By Jad Chamseddine, CQ Roll Call
March 23, 2016 -- House Republicans overcame opposition from Democrats and the White House to pass a bill that would align the Federal Trade Commission's (FTC) merger review process with procedures used by the Department of Justice.
The House voted, 235-171, largely along party lines Wednesday to pass the measure (HR 2745). The sponsor, Blake Farenthold, R-Texas, praised its potential effects on merger reviews, calling the proposal "good governance." The bill will go to the Senate, where a companion measure was introduced last year.
The FTC and the Justice Department review most mergers to determine whether there are anti-competitive effects. The agencies divide the deals for examination based on each agency's relative expertise. They also follow different procedures.
Republicans argue that the FTC's standard process of seeking a preliminary injunction in federal court when the agency seeks to block mergers has a lower burden of proof than the Department of Justice's standard.
"There was no justification for these disparities," House Judiciary Chairman Robert W. Goodlatte, R-Va., said on the floor Wednesday.
The agencies don't have a clear procedure to decide which one will review a merger. They typically rely on precedent and subject expertise to assign the review.
Goodlatte likened the process to a "flip of a coin" and said it wasn't fair for one company to face a harder road based on the luck of the draw. He added that the bill would "enhance the transparency" and return "credibility" to the antitrust merger review process.
In addition to harmonizing the review standard, the bill would dismantle the FTC's Part III administrative review process, preventing the agency from falling back on administrative courts to block a merger. Republicans argue that administrative courts take too long, and accused the FTC of turning to its own courts when a federal court denies a preliminary injunction blocking a merger. The Justice Department lacks the option of its own administrative courts.
"Just a threat of going through this administrative process gives the FTC the ability to extract concessions that the Justice Department wouldn't have," Farenthold said Wednesday.
But Democrats said the bill would "gut" the FTC's special powers and weaken antitrust policy during a time of increased consolidation. Hank Johnson, D-Ga., ranking member of the subcommittee on regulatory reform, commercial and antitrust law, said the bill will apply to less than 1 percent of mergers, and is only going to strengthen "big business" and hurt consumers. "The corporations and the wealthy have been doing pretty well over the last couple of generations," Johnson said.
New Jersey Democrat Bill Pascrell Jr. went further, calling the bill "terrible" and said it is "attacking a problem that doesn't exist."
The White House also opposes the legislation, saying the bill would "eliminate the Federal Trade Commission's ability to use critical administrative and procedural tools to promote competition and protect consumers" and calling the changes "unnecessary."
Goodlatte said the bill is meant to help smaller companies because they don't have the resources to fight the government in court, unlike large corporations that can hire lawyers and economists to make their case.
Republicans also rejected a late motion from Rep. Lloyd Doggett, D-Texas, to recommit the bill to the House Judiciary in order to add an amendment to protect consumers from pharmaceutical price hikes.
Similar legislation was introduced in the Senate (S 2102) by Sen. Mike Lee, R-Utah, the chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, late last year. Lee said at a hearing this month that he "hopes to move forward" with the legislation in the "near future."
