five years, there was a 50 percent increase in mergers reviewed by the Federal Trade Commission and Department of Justice Antitrust Division," she added.
Merger remedies reporting. The first proposal would require companies that are subject to a settlement resolving a merger challenge with the antitrust agencies to report on the impact of the remedies on a yearly basis after the settlement. The idea stems from the FTC’s merger retrospective studies. The new company reporting would enable the agencies to more easily review the effectiveness of past settlements, thereby informing future enforcement decisions, in Klobuchar’s view.
New, increased premerger notification fees. The Hart-Scott-Rodino (HSR) Antitrust Improvements Act requires companies to notify antitrust authorities of larger proposed mergers and acquisitions to enable agency review before completion. The HSR rules impose filing fees on merging parties.
Noting that "the fee has not been adjusted since 2001 . . . [a]nd parties involved in larger deals are not paying their fair share," Klobuchar proposed increasing fees based on gross national product and creating a new category of fees for mega-mergers. Currently, each party is required to pay $280,000 for any deal valued at over $807 million, Klobuchar commented. One idea suggested by the senator would be to double charges for deals over one billion dollars.
Information on investment fund ownership. Lastly, Klobuchar is considering ways to assist the FTC and Department of Justice Antitrust Division in gathering information about how investment fund ownership impacts competition. Some have raised antitrust concerns over the ownership of competing companies in concentrated markets by investment funds. Klobuchar believes that more information is needed to understand whether there is a problem and when investment fund ownership is anticompetitive or benign.
Hopes for the Trump Administration. In her remarks, Klobuchar also expressed her hope that President Donald Trump will be a champion of increased antitrust enforcement efforts. She noted that Trump, on the campaign trail, talked about "too much concentration of power in the hands of too few." However, she suggested that the President may now be speaking a different language. "Early warning signs suggest that the Trump Administration will appoint people who will scale back enforcement," Klobuchar commented.
Word on new antitrust agency heads could come at any time. Klobuchar will have an opportunity to question nominees on their enforcement plans during Senate confirmation hearings.
A video of the talk is available on the Center for American Progress website at: https://www.americanprogress.org/events/2017/03/07/427631/trump-gorsuch-concentration-economic-power/.
MainStory: TopStory Antitrust AcquisitionsMergers AntitrustDivisionNews FederalTradeCommissionNews TrumpAdministrationNews FedTracker
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