59–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 114–449 

STANDARD MERGER AND ACQUISITION REVIEWS 

THROUGH EQUAL RULES ACT OF 2015 

MARCH 14, 2016.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. GOODLATTE, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 2745] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 2745) to amend the Clayton Act and the Federal Trade Commission Act to provide that the Federal Trade Commission shall exercise authority with respect to mergers only under the Clayton Act 

and only in the same procedural manner as the Attorney General 

exercises such authority, having considered the same, reports favorably thereon without amendment and recommends that the bill 

do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for the Legislation ............................................................. 2 

Hearings ................................................................................................................... 6 

Committee Consideration ........................................................................................ 6 

Committee Votes ...................................................................................................... 6 

Committee Oversight Findings ............................................................................... 7 

New Budget Authority and Tax Expenditures ...................................................... 8 

Congressional Budget Office Cost Estimate .......................................................... 8 

Duplication of Federal Programs ............................................................................ 9 

Disclosure of Directed Rule Makings ..................................................................... 9 

Performance Goals and Objectives ......................................................................... 9 

Advisory on Earmarks ............................................................................................. 10 


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1 ANTITRUST MODERNIZATION COMMISSION, REPORT AND RECOMMENDATIONS, at 129 (Apr. 

2007), available at http://govinfo.library.unt.edu/amc/report-recommendation/amc-final-report.pdf 

[hereinafter, the ‘‘AMC Report’’]. 2 Id. 

3 15 U.S.C. §§ 41–58 (1914). 

4 15 U.S.C. § 18 (2013). 

5 15 U.S.C. § 18a (2013), as amended. 

6 As a practical matter, virtually every transaction includes a period of time between the execution of the initial transaction documents that outline the intent of parties to enter into a deal 

and the manner in which they intend to consummate the deal, and the ‘‘closing’’ of the transaction when the deal is consummated. Depending on the size and complexity of the transaction, 

that period of time could be anywhere between a matter of weeks to over a year. 7 AMC Report, at 132 (2007) (explaining that there is not a governing document or policy that 

determines which agency reviews each proposed transaction; however, there are some historical 

Section-by-Section Analysis .................................................................................... 10 

Changes in Existing Law Made by the Bill, as Reported ..................................... 11 

Dissenting Views ..................................................................................................... 35 

Purpose and Summary 

H.R. 2745, the ‘‘Standard Merger and Acquisition Reviews 

Through Equal Rules Act of 2015,’’ or the ‘‘SMARTER Act,’’ harmonizes the standards applied to the Department of Justice (DOJ) 

and the Federal Trade Commission (FTC) when each agency seeks 

a preliminary injunction to a proposed merger or acquisition. Additionally, the SMARTER Act amends the Clayton Act to provide the 

FTC with the same authority DOJ already possesses to seek an injunction against a proposed merger in Federal court, and, in doing 

so, removes the ability of the FTC to pursue internal administrative litigation following a court’s denial of an FTC preliminary injunction request. The SMARTER Act would preserve each agency’s 

authority to challenge monopolistic transactions or ones that would 

substantially lessen competition and not affect the judicial remedies available to address such transactions. 

Background and Need for the Legislation 

A. BRIEF OVERVIEW OF ANTITRUST ENFORCEMENT BY DOJ AND THE

FTC OF PROPOSED MERGERS AND ACQUISITIONS

Two Federal agencies, the Antitrust Division of DOJ and the 

FTC, share responsibility for government enforcement of the Federal antitrust laws.1 The position of Assistant Attorney General for 

Antitrust was created in 1903, and the Antitrust Division became 

a separate operating unit within DOJ thirty years later.2 In 1914, 

Congress passed the Federal Trade Commission Act (the FTC 

Act),3 which created the FTC and conferred to the independent 

agency antitrust enforcement authority that would, in part, supplement DOJ’s antitrust enforcement authority. 

Section 7 of the Clayton Act (Section 7) prohibits mergers and acquisitions that would ‘‘substantially lessen competition’’ or ‘‘tend to 

create a monopoly.’’ 4 The Antitrust Division and the FTC have essentially identical authority to enforce Section 7. The manner in 

which they review and enforce their Section 7 authority largely is 

prescribed by the Hart-Scott-Rodino Antitrust Improvements Act 

(the HSR Act).5 Under the HSR Act, each of the antitrust enforcement agencies is notified in advance of a proposed transaction and 

afforded a period of time to review the effects of such a transaction.6 Only one agency takes responsibility for the review of a 

proposed transaction.7 For the vast majority of transactions, the 


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practices that can influence which agency reviews the transaction. For example, DOJ typically 

reviews telecommunications transactions and the FTC typically reviews health care transactions. These historical practices, however, are not hard and fast rules and are not always followed.). 8 15 U.S.C. § 53(b) (2013). 

9See, e.g., United States v. Siemens Corp., 621 F.2d 499, 505–06 (2d Cir. 1980) (citations omitted). Although courts generally also require a showing of irreparable injury or substantial harm 

to the public to grant a preliminary injunction, many courts have held that irreparable harm 

to the public should be presumed once the government establishes a reasonable probability of 

success. See, e.g., id. at 506. See also the American Bar Association, Section of Antitrust Law, 

Public Comments Submitted to the Antitrust Modernization Commission Regarding Differential 

Merger Enforcement Standards, at 3 (Oct. 28, 2005). 10 AMC Report, at 142 (2007). But see AMC Report at 142 n.90 statement of William 

Blumenthal (stating that the perception continually changes, and that it is not invariably the 

case that people would rather be before the DOJ). 11 AMC Report, at 138 (2007). 

antitrust enforcement agencies will grant an early termination of 

the statutory waiting period or simply allow the waiting period to 

expire without taking any formal action, both of which have the effect of allowing the transaction to proceed to consummation. 

When the antitrust enforcement agencies conclude that the consummation of a proposed transaction would violate Section 7, the 

agencies pursue an injunction of the transaction in Federal court. 

Generally speaking, if the court grants the injunction, the parties 

abandon the merger; if the court denies the injunction, the parties 

consummate the transaction shortly thereafter. 

B. DISPARATE PRELIMINARY INJUNCTION STANDARDS

The FTC and DOJ confront different standards when seeking a 

preliminary injunction of a proposed transaction in court. When reviewing the FTC’s request for a preliminary injunction, courts 

apply the standard explicitly set forth in Section 13(b) of the FTC 

Act, which states that ‘‘[u]pon a proper showing that, weighing the 

equities and considering the Commission’s likelihood of ultimate 

success, such action would be in the public interest, and after notice to the defendant, a temporary restraining order or a preliminary injunction may be granted without bond.’’ 8 By comparison, 

Section 15 of the Clayton Act, pursuant to which DOJ seeks injunctions, does not specify a standard of review for courts when they 

determine whether to grant preliminary injunctive relief. Consequently, DOJ must meet the traditional preliminary injunction 

standard as applied by the presiding Circuit Court, which generally 

requires ‘‘a reasonable likelihood of success on the merits’’ and ‘‘the 

balance of equities’’ favoring DOJ.9

These disparate preliminary injunction standards can yield different results. Some commentators go so far as to suggest that the 

FTC may even be subject to a more lenient standard than DOJ.10

C. DISPARATE PROCESSES TO PREVENT A PROPOSED TRANSACTION

Generally, DOJ agrees with the transaction parties to combine 

the proceedings for both a preliminary injunction and permanent 

injunction before the district court.11 In contrast, the FTC’s practice is to seek only a preliminary injunction, despite the fact that 

it has the authority to consolidate the proceedings in the same 

fashion as DOJ. In fact, the FTC has affirmatively fought against 


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12See Pl. FTC’s Mem. in Opp’n to Defs.’ Mot. Seeking Consolidation of Prelim. & Permanent 

Injs., FTC v. Arch Coal, Inc., Case No. 1:04–CV–00534, at 3, 4 (Apr. 22, 2004) (arguing against 

consolidation). 13 Antitrust Modernization Commission Act of 2002, Pub. L. No. 107–273, § 11054(h), 116 Stat. 

1856, 1857. 14 AMC Report, at 138–9 (2007). The importance of removing any potential divergence is underscored by the fact that it often is mere chance or, the ‘‘flip of a coin,’’ that determines which 

agency reviews the proposed transaction. 

efforts to consolidate the preliminary injunction and permanent injunction proceedings.12

One of the primary reasons behind the FTC’s practice to pursue 

only a preliminary injunction is it preserves the FTC’s ability to 

pursue administrative litigation following the denial of a preliminary injunction request. When the FTC seeks to prevent the consummation of a proposed transaction, it will file simultaneously an 

administrative complaint that initiates the administrative litigation process and, because the administrative complaint does not by 

itself prevent the consummation of the transaction, a preliminary 

injunction request in Federal court. Ostensibly, the preliminary injunction is to preclude the parties from closing the transaction 

while the administrative litigation is pending. Absent such a request, the parties to the transaction theoretically could consummate the transaction and continue with their administrative litigation at the FTC. If the parties lose their case, they would face the 

prospect of having their transaction unwound. In contrast, DOJ 

does not have the authority to conduct administrative litigation. 

D. THE ANTITRUST MODERNIZATION COMMISSION AND ITS

RECOMMENDATIONS

In early 2003, the bi-partisan Antitrust Modernization Commission (the AMC) was formed pursuant to the Antitrust Modernization Act.13 The AMC was charged with examining the antitrust 

laws, soliciting the opinions of experts on the operation of such 

laws, and publishing a report with the AMC’s recommendations for 

any improvement to the antitrust laws. On April 2, 2007, the AMC 

issued a 540-page report that detailed the issues it examined and 

provided a number of recommendations for legislative, administrative, and judicial action. 

Included in the AMC report was an examination of the issues attendant to the existing disparities in the preliminary injunction 

standards applied to DOJ and the FTC, and the disparate processes available to DOJ and the FTC when each agency seeks to 

prevent a proposed transaction. As stated within the AMC report: 

Parties to a proposed merger should receive comparable 

treatment and face similar burdens regardless of whether 

the FTC or the DOJ reviews their merger. A divergence 

undermines the public’s trust that the antitrust agencies 

will review transactions efficiently and fairly. More important, it creates the impression that the ultimate decision 

as to whether a merger may proceed depends in substantial part on which agency reviews the transaction.14

The AMC report further explains that even the perception of a difference between the standards applied to, and processes used by, 

the agencies could impact how parties interact with the agencies. 

For example, the FTC may be perceived as having greater leverage 


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15 AMC Report, at 142 (2007). 16 Id. 17FTC, Commission Approves Revisions to Its Rules of Practice (Mar. 13, 2015), https:// 

www.ftc.gov/news-events/press-releases/2015/03/commission-approves-revisions-its-rules-practice; 

Administrative Litigation Following the Denial of a Preliminary Injunction: Policy Statement, 

60 Fed. Reg. 39,741 (1995). 18Debbie Feinstein, Changes to Commission Rule 3.26 re: Part 3 Proceedings Following Federal Court Denial of a Preliminary Injunction, FTC (Mar. 16, 2015), https://www.ftc.gov/newsevents/blogs/competition-matters/2015/03/changes-commission-rule-326-re-part-3-proceedings. 

when negotiating a consensual consent decree with the proposed 

transaction parties.15 Again, ‘‘just the perception that the applicable rules depend on the happenstance of which agency is reviewing 

the transaction can undermine confidence in the fairness of a dual 

merger enforcement regime.’’ 16

E. RECENT FTC ACTIONS

On March 13, 2015, the FTC announced that it was re-adopting 

a rule created in 1995, often referred to as the ‘‘Pitofsky Rule’’ after 

the FTC Chairman at the time.17 In brief, the Pitofsky Rule provides that if the FTC is unsuccessful in obtaining a preliminary injunction against a proposed transaction in Federal court, it will not 

automatically proceed to continue to block the transaction through 

administrative litigation. Rather, the FTC will review each matter 

on a case-by-case basis and determine whether proceeding to administrative litigation is warranted. Additionally, the Pitofsky Rule 

provides for the automatic stay of the pending administrative litigation following the denial of the preliminary injunction request in 

Federal court. 

In 2009, the FTC repealed the component of the Pitofsky Rule 

that provided for the automatic stay of the administrative litigation.18 The latest FTC action reinstates the automatic stay component of the Pitofsky Rule. To be clear, the FTC still retains the 

ability to continue administrative litigation following the denial of 

a preliminary injunction request; and, the Pitofsky Rule may be repealed in whole, or in part, by a Commission vote. Notably, the 

Pitofsky Rule predates the AMC Report. 

F. THE SMARTER ACT

The SMARTER Act incorporates certain of the recommendations 

made by the AMC, and provides the antitrust enforcement agencies 

with consistent authority and processes when seeking to prevent a 

proposed transaction. Specifically, the SMARTER Act confers to the 

FTC the same authority that DOJ presently possesses under the 

Clayton Act. In doing so, the SMARTER Act also requires the FTC 

to petition the district court to seek an injunction of a proposed 

transaction rather than using an internal administrative process. 

The FTC will retain administrative litigation capabilities in other 

contexts. As the AMC report highlights: 

Elimination of administrative litigation in HSR Act merger 

cases will not deprive the FTC of an important enforcement option. Although administrative litigation may provide a valuable avenue to develop antitrust law in general, 

it appears unlikely to add significant value beyond that developed in Federal court proceedings for injunctive relief in 

HSR Act merger cases. Whatever the value, it is signifiVerDate Sep 11 2014 01:59 Mar 15, 2016 Jkt 059006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6601 E:\HR\OC\HR449.XXX HR449

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19 AMC Report, at 141 (2007) (citations omitted). 

cantly outweighed by the costs it imposes on merging parties in uncertainty and litigation costs.19

Accordingly, under the SMARTER Act, both DOJ and the FTC 

remain able to pursue both preliminary and permanent injunctions, 

and the standards applied by courts to both agencies will be identical. Consequently, while there will continue to be a dual antitrust 

enforcement regime, the standards and processes applied to parties 

who undergo a transaction review will be harmonized. 

Hearings 

On June 16, 2015, the Subcommittee on Regulatory Reform, 

Commercial and Antitrust Law conducted a hearing on the 

SMARTER Act. The witnesses at the hearing were: Deborah Garza, 

Esq., Partner, Covington & Burling LLP, former Chairwoman of 

the Antitrust Modernization Commission, and former Acting Assistant Attorney General of the Department of Justice; David 

Clanton, Esq., Senior Counsel, Baker & McKenzie LLP, former 

Commissioner, and former acting Chairman of the Federal Trade 

Commission; Abbott (Tad) B. Lipsky, Jr., Esq., Partner, Latham & 

Watkins LLP, former Deputy Assistant to the Assistant Attorney 

General of the Department of Justice; and, Albert A. Foer, Esq., 

founder and former president of the American Antitrust Institute. 

Three of the four witnesses testified in support of the same preliminary injunction standard being applied to both antitrust enforcement agencies. Additionally, these same three witnesses testified in support of removing the FTC’s ability to pursue administrative litigation solely in the context of merger reviews. These witnesses testified that such a change would promote transparency, 

fairness, and predictability to the merger review process as well as 

allow the United States to continue its leadership role in global 

antitrust enforcement policy. The Minority witness testified that he 

believed there was not significant cause to amend the law. 

During the 113th Congress, the Subcommittee on Regulatory Reform, Commercial and Antitrust Law conducted a hearing on a discussion draft of the SMARTER Act. The testimony provided at this 

hearing similarly supported harmonizing the preliminary injunction standard and removing the FTC’s ability to pursue administrative litigation solely in the context of merger reviews. 

Committee Consideration 

On September 30, 2015, the Committee met in open session and 

ordered the bill H.R. 2745 favorably reported, without amendment, 

by a vote of 18–10, a quorum being present. 

Committee Votes 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the following 

rollcall votes occurred during the Committee’s consideration of H.R. 

2745: 

1. Motion to report H.R. 2745 favorably to the House of Representatives. Agreed to by a vote of 18 ayes to 10 noes. 


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ROLLCALL NO. 1 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................. X 

Mr. Sensenbrenner, Jr. (WI) ....................................

Mr. Smith (TX) ..........................................................

Mr. Chabot (OH) ........................................................ X 

Mr. Issa (CA) ............................................................. X 

Mr. Forbes (VA) ......................................................... X 

Mr. King (IA) ............................................................. X 

Mr. Franks (AZ) ......................................................... X 

Mr. Gohmert (TX) ...................................................... X 

Mr. Jordan (OH) ........................................................

Mr. Poe (TX) .............................................................. X 

Mr. Chaffetz (UT) ...................................................... X 

Mr. Marino (PA) ........................................................ X 

Mr. Gowdy (SC) .........................................................

Mr. Labrador (ID) ......................................................

Mr. Farenthold (TX) .................................................. X 

Mr. Collins (GA) ........................................................ X 

Mr. DeSantis (FL) .....................................................

Ms. Walters (CA) ....................................................... X 

Mr. Buck (CO) ........................................................... X 

Mr. Ratcliffe (TX) ...................................................... X 

Mr. Trott (MI) ............................................................ X 

Mr. Bishop (MI) ......................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member ................. X 

Mr. Nadler (NY) ........................................................

Ms. Lofgren (CA) ....................................................... X 

Ms. Jackson Lee (TX) ................................................ X 

Mr. Cohen (TN) ......................................................... X 

Mr. Johnson (GA) ...................................................... X 

Mr. Pierluisi (PR) ......................................................

Ms. Chu (CA) ............................................................. X 

Mr. Deutch (FL) .........................................................

Mr. Gutierrez (IL) ..................................................... X 

Ms. Bass (CA) ............................................................

Mr. Richmond (LA) ....................................................

Ms. DelBene (WA) ..................................................... X 

Mr. Jeffries (NY) ....................................................... X 

Mr. Cicilline (RI) ....................................................... X 

Mr. Peters (CA) ......................................................... X 

Total ............................................................. 18 10 

Committee Oversight Findings 

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 


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New Budget Authority and Tax Expenditures 

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

Congressional Budget Office Cost Estimate 

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 2745, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, October 16, 2015. 

Hon. BOB GOODLATTE, CHAIRMAN, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2745, the ‘‘Standard 

Merger and Acquisition Reviews Through Equal Rules Act of 2015.’’ 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susan Willie, who can 

be reached at 226–2860. 

Sincerely, 

KEITH HALL, DIRECTOR. 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 2745—Standard Merger and Acquisition Reviews 

Through Equal Rules Act of 2015. 

As ordered reported by the House Committee on the Judiciary 

on September 30, 2015. 

CBO estimates that implementing H.R. 2745 would not have a 

significant effect on discretionary spending. Enacting H.R. 2745 

would not affect direct spending or revenues; therefore, pay-as-yougo procedures do not apply. 

CBO estimates that enacting H.R. 2745 would not increase net 

direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2026. 

Under current law, both the Federal Trade Commission (FTC) 

and the Department of Justice (DOJ) enforce Federal antitrust 

laws, though in some instances, the manner in which the two agencies exercise that authority is different. H.R. 2745 would amend 

the Clayton Act and the Federal Trade Commission Act to align 

certain procedures followed by the FTC when it reviews a proposed 

merger or acquisition with the procedures followed by DOJ. 

Specifically, the bill would: 


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• Harmonize the standard each agency must meet before a 

Federal court can issue a preliminary injunction against a 

proposed transaction; and 

• Direct the FTC to resolve certain contested mergers or acquisitions through a Federal court rather than through administrative litigation. 

CBO expects that the FTC’s efforts to prepare for and litigate a 

contested merger in Federal court using the harmonized standard 

specified in H.R. 2745 would not require a significant increase in 

staffing levels. Over the past five years, the FTC has filed eight 

preliminary injunctions in Federal court. Based on information 

from the agency, CBO expects that volume to remain relatively 

constant over the next five years. 

Similarly, the FTC approved, on average, fewer than 15 agreements related to proposed mergers over the past five years. Under 

H.R. 2745, those agreements would be considered by the Federal 

courts rather than the FTC under similar, though not identical, 

procedures. Taking into account the small number of agreements 

sought each year and the fact that the FTC follows procedures 

similar to those required in H.R. 2745, CBO estimates the increased workloads resulting from the new requirement would have 

an insignificant effect on the FTC’s staffing levels and on the workload of the Federal courts. 

H.R. 2745 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

not affect the budgets of state, local, or tribal governments. 

The CBO staff contact for this estimate is Susan Willie. The estimate was approved by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis. 

Duplication of Federal Programs 

No provision of H.R. 2745 establishes or reauthorizes a program 

of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from GAO 

to Congress pursuant to section 21 of Public Law 111–139, or a 

program related to a program identified in the most recent Catalog 

of Federal Domestic Assistance. 

Disclosure of Directed Rule Makings 

The Committee estimates that H.R. 2745 specifically directs to be 

completed no specific rule makings within the meaning of § 5 

U.S.C. 551. 

Performance Goals and Objectives 

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 2745 amends 

the Clayton Act and the Federal Trade Commission Act to provide 

the Federal Trade Commission with the same authority as the Department of Justice with respect to mergers under the Clayton Act. 


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Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 2745 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(e), 9(f) or 9(g) of Rule XXI. 

Section-by-Section Analysis 

The following discussion describes the bill as reported by the 

Committee. 

Section 1. Short Title. 

Sets forth the short title of the legislation as the ‘‘Standard 

Merger and Acquisition Reviews Through Equal Rules Act of 2015.’’ 

Section 2. Amendments to the Clayton Act. 

Sec. 2(1): Section 4F of the Clayton Act provides that the Attorney General must notify state attorneys general of any antitrust 

action in which the Attorney General believes the state could bring 

an action based on substantially similar facts, and share related 

files with such state attorneys general. The SMARTER Act amends 

this section to subject the FTC to these same requirements. 

Sec. 2(2)(A): Section 5(a) of the Clayton Act provides that, in 

cases brought by the United States that result in final judgments 

against a defendant, those judgments can be used as prima facie 

evidence (i.e., unless rebutted, sufficient to prove the allegation) of 

antitrust violations under substantially similar facts brought by 

other parties. The SMARTER Act amends this section to clarify 

that actions brought by the United States include actions brought 

by the FTC under Section 7. 

Section 2(2)(B): Section 5(i) of the Clayton Act suspends the statute of limitations for private and state rights of action based on the 

conduct in question during a United States’ proceeding and for 1 

year thereafter, except that claims brought under section 4 or 4C 

of the Clayton Act only may be brought during the United States’ 

proceeding or within 4 years after the cause of action accrued. The 

SMARTER Act amends this section to clarify that the statute of 

limitations is also tolled for actions brought by the FTC under Section 7. 

Section 2(3): Section 11 of the Clayton Act authorizes the enforcement of compliance with certain sections of the Clayton Act by Federal agencies with specific expertise and provides for procedures for 

such enforcement. For example, section 11 authorizes the Federal 

Reserve Board to enforce compliance of these sections of the Clayton Act against banks, banking associations, and trust companies. 

Section 11 also provides the FTC with the authority to prosecute 

violations of the Clayton Act through the FTC administrative litigation process. The SMARTER Act amends the Clayton Act to exclude the FTC’s enforcement of Section 7 from these separate procedures, which ensures that the FTC’s Section 7 enforcement procedures will be identical to the procedures applicable to the Attorney 

General. Additionally, the SMARTER Act includes clarifying language that the FTC may still enter into Section 7 consent decrees 

with parties to the proposed transaction. 


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Section 2(4): Section 13 of the Clayton Act allows the United 

States to issue subpoenas that will be effective in any judicial district. The SMARTER Act amends this section to clarify that the 

term United States includes the FTC when it is prosecuting Section 

7 cases. 

Section 2(5): Section 15 of the Clayton Act provides that it is the 

duty of the United States district attorneys, under the direction of 

the Attorney General, to institute antitrust lawsuits whereby they 

may seek temporary restraining orders or other remedies against 

the offensive conduct. The SMARTER Act amends this section to 

extend the duty to initiate lawsuits to the FTC. 

Section 3. Amendments to the FTC Act. 

Section 3(1): Section 5 of the FTC Act allows the FTC to initiate 

an administrative proceeding to evaluate an ‘‘unfair method of competition,’’ which could include a proposed merger. The SMARTER 

Act amends this section to preclude the FTC from initiating an administrative proceeding against a proposed transaction. 

Section 3(2): Section 9 of the FTC Act, in the paragraph to be 

amended, provides jurisdiction to the Federal courts to issue writs 

of mandamus that command compliance with the FTC Act. The 

process for obtaining such a writ of mandamus requires the FTC 

to request the Attorney General to submit an application to the 

courts for the writ. The SMARTER Act amends this section to 

allow the FTC to submit independently an application to the courts 

for such a writ for merger review cases in which the FTC finds that 

the activity in question constitutes an ‘‘unfair method of competition.’’ 

Section 3(3): Section 13(b) of the FTC Act provides authority to 

the FTC to seek a preliminary injunction for a violation of the FTC 

Act. The SMARTER Act amends this section specifically to exclude 

the FTC from seeking a preliminary injunction in a case brought 

under Section 7 because the FTC now has this authority separately 

under the Clayton Act. 

Section 3(4): Section 20(c)(1) of the FTC Act provides authority 

to the FTC to issue subpoenas and take depositions. The SMARTER Act amends this section to clarify that the FTC also has this 

authority when prosecuting Section 7 cases. 

Section 4. Effective Date; Application of Amendments. 

Subsection 4(a) provides that the effective date of the SMARTER 

Act will be the day that it is signed into law. 

Subsection 4(b) provides that the SMARTER Act will not apply 

to violations of Section 7 that occurred prior to the enactment of 

the SMARTER Act, transactions that are in compliance with Section 7A of the Clayton Act (i.e., transactions for which the parties 

have filed a Hart-Scott-Rodino merger review notice), and consummated mergers. 

Changes in Existing Law Made by the Bill, as Reported 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 


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and existing law in which no change is proposed is shown in 

roman): 

CLAYTON ACT 

* * * * * * * 

øACTIONS BY ATTORNEY GENERAL OF THE UNITED STATES

øSEC. 4F. (a) Whenever the Attorney General of the United 

States has brought an action under the antitrust laws, and he has 

reason to believe that any State attorney general would be entitled 

to bring an action under this Act based substantially on the same 

alleged violation of the antitrust laws, he shall promptly give written notification thereof to such State attorney general. 

ø(b) To assist a State attorney general in evaluating the notice 

or in bringing any action under this Act, the Attorney General of 

the United States shall, upon request by such State attorney general, make available to him, to the extent permitted by law, any 

investigative files or other materials which are or may be relevant 

or material to the actual or potential cause of action under this 

Act.¿ 

SEC. 4F. ACTIONS BY ATTORNEY GENERAL OF THE UNITED STATES OR 

THE FEDERAL TRADE COMMISSION. 

(a) Whenever the Attorney General of the United States has 

brought an action under the antitrust laws or the Federal Trade 

Commission has brought an action under section 7, and the Attorney General or Federal Trade Commission, as applicable, has reason to believe that any State attorney general would be entitled to 

bring an action under this Act based substantially on the same alleged violation of the antitrust laws or section 7, the Attorney General or Federal Trade Commission, as applicable, shall promptly 

give written notification thereof to such State attorney general. 

(b) To assist a State attorney general in evaluating the notice 

described in subsection (a) or in bringing any action under this Act, 

the Attorney General of the United States or Federal Trade Commission, as applicable, shall, upon request by such State attorney 

general, make available to the State attorney general, to the extent 

permitted by law, any investigative files or other materials which 

are or may be relevant or material to the actual or potential cause 

of action under this Act. 

* * * * * * * 

SEC. 5. (a) A final judgment or decree heretofore or hereafter 

rendered in any civil or criminal proceeding brought by or on behalf of the United States under the antitrust laws (including a proceeding brought by the Federal Trade Commission with respect to 

a violation of section 7) to the effect that a defendant has violated 

said laws shall be prima facie evidence against such defendant in 

any action or proceeding brought by any other party against such 

defendant under said laws as to all matters respecting which said 

judgment or decree would be an estoppel as between the parties 

thereto: Provided, That this section shall not apply to consent judgments or decrees entered before any testimony has been taken. 

Nothing contained in this section shall be construed to impose any 


SSpencer on DSK4SPTVN1PROD with REPORTS
13 

limitation on the application of collateral estoppel, except that, in 

any action or proceeding brought under the antitrust laws, collateral estoppel effect shall not be given to any finding made by the 

Federal Trade Commission under the antitrust laws or under section 5 of the Federal Trade Commission Act which could give rise 

to a claim for relief under the antitrust laws. 

(b) Any proposal for a consent judgment submitted by the 

United States for entry in any civil proceeding brought by or on behalf of the United States under the antitrust laws shall be filed 

with the district court before which such proceeding in pending and 

published by the United States in the Federal Register at least 60 

days prior to the effective date of such judgment. Any written comments relating to such proposal and any responses by the United 

States thereto, shall also be filed with such district court and published by the United States in the Federal Register within such 

sixty-day period. Copies of such proposal and any other materials 

and documents which the United States considered determinative 

in formulating such proposal, shall also be made available to the 

public at the district court and in such other districts as the court 

may subsequently direct. Simultaneously with the filing of such 

proposal, unless otherwise instructed by the court, the United 

States shall file with the district court, publish in the Federal Register, and thereafter furnish to any person upon request, a competitive impact statement which shall recite— 

(1) the nature and purpose of the proceeding; 

(2) a description of the practices or events giving rise to 

the alleged violation of the antitrust laws; 

(3) an explanation of the proposal for a consent judgment, 

including an explanation of any unusual circumstances giving 

rise to such proposal or any provision contained therein, relief 

to be obtained thereby, and the anticipated effects on competition of such relief; 

(4) the remedies available to potential private plaintiffs 

damaged by the alleged violation in the event that such proposal for the consent judgment is entered in such proceeding; 

(5) a description of the procedures available for modification of such proposal; and 

(6) a description and evaluation of alternatives to such proposal actually considered by the United States. 

(c) the United States shall also cause to be published, commencing at least 60 days prior to the effective date of the judgment 

described in subsection (b) of this section, for 7 days over a period 

of 2 weeks in newspapers of general circulation of the district in 

which the case has been filed, in the District of Columbia, and in 

such other districts as the court may direct— 

(i) a summary of the terms of the proposal for the consent 

judgment, 

(ii) a summary of the competitive impact statement filed 

under subsection (b), 

(iii) and a list of the materials and documents under subsection (b) which the United States shall make available for 

purposes of meaningful public comment, and the place where 

such materials and documents are available for public inspection. 


SSpencer on DSK4SPTVN1PROD with REPORTS
14 

(d) during the 60-day period as specified in subsection (b) of 

this section, and such additional time as the United States may request and the court may grant, the United States shall receive and 

consider any written comments relating to the proposal for the consent judgment submitted under subsection (b). the Attorney General or his designee shall establish procedures to carry out the provisions of this subsection, but such 60-day time period shall not be 

shortened except by order of the district court upon a showing that 

(1) extraordinary circumstances require such shortening and (2) 

such shortening is not adverse to the public interest. At the close 

of the period during which such comments may be received, the 

United States shall file with the district court and cause to be published in the Federal Register a response to such comments. Upon 

application by the United States, the district court may, for good 

cause (based on a finding that the expense of publication in the 

Federal Register exceeds the public interest benefits to be gained 

from such publication), authorize an alternative method of public 

dissemination of the public comments received and the response to 

those comments. 

(e)(1) Before entering any consent judgment proposed by the 

United States under this section, the court shall determine that 

entry of such judgment is in the public interest. For the purpose 

of such determination, the court shall consider— 

(A) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and 

modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are 

ambiguous, and any other competitive considerations bearing 

upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is 

in the public interest; and 

(B) the impact of entry of such judgment upon competition 

in the relevant market or markets, upon the public generally 

and individuals alleging specific injury from the violations set 

forth in the complaint including consideration of the public 

benefit, if any, to be derived from a determination of the issues 

at trial. 

(2) Nothing in this section shall be construed to require the 

court to conduct an evidentiary hearing or to require the court to 

permit anyone to intervene. 

(f) In making its determination under subsection (e), the court 

may— 

(1) take testimony of Government officials or experts or 

such other expert witnesses, upon motion of any party or participant or upon its own motion, as the court may deem appropriate; 

(2) appoint a special master and such outside consultants 

or expert witnesses as the court may deem appropriate; and request and obtain the views, evaluations, or advice of any individual, group or agency of government with respect to any aspects of the proposed judgment or the effect of such judgment, 

in such manner as the court deems appropriate; 

(3) authorize full or limited participation in proceedings 

before the court by interested persons or agencies, including 

appearance amicus curiae, intervention as a party pursuant to 


SSpencer on DSK4SPTVN1PROD with REPORTS
15 

the Federal Rules of Civil Procedure, examination of witnesses 

or documentary materials, or participation in any other manner and extent which serves the public interest as the court 

may deem appropriate. 

(4) review any comments including any objections filed 

with the United States under subsection (d) concerning the 

proposed judgment and the responses of the United States to 

such comments and objections; and 

(5) take such other action in the public interest as the 

court may deem appropriate. 

(g) Not later than 10 days following the date of the filing of 

any proposal for a consent judgment under subsection (b), each defendant shall file with the district court a description of any and 

all written or oral communications by or on behalf of such defendant, including any and all written or oral communications on behalf 

of such defendant by any officer, director, employee, or agent of 

such defendant, or other person, with any officer or employee of the 

United States concerning or relevant to such proposal, except that 

any such communications made by counsel of record alone with the 

Attorney General or the employees of the Department of Justice 

alone shall be excluded from the requirements of this subsection. 

Prior to the entry of any consent judgment pursuant to the antitrust laws, each defendant shall certify to the district court that 

the requirements of this subsection have been complied with and 

that such filing is a true and complete description of such communications known to the defendant or which the defendant reasonably should have known. 

(h) Proceedings before the district court under subsections (e) 

and (f) of this section, and the competitive impact statement filed 

under subsection (b) of this section, shall not be admissible against 

any defendant in any action or proceeding brought by any other 

party against such defendant under the antitrust laws or by the 

United States under section 4A of this Act nor constitute a basis 

for the introduction of the consent judgment as prima facie evidence against such defendant in any such action or proceeding. 

(i) Whenever any civil or criminal proceeding is instituted by 

the United States to prevent, restrain, or punish violations of any 

of the antitrust laws (including a proceeding instituted by the Federal Trade Commission with respect to a violation of section 7), but 

not including an action under section 4A, the running of the statute of limitations in respect of every private or State right of action 

arising under said laws and based in whole or in part on any matter complained of in said proceeding shall be suspended during the 

pendency thereof and for one year thereafter: Provided, however, 

That whenever the running of the statute of limitations in respect 

of a cause of action arising under section 4 or 4C is suspended 

hereunder, any action to enforce such cause of action shall be forever barred unless commenced either within the period of suspension or within four years after the cause of action accrued. 

* * * * * * * 

SEC. 11. (a) That authority to enforce compliance with sections 

2, 3, 7, and 8 of this Act by the persons respectively subject thereto 

is hereby vested in the Surface Transportation Board where applicable to common carriers subject to jurisdiction under subtitle IV 

of title 49, United States Code; in the Federal Communications 


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16 

Commission where applicable to common carriers engaged in wire 

or radio communication or radio transmission of energy; in the Secretary of Transportation where applicable to air carriers and foreign air carriers subject to the Federal Aviation Act of 1958; in the 

Federal Reserve Board where applicable to banks, banking associations, and trust companies; and in the Federal Trade Commission 

where applicable to all other character of commerce to be exercised 

as follows: 

(b) Whenever the Commission, Board, or Secretary vested with 

jurisdiction thereof shall have reason to believe that any person is 

violating or has violated any of the provisions of sections 2, 3, 7, 

and 8 of this Act, it shall issue and serve upon such person and 

the Attorney General a complaint stating its charges in that respect, and containing a notice of a hearing upon a day and at a 

place therein fixed at least thirty days after the service of said complaint. The person so complained of shall have the right to appear 

at the place and time so fixed and show cause why an order should 

not be entered by the Commission, Board, or Secretary requiring 

such person to cease and desist from the violation of the law so 

charged in said complaint. The Attorney General shall have the 

right to intervene and appear in said proceeding and any person 

may make application, and upon good cause shown may be allowed 

by the Commission, Board, or Secretary, to intervene and appear 

in said proceeding by counsel or in person. The testimony in any 

such proceeding shall be reduced to writing and filed in the office 

of the Commission, Board, or Secretary. If upon such hearing the 

Commission, Board, or Secretary, as the case may be, shall be of 

the opinion that any of the provisions of said sections have been 

or are being violated, it shall make a report in writing, in which 

it shall state its findings as to the facts, and shall issue and cause 

to be served on such person an order requiring such person to cease 

and desist from such violations, and divest itself of the stock, or 

other share capital, or assets, held or rid itself of the directors chosen contrary to the provisions of sections 7 and 8 of this Act, if any 

there be, in the manner and within the time fixed by said order. 

Until the expiration of the time allowed for filing a petition for review, if no such petition has been duly filed within such time, or, 

if a petition for review has been filed within such time then until 

the record in the proceeding has been filed in a court of appeals 

of the United States, as hereinafter provided, the Commission, 

Board, or Secretary may at any time, upon such notice and in such 

manner as it shall deem proper, modify or set aside, in whole or 

in part, any report or any order made or issued by it under this 

section. After the expiration of the time allowed for filing a petition 

for review, if no such petition has been duly filed within such time, 

the Commission, Board, or Secretary may at any time, after notice 

and opportunity for hearing, reopen and alter, modify, or set aside, 

in whole or in part, any report or order made or issued by it under 

this section, whenever in the opinion of the Commission, Board, or 

Secretary conditions of fact or of law have so changed as to require 

such action or if the public interest shall so require: Provided, however, That the said person may, within sixty days after service 

upon him or it of said report or order entered after such a reopening, obtain a review thereof in the appropriate court of appeals of 


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the United States, in the manner provided in subsection (c) of this 

section. 

(c) Any person required by such order of the commission, 

board, or Secretary to cease and desist from any such violation may 

obtain a review of such order in the court of appeals of the United 

States for any circuit within which such violation occurred or within which such person resides or carries on business, by filing in the 

court, within sixty days after the date of the service of such order, 

a written petition praying that the order of the commission, board, 

or Secretary be set aside. A copy of such petition shall be forthwith 

transmitted by the clerk of the court to the commission, board, or 

Secretary, and thereupon the commission, board, or Secretary shall 

file in the court the record in the proceeding, as provided in section 

2112 of title 28, United States Code. Upon such filing of the petition the court shall have jurisdiction of the proceeding and of the 

question determined therein concurrently with the commission, 

board, or Secretary until the filing of the record, and shall have 

power to make and enter a decree affirming, modifying, or setting 

aside the order of the commission, board, or Secretary, and enforcing the same to the extent that such order is affirmed, and to issue 

such writs as are ancillary to its jurisdiction or are necessary in its 

judgment to prevent injury to the public or to competitors pendente 

lite. The findings of the commission, board, or Secretary as to the 

facts, if supported by substantial evidence, shall be conclusive. To 

the extent that the order of the commission, board, or Secretary is 

affirmed, the court shall issue its own order commanding obedience 

to the terms of such order of the commission, board, or Secretary. 

If either party shall apply to the court for leave to adduce additional evidence, and shall show to the satisfaction of the court that 

such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the proceeding before the commission, board, or Secretary, the court may 

order such additional evidence to be taken before the commission, 

board, or Secretary, and to be adduced upon the hearing in such 

manner and upon such terms and conditions as to the court may 

seem proper. The commission, board, or Secretary may modify its 

findings as to the facts, or make new findings, by reason of the additional evidence so taken, and shall file such modified or new findings, which, if supported by substantial evidence, shall be conclusive, and its recommendation, if any, for the modification or setting 

aside of its original order, with the return of such additional evidence. The judgment and decree of the court shall be final, except 

that the same shall be subject to review by the Supreme Court 

upon certiorari, as provided in section 1254 of title 28 of the United 

States Code. 

(d) Upon the filing of the record with it the jurisdiction of the 

court of appeals to affirm, enforce, modify, or set aside orders of the 

commission, board, or Secretary shall be exclusive. 

(e) No order of the commission, board, or Secretary or judgment of the court to enforce the same shall in anywise relieve or 

absolve any person from any liability under the antitrust laws. 

(f) Complaints, orders, and other processes of the commission, 

board, or Secretary under this section may be served by anyone 

duly authorized by the commission, board, or Secretary, either (1) 

by delivering a copy thereof to the person to be served, or to a 


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member of the partnership to be served, or to the president, secretary, or other executive officer or a director of the corporation to 

be served; or (2) by leaving a copy thereof at the residence or the 

principal office or place of business of such person; or (3) by mailing by registered or certified mail a copy thereof addressed to such 

person at his or its residence or principal office or place of business. 

The verified return by the person so serving said complaint, order, 

or other process setting forth the manner of said service shall be 

proof of the same, and the return post office receipt for said complaint, order, or other process mailed by registered or certified mail 

as aforesaid shall be proof of the service of the same. 

(g) Any order issued under subsection (b) shall become final— 

(1) upon the expiration of the time allowed for filing a petition for review, if no such petition has been duly filed within 

such time; but the commission, board, or Secretary may thereafter modify or set aside its order to the extent provided in the 

last sentence of subsection (b); or 

(2) upon the expiration of the time allowed for filing a petition for certiorari, if the order of the commission, board, or Secretary has been affirmed, or the petition for review has been 

dismissed by the court of appeals, and no petition for certiorari 

has been duly filed; or 

(3) upon the denial of a petition for certiorari, if the order 

of the commission, board, or Secretary has been affirmed or the 

petition for review has been dismissed by the court of appeals; 

or 

(4) upon the expiration of thirty days from the date of 

issuance of the mandate of the Supreme Court, if such Court 

directs that the order of the commission, board, or Secretary be 

affirmed or the petition for review be dismissed. 

(h) If the Supreme Court directs that the order of the commission, board, or Secretary be modified or set aside, the order of the 

commission, board, or Secretary rendered in accordance with the 

mandate of the Supreme Court shall become final upon the expiration of thirty days from the time it was rendered, unless within 

such thirty days either party has instituted proceedings to have 

such order corrected to accord with the mandate, in which event 

the order of the commission, board, or Secretary shall become final 

when so corrected. 

(i) If the order of the commission, board, or Secretary is modified or set aside by the court of appeals, and if (1) the time allowed 

for filing a petition for certiorari has expired and no such petition 

has been duly filed, or (2) the petition for certiorari has been denied, or (3) the decision of the court has been affirmed by the Supreme Court, then the order of the commission, board, or Secretary 

rendered in accordance with the mandate of the court of appeals 

shall become final on the expiration of thirty days from the time 

such order of the commission, board, or Secretary was rendered, 

unless within such thirty days either party has instituted proceedings to have such order corrected so that it will accord with the 

mandate, in which event the order of the commission, board, or 

Secretary shall become final when so corrected. 

(j) If the Supreme Court orders a rehearing; or if the case is 

remanded by the court of appeals to the commission, board, or Secretary for a rehearing, and if (1) the time allowed for filing a petiVerDate Sep 11 2014 01:59 Mar 15, 2016 Jkt 059006 PO 00000 Frm 00018 Fmt 6659 Sfmt 6601 E:\HR\OC\HR449.XXX HR449

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tion for certiorari has expired, and no such petition has been duly 

filed, or (2) the petition for certiorari has been denied, or (3) the 

decision of the court has been affirmed by the Supreme Court, then 

the order of the commission, board, or Secretary rendered upon 

such rehearing shall become final in the same manner as though 

no prior order of the commission, board, or Secretary had been rendered. 

(k) As used in this section the term ‘‘mandate’’, in case a mandate has been recalled prior to the expiration of thirty days from 

the date of issuance thereof, means the final mandate. 

(l) Any person who violates any order issued by the commission, board, or Secretary under subsection (b) after such order has 

become final, and while such order is in effect, shall forfeit and pay 

to the United States a civil penalty of not more than $5,000 for 

each violation, which shall accrue to the United States and may be 

recovered in a civil action brought by the United States. Each separate violation of any such order shall be a separate offense, except 

that in the case of a violation through continuing failure or neglect 

to obey a final order of the commission, board, or Secretary each 

day of continuance of such failure or neglect shall be deemed a separate offense. 

(m)(1) Except as provided in paragraph (2), in enforcing compliance with section 7, the Federal Trade Commission shall enforce 

compliance with that section in the same manner as the Attorney 

General in accordance with section 15. 

(2) If the Federal Trade Commission approves an agreement 

with the parties to the transaction that contains a consent order 

with respect to a violation of section 7, the Commission shall enforce 

compliance with that section in accordance with this section. 

* * * * * * * 

SEC. 13. That in any suit, action, or proceeding brought by or 

on behalf of the United States (including a suit, action, or proceeding brought by the Federal Trade Commission with respect to 

a violation of section 7) subpoenas for witnesses who are required 

to attend a court of the United States in any judicial district in any 

case, civil or criminal, arising under the antitrust laws may run 

into any other district: Provided, That in civil cases no writ of 

supoena shall issue for witnesses living out of the district in which 

the court is held at a greater distance than one hundred miles from 

the place of holding the same without the permission of the trial 

court being first had upon proper application and cause shown. 

* * * * * * * 

SEC. 15. That the several district courts of the United States 

are hereby invested with jurisdiction to prevent and restrain violations of this Act, and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the 

direction of the Attorney General, and the duty of the Federal 

Trade Commission with respect to a violation of section 7, to institute proceedings in equity to prevent and restrain such violations. 

Such proceedings may be by way of petition setting forth the case 

and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition, the court shall proceed, as soon as may be, 

to the hearing and determination of the case; and pending such peVerDate Sep 11 2014 01:59 Mar 15, 2016 Jkt 059006 PO 00000 Frm 00019 Fmt 6659 Sfmt 6601 E:\HR\OC\HR449.XXX HR449

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tition, and before final decree, the court may at any time make 

such temporary restraining order or prohibition as shall be deemed 

just in the premises. Whenever it shall appear to the court before 

which any such proceeding may be pending that the ends of justice 

require that other parties should be brought before the court, the 

court may cause them to be summoned, whether they reside in the 

district in which the court is held or not, and subpoenas to that end 

may be served in any district by the marshal thereof. 

* * * * * * * 

FEDERAL TRADE COMMISSION ACT 

* * * * * * * 

SEC. 5. (a)(1) Unfair methods of competition in or affecting 

commerce, and unfair or deceptive acts or practices in or affecting 

commerce, are hereby declared unlawful. 

(2) The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, savings 

and loan institutions described in section 18(f)(3), Federal credit 

unions described in section 18(f)(4), common carriers subject to the 

Acts to regulate commerce, air carriers and foreign air carriers subject to the Federal Aviation Act of 1958, and persons, partnerships, 

or corporations insofar as they are subject to the Packers and 

Stockyards Act, 1921, as amended, except as provided in section 

406(b) of said Act, from using unfair methods of competition in or 

affecting commerce and unfair or deceptive acts or practices in or 

affecting commerce. 

(3) This subsection shall not apply to unfair methods of competition involving commerce with foreign nations (other than import commerce) unless— 

(A) such methods of competition have a direct, substantial, 

and reasonably foreseeable effect— 

(i) on commerce which is not commerce with foreign 

nations, or on import commerce with foreign nations; or 

(ii) on export commerce with foreign nations, of a person engaged in such commerce in the United States; and 

(B) such effect gives rise to a claim under the provisions 

of this subsection, other than this paragraph. 

If this subsection applies to such methods of competition only because of the operation of subparagraph (A)(ii), this subsection shall 

apply to such conduct only for injury to export business in the 

United States. 

(4)(A) For purposes of subsection (a), the term ‘‘unfair or 

deceptive acts or practices’’ includes such acts or practices involving foreign commerce that— 

(i) cause or are likely to cause reasonably foreseeable 

injury within the United States; or 

(ii) involve material conduct occurring within the 

United States. 

(B) All remedies available to the Commission with respect 

to unfair and deceptive acts or practices shall be available for 

acts and practices described in this paragraph, including restitution to domestic or foreign victims. 


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(b) Whenever the Commission shall have reason to believe that 

any such person, partnership, or corporation has been or is using 

any unfair method of competition (excluding the consummation of 

a proposed merger, acquisition, joint venture, or similar transaction 

that is subject to section 7 of the Clayton Act (15 U.S.C. 18), except 

in cases where the Commission approves an agreement with the parties to the transaction that contains a consent order) or unfair or deceptive act or practice in or affecting commerce, and if it shall appear to the Commission that a proceeding by it in respect thereof 

would be to the interest of the public, it shall issue and serve upon 

such person, partnership, or corporation a complaint stating its 

charges in that respect and containing a notice of a hearing upon 

a day and at a place therein fixed at least thirty days after the 

service of said complaint. The person, partnership, or corporation 

so complained of shall have the right to appear at the place and 

time so fixed and show cause why an order should not be entered 

by the Commission requiring such person, partnership, or corporation to cease and desist from the violation of the law so charged 

in said complaint. Any person, partnership, or corporation may 

make application, and upon good cause shown may be allowed by 

the Commission to intervene and appear in said proceeding by 

counsel or in person. The testimony in any such proceeding shall 

be reduced to writing and filed in the office of the Commission. If 

upon such hearing the Commission shall be of the opinion that the 

method of competition or the act or practice in question is prohibited by this Act, it shall make a report in writing in which it shall 

state its findings as to the facts and shall issue and cause to be 

served on such person, partnership, or corporation an order requiring such person, partnership, or corporation to cease and desist 

from using such method of competition or such act or practice. 

Until the expiration of the time allowed for filing a petition for review, if no such petition has been duly filed within such time, or, 

if a petition for review has been filed within such time then until 

the record in the proceeding has been filed in a court of appeals 

of the United States, as hereinafter provided, the Commission may 

at any time, upon such notice and in such manner as it shall deem 

proper, modify or set aside, in whole or in part, any report or any 

order made or issued by it under this section. After the expiration 

of the time allowed for filing a petition for review, if no such petition has been duly filed within such time, the Commission may at 

any time, after notice and opportunity for hearing, reopen and 

alter, modify, or set aside, in whole or in part, any report or order 

made or issued by it under this section, whenever in the opinion 

of the Commission conditions of fact or of law have so changed as 

to require such action or if the public interest shall so require, except that (1) the said person, partnership, or corporation may, 

within sixty days after service upon him or it of said report or 

order entered after such a reopening, obtain a review thereof in the 

appropriate circuit court of appeals of the United States, in the 

manner provided in subsection (c) of this section; and (2) in the 

case of an order, the Commission shall reopen any such order to 

consider whether such order (including any affirmative relief provision contained in such order) should be altered, modified, or set 

aside, in whole or in part, if the person, partnership, or corporation 

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factory showing that changed conditions of law or fact require such 

order to be altered, modified, or set aside, in whole or in part. The 

Commission shall determine whether to alter, modify, or set aside 

any order of the Commission in response to a request made by a 

person, partnership, or corporation under paragraph (2) not later 

than 120 days after the date of the filing of such request. 

(c) Any person, partnership, or corporation required by an 

order of the Commission to cease and desist from using any method 

of competition or act or practice may obtain a review of such order 

in the circuit court of appeals of the United States, within any circuit where the method of competition or the act or practice in question was used or where such person, partnership, or corporation resides or carries on business, by filing in the court, within sixty days 

from the date of the service of such order, a written petition praying that the order of the Commission be set aside. A copy of such 

petition shall be forthwith transmitted by the clerk of the court to 

the Commission, and thereupon the Commission shall file in the 

court the record in the proceeding, as provided in section 2112 of 

title 28, United States Code. Upon such filing of the petition the 

court shall have jurisdiction of the proceeding and of the question 

determined therein concurrently with the Commission until the filing of the record and shall have power to make and enter a decree 

affirming, modifying, or setting aside the order of the Commission, 

and enforcing the same to the extent that such order is affirmed 

and to issue such writs as are ancillary to its jurisdiction or are 

necessary in its judgment to prevent injury to the public or to competitors pendente lite. The findings of the Commission as to the 

facts, if supported by evidence, shall be conclusive. To the extent 

that the order of the Commission is affirmed, the court shall thereupon issue its own order commanding obedience to the terms of 

such order of the Commission. If either party shall apply to the 

court for leave to adduce additional evidence, and shall show to the 

satisfaction of the court that such additional evidence is material 

and that there were reasonable grounds for the failure to adduce 

such evidence in the proceeding before the Commission, the court 

may order such additional evidence to be taken before the Commission and to be adduced upon the hearing in such manner and upon 

such terms and conditions as to the court may seem proper. The 

Commission may modify its findings as to the facts, or make new 

findings, by reason of the additional evidence so taken, and it shall 

file such modified or new findings, which if supported by evidence, 

shall be conclusive, and its recommendation, if any, for the modification or setting aside of its original order, with the return of 

such additional evidence. The judgment and decree of the court 

shall be final, except that the same shall be subject to review by 

the Supreme Court upon certiorari, as provided in section 240 of 

the Judicial Code. 

(d) Upon the filing of the record with it the jurisdiction of the 

court of appeals of the United States to affirm, enforce, modify, or 

set aside orders of the Commission shall be exclusive. 

(e) No order of the Commission or judgment of court to enforce 

the same shall in anywise relieve or absolve any person, partnership, or corporation from any liability under the Antitrust Acts. 

(f) Complaints, orders, and other processes of the Commission 

under this section may be served by anyone duly authorized by the 


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23 

Commission, either (a) by delivering a copy thereof to the person 

to be served, or to a member of the partnership to be served, or 

the president, secretary, or other executive officer or a director of 

the corporation to be served; or (b) by leaving a copy thereof at the 

residence or the principal office or place of business of such person, 

partnership, or corporation; or (c) by mailing a copy thereof by registered mail or by certified mail addressed to such person, partnership, or corporation at his or its residence or principal office or 

place of business. The verified return by the person so serving said 

complaint, order, or other process setting forth the manner of said 

service shall be proof of the same, and the return post office receipt 

for said complaint, order, or other process mailed by registered 

mail or certified mail as aforesaid shall be proof of the service of 

the same. 

(g) An order of the Commission to cease and desist shall become final— 

(1) Upon the expiration of the time allowed for filing a petition for review, if no such petition has been duly filed within 

such time; but the Commission may thereafter modify or set 

aside its order to the extent provided in the last sentence of 

subsection (b). 

(2) Except as to any order provision subject to paragraph 

(4), upon the sixtieth day after such order is served, if a petition for review has been duly filed; except that any such order 

may be stayed, in whole or in part and subject to such conditions as may be appropriate, by— 

(A) the Commission; 

(B) an appropriate court of appeals of the United 

States, if (i) a petition for review of such order is pending 

in such court, and (ii) an application for such a stay was 

previously submitted to the Commission and the Commission, within the 30-day period beginning on the date the 

application was received by the Commission, either denied 

the application or did not grant or deny the application; or 

(C) the Supreme Court, if an applicable petition for 

certiorari is pending. 

(3) For purposes of subsection (m)(1)(B) and of section 

19(a)(2), if a petition for review of the order of the Commission 

has been filed— 

(A) upon the expiration of the time allowed for filing 

a petition for certiorari, if the order of the Commission has 

been affirmed or the petition for review has been dismissed by the court of appeals and no petition for certiorari has been duly filed; 

(B) upon the denial of a petition for certiorari, if the 

order of the Commission has been affirmed or the petition 

for review has been dismissed by the court of appeals; or 

(C) upon the expiration of 30 days from the date of 

issuance of a mandate of the Supreme Court directing that 

the order of the Commission be affirmed or the petition for 

review be dismissed. 

(4) In the case of an order provision requiring a person, 

partnership, or corporation to divest itself of stock, other share 

capital, or assets, if a petition for review of such order of the 

Commission has been filed— 


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(A) upon the expiration of the time allowed for filing 

a petition for certiorari, if the order of the Commission has 

been affirmed or the petition for review has been dismissed by the court of appeals and no petition for certiorari has been duly filed; 

(B) upon the denial of a petition for certiorari, if the 

order of the Commission has been affirmed or the petition 

for review has been dismissed by the court of appeals; or 

(C) upon the expiration of 30 days from the date of 

issuance of a mandate of the Supreme Court directing that 

the order of the Commission be affirmed or the petition for 

review be dismissed. 

(h) If the Supreme Court directs that the order of the Commission be modified or set aside, the order of the Commission rendered 

in accordance with the mandate of the Supreme Court shall become 

final upon the expiration of thirty days from the time it was rendered, unless within such thirty days either party has instituted 

proceedings to have such order corrected to accord with the mandate, in which event the order of the Commission shall become 

final when so corrected. 

(i) If the order of the Commission is modified or set aside by 

the circuit court of appeals, and if (1) the time allowed for filing 

a petition for certiorari has expired and no such petition has been 

duly filed, or (2) the petition for certiorari has been denied, or (3) 

the decision of the court has been affirmed by the Supreme Court, 

then the order of the Commission rendered in accordance with the 

mandate of the circuit court of appeals shall become final on the 

expiration of thirty days from the time such order of the Commission was rendered, unless within such thirty days either party has 

instituted proceedings to have such order corrected so that it will 

accord with the mandate, in which event the order of the Commission shall become final when so corrected. 

(j) If the Supreme Court orders a rehearing; or if the case is 

remanded by the circuit court of appeals to the Commission for a 

rehearing, and if (1) the time allowed for filing a petition for certiorari has expired, and no such petition has been duly filed, or (2) 

the petition for certiorari has been denied, or (3) the decision of the 

court has been affirmed by the Supreme Court, then the order of 

the Commission rendered upon such rehearing shall become final 

in the same manner as though no prior order of the Commission 

had been rendered. 

(k) As used in this section the term ‘‘mandate’’, in case a mandate has been recalled prior to the expiration of thirty days from 

the date of issuance thereof, means the final mandate. 

(l) Any person, partnership, or corporation who violates an 

order of the Commission after it has become final, and while such 

order is in effect, shall forfeit and pay to the United States a civil 

penalty of not more than $10,000 for each violation, which shall accrue to the United States and may be recovered in a civil action 

brought by the Attorney General of the United States. Each separate violation of such an order shall be a separate offense, except 

that in the case of a violation through continuing failure to obey 

or neglect to obey a final order of the Commission, each day of continuance of such failure or neglect shall be deemed a separate offense. In such actions, the United States district courts are empowVerDate Sep 11 2014 01:59 Mar 15, 2016 Jkt 059006 PO 00000 Frm 00024 Fmt 6659 Sfmt 6601 E:\HR\OC\HR449.XXX HR449

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ered to grant mandatory injunctions and such other and further equitable relief as they deem appropriate in the enforcement of such 

final orders of the Commission. 

(m)(1)(A) The Commission may commence a civil action to recover a civil penalty in a district court of the United States against 

any person, partnership, or corporation which violates any rule 

under this Act respecting unfair or deceptive acts or practices 

(other than an interpretive rule or a rule violation of which the 

Commission has provided is not an unfair or deceptive act or practice in violation of subsection (a)(1)) with actual knowledge or 

knowledge fairly implied on the basis of objective circumstances 

that such act is unfair or deceptive and is prohibited by such rule. 

In such action, such person, partnership, or corporation shall be 

liable for a civil penalty of not more than $10,000 for each violation. 

(B) If the Commission determines in a proceeding under subsection (b) that any act or practice is unfair or deceptive, and 

issues a final cease and desist order, other than a consent order, 

with respect to such act or practice, then the Commission may commence a civil action to obtain a civil penalty in a district court of 

the United States against any person, partnership, or corporation 

which engages in such act or practice— 

(1) after such cease and desist order becomes final (whether or not such person, partnership, or corporation was subject 

to such cease and desist order), and 

(2) with actual knowledge that such act or practice is unfair or deceptive and is unlawful under subsection (a)(1) of this 

section. 

In such action, such person, partnership, or corporation 

shall be liable for a civil penalty of not more than $10,000 

for each violation. 

(C)(1) In the case of a violation through continuing failure to 

comply with a rule or with section 5(a)(1), each day of continuance 

of such failure shall be treated as a separate violation, for purposes 

of subparagraphs (A) and (B). In determining the amount of such 

a civil penalty, the court shall take into account the degree of culpability, any history of prior such conduct, ability to pay, effect on 

ability to continue to do business, and such other matters as justice 

may require. 

(2) If the cease and desist order establishing that the act or 

practice is unfair or deceptive was not issued against the defendant 

in a civil penalty action under paragraph (1)(B) the issues of fact 

in such action against such defendant shall be tried de novo. Upon 

request of any party to such an action against such defendant, the 

court shall also review the determination of law made by the Commission in the proceeding under subsection (b) that the act or practice which was the subject of such proceeding constituted an unfair 

or deceptive act or practice in violation of subsection (a). 

(3) The Commission may compromise or settle any action for 

a civil penalty if such compromise or settlement is accompanied by 

a public statement of its reasons and is approved by the court. 

(n) The Commission shall have no authority under this section 

or section 18 to declare unlawful an act or practice on the grounds 

that such act or practice is unfair unless the act or practice causes 

or is likely to cause substantial injury to consumers which is not 


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26 

reasonably avoidable by consumers themselves and not outweighed 

by countervailing benefits to consumers or to competition. In determining whether an act or practice is unfair, the Commission may 

consider established public policies as evidence to be considered 

with all other evidence. Such public policy considerations may not 

serve as a primary basis for such determination. 

* * * * * * * 

SEC. 9. That for the purposes of this Act the commission, or its 

duly authorized agent or agents, shall at all reasonable times have 

access to, for the purpose of examination, and the right to copy any 

documentary evidence of any corporation being investigated or proceeded against; and the commission shall have power to require by 

subpoena the attendance and testimony of witnesses and the production of all such documentary evidence relating to any matter 

under investigation. Any member of the commission may sign subpoenas, and members and examiners of the commission may administer oaths and affirmations, examine witnesses, and receive 

evidence. 

Such attendance of witnesses, and the production of such documentary evidence, may be required from any place in the United 

States, at any designated place of hearing. And in case of disobedience to a subpoena the commission may invoke the aid of any 

court of the United States in requiring the attendance and testimony of witnesses and the production of documentary evidence. 

Any of the district courts of the United States within the jurisdiction of which such inquiry is carried on may, in case of contumacy or refusal to obey a subpoena issued to any corporation or 

other person, issue an order requiring such corporation or other 

person to appear before the commission, or to produce documentary 

evidence if so ordered, or to give evidence touching the matter in 

question; and any failure to obey such order of the court may be 

punished by such court as a contempt thereof. 

Upon the application of the Attorney General of the United 

States, at the request of the commission, the district courts of the 

United States shall have jurisdiction to issue writs of mandamus 

commanding any person or corporation to comply with the provisions of this Act or any order of the commission made in pursuance 

thereof. 

Upon the application of the commission with respect to any activity related to the consummation of a proposed merger, acquisition, joint venture, or similar transaction that is subject to section 

7 of the Clayton Act (15 U.S.C. 18) that may result in any unfair 

method of competition, the district courts of the United States shall 

have jurisdiction to issue writs of mandamus commanding any person or corporation to comply with the provisions of this Act or any 

order of the commission made in pursuance thereof. 

The commission may order testimony to be taken by deposition 

in any proceeding or investigation pending under this Act at any 

stage of such proceeding or investigation. Such depositions may be 

taken before any person designated by the commission and having 

power to administer oaths. Such testimony shall be reduced to 

writing by the person taking the deposition, or under his direction, 

and shall then be subscribed by the deponent. Any person may be 

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pear and testify and produce documentary evidence before the commission as hereinbefore provided. 

Witnesses summoned before the commission shall be paid the 

same fees and mileage that are paid witnesses in the courts of the 

United States, and witnesses whose depositions are taken and the 

persons taking the same shall severally be entitled to the same fees 

as are paid for like services in the courts of the United States. 

* * * * * * * 

SEC. 13. (a) Whenever the Commission has reason to believe— 

(1) that any person, partnership, or corporation is engaged 

in, or is about to engage in, the dissemination or the causing 

of the dissemination of any advertisement in violation of section 12, and 

(2) that the enjoining thereof pending the issuance of a 

complaint by the Commission under section 5, and until such 

complaint is dismissed by the Commission or set aside by the 

court on review, or the order of the Commission to cease and 

desist made thereon has become final within the meaning of 

section 5, would be to the interest of the public, 

the Commission by any of its attorneys designated by it for such 

purpose may bring suit in a district court of the United States or 

in the United States court of any Territory, to enjoin the dissemination or the causing of the dissemination of such advertisement. 

Upon proper showing a temporary injunction or restraining order 

shall be granted without bond. Any suit may be brought where 

such person, partnership, or corporation resides or transacts business, or wherever venue is proper under section 1391 of title 28, 

United States Code. In addition, the court may, if the court determines that the interests of justice require that any other person, 

partnership, or corporation should be a party in such suit, cause 

such other person, partnership, or corporation to be added as a 

party without regard to whether venue is otherwise proper in the 

district in which the suit is brought. In any suit under this section, 

process may be served on any person, partnership, or corporation 

wherever it may be found. 

(b) Whenever the Commission has reason to believe— 

(1) that any person, partnership, or corporation is violating, or is about to violate, any provision of law enforced by 

the Federal Trade Commission (excluding section 7 of the Clayton Act (15 U.S.C. 18) and section 5(a)(1) with respect to the 

consummation of a proposed merger, acquisition, joint venture, 

or similar transaction that is subject to section 7 of the Clayton 

Act (15 U.S.C. 18)), and 

(2) that the enjoining thereof pending the issuance of a 

complaint by the Commission and until such complaint is dismissed by the Commission or set aside by the court on review, 

or until the order of the Commission made thereon has become 

final, would be in the interest of the public— 

the Commission by any of its attorneys designated by it for such 

purpose may bring suit in a district court of the United States to 

enjoin any such act or practice. Upon a proper showing that, weighing the equities and considering the Commission’s likelihood of ultimate success, such action would be in the public interest, and after 

notice to the defendant, a temporary restraining order or a preliminary injunction may be granted without bond: Provided, however, 


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That if a complaint is not filed within such period (not exceeding 

20 days) as may be specified by the court after issuance of the temporary restraining order or preliminary injunction, the order or injunction shall be dissolved by the court and be of no further force 

and effect: Provided further, That in proper cases the Commission 

may seek, and after proper proof, the court may issue, a permanent 

injunction. Any suit may be brought where such person, partnership, or corporation resides or transacts business, or wherever 

venue is proper under section 1391 of title 28, United States Code. 

In addition, the court may, if the court determines that the interests of justice require that any other person, partnership, or corporation should be a party in such suit, cause such other person, 

partnership, or corporation to be added as a party without regard 

to whether venue is otherwise proper in the district in which the 

suit is brought. In any suit under this section, process may be 

served on any person, partnership, or corporation wherever it may 

be found. 

(c) Any process of the Commission under this section may be 

served by any person duly authorized by the Commission— 

(1) by delivering a copy of such process to the person to be 

served, to a member of the partnership to be served, or to the 

president, secretary, or other executive officer or a director of 

the corporation to be served; 

(2) by leaving a copy of such process at the residence or 

the principal office or place of business of such person, partnership, or corporation; or 

(3) by mailing a copy of such process by registered mail or 

certified mail addressed to such person, partnership, or corporation at his, or her, or its residence, principal office, or principal place or business. 

The verified return by the person serving such process setting forth 

the manner of such service shall be proof of the same. 

(d) Whenever it appears to the satisfaction of the court in the 

case of a newspaper, magazine, periodical, or other publication, 

published at regular intervals— 

(1) that restraining the dissemination of a false advertisement in any particular issue of such publication would delay 

the delivery of such issue after the regular time therefor, and 

(2) that such delay would be due to the method by which 

the manufacture and distribution of such publication is customarily conducted by the publisher in accordance with sound 

business practice, and not to any method or device adopted for 

the evasion of this section or to prevent or delay the issuance 

of an injunction or restraining order with respect to such false 

advertisement or any other advertisement, 

the court shall exclude such issue from the operation of the restraining order or injunction. 

* * * * * * * 

SEC. 20. (a) For purposes of this section: 

(1) The terms ‘‘civil investigative demand’’ and ‘‘demand’’ 

mean any demand issued by the Commission under subsection 

(c)(1). 

(2) The term ‘‘Commission investigation’’ means any inquiry conducted by a Commission investigator for the purpose 

of ascertaining whether any person is or has been engaged in 


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29 

any unfair or deceptive acts or practices in or affecting commerce (within the meaning of section 5(a)(1)) or in any antitrust violations. 

(3) The term ‘‘Commission investigator’’ means any attorney or investigator employed by the Commission who is 

charged with the duty of enforcing or carrying into effect any 

provisions relating to unfair or deceptive acts or practices in or 

affecting commerce (within the meaning of section 5(a)(1)) or 

any provisions relating to antitrust violations. 

(4) The term ‘‘custodian’’ means the custodian or any deputy custodian designated under section 21(b)(2)(A). 

(5) The term ‘‘documentary material’’ includes the original 

or any copy of any book, record, report, memorandum, paper, 

communication, tabulation, chart, or other document. 

(6) The term ‘‘person’’ means any natural person, partnership, corporation, association, or other legal entity, including 

any person acting under color or authority of State law. 

(7) The term ‘‘violation’’ means any act or omission constituting an unfair or deceptive act or practice in or affecting 

commerce (within the meaning of section 5(a)(1)) or any antitrust violation. 

(8) The term ‘‘antitrust violation’’ means— 

(A) any unfair method of competition (within the 

meaning of section 5(a)(1)); 

(B) any violation of the Clayton Act or of any other 

Federal statute that prohibits, or makes available to the 

Commission a civil remedy with respect to, any restraint 

upon or monopolization of interstate or foreign trade or 

commerce; 

(C) with respect to the International Antitrust Enforcement Assistance Act of 1994, any violation of any of 

the foreign antitrust laws (as defined in section 12 of such 

Act) with respect to which a request is made under section 

3 of such Act; or 

(D) any activity in preparation for a merger, acquisition, joint venture, or similar transaction, which if consummated, may result in any such unfair method of competition or in any such violation. 

(b) For the purpose of investigations performed pursuant to 

this section with respect to unfair or deceptive acts or practices in 

or affecting commerce (within the meaning of section 5(a)(1)), all 

actions of the Commission taken under section 6 and section 9 

shall be conducted pursuant to subsection (c). 

(c)(1) Whenever the Commission has reason to believe that any 

person may be in possession, custody, or control of any documentary material or tangible things, or may have any information, relevant to unfair or deceptive acts or practices in or affecting commerce (within the meaning of section 5(a)(1)), or to antitrust violations, the Commission may, before the institution of any proceedings under this Act, or under section 7 of the Clayton Act (15 

U.S.C. 18), where applicable, issue in writing, and cause to be 

served upon such person, a civil investigative demand requiring 

such person to produce such documentary material for inspection 

and copying or reproduction, to submit such tangible things, to file 

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cerning documentary material or other information, or to furnish 

any combination of such material, answers, or testimony. 

(2) Each civil investigative demand shall state the nature of 

the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation. 

(3) Each civil investigative demand for the production of documentary material shall— 

(A) describe each class of documentary material to be produced under the demand with such definiteness and certainty 

as to permit such material to be fairly identified; 

(B) prescribe a return date or dates which will provide a 

reasonable period of time within which the material so demanded may be assembled and made available for inspection 

and copying or reproduction; and 

(C) identify the custodian to whom such material shall be 

made available. 

(4) Each civil investigative demand for the submission of tangible things shall— 

(A) describe each class of tangible things to be submitted 

under the demand with such definiteness and certainty as to 

permit such things to be fairly identified; 

(B) prescribe a return date or dates which will provide a 

reasonable period of time within which the things so demanded 

may be assembled and submitted; and 

(C) identify the custodian to whom such things shall be 

submitted. 

(5) Each civil investigative demand for written reports or answers to questions shall— 

(A) propound with definiteness and certainty the reports to 

be produced or the questions to be answered; 

(B) prescribe a date or dates at which time written reports 

or answers to questions shall be submitted; and 

(C) identify the custodian to whom such reports or answers 

shall be submitted. 

(6) Each civil investigative demand for the giving of oral testimony shall— 

(A) prescribe a date, time, and place at which oral testimony shall be commenced; and 

(B) identify a Commission investigator who shall conduct 

the investigation and the custodian to whom the transcript of 

such investigation shall be submitted. 

(7)(A) Any civil investigative demand may be served by any 

Commission investigator at any place within the territorial jurisdiction of any court of the United States. 

(B) Any such demand or any enforcement petition filed under 

this section may be served upon any person who is not found within the territorial jurisdiction of any court of the United States, in 

such manner as the Federal Rules of Civil Procedure prescribe for 

service in a foreign nation. 

(C) To the extent that the courts of the United States have authority to assert jurisdiction over such person consistent with due 

process, the United States District Court for the District of Columbia shall have the same jurisdiction to take any action respecting 

compliance with this section by such person that such district court 


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31 

would have if such person were personally within the jurisdiction 

of such district court. 

(8) Service of any civil investigative demand or any enforcement petition filed under this section may be made upon a partnership, corporation, association, or other legal entity by— 

(A) delivering a duly executed copy of such demand or petition to any partner, executive officer, managing agent, or general agent of such partnership, corporation, association, or 

other legal entity, or to any agent of such partnership, corporation, association, or other legal entity authorized by appointment or by law to receive service of process on behalf of such 

partnership, corporation, association, or other legal entity; 

(B) delivering a duly executed copy of such demand or petition to the principal office or place of business of the partnership, corporation, association, or other legal entity to be served; 

or 

(C) depositing a duly executed copy in the United States 

mails, by registered or certified mail, return receipt requested, 

duly addressed to such partnership, corporation, association, or 

other legal entity at its principal office or place of business. 

(9) Service of any civil investigative demand or of any enforcement petition filed under this section may be made upon any natural person by— 

(A) delivering a duly executed copy of such demand or petition to the person to be served; or 

(B) depositing a duly executed copy in the United States 

mails by registered or certified mail, return receipt requested, 

duly addressed to such person at his residence or principal office or place of business. 

(10) A verified return by the individual serving any civil investigative demand or any enforcement petition filed under this section setting forth the manner of such service shall be proof of such 

service. In the case of service by registered or certified mail, such 

return shall be accompanied by the return post office receipt of delivery of such demand or enforcement petition. 

(11) The production of documentary material in response to a 

civil investigative demand shall be made under a sworn certificate, 

in such form as the demand designates, by the person, if a natural 

person, to whom the demand is directed or, if not a natural person, 

by any person having knowledge of the facts and circumstances relating to such production, to the effect that all of the documentary 

material required by the demand and in the possession, custody, or 

control of the person to whom the demand is directed has been produced and made available to the custodian. 

(12) The submission of tangible things in response to a civil investigative demand shall be made under a sworn certificate, in 

such form as the demand designates, by the person to whom the 

demand is directed or, if not a natural person, by any person having knowledge of the facts and circumstances relating to such production, to the effect that all of the tangible things required by the 

demand and in the possession, custody, or control of the person to 

whom the demand is directed have been submitted to the custodian. 

(13) Each reporting requirement or question in a civil investigative demand shall be answered separately and fully in writing 


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32 

under oath, unless it is objected to, in which event the reasons for 

the objection shall be stated in lieu of an answer, and it shall be 

submitted under a sworn certificate, in such form as the demand 

designates, by the person, if a natural person, to whom the demand 

is directed or, if not a natural person, by any person responsible 

for answering each reporting requirement or question, to the effect 

that all information required by the demand and in the possession, 

custody, control, or knowledge of the person to whom the demand 

is directed has been submitted. 

(14)(A) Any Commission investigator before whom oral testimony is to be taken shall put the witness on oath or affirmation 

and shall personally, or by any individual acting under his direction and in his presence, record the testimony of the witness. The 

testimony shall be taken stenographically and transcribed. After 

the testimony is fully transcribed, the Commission investigator before whom the testimony is taken shall promptly transmit a copy 

of the transcript of the testimony to the custodian. 

(B) Any Commission investigator before whom oral testimony 

is to be taken shall exclude from the place where the testimony is 

to be taken all other persons except the person giving the testimony, his attorney, the officer before whom the testimony is to be 

taken, and any stenographer taking such testimony. 

(C) The oral testimony of any person taken pursuant to a civil 

investigative demand shall be taken in the judicial district of the 

United States in which such person resides, is found, or transacts 

business, or in such other place as may be agreed upon by the 

Commission investigator before whom the oral testimony of such 

person is to be taken and such person. 

(D)(i) Any person compelled to appear under a civil investigative demand for oral testimony pursuant to this section may be accompanied, represented, and advised by an attorney. The attorney 

may advise such person, in confidence, either upon the request of 

such person or upon the initiative of the attorney, with respect to 

any question asked of such person. 

(ii) Such person or attorney may object on the record to any 

question, in whole or in part, and shall briefly state for the record 

the reason for the objection. An objection may properly be made, 

received, and entered upon the record when it is claimed that such 

person is entitled to refuse to answer the question on grounds of 

any constitutional or other legal right or privilege, including the 

privilege against self-incrimination. Such person shall not otherwise object to or refuse to answer any question, and shall not himself or through his attorney otherwise interrupt the oral examination. If such person refuses to answer any question, the Commission may petition the district court of the United States pursuant 

to this section for an order compelling such person to answer such 

question. 

(iii) If such person refuses to answer any question on grounds 

of the privilege against self-incrimination, the testimony of such 

person may be compelled in accordance with the provisions of section 6004 of title 18, United States Code. 

(E)(i) After the testimony of any witness is fully transcribed, 

the Commission investigator shall afford the witness (who may be 

accompanied by an attorney) a reasonable opportunity to examine 

the transcript. The transcript shall be read to or by the witness, 


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33 

unless such examination and reading are waived by the witness. 

Any changes in form or substance which the witness desires to 

make shall be entered and identified upon the transcript by the 

Commission investigator with a statement of the reasons given by 

the witness for making such changes. The transcript shall then be 

signed by the witness, unless the witness in writing waives the 

signing, is ill, cannot be found, or refuses to sign. 

(ii) If the transcript is not signed by the witness during the 30- 

day period following the date upon which the witness is first afforded a reasonable opportunity to examine it, the Commission investigator shall sign the transcript and state on the record the fact 

of the waiver, illness, absence of the witness, or the refusal to sign, 

together with any reasons given for the failure to sign. 

(F) The Commission investigator shall certify on the transcript 

that the witness was duly sworn by him and that the transcript is 

a true record of the testimony given by the witness, and the Commission investigator shall promptly deliver the transcript or send 

it by registered or certified mail to the custodian. 

(G) The Commission investigator shall furnish a copy of the 

transcript (upon payment of reasonable charges for the transcript) 

to the witness only, except that the Commission may for good cause 

limit such witness to inspection of the official transcript of his testimony. 

(H) Any witness appearing for the taking of oral testimony 

pursuant to a civil investigative demand shall be entitled to the 

same fees and mileage which are paid to witnesses in the district 

courts of the United States. 

(d) Materials received as a result of a civil investigative demand shall be subject to the procedures established in section 21. 

(e) Whenever any person fails to comply with any civil investigative demand duly served upon him under this section, or whenever satisfactory copying or reproduction of material requested pursuant to the demand cannot be accomplished and such person refuses to surrender such material, the Commission, through such officers or attorneys as it may designate, may file, in the district 

court of the United States for any judicial district in which such 

person resides, is found, or transacts business, and serve upon such 

person, a petition for an order of such court for the enforcement of 

this section. All process of any court to which application may be 

made as provided in this subsection may be served in any judicial 

district. 

(f)(1) Not later than 20 days after the service of any civil investigative demand upon any person under subsection (c), or at any 

time before the return date specified in the demand, whichever period is shorter, or within such period exceeding 20 days after service or in excess of such return date as may be prescribed in writing, 

subsequent to service, by any Commission investigator named in 

the demand, such person may file with the Commission a petition 

for an order by the Commission modifying or setting aside the demand. 

(2) The time permitted for compliance with the demand in 

whole or in part, as deemed proper and ordered by the Commission, shall not run during the pendency of such petition at the 

Commission, except that such person shall comply with any portions of the demand not sought to be modified or set aside. Such 


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34 

petition shall specify each ground upon which the petitioner relies 

in seeking such relief, and may be based upon any failure of the 

demand to comply with the provisions of this section, or upon any 

constitutional or other legal right or privilege of such person. 

(g) At any time during which any custodian is in custody or 

control of any documentary material, tangible things, reports, answers to questions, or transcripts of oral testimony given by any 

person in compliance with any civil investigative demand, such person may file, in the district court of the United States for the judicial district within which the office of such custodian is situated, 

and serve upon such custodian, a petition for an order of such court 

requiring the performance by such custodian of any duty imposed 

upon him by this section or section 21. 

(h) Whenever any petition is filed in any district court of the 

United States under this section, such court shall have jurisdiction 

to hear and determine the matter so presented, and to enter such 

order or orders as may be required to carry into effect the provisions of this section. Any final order so entered shall be subject to 

appeal pursuant to section 1291 of title 28, United States Code. 

Any disobedience of any final order entered under this section by 

any court shall be punished as a contempt of such court. 

(i) Notwithstanding any other provision of law, the Commission shall have no authority to issue a subpoena or make a demand 

for information, under authority of this Act or any other provision 

of law, unless such subpoena or demand for information is signed 

by a Commissioner acting pursuant to a Commission resolution. 

The Commission shall not delegate the power conferred by this section to sign subpoenas or demands for information to any other 

person. 

(j) The provisions of this section shall not— 

(1) apply to any proceeding under section 5(b), any proceeding under section 11(b) of the Clayton Act (15 U.S.C. 

21(b)), or any adjudicative proceeding under any other provision of law; or 

(2) apply to or affect the jurisdiction, duties, or powers of 

any agency of the Federal Government, other than the Commission. 

* * * * * * * 


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(35) 

1Federal Trade Commission Act of 1914, Pub. L. No. 63–203, 38 Stat. 717 (1914), codified at 

15 U.S.C. §§ 41–58 (2016). 2The Standard Merger and Acquisition Reviews Through Equal Rules Act of 2015: Hearing 

on S. 2102 Before the Subcomm. on Antitrust, Competition Policy and Consumer Rights of the 

S. Comm on the Judiciary, 114th Cong. 47 (2015) (statement of Edith Ramirez, Chairwoman, 

Federal Trade Commission), https://www.judiciary.senate.gov/imo/media/doc/10-07-15%20 

Ramirez%20Testimony.pdf [hereinafter Senate Hearing]. Chairwoman Ramirez expressed similar concerns with an earlier, but substantially similar, draft of the SMARTER Act, that she said 

would have ‘‘far-reaching immediate effects’’ and the ‘‘potential for significant unintended consequences.’’ Letter from the Honorable Edith Ramirez, Chairwoman, Federal Trade Commission, 

to Representatives Spencer Bachus (R–AL), Chair, and Henry C. Johnson, Jr. (D–GA), Ranking 

Member, of the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. 

Comm. on the Judiciary (Apr. 2, 2014) (on file with Democratic staff of the H. Comm. on the 

Judiciary) [hereinafter Ramirez Letter]. 

Dissenting Views 

H.R. 2745, the ‘‘Standard Merger and Acquisition Reviews 

Through Equal Rules Act of 2015’’ or ‘‘SMARTER Act,’’ would undermine the independence of the Federal Trade Commission (FTC) 

and contravene the agency’s unique role in developing antitrust 

policy. H.R. 2745 does this by eliminating the FTC’s ability to use 

the procedures established under the Federal Trade Commission 

Act (FTC Act)1 to enforce antitrust law in merger cases, including 

its ability to use administrative adjudication. Moreover, while this 

proposal purports to implement recommendations of the Antitrust 

Modernization Commission (AMC), it goes far beyond the AMC’s 

recommendations by undermining the FTC’s ability to address nonmerger activity. Finally, in seeking to harmonize the process for 

proposed mergers or acquisitions, H.R. 2745 addresses a non-existent problem while applying a less consumer-friendly standard. 

H.R. 2745 is not a modest measure. It represents a major change 

to the status quo by changing the FTC’s fundamental nature as an 

independent administrative agency charged with enforcing antitrust laws and developing antitrust policy in a stable, long-term 

manner using bipartisan expertise. Reducing the FTC’s independence directly conflicts with Congress’s intent in creating this antitrust enforcement agency and policymaking body to be relatively 

shielded from political, and particularly Executive Branch, interference. More generally, the elimination of distinctions between the 

FTC and the DOJ in merger enforcement actions potentially opens 

the door to the elimination of the FTC itself by chipping away at 

the various differences that justify its separate existence. 

We share the views expressed by FTC Chairwoman Edith Ramirez, who testified earlier this Congress that the identical Senate 

companion bill ‘‘would fundamentally alter a critical aspect of the 

agency’s institutional role and risks impeding its ability to protect 

American consumers and the public interest.’’ 2 In addition, the 

American Antitrust Institute, a consumer-oriented antitrust organization, strongly opposes the legislation, particularly with respect to 

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3Letter from Albert A. Foer, President, American Antitrust Institute, to Representatives 

Spencer Bachus (R–AL), Chair, and Henry C. Johnson, Jr. (D–GA), Ranking Member, of the 

Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the Judiciary (Apr. 9, 2014) (on file with Democratic staff of the H. Comm. on the Judiciary) [hereinafter 

‘‘Foer Letter’’]; The Standard Merger and Acquisition Reviews Through Equal Rules Act of 2015: 

Hearing on H.R. 2745 Before the Subcomm. on Regulatory Reform, Commercial and Antitrust 

Law of the H. Comm. on the Judiciary, 114th Cong. 47 (2015), http://judiciary.house.gov/_cache/ 

files/9f77f8c3-6b40-4b22-b337-51ddbedab9b6/114-32-95119.pdf (statement of Bert Foer, senior 

fellow, American Antitrust Institute). 4Letter from George P. Slover, Senior Policy Counsel, Consumers Union, to Representatives 

Bob Goodlatte (R-VA), Chairman, H. Comm. on the Judiciary, et al. (June 25, 2015) (on file with 

Democratic staff of the H. Comm. on the Judiciary). 5 Clayton Antitrust Act of 1914, Pub. L. No. 63–212, 38 Stat. 730 (1914), codified at 15 U.S.C. 

§§ 12–27, 29 U.S.C. §§ 52–53 (2016). 

tion in merger cases.3 Consumers Union, the policy and advocacy 

arm of Consumer Reports, has echoed these concerns, observing 

that that ‘‘we do not believe the case has been made . . . that there 

is a material problem here that warrants making alterations to the 

FTC’s fundamental enforcement structure.’’ 4

For these reasons, and those described below, we urge our colleagues to oppose H.R. 2745. 

DESCRIPTION AND BACKGROUND

DESCRIPTION

H.R. 2745 eliminates the ability of the FTC to use the procedures 

of the FTC Act in merger enforcement cases and with respect to 

certain types of non-merger activity. In its stead, the bill requires 

the FTC to use the procedures available to the DOJ under the 

Clayton Antitrust Act (Clayton Act) in such circumstances.5 The 

following is a description of the bill’s substantive provisions. 

Section 2 of H.R. 2745 amends the Clayton Act in order to bring 

the FTC’s merger enforcement authority under the Act. Under current law, the DOJ’s Antitrust Division and the FTC’s Bureau of 

Competition enforce the Nation’s antitrust laws jointly. Nevertheless, while the DOJ enforces the antitrust laws through civil actions under the Clayton Act and Sherman Act, the FTC enforces 

the antitrust laws through section 5 of the FTC Act, which prohibits unfair methods of competition. As amended, H.R. 2745 would 

align the merger-enforcement requirements of the DOJ and FTC 

under the Clayton Act. 

Section 2(1) amends section 4F of the Clayton Act, which currently requires the U.S. Attorney General to notify any state attorney general when initiating an action under the antitrust laws if 

the U.S. Attorney General has reason to believe that the state 

would be entitled to bring an action under the Clayton Act based 

on substantially the same alleged violation. It also requires the 

U.S. Attorney General to provide assistance upon request of any 

state attorney general in any actual or potential cause of action by 

the state in these circumstances. As amended, new section 4F 

would make these requirements applicable to the FTC’s enforcement actions under section 7 of the Clayton Act. 

Section 2(2) of the bill amends section 5 of the Clayton Act, 

which specifies the evidentiary weight of judgments and consent 

decrees in any criminal or civil proceeding brought by the government under the antitrust laws in any action by a third party. Section 5 also specifies procedures for public notice and comment on 


SSpencer on DSK4SPTVN1PROD with REPORTS
37 

proposed consent decrees; requires that the government file a competitive impact statement; requires a court to make a public interest determination prior to entering a consent judgment; outlines 

procedures for making such a public interest determination; requires a defendant to file with the court written or oral communications with the government; makes inadmissible as evidence 

competitive impact statements or public interest determinations in 

any action brought against a defendant by a third party; and suspends the statute of limitations for every private or state right of 

action under the antitrust laws when the Federal Government institutes a proceeding. Section 2(2) of the bill adds references specifying that the term ‘‘United States’’ as used throughout this provision includes the FTC with respect to merger cases. As amended, 

new section 5 would make these requirements applicable to the 

FTC’s enforcement actions under section 7 of the Clayton Act. 

Section 2(3) of H.R. 2745 amends section 11(a) of the Clayton 

Act, which reserves enforcement authority for certain provisions of 

the Clayton Act for agencies other than the DOJ. Among the other 

agencies listed is the FTC ‘‘where applicable to all other character 

of commerce.’’ Section 2(3) of the bill would add at the end a new 

provision specifying that when engaged in merger enforcement, the 

FTC must follow the same procedures that the DOJ would follow, 

except with respect to the enforcement of a consent order. 

Section 2(4) of the bill amends section 13 of the Clayton Act, 

which provides that in any government suit, a subpoena for a witness who is required to attend a Federal court in any judicial district in an antitrust case may have effect in any other district when 

the witness lives within 100 miles of the trial court, unless the trial 

court permits the subpoena to extend beyond the 100-mile reach. 

Section 2(4) of the bill would make this provision also applicable 

to the FTC in merger cases. 

Section 2(5) of the bill amends section 15 of the Clayton Act, 

which grants Federal district courts jurisdiction to consider violations of the Act. It also makes it the duty of the U.S. Attorney General and U.S. Attorneys to institute court proceedings to restrain 

violations of the Act. In addition, section 15 specifies that the court 

may provide injunctive relief, issue temporary restraining orders, 

and summon other parties through subpoena if necessary when the 

ends of justice require in such cases. Section 2(5) would, in addition, assign the FTC the same duties as the U.S. Attorney General 

and U.S. Attorneys. 

Section 3 of the bill makes several amendments to the FTC Act 

that, broadly speaking, eliminate the FTC’s authority to act pursuant to the Act’s provisions. Section 3(1) amends section 5(b) of the 

FTC Act, which provides the FTC with the authority to institute 

administrative proceedings against a person, partnership, or corporation whenever the FTC determines that such a party has been 

or is using ‘‘any unfair method of competition,’’ among other things. 

If the FTC determines after a notice and hearing that the target 

of the complaint has engaged in the ‘‘unfair method of competition’’ 

and prepares a report to that effect, the FTC may issue a cease and 

desist order. A party may appeal an FTC decision to a Federal 

court of appeals. 


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6 15 U.S.C. §§ 1–7 (2016). 

Section 3(1) of the bill would exclude from the definition of ‘‘unfair method of competition’’ any ‘‘unfair method of competition that 

would result from the consummation of a merger, acquisition, joint 

venture, or similar transaction.’’ Notably, section 3(1) excludes 

mergers from the FTC’s administrative process as well as premerger activity, acquisitions, joint ventures, or other similar transactions from the definition of ‘‘method of competition’’ as used in 

the portion of section 5(b) of the FTC Act giving the FTC the authority to issue reports and cease-and-desist orders. The inclusion 

of pre-merger activity suggests that the bill’s elimination of the 

FTC’s administrative authority extends beyond mergers to include 

arguably non-merger anticompetitive conduct. 

Section 3(2) of the bill amends section 9 of the FTC Act, which 

specifies, among other things, that the FTC may request, through 

the U.S. Attorney General, that a Federal district court issue a 

writ of mandamus to any person, partnership, or corporation to 

comply with any of the FTC’s orders pursuant to the FTC Act. Section 3(2) of the bill allows the FTC to directly seek a writ of mandamus from a Federal district court with respect to any activity in 

preparation for a merger, acquisition, joint venture, or similar 

transaction which if consummated, may result in any unfair method of competition. 

Section 3(3) of the bill amends section 13(b)(1) of the FTC Act, 

which sets forth the FTC’s authority to bring suit in a Federal district court to enjoin any conduct that violates any provision of law 

enforced by the FTC. Section 13(b) also articulates the standard for 

granting a preliminary injunction, which requires a showing that, 

‘‘weighing the equities and considering the [FTC’s] likelihood of ultimate success, such action would be in the public interest.’’ It further provides that if the FTC does not file a complaint within a 

time period specified by the court not to exceed 20 days, the preliminary injunction is dissolved. Section 3(3) of the bill excludes 

from section 13(b) any actions that violate section 7 of the Clayton 

Act and section 5(a)(1) of the FTC Act—which declares, in part, 

that unfair methods of competition are unlawful—with respect to 

an unfair method of competition that would result from the consummation of a merger, acquisition, joint venture, or similar transaction. 

Section 3(4) amends section 20(c)(1) of the FTC Act, which grants 

the FTC the authority to issue civil investigative demands requiring the production of documents or other discovery. Section 3(4) of 

the bill specifies that the FTC retains this authority in any enforcement proceeding under the Clayton Act. 

BACKGROUND

A. The Federal Trade Commission 

1. History and Reasons for Creation 

In 1890, the Sherman Antitrust Act was enacted to stop the anticonsumer abuses resulting from an unchecked wave of corporate 

mergers.6 Thereafter, the position of Assistant Attorney General for 


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39 

7The Antitrust Division became a separate operating unit within DOJ in 1933. ANTITRUST

MODERNIZATION COMMISSION, Report and Recommendations, at 129 (Apr. 2007), http:// 

govinfo.library.unt.edu/amc/report_recommendation/amc_final_report.pdf [hereinafter ‘‘AMC Report’’]. 8 15 U.S.C. §§ 41–58 (2016). 

9 15 U.S.C. § 45(a) (2016); Marc Winerman, A Brief History of the Federal Trade Commission: 

Federal Trade Commission 90th Anniversary Symposium, 6 (Sept. 22, 2004), http://www.ftc.gov/ 

sites/default/files/attachments/ftc-90-symposium/90thanniv_program.pdf [hereinafter FTC History]. 10FTC History, supra note 9, at 6; 15 U.S.C. §§ 12–27, 29 U.S.C. §§ 52–53 (2016). 11 An ‘‘independent’’ agency is one that has some measure of independence from the President. 

The principal evidence of such independence is that the President cannot remove the head of 

such an agency without cause. Independent agencies are often styled ‘‘commissions’’ or ‘‘boards.’’ 

STEPHEN G. BREYER, et al., ADMINISTRATIVE LAW AND REGULATORY POLICY, at 100 (4th ed. 

1999). 12While the FTC has no authority to enforce the Sherman Act, the Supreme Court has held 

that any conduct that violates section 1 of the Sherman Act would also violate section 5(a) of 

the FTC Act. Federal Trade Comm’n v. California Dental Ass’n, 526 U.S. 756, 763 n.3 (1999) 

(‘‘The FTC Act’s prohibition of unfair competition and deceptive acts or practices . . . overlaps 

the scope of § 1 of the Sherman Act.’’). 13 15 U.S.C. § 45(b) (2016). 14Marc Winerman, The Origins of the FTC: Concentration, Cooperation, Control, and Competition, 71 ANTITRUST L. J. 74 (2003), http://www.ftc.gov/sites/default/files/attachments/federaltrade-commission-history/origins.pdf. 15 Id. 16 Id. 17FTC History, supra note 9, at 7–9 (outlining instances in the 1920’s and 1930’s in which 

Congress expanded the FTC’s authority in response to restrictive Supreme Court decisions, and 

also highlighting further expansions of the FTC’s authority by Congress in the 1950’s and 

1970’s). 

Antitrust in the DOJ was created in 1903.7 Neither effort, however, 

was sufficiently effective to stem these abuses. President Woodrow 

Wilson subsequently signed the FTC Act in 1914,8 establishing the 

FTC and making unlawful, inter alia, ‘‘unfair methods of competition.’’ 9 That same year, President Wilson also signed into law the 

Clayton Antitrust Act.10 Congress created the FTC to encourage 

development of antitrust policy by antitrust experts through an 

independent administrative agency that would share enforcement 

authority with the DOJ 11 and have the exclusive authority to enforce the FTC Act.12 Additionally, Congress gave the FTC broad investigative and reporting powers and authorized its Commissioners 

to use an administrative adjudication process to enforce the antitrust laws rather than try cases before a Federal judge, though the 

FTC’s decisions may be appealed to a Federal court of appeals.13

According to one study of the origins of the FTC, the congressional advocates for its creation were dissatisfied with what, in 

their view, was the failure of the Sherman Antitrust Act to stop the 

merger wave and corporate abuses that occurred in the 24 years 

between its enactment and the passage of the FTC Act in 1914.14

Advocates for the creation of the FTC disclaimed any intent to 

amend the Sherman Act or to undermine DOJ’s enforcement role.15

Rather, they sought to enhance existing antitrust law and enforcement, and in particular, to establish ‘‘a new agency that would 

prosecute if the [DOJ] faltered, enforcing a flexible new standard 

where the Sherman Act might not.’’ 16

Congress has historically granted the FTC broad authority to 

prohibit unfair methods of competition. Indeed, every time the Supreme Court has restricted the FTC’s statutory authority through 

a ruling, Congress has responded by amending the FTC Act to expand the FTC’s authority.17 Notwithstanding this support, a congressional backlash against the FTC’s authority materialized in 

1980 through what one commentator describes as ‘‘a tidal wave of 


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18 Id. at 9. 19 U.S. CHAMBER OF COMMERCE, Unfair Methods of Competition Under Section 5 of the FTC 

Act: Does the U.S. Need Rules ‘‘Above and Beyond Antitrust’’?, GCP: THE ANTITRUST CHRONICLE, (Sept. 2009), http://www.uschamber.com/sites/default/files/reports/0909antrust_0.pdf. 20 15 U.S.C. § 21(a) (2016). 21 U.S. DEP’T OF JUSTICE AND FEDERAL TRADE COMM’N, HORIZONTAL MERGER GUIDELINES

(2010). 22 Id. at 2. 23 Hart-Scott-Rodino Antitrust Improvements Act of 1976, Pub. L. No. 94–435, 90 Stat. 1383 

(1976), codified at 15 U.S.C. § 18a (2016) (establishing a pre-merger review process for transactions that meet certain dollar thresholds). 

response and restricting legislation.’’ 18 Most recently, for example, 

the U.S. Chamber of Commerce has been highly critical of the FTC 

for its use of its authority under section 5 of the FTC Act to prohibit ‘‘unfair methods of competition.’’ 19

2. FTC and the Broader Antitrust Merger Enforcement Regime 

The DOJ’s Antitrust Division and the FTC’s Bureau of Competition enforce the Nation’s antitrust laws jointly. Both agencies enforce section 7 of the Clayton Act, which prohibits anticompetitive 

mergers and other types of acquisitions.20 Pursuant to this responsibility, both have the authority to conduct antitrust reviews of proposed mergers and acquisitions. To facilitate coordination between 

them, the DOJ and FTC developed joint standards known as 

‘‘Merger Guidelines’’ that outline the type of inquiry to be followed 

in reviewing a proposed merger.21 According to the Guidelines, 

‘‘mergers should not be permitted to create, enhance, or entrench 

market power or to facilitate its exercise.’’ 22

With respect to the review of a proposed merger, once parties 

make the requisite filings under the Hart-Scott-Rodino Antitrust 

Improvements Act of 1976 (HSR Act),23 it is up to the agencies to 

decide during that initial 30-day review period which agency will 

review the transaction. The agencies have developed an informal 

process that relies primarily upon historical experience in the relevant industry to determine which agency has a better claim to a 

particular transaction. 

If the reviewing agency ultimately determines that the transaction is illegal, the DOJ will file a complaint in Federal court, 

while the FTC will institute an administrative proceeding to stop 

the parties from consummating the transaction. Oftentimes, such 

suits are resolved with the entry of a consent decree in which the 

merger parties agree to take certain steps—usually the divestiture 

of certain assets, sometimes commitments by the merging parties 

to take certain other actions—to address the reviewing agency’s 

antitrust concerns. As a practical matter, the pre-merger review 

process under the HSR Act has dramatically reduced the amount 

of antitrust litigation since its enactment. 

3. Preliminary Injunctions in Merger Cases 

In the exceedingly rare instances where the government and the 

merging parties do not reach a consent agreement at the moment 

the government has filed suit, the government may seek a temporary restraining order and a preliminary injunction to stop consummation of the merger while the government pursues its complaint. Nominally, FTC and DOJ are subject to different standards 


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24See, e.g., AMC Report, supra note 7, at 142 (‘‘[A]gencies face nominally different standards 

governing whether a Federal district court will issue a preliminary injunction,’’ but ‘‘the magnitude of the difference between the two standards is not clear.’’). 25 Antitrust Modernization Commission Act of 2002, Pub. L. No. 107–273, § 11054(h), 116 Stat. 

1856, 1857 (2002). 26 AMC Report, supra note 7, at 1. 27 Id. at 129 (noting that Congress ‘‘also believed that an administrative agency—conducting 

administrative adjudication of antitrust cases, and vested with broad information-gather powers—would be a better vehicle for developing more flexible standards of antitrust law than were 

the courts.’’). 28Senate Hearing, supra note 2, at 2 (statement of Edith Ramirez, Chairwoman, Federal 

Trade Commission). 

for the grant of preliminary injunctions. While the dominant view 

is that in practice both standards essentially are the same, there 

are some who believe that the FTC standard is more favorable to 

the enforcement agency.24

B. Antitrust Modernization Commission 

Congress created the Antitrust Modernization Commission 

(AMC) in 2002 to examine whether antitrust laws, policies, and 

procedures should be amended in light of changes to the economy, 

and particularly the impact of the rise of the high-technology sector 

and its implications for antitrust and competition policy.25 In 2007, 

the AMC issued a 449-page report outlining 80 recommendations 

for revisions to antitrust law and policy.26 Only two of these 80 recommendations—advocating the elimination of FTC’s administrative 

adjudication authority for merger cases and the adoption of a uniform preliminary injunction standard—are relevant to consideration of the SMARTER Act. To date, Congress has not considered 

the remainder of the AMC’s recommendations. 

CONCERNS WITH H.R. 2745

I. H.R. 2745 WOULD ELIMINATE THE FTC’S ADMINISTRATIVE ADJUDICATION AUTHORITY IN MERGER CASES, UNDERMINING THE FTC’S INDEPENDENCE AND CONTRAVENING CONGRESS’ PURPOSE IN CREATING

THE AGENCY. 

H.R. 2745 would effectuate a fundamental change to the FTC’s 

century-old organizational structure and lessen the agency’s independence. By eliminating its authority to pursue administrative 

litigation in merger cases and other circumstances, the bill would 

serve to alter the FTC’s character as an independent administrative agency and turn it into another executive enforcement agency 

in HSR merger cases. This fundamental change would undermine 

Congress’s purpose in establishing the FTC in the first place. 

As the AMC Report recognized, Congress created the FTC as an 

independent agency—that is, one with a considerable measure of 

independence from the President. Congress’ intent in establishing 

the FTC as an independent agency was not only to supplement the 

DOJ’s enforcement activity where it may be lacking, but to also develop antitrust policy with a body of antitrust experts not subject 

to swings in political ideology that the DOJ, as an arm of the Executive Branch, may experience.27 As FTC Chairwoman Ramirez 

noted, ‘‘Congress created the Commission in 1914 as an independent, bipartisan agency to augment then-existing antitrust enforcement efforts.’’ 28 In doing so, Congress recognized that ‘‘AmerVerDate Sep 11 2014 01:59 Mar 15, 2016 Jkt 059006 PO 00000 Frm 00041 Fmt 6601 Sfmt 6601 E:\HR\OC\HR449.XXX HR449

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29 Id. 30 Humphrey’s Ex’r v. United States, 295 U.S. 602, 624 (1935) (quoting S. Rep. No. 63–597, 

at 10–11 (1914)). 31See, e.g., U.S. CHAMBER OF COMMERCE, Unfair Methods of Competition Under Section 5 of 

the FTC Act: Does the U.S. Need Rules ‘‘Above and Beyond Antitrust’’?, GCP: THE ANTITRUST

CHRONICLE, (Sept. 2009), http://www.uschamber.com/sites/default/files/reports/0909 

antrust_0.pdf. 32Senate Hearing, supra note 2, at 14 (statement of Edith Ramirez, Chairwoman, Federal 

Trade Commission). 

ican consumers would benefit from an expert agency with the 

means to develop competition law and policy over time,’’ Chairwoman Ramirez added.29 Committee reports from both houses of 

Congress during the establishment of the FTC bolster this view.30

By weakening the FTC’s independence, H.R. 2745 undermines 

these benefits for American consumers. 

Beyond the specific changes proposed by H.R. 2745, we are wary 

of any measure to alter, and possibly diminish, the FTC’s authority. Opponents of the FTC’s enforcement activities have engaged in 

a longstanding campaign to undermine the agency, both because of 

its role as an antitrust enforcer and also because of its work in the 

consumer protection arena. Any proposal to alter the FTC’s authority, and particularly one that would eliminate its distinctiveness 

from the DOJ, should be viewed with skepticism.31 Although H.R. 

2745 is ostensibly limited to HSR merger cases, eliminating distinctions between the DOJ and the FTC is a possible way to justify ultimately eliminating the FTC as an antitrust enforcement and policymaking agency. 

We are therefore particularly troubled by H.R. 2745’s elimination 

of the FTC’s authority to use administrative adjudication in merger 

enforcement matters. As Chairwoman Ramirez noted: 

The FTC plays an essential role in protecting consumers 

from anticompetitive mergers. By seeking to alter the 

Commission’s adjudicative function, the proposed legislation risks eroding a fundamental institutional attribute of 

the FTC. This quasi-judicial role is a defining characteristic of the agency—authority Congress very deliberately granted to the FTC when the agency was created 

to serve as a complement to enforcement by DOJ. The current system has worked well for over one hundred years, 

and all indications are that it will continue to do so to the 

benefit of competition and consumers.32

In discussing the value of administrative adjudication, Bert Foer, 

President of the American Antitrust Institute, stated in his letter 

to the Committee: 

[P]rudence compels caution in any tinkering with a system 

of dual enforcement including administrative adjudication 

that emerged out of robust debate in the course of the 

1912 Presidential election campaign and that Congress 

adopted 2 years later in the face of grave concern over the 

fate of antitrust enforcement generally when left exclusively in the hands of generalist judges. . . . AAI believes 

that eliminating FTC administrative adjudication would 

almost surely be counterproductive. We would thereby (a) 

lose the considerable benefits of expert agency policy evoVerDate Sep 11 2014 01:59 Mar 15, 2016 Jkt 059006 PO 00000 Frm 00042 Fmt 6601 Sfmt 6601 E:\HR\OC\HR449.XXX HR449

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33Foer Letter, supra note 3, at ¶¶ 3, 5. 34 Hearing on the Standard Merger and Acquisition Reviews Through Equal Rules Act of 2014 

Before the S. Comm. On Regulatory Reform, Commercial and Antitrust Law, 113th Cong. 13 

(2014) (statement of John B. Kirkwood, Professor of Law and Associate Dean for Strategic Planning and Mission, Seattle University School of Law), http://judiciary.house.gov/_cache/files/ 

4b07b175-6ca6-400e-b218-2e42b3ffa0d0/113-83-87424.pdf [hereinafter Kirkwood Statement]. 35 Id. 36 Id. at 5. 37 Id. 38 Id. 

lution, the original Wilson/Brandeis vision giving rise to 

the FTC’s creation a hundred years ago and more important than ever for sound evolution of merger policy in the 

21st Century; and (b) exacerbate any inefficiency of dual 

enforcement generally since we would then have two enforcement agencies applying the same merger law standards and procedures to different companies in different industries in cases brought exclusively to generalist courts. 

A more logical course would be channeling all merger enforcement to the FTC and its expert administrative processes.33

Similarly, at a hearing before the Subcommittee on Regulatory 

Reform, Commercial, and Antitrust Law examining draft legislation that was substantially similar to H.R. 2745, Professor John 

Kirkwood of the Seattle University School of Law, expressed great 

concern about the removal of the FTC’s administrative adjudication 

authority.34 He testified that the purpose of having this authority 

was to allow the FTC to develop antitrust law in a less partisan, 

more expert way than generalist courts and a DOJ under the control of one political party may be able to do.35 Professor Kirkwood’s 

concern was twofold. First, removing the FTC’s administrative adjudication authority in merger cases might lead to a ‘‘slippery 

slope’’ whereby such authority would eventually be removed in 

other areas of antitrust enforcement.36 Second, administrative adjudication supports the FTC’s congressionally-mandated mission of 

developing administrative expertise through sustained attention, 

information-gathering, and vigorous enforcement.37 Professor Kirkwood acknowledged that the unique benefits of administrative adjudication were not as strong in all cases. In those instances when 

an industry is changing rapidly or when an agency has not developed much expertise in it, an administrative proceeding would be 

quite helpful, such as the FTC’s use of administrative proceedings 

in hospital merger enforcement as an example of such benefits.38

Jonathan Jacobson, a former AMC commissioner, echoed many of 

these concerns. He observed: 

Part III administrative litigation—both for anticompetitive 

conduct matters and mergers—is core to the FTC’s basic 

mission. Prior to 1976 (when Hart-Scott-Rodino was 

passed), administrative litigation of FTC merger matters 

was the only type of FTC merger review, and retaining 

discretion to pursue administrative litigation where appropriate is consistent with the FTC’s assignment to develop 

and apply expertise on competition law issues in an administrative context. If the FTC finds it appropriate to develop the law through follow-on administrative proceedings 


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39Senate Hearing, supra note 2, at 7 (statement of Jonathan Jacobson, former commissioner 

of the Antitrust Modernization Commission), https://www.judiciary.senate.gov/imo/media/doc/10- 

07-15%20Jacobson%20Testimony.pdf. 40 Unofficial Tr. of the Markup of: H.R. 2745, the ‘‘Standard Merger and Acquisition Reviews 

Through Equal Rules (SMARTER) Act of 2015’’ by the H. Comm. on the Judiciary, 114th Cong. 

(2015), at 24, http://judiciary.house.gov/_cache/files/832fcdef-e01f-4cef-a40f-b5c3c869a4bf/ 

09.30.15-markup-transcript.pdf. 41 Id. at 33. 42 Id. at 56. 43 AMC Report, supra note 7, at 140–41. 44 Id. at 129 (recommending ‘‘no comprehensive change to the existing system in which both 

the FTC and the DOJ enforce the antitrust laws’’). 

where it could, for example, perform a more rigorous analysis of new economic theories and evidence than a generalist district court might be able to perform, it should have 

discretion to do so. That is precisely what Congress intended when creating the FTC 101 years ago.39

Ranking Member John Conyers, Jr., in agreeing with the views 

of Chairwoman Ramirez, Mr. Jacobson, Mr. Foer, and Professor 

Kirkwood, stated that H.R. 2745 does not strengthen the Commission’s authority, and ‘‘unfortunately does just the opposite.’’ 40 Rep. 

Henry C. ‘‘Hank’’ Johnson, Jr., Ranking Member of the Subcommittee on Regulatory Reform, Commercial, and Antitrust Law, 

echoed this concern while noting that ‘‘[l]eading authorities in antitrust across party lines have expressed serious reservations with 

eliminating the Commission’s administrative litigation authority.’’ 41 Notwithstanding these concerns, the bill was reported out of 

Committee unamended by a vote of 18 to 10.42

II. H.R. 2745’S SCOPE IS BROADER THAN THE AMC RECOMMENDATIONS

H.R. 2745 exceeds what the AMC contemplated in its recommendations. Specifically, the AMC recommended that Congress 

should eliminate the FTC’s authority to pursue administrative litigation in HSR cases and that it should ensure the same standard 

that DOJ is subject to when seeking a preliminary injunction in an 

HSR case.43 First, rather than limiting its provisions to these two 

recommendations, the bill would make the FTC functionally equivalent to the DOJ in large merger cases, which, arguably, is a step 

towards eliminating the dual enforcement regime, a recommendation that the AMC specifically rejected.44 Second, the bill’s carveout for the FTC’s administrative adjudication authority would 

reach beyond merger cases to also include ‘‘joint ventures’’ and 

‘‘similar transactions’’ as well as pre-merger activity, meaning that 

the loss of the FTC administrative adjudication authority would extend beyond the scope of section 7 of the Clayton Act to potentially 

include non-merger activity. 

Additionally, the FTC’s loss of administrative litigation authority 

could reach consummated mergers as well as non-consummated 

ones. Mr. Jacobson noted in his testimony in opposition to the 

SMARTER Act that ‘‘to the extent that the legislation is intended 

to implement the AMC’s recommendation, it is drafted too broadly.’’ He explained: 

The AMC recommended that Congress implement legislation ‘‘to prohibit the Federal Trade Commission from pursuing administrative litigation in Hart-Scott-Rodino Act 


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45Senate Hearing, supra note 2, at 3–4 (statement of Jonathan Jacobson, former commissioner of the Antitrust Modernization Commission), (emphasis in original) (footnotes omitted) 

https://www.judiciary.senate.gov/imo/media/doc/10-07-15%20Jacobson%20Testimony.pdf. 46 Id. 47When DOJ seeks a preliminary injunction, it acts pursuant to section 15 of the Clayton Act, 

which provides, in part, that a court hearing a case under the Act ‘‘may at any time make such 

temporary restraining order or prohibition as shall be deemed just in the premises.’’ 15 U.S.C. 

§ 25 (2016). Section 15, however, does not specify a standard for determining when to grant a 

preliminary injunction. Therefore, a modified version of the general test for preliminary injunctions applies. The test is usually articulated as requiring that the government show a reasonable likelihood of success on the merits and that the balance of equities tips in its favor. U.S. 

v. Siemens Corp., 621 F.2d 499, 505 (2d Cir. 1980). 48FTC Act section 13(b) requires a court to grant a preliminary injunction to the FTC upon 

‘‘a proper showing that, weighing the equities and considering the Commission’s likelihood of 

ultimate success, such action would be in the public interest.’’ 15 U.S.C. § 53(b) (2016). Courts 

have interpreted this standard to mean that the FTC must raise questions that are ‘‘so serious, 

substantial, difficult and doubtful as to make them fair ground for thorough investigation.’’ FTC 

v. H.J. Heinz Co., 246 F.3d 708, 714–15 (D.C. Cir. 2001). 49See, e.g., AMC Report, supra note 7, at 141 (noting the view of Commissioners Garza, 

Jacobson, and Kempf that the standard is the same and that such legislation is not truly necessary). 

merger cases.’’ Its proposal ‘‘would not preclude the FTC 

from pursuing an administrative complaint after the consummation of a merger, based on evidence that the merger 

has had actual, as opposed to predicted, anticompetitive effects.’’ But the proposed legislation could be construed as 

prohibiting a challenge to the ‘‘consummation’’ of any 

merger in administrative proceedings, even a post-merger 

challenge, notwithstanding the term ‘‘proposed.’’ If enacted 

at all, I strongly recommend clarifying that the exclusion 

would only apply to ‘‘the consummation of a proposed 

merger, acquisition, joint venture, or similar transaction 

that is subject to section 7 of the Clayton Act (15 U.S.C. 

18) where the merger, acquisition, joint venture, or 

similar transaction has not yet been consummated’’ 

for avoidance of doubt. There is no justification for eliminating administrative litigation in post-consummation 

challenges, for those are not undertaken with the time 

sensitivity attendant on a challenge to a merger occurring 

prior to the closing of the transaction.45

Mr. Jacobson further noted that the FTC’s success in post-consummation merger challenges is held in high regard by the antitrust bar and has been upheld on appeal.46

III. H.R. 2745 ADDRESSES A NON-EXISTENT PROBLEM WHILE APPLYING

A LESS CONSUMER-FRIENDLY STANDARD

To the extent that H.R. 2745 seeks to harmonize the preliminary 

injunction standard applicable in both DOJ merger cases 47 and 

FTC merger cases,48 doing so does not appear to solve a real problem. The dominant opinion among courts, academics, and the antitrust bar is that the standards, while nominally different, are the 

same in practice.49 Both FTC Chairwoman Ramirez and Assistant 

Attorney General William Baer have underscored this point, arguing that regardless of which agency seeks a preliminary injunction 

in merger cases, both are required ‘‘to make a robust evidentiary 

and legal showing that the transaction would likely be anticompetiVerDate Sep 11 2014 01:59 Mar 15, 2016 Jkt 059006 PO 00000 Frm 00045 Fmt 6601 Sfmt 6601 E:\HR\OC\HR449.XXX HR449

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50Senate Hearing, supra note 2, at 13 (statement of Edith Ramirez, Chairwoman, Federal 

Trade Commission), 

https://www.judiciary.senate.gov/imo/media/doc/10-07-15%20Ramirez%20Testimony.pdf. 

51 Id. 52Fed. Trade Comm’n v. Sysco Corp., 113 F. Supp. 3d 1, 23 (D.D.C. 2015). 53The Standard Merger and Acquisition Reviews Through Equal Rules Act of 2015: Hearing 

on H.R. 2745 Before the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the 

H. Comm. on the Judiciary, 114th Cong. 47 (2015), http://judiciary.house.gov/_cache/files/ 

9f77f8c3-6b40-4b22-b337-51ddbedab9b6/114-32-95119.pdf. 54Kirkwood Statement, supra note 34, at 3. 55 Id at 4–5. 

tive.’’ 50 Far from providing differential treatment, Federal district 

courts ‘‘closely scrutinize cases brought by both agencies,’’ 51 with 

one court recently observing that the FTC’s preliminary injunction 

standard ‘‘demands rigorous proof to block a proposed merger or acquisition.’’ 52

Assuming there is a substantive difference between the injunction standards, however, attempting to unify them raises the concern that the bill simply seeks to undermine the FTC’s independence and distinctiveness, contrary to Congress’s intent in creating 

an independent antitrust enforcement agency in the first place. Instead, Congress should default to a standard that is deferential to 

agency expertise, as Mr. Foer of AAI suggests: 

SMARTER Act supporters prematurely jump to the conclusion that the correct solution to this ‘‘unfairness’’ is to subject FTC challenges to the tougher standard applicable to 

DOJ. Why is it not better from a public policy standpoint 

to address the anomaly by extending the benefit of the 

Section 13(b) standard to DOJ challenges? A deferential 

standard for both agencies is warranted by the expertise 

and sophistication of the merger review process at both 

agencies.53

Similarly, Professor Kirkwood testified that equalizing the FTC 

and DOJ preliminary injunction standards was not necessary because both standards function the same way as a practical matter.54 He did, however, express the concern that changing the preliminary injunction standard applicable to the FTC in merger cases 

could have unintended consequences, like causing courts to apply 

the non-FTC standard in non-merger cases as well. He also testified that the FTC Act standard, to the extent that it really was 

substantively more favorable to the government than the one applicable to the DOJ, was designed to allow the FTC to use its administrative proceedings.55

In addition, H.R. 2745 does not appear to address any pressing 

or widespread problem. The changes that H.R. 2745 contemplates 

would apply in the exceedingly rare instances where: (1) a transaction is large enough to merit HSR review; (2) after the review, 

the reviewing agency determines that it would challenge the transaction through litigation; (3) the parties do not agree to any settlement, including divestures and other commitments; and (4) the 

parties choose to continue with their transaction despite the filing 

of a complaint by the reviewing agency rather than abandoning the 

transaction. Instances where the FTC would seek a preliminary injunction and use its administrative process are rare, and instances 


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56Senate Hearing, supra note 2, at 1 (response to questions for the record from Jonathan 

Jacobson, former commissioner, Antitrust Modernization Commission) (emphasis in original), 

https://www.judiciary.senate.gov/imo/media/doc/Jacobson%20Responses%20to%20Klobuchar.pdf. 57 H.R. 2745’s proponents may cite the actions of the FTC in the Whole Foods-Wild Oats merger as an example of the FTC’s problematic use of administrative proceedings after losing a preliminary injunction matter in court. In that case, however, the U.S. Court of Appeals for the 

D.C. Circuit ultimately vindicated the FTC’s pursuit of administrative litigation after losing the 

preliminary injunction proceeding in court when the appeals court reversed the district court’s 

denial of the FTC’s request for a preliminary injunction. FTC v. Whole Foods Market, Inc., 548 

F.3d 1028 (D.C. Cir. 2008). Additionally, as both the AMC and AAI have pointed out, the FTC’s 

own internal practice and procedures make the ‘‘second bite’’ scenario unlikely. AMC Report, 

supra note 7, at 141; Foer Letter, supra note 3. 58 15 U.S.C. § 53(b) (2016); FED. TRADE COMMISSION, Commission Approves Revisions to Its 

Rules of Practice (Mar. 13, 2015), https://www.ftc.gov/news-events/press-releases/2015/03/ 

commission-approves-revisions-its-rules-practice. 59 A party may also utilize this process following the denial of the Commission’s motion for 

relief pending appeal by a Federal court of appeals. 16 C.F.R. § 3.26(b)(2) (2016). 60 16 C.F.R. § 3.26(c) (2016) (‘‘The Secretary shall issue an order withdrawing the matter from 

adjudication 2 days after such a motion is filed, except that, if complaint counsel file an objection asserting that the conditions of paragraph (b) of this section have not been met, the Commission shall decide the motion within 10 days after the objection is filed.’’). 

when the FTC seeks to use its administrative process after losing 

a preliminary injunction proceeding in court are even rarer. 

In response to the claim that H.R. 2745 would reduce costs and 

uncertainty by promoting uniformity in merger reviews, it should 

be noted that FTC and DOJ already analyze mergers in exactly the 

same way, following the same substantive policy in conducting premerger reviews (i.e., the joint Merger Guidelines). Jonathan 

Jacobson, a former AMC Commissioner, underscored this similarity, arguing that in his experience the outcome of a merger has 

never turned on the perceived differences in merger enforcement 

addressed by H.R. 2745: 

In my 39 years of practice, the firms in which I have been 

a partner have sheparded many dozens of mergers through 

the agencies. In each one, the planning process has included a prediction as to which agency would be cleared to 

evaluate the transaction. In none has there been any consideration of abandoning or revising the transaction because of the possibility that, after prevailing in an FTCbrought preliminary injunction proceeding, the Commission might later unwind the merger through an administrative proceeding. The potential for such an outcome occasionally appears as a single sub-bullet point in a long 

PowerPoint, but never affects planning or evaluation of the 

transaction’s prospects.56

Additionally, the FTC’s internal procedures already make it highly unusual that the agency would ever seek such a ‘‘second bite at 

the apple.’’ 57 In 2015, the FTC set forth new procedures for the administrative adjudication process following a Federal court’s denial 

of a preliminary injunction under section 13(b) of the FTC Act.58

Under the revised rule, parties have two options to end administrative adjudication following a preliminary injunction.59 First, a 

party may move to have an administrative adjudication withdrawn, 

which will automatically occur within 2 days of the filing unless 

there is an objection by the complaint counsel.60 Previously, administrative cases were only withdrawn from adjudication pursuant to 


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61 16 C.F.R. § 3.26(c) (2016) (‘‘The matter will not be withdrawn from adjudication unless the 

Commission so directs.’’). 62 16 C.F.R. § 3.26(d)(2), (4) (2016). 63 16 C.F.R. § 3.26(d) (2016) (‘‘The filing of a motion to dismiss shall not stay the proceeding 

unless the Commission so directs.’’). 64Deborah Feinstein, Changes to Commission Rule 3.26 Re: Part 3 Proceedings following Federal Court Denial of a Preliminary Injunction, FED. TRADE COMMISSION (Mar. 16, 2015), https:// 

www.ftc.gov/news-events/blogs/competition-matters/2015/03/changes-commission-rule-326-repart-3-proceedings. 65 Administrative Litigation Following the Denial of a Preliminary Injunction: Policy Statement, 60 Fed. Reg. 39742 (Aug. 3, 1995), https://www.ftc.gov/sites/default/files/attachments/ 

merger-review/950803administrativelitigation.pdf. 66 Id. 67Senate Hearing, supra note 2, at 2 (response to questions for the record from Jonathan 

Jacobson, former commissioner of the Antitrust Modernization Commission) (‘‘[T]here has not 

been a single merger since then challenged in Part 3 after a preliminary injunction has been 

denied.’’), https://www.judiciary.senate.gov/imo/media/doc/Jacobson%20Responses%20to%20 

Klobuchar.pdf. 

the Commission’s direction.61 Second, a party may file a motion to 

dismiss the administrative complaint on the basis that the public 

interest does not warrant further litigation,’’ which results in an 

automatic stay of the proceeding for 7 days until Commission rules 

on the motion.62 Formerly, absent the Commission’s direction, filing a motion to dismiss did not result in an automatic stay of the 

proceeding.63 Deborah Feinstein, the Director of the FTC’s Bureau 

of Competition noted that this change creates ‘‘a new and improved 

process that aims to be quicker, more predictable, and more transparent.’’ 64

The FTC’s revision to Rule 3.26 does not, however, displace the 

Commission’s longstanding policies of determining whether to forego administrative adjudication solely because a Federal court does 

not grant a preliminary injunction.65 In 1995, the FTC clarified 

that this determination is made on a case-by-case basis, guided by 

five factors to determine whether continuing administrative adjudication is in the public interest. These factors include: 

(1) the factual findings and legal conclusions of the district 

court or any appellate court; 

(2) any new evidence developed during the preliminary injunction proceeding; 

(3) whether the transaction raises important issues of fact, 

law, or merger policy that need resolution in administrative litigation; 

(4) an overall assessment of the costs and benefits of further proceedings; and 

(5) any other matter that bears on whether it would be in 

the public interest to proceed with the merger challenge.66

While there may be rare instances where there may be a ‘‘second 

bite’’ scenario, Mr. Jacobson notes that the FTC has refrained from 

using this authority since 1995, but that its use has historically 

served the public interest.67

CONCLUSION

For over a century, the FTC has strengthened the enforcement 

of antitrust laws to protect American consumers. Congress inVerDate Sep 11 2014 01:59 Mar 15, 2016 Jkt 059006 PO 00000 Frm 00048 Fmt 6601 Sfmt 6601 E:\HR\OC\HR449.XXX HR449

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tended the agency to be a vigorous enforcer of the law and to develop antitrust policy in a bipartisan and expert manner while 

being comparatively insulated from the changing political and economic priorities that occur with each new presidential administration. A hallmark of this independence is the FTC’s ability to pursue 

administrative adjudication, including in merger enforcement 

cases. By prohibiting the agency from exercising this authority in 

merger cases, H.R. 2745 ultimately strikes at the very heart of the 

rationale for the FTC’s existence and directly contravenes Congress’ intent in establishing the FTC over a century ago. Whatever 

the benefits for business in terms of lowered costs and uncertainty, 

undermining the FTC’s independence and distinctiveness is simply 

too high a price to pay. 

We are additionally concerned that H.R. 2745 goes well-beyond 

the recommendations of the AMC. In particular, the elimination of 

administrative adjudication authority would also apply to certain 

non-merger conduct, including joint ventures and pre-merger activity, as well as consummated transaction. 

Finally, the bill’s uniform preliminary injunction standard for 

merger cases appears to be a solution in search of a problem. Nonetheless, to the extent that there is a material difference, and to the 

extent that the FTC Act standard is, in fact, more favorable to enforcement authorities, as the bill’s proponents contend, H.R. 2745 

chooses the less consumer-protective standard. 

For the foregoing reasons, we urge our colleagues to oppose H.R. 

2745. 

MR. CONYERS, JR. 

MR. NADLER. 

MS. JACKSON LEE. 

MR. COHEN. 

MR. JOHNSON, JR. 

MR. GUTIERREZ. 

MR. RICHMOND. 

MR. JEFFRIES. 

MR. CICILLINE. 

Æ 


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