House approves bill on merger reviews

WASHINGTON — The U.S. House approved a partisan bill last week that Republicans contend would help guarantee fairness in the government’s review of business mergers while Democrats warn it would gut an independent process that protects competition and consumers.

Now headed to the Senate, the Standard Merger and Acquisition Reviews Through Equal Rules Act passed on a largely party-line vote of 235 to 171.

“As a government watchdog, I’m always looking for ways to make government smaller, more efficient and fairer,” said Rep. Blake Farenthold, R-Texas, who sponsored the legislation.

Farenthold said his bill would have the Federal Trade Commission and the Department of Justice use the same process in reviewing mergers and acquisitions and avoid leaving the parties involved with unequal burdens.

Under the bill, the FTC would be required to satisfy the same standards the Justice Department must meet in obtaining a preliminary injunction to block a merger and litigate the merits of contested mergers in court under federal law as the department already does, rather than using its own administrative tribunals.

Farenthold said his bill also would provide the FTC with the same authority the department already possesses to seek an injunction in federal court.

FTC’s ability to pursue internal administrative litigation after a court’s denial of its request for an injunction would be eliminated.

Rep. Bob Goodlatte, R-Va., chairman of the House Judiciary Committee, also welcomed the House vote, saying the outcome of merger reviews should not be determined by “the flip of an agency coin.”

“Mergers have the potential to significantly impact our nation’s economy and the livelihood of millions of Americans,” Goodlatte said.

“The future of some American businesses depends on a fair merger review by the federal government, and the process must be predictable.”

Rep. John Conyers Jr. of Michigan, the Judiciary Committee’s top Democrat, warned the bill would weaken the FTC’s independence and undermine the original intent in creating the agency in 1914.

Conyers said Congress believed that while the Sherman Antitrust Act of 1890 empowered the Justice Department to enforce antitrust laws, more needed to be done to address a wave of mergers and anti-competitive abuses.

“To this end, Congress specifically gave the commission broad administrative powers to investigate and enforce laws to stop unfair methods of competition,” Conyers said.

He said Farenthold’s bill would transform the FTC from an independent agency to just another enforcement agency with redundant powers that might be headed for elimination.

The Obama administration also voiced strong opposition to the bill.

In its official statement of administration policy, it said the changes proposed by the legislation are not only unnecessary but threaten to undermine the FTC’s important role in protecting competition and consumers.

“While the process the FTC uses to challenge mergers differs from DOJ’s, there is no evidence that it affects outcomes or prejudices parties,” the administration said.

Nevada Republican Reps. Mark Amodei, Cresent Hardy and Joe Heck supported the bill while Democrat Dina Titus opposed it.

The House limited its votes to three days last week, and the Senate was on recess.

Contact Jim Myers at jmyers@reviewjournal.com or 202-783-1760. Find @myers_dc on Twitter