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HEARING ON THE STANDARD MERGER AND 

ACQUISITION REVIEWS THROUGH 

EQUAL RULES ACT OF 2014 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

APRIL 3, 2014 

Serial No. 113–83 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

BOB GOODLATTE, Virginia, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

LAMAR SMITH, Texas 

STEVE CHABOT, Ohio 

SPENCER BACHUS, Alabama 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

RAU ́ L LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

GEORGE HOLDING, North Carolina 

DOUG COLLINS, Georgia 

RON DeSANTIS, Florida 

JASON T. SMITH, Missouri 

[Vacant] 

JOHN CONYERS, JR., Michigan 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

JUDY CHU, California 

TED DEUTCH, Florida 

LUIS V. GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC RICHMOND, Louisiana 

SUZAN DelBENE, Washington 

JOE GARCIA, Florida 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

SHELLEY HUSBAND, Chief of Staff & General Counsel 

PERRY APELBAUM, Minority Staff Director & Chief Counsel 

SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW

SPENCER BACHUS, Alabama, Chairman 

BLAKE FARENTHOLD, Texas, Vice-Chairman 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

GEORGE HOLDING, North Carolina 

DOUG COLLINS, Georgia 

JASON T. SMITH, Missouri 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

SUZAN DelBENE, Washington 

JOE GARCIA, Florida 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

DANIEL FLORES, Chief Counsel 
(III) 

C O N T E N T S 

APRIL 3, 2014 

Page 

OPENING STATEMENTS 

The Honorable Spencer Bachus, a Representative in Congress from the State 

of Alabama, and Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ........................................................................................ 1 

The Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress 

from the State of Tennessee, and Ranking Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ................................................. 9 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Ranking Member, Committee on the Judiciary ......... 10 

WITNESSES 

Deborah A. Garza, Partner, Covington & Burling LLP 

Oral Testimony ..................................................................................................... 12 

Prepared Statement ............................................................................................. 15 

Abbott B. Lipsky, Jr., Partner, Latham & Watkins LLP 

Oral Testimony ..................................................................................................... 23 

Prepared Statement ............................................................................................. 25 

Richard G. Parker, Partner, O’Melveny & Myers LLP 

Oral Testimony ..................................................................................................... 30 

Prepared Statement ............................................................................................. 32 

John B. Kirkwood, Professor of Law, Associate Dean for Strategic Planning 

and Mission, Seattle University School of Law 

Oral Testimony ..................................................................................................... 40 

Prepared Statement ............................................................................................. 42 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Tennessee, and Ranking Member, 

Subcommittee on Regulatory Reform, Commercial and Antitrust Law .......... 61 

Prepared Statement of the Honorable John Conyers, Jr., a Representative 

in Congress from the State of Michigan, and Ranking Member, Committee 

on the Judiciary ................................................................................................... 62 

Letter from Albert A. Foer, President, the American Antitrust Institute (AAI), 

submitted by the Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Tennessee, and Ranking Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ................. 64 

Letter from the Edith Ramirez, Chairwoman, Federal Trade Commission, 

submitted by the Honorable John Conyers, Jr., a Representative in Congress from the State of Michigan, and Ranking Member, Committee on 

the Judiciary ......................................................................................................... 68 

Letter from George S. Cary, Partner, Cleary Gottlieb Steen & Hamilton 

LLP, former Deputy Director, Bureau of Competition, Federal Trade Commission, submitted by the Honorable George Holding, a Representative 

in Congress from the State of North Carolina, and Member, Subcommittee 

on Regulatory Reform, Commercial and Antitrust Law ................................... 70 
Page

IV 

Response to Questions for the Record from Deborah A. Garza, Partner, Covington & Burling LLP .......................................................................................... 72 

Response to Questions for the Record from Abbott B. Lipsky, Jr., Partner, 

Latham & Watkins LLP ...................................................................................... 76 

Response to Questions for the Record from Richard G. Parker, Partner, 

O’Melveny & Myers LLP ..................................................................................... 78 

Response to Questions for the Record from John B. Kirkwood, Professor 

of Law, Associate Dean for Strategic Planning and Mission, Seattle University School of Law ................................................................................................ 81 
(1) 

HEARING ON THE STANDARD MERGER AND 

ACQUISITION REVIEWS THROUGH 

EQUAL RULES ACT OF 2014 

THURSDAY, APRIL 3, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 1:06 p.m., in room 

2237, Rayburn Office Building, the Honorable Spencer Bachus, 

(Chairman of the Subcommittee) presiding. 

Present: Representatives Bachus, Marino, Holding, Collins, Johnson, Conyers, and Jeffries. 

Staff Present: (Majority), Anthony Grossi, Counsel; Ashley Lewis, 

Clerk; (Minority) Slade Bond (Counsel); and Rosalind Jackson, Professional Staff Member. 

Mr. BACHUS. Good afternoon. The Subcommittee on Regulatory 

Reform, Commercial and Antitrust Law hearing will come to order. 

Without objection, the Chair is authorized to declare recesses of 

the Committee at any time. 

How many of you all have testified before a congressional Committee? Okay. What we do, Professor, we have our opening statements of Members. Then we go to your statements, and then we 

have questions for all of you, and I will introduce each of you all 

at the appropriate time. 

I recognize myself for an opening statement. 

Let me welcome everyone to today’s hearing, which is on the discussion draft of legislation. We thank our distinguished panel of 

witnesses because their testimony on the language in this draft 

will help to inform our further discussions on Federal antitrust enforcement procedures. 

Antitrust enforcement plays an important function in the fair 

and efficient operation of our market economy. Two Federal agencies enforce our nation’s antitrust law, the Department of Justice 

and the Federal Trade Commission. When a company wishes to 

merge with or purchase another company, it notifies both antitrust 

enforcement agencies of the proposed transaction. The agencies 

then confer and determine which will review the transaction to ensure that antitrust laws are not violated. 
2 

There are no fixed rules to determine which agency will conduct 

the review. If the reviewing agency determines that the proposed 

transaction violates antitrust law, the agency files a lawsuit in district court to seek an injunction against the transaction. Generally 

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

the transaction. If the court denies the injunction, the parties may 

consummate the transaction shortly thereafter. 

Although the FTC may pursue further internal administrative 

proceedings for a merger under its review, the Antitrust Modernization Act of 2002 created a special commission to conduct a 

review of the antitrust laws and the manner in which DoJ and 

FTC enforce these laws. 

In 2007, this commission published a comprehensive report that 

included recommendations for potential reforms to existing antitrust enforcement practices. Two of these recommendations were 

focused on the procedures that agencies follow when they seek to 

prevent the consummation of a proposed transaction. The report 

found that courts apply different standards to preliminary injunction requests from DoJ and FTC. 

The preliminary injunction standard applied to the FTC is drawn 

directly from the Federal Trade Commission Act, while the standard applied to the Department of Justice is the government case 

law standard of the relevant court of appeals. The Antitrust Modernization Commission also highlighted that the FTC has the ability to pursue administrative litigation following a court’s denial of 

its preliminary injunction request, while DoJ cannot conduct administrative litigation. The Antitrust Modernization Commission 

recommended that Congress enact legislation that would harmonize the preliminary injunction standard at both the FTC and 

DoJ and provide that the agencies have identical authority to prevent a proposed transaction that is monopolistic or substantially 

lessens competition. 

Today’s hearing will examine the discussion draft of legislation 

called the Standard Merger and Acquisition Reviews Through 

Equal Rules Act of 2014, or SMARTER Act, that draws from these 

recommendations. 

There is much today from our witnesses to discuss. I look forward to the start of testimony. 

[Discussion Draft of H.R. lll, the ‘‘Strandard Merger and Acquisition Reviews Through Equal Rules Act of 2014’’ follows:] 
3 
4 
5 
6 
7 
8 
9 

Mr. BACHUS. At this time, I recognize the Ranking Member, Mr. 

Hank Johnson of Georgia, for his opening statement. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Today’s hearing is—— 

Mr. BACHUS. Let me say this, and probably you may comment on 

this, too. Of course, I think we are all mindful of what happened 

at Fort Hood today, and some of us discussed our time in the 

Army, and it is obviously a sad day for our country, and our 

thoughts and prayers are with our soldiers and their families. 

Mr. Johnson? 

Mr. JOHNSON. Thank you. I stand with you in that regard. 

Today’s hearing is an important opportunity to consider the Federal Trade Commission’s role in developing and enforcing antitrust 

law. When Congress first established the Federal Trade Commission in 1914, it sought to safeguard consumers against anticompetitive behavior by breathing new life into antitrust enforcement. Unlike its predecessor, the Commerce Department’s Bureau of Corporations, Congress specifically empowered the Commission with 

adjudicative authority to enforce, clarify, and develop antitrust law. 

And unlike generalist courts of that era, the Commission also had 

the mission to study and enunciate the law as an expert tribunal 

through its research and information-gathering authority. 

A century later, the Commission continues to advance antitrust 

law. Under the process for administrative litigation, also known as 

Part 3 litigation, the Commission may seek permanent injunctions 

in its own administrative court in addition to its ability to seek preliminary injunctions in Federal district courts. This additional authority is a unique mechanism that takes advantage of the Commission’s longstanding expertise to develop some of the most complex issues in antitrust law. It is critical to the Commission’s mission to promote competition and consumer welfare. 

Today, the Subcommittee will consider the Standard Merger and 

Acquisition Reviews Through Equal Rules, or the SMARTER, Act. 

This bill would create a uniform standard for preliminary injunctions and eliminate the Commission’s century-old authority to adjudicate the permanent injunctions of mergers, acquisitions, joint 

ventures, or similar transactions. 

The stated goal of the SMARTER Act to create a uniform process 

for merger review between the Federal Trade Commission and the 

Department of Justice is not without appeal. I consider myself a 

man of strong and unrelenting support for the third co-equal 

branch of government, the Federal Judiciary. I understand the objective of reserving power for the Federal courts instead of agencies 

and creating symmetry in antitrust enforcement. I also understand 

the concerns associated with administrative litigation. 

But I would point out that these concerns are hardly new and 

have existed for decades without serious proof of actual harm or 

unfairness. The American Bar Association expressed concerns with 

the FTC’s twin role as prosecutor and judge in a landmark report 

25 years ago but ultimately concluded that the benefits of this enforcement regime outweighed these concerns. 

Likewise, when the ABA revisited this question 7 years ago, it 

continued its support of administrative litigation with an important 
10 

exception in those rare cases of the FTC pursuing administrative 

litigation after a Federal court denies a preliminary injunction. 

But the prospect of completely eliminating the FTC’s adjudicative 

authority, a practice that has expertly guided our nation’s antitrust 

laws for a century, raises serious concerns. I cannot stand by and 

support legislation that would dismantle government and a century 

of progress under the guise of symmetrical enforcement. Although 

I welcome today’s hearing, I sincerely hope that we can find an 

evenhanded solution that does not throw the baby out with the 

bath water. After all, if we can all agree that anticompetitive mergers pose serious threats to consumers and to the marketplace, the 

overriding goal of this legislation should be to preserve competition. 

I thank the Chair for holding this hearing and I yield back. 

Mr. BACHUS. I thank the gentleman from Georgia. 

At this time, I recognize the Ranking Member of the full Committee, Mr. Conyers from Michigan, for his opening statement. 

Mr. CONYERS. Thank you, Chairman Bachus. I will not take up 

the 4 or 5 minutes, but I did want you to know that there are some 

reservations that I will be considering as we proceed on this very 

important hearing. 

What I think we are trying to do is to make the Federal Trade 

Commission adhere to the same merger enforcement procedures as 

the Justice Department’s Antitrust Division. Now, there are some 

logical appeals that reach out to me, and there are some serious 

concerns about potential detrimental effects that may occur. 

You see, by making the FTC like DoJ, this proposal would weaken the FTC’s independence, which contravenes Congress’ original 

intent in establishing the Federal Trade Commission in the first 

place. And so I need you to work with me on that, and I invite any 

comments, particularly from the witnesses, and I will be holding 

these discussions with the Chairman and my colleagues on this 

very important Committee. 

Now, a concern. Eliminating the FTC’s ability to conduct administrative adjudication could harm the FTC’s ability to protect consumers. Administrative adjudication by which the agency and the 

merging parties litigate their case in front of an administrative law 

judge allows for a less formal adjudication process before a panel 

of experts, in contrast to litigation before a judge, a generalist 

judge, in a Federal court. 

Moreover, the administrative process allows the testing of novel 

theories and the development of expertise in new industries in a 

way that a generalist court is less well suited to handle. 

So the smarter approach is with some caution, and I will be listening carefully to what is said. 

Our preeminent goal here should be to strengthen, not weaken, 

antitrust enforcement in order to protect consumers, which is why 

FTC Chairwoman Ramirez wrote to this Subcommittee raising concerns about the bill under discussion, pointing out that it would 

have far-reaching, immediate effects and could fundamentally alter 

the nature and function of the FTC, as well as the potential for significant and unintended consequences. 

So it is with great pleasure that I join in welcoming all of our 

distinguished witnesses and look forward to this hearing, and I ask 

unanimous consent to put the remainder of my remarks in the 
11 

record, including the letter to the Chairman and the Ranking Member by the chairwoman of the FTC, and I yield back the balance 

of my time. 

Mr. BACHUS. Let me say this; and, of course, I only speak as the 

Subcommittee Chair. But I think that we are all concerned about 

monopolistic transactions that create monopolistic entities or that 

are monopolistic or that substantially lessen competition, and that 

is really why we are having this hearing, to see whether these proposals, how narrowly they are drawn and whether or not they will 

have any effect on that. We obviously are concerned about cartels. 

You read about some of those in existence in other countries and 

in the history of this country. 

So I think we are all cautious about anything that would create 

more opportunities for that type of transaction, and I think that 

will be something on which our witnesses will build a record and 

can address some of those concerns. 

Without objection, other Members’ opening statements will be 

made a part of the record. 

We have a very distinguished panel today, and I will first begin 

by introducing all our witnesses. 

Ms. Garza is Co-Chair of Covington & Burling’s Antitrust and 

Competition Law Practice Group. Ms. Garza has been involved in 

some of the largest antitrust matters in the last 30 years, including 

the merger of Exxon and Mobil, the U.S. Government’s suit against 

Microsoft, the USFL’s suit against the NFL, and many other litigation and regulatory matters on behalf of Fortune 500 companies. 

Before her time at Covington, Ms. Garza served as Acting Assistant Attorney General in charge of the Antitrust Division at the Department of Justice. She also served as Deputy Assistant Attorney 

General for Regulatory Affairs, Special Assistant, Chief of Staff, 

and Counselor to the Assistant Attorney General in charge of the 

antitrust Division. 

In 2004, she was supported by President George W. Bush to 

chair the Antitrust Modernization Commission, or AMC, a bipartisan blue-ribbon panel created by Congress to study and report to 

the President and Congress on the state of antitrust enforcement 

in the United States. The Commission’s report has been widely 

praised for providing a valuable framework for policy discussions 

going forward. 

Ms. Garza received her Bachelor’s degree from Northern Illinois 

University and her J.D. from the University of Chicago. 

We welcome you, Ms. Garza. 

Mr. Lipsky is a partner in the Washington, D.C. office of Latham 

& Watkins. He is internationally recognized for his work on both 

U.S. and non-U.S. competition law and policy, and has handled 

antitrust matters throughout the world. Before Lathan & Watkins, 

Mr. Lipsky served as Chief Antitrust lawyer for the Coca-Cola 

Company from 1992 to 2002. He has been closely associated with 

efforts to streamline antitrust enforcement around the world, advocating a reduction of compliance burdens and the harmonization of 

fundamental objectives of antitrust law. 

From 1981 through 1983, Mr. Lipsky served as Deputy Assistant 

Attorney General under William F. Baxter, who sparked profound 

antitrust law changes while serving as President Reagan’s chief 
12 

antitrust official. In that position, Mr. Lipsky supervised Supreme 

Court litigation in a series of ground-breaking antitrust cases and 

played a fundamental role in developing DoJ’s merger guidelines. 

Mr. Lipsky received his Bachelor’s degree from Amherst College, 

his Master’s from Stanford University, and his J.D. from Stanford 

Law School. 

We welcome you, Mr. Lipsky. 

Mr. Parker is in the Washington, D.C. office of O’Melveny and 

Myers and the chair of the firm’s antitrust and competition practice. He has extensive experience in antitrust matters both before 

the enforcement agencies and in the courts. Mr. Parker has been 

recognized as a leading antitrust lawyer by many publications, including Chambers USA, which noted that he is acknowledged by 

all corners of the market as a tremendous antitrust lawyer who can 

both litigate and handle deals. 

Prior to O’Melveny and Myers or his tenure there, Mr. Parker 

spent 3 years at the Federal Trade Commission as Director for the 

Bureau of Competition and received the Distinguished Service 

Award from the chairman of the FTC upon his departure. 

Mr. Parker received his Bachelor’s degree summa cum laude 

from the University of California at Davis and his J.D. from the 

University of California at Los Angeles or, I guess, UCLA. 

We welcome you. 

Our final witness, Professor Kirkwood, is Professor of Law and 

Associate Dean for Strategic Planning and Mission at Seattle University School of Law. He is also a Senior Fellow of the American 

Antitrust Institute. Following his graduation from law school, Professor Kirkwood directed antitrust policy offices in the Premerger 

Notification Program at the FTC. He managed antitrust cases and 

investigations at the FTC Seattle office and presently consults on 

antitrust matters. He has received the Outstanding Faculty Award 

and the Dean’s Medal from Seattle University. 

Professor Kirkwood received his Bachelor’s degree magna cum 

laude from Yale University, his Master’s in Public Policy cum laude 

from the Kennedy School of Harvard University, and his J.D. cum 

laude from Harvard Law School. 

So you are an Ivy League man, right? So, we welcome you, Professor. 

And we welcome all our witnesses. 

Each of the witnesses’ written testimony will be entered into the 

record in its entirety. 

I ask that each of the witnesses summarize his or her testimony 

in the 5 minutes allotted. I will say this, we will turn on a light, 

but if you go 6 minutes, 6-and-a-half minutes, at least in this Subcommittee, nobody is going to stop you because we are more interested in you making a coherent statement than we are in yellow 

and red lights. 

So we will start, Ms. Garza, with your testimony. 

TESTIMONY OF DEBORAH A. GARZA, PARTNER, 

COVINGTON & BURLING LLP 

Ms. GARZA. So, you want me to turn the mic on, and you would 

like a coherent statement. 
13 

Mr. BACHUS. Coherent. Really, if it is 7 or 8 minutes, I don’t 

mind. 

Ms. GARZA. You keep making it longer, and I was going for 2 or 

3, but we will do it. 

So, Chairman Bachus, Ranking Member Johnson, and Members 

of the Subcommittee, thank you very much for the opportunity to 

appear before you today to provide views on the proposed SMARTER Act. 

In May 2007, Representative Conyers, I remember that you were 

there. You might remember me. In May 2007, I testified before the 

Judiciary Committee’s Antitrust Task Force as former Chair of the 

Antitrust Modernization Commission regarding the AMC’s report 

and recommendations. Three of those recommendations actually 

read on the types of issues that you are considering here today. 

Each of the three recommendations were bipartisan. 

I want to make the point that in my view, this is not a partisan 

issue, not a DoJ versus FTC issue, not really even an enforcement, 

pro-enforcement versus anti-enforcement, issue. It really is, I think, 

in our view at the time with the AMC, a good government issue, 

and I do think it is important for you to be considering it now even 

though it has taken 7 years. I have been very patient. It is important to consider it now because we do have an issue, frankly, 

around the world with due process. Right now we have an issue 

with other jurisdictions and the way that they are enforcing their 

antitrust laws. 

So I think it is important, at the same time that the U.S. Government is out talking to other jurisdictions about the way that 

they enforce their antitrust laws, that we at least take the time to 

examine our own processes to make sure that they are fair and 

equal and perceived as being fair and equal. So I thank you for taking this opportunity to make a review of the way that the FTC and 

the DoJ handle HSR mergers. 

One of the recommendations of the AMC called specifically for 

legislation like the SMARTER Act—that is a great name, by the 

way—to equalize merger enforcement authority of the U.S. Federal 

Trade Commission and the U.S. Justice Department under the 

Hart-Scott-Rodino Act. I will say that the AMC’s recommendation 

was narrowly and specifically focused on the issue of mergers that 

are notified under the Hart-Scott-Rodino Act. 

The premise of SMARTER and the recommendation by the AMC 

was quite simple. A merger should not be treated differently depending on which antitrust enforcement agency happens to review 

it. Regulatory outcome should not be determined by the flip of an 

agency merger coin, wise legislation needed or appropriate the 

AMC thought at the time and I think now. It is appropriate precisely to maintain consensus about a strong antitrust enforcement 

regime. A perception of unequal or unfair treatment I think undermines that consensus. 

As the AMC explained at the time, parties to a 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. 
14 

I won’t repeat much more of what is in my testimony, but I will 

add to you that it is very easy for companies to understand that 

certain of their transactions will have to be reviewed by the government, and it is easy for them to understand that they will eventually, if necessary, get their day in court. It is much more difficult 

for them to understand that how they will be treated and how their 

transaction will fare may depend on whether the Federal Trade 

Commission looks at their transaction or the Justice Department. 

And it is very hard to explain to a company that is before the FTC 

why it is that they won’t get that same day in court, necessarily. 

As other people will testify, and as we indicated in the AMC report and, Chairman Bachus, you mentioned, it can be very difficult 

to hold a transaction together for the length of time that it takes 

to go through a full proceeding, from a preliminary injunction action in court all the way through to an administrative hearing, review by the Commission, and then finally review by a court. 

So the idea, I think, is not to prevent either agency from being 

able to fully consider a transaction. It is really to make sure that 

every company feels that it has its day in court. We didn’t see it 

at the time, and I don’t see it now, as disadvantaging or handicapping the Federal Trade Commission. The Justice Department 

wins cases and wins case challenges to HSR mergers. The FTC just 

won a challenge in a merger out in Idaho. The agencies do win 

cases when they have the evidence to support their cases. So this 

is not about tilting the deck to make sure that mergers that 

shouldn’t go through, go through. It is simply about making the 

process fair and equal and understandable. 

Thank you. 

[The prepared statement of Ms. Garza follows:] 
15 
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19 
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21 
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Mr. BACHUS. Thank you very much. 

Mr. Lipsky? 

TESTIMONY OF ABBOTT B. LIPSKY, JR., 

PARTNER, LATHAM & WATKINS LLP 

Mr. LIPSKY. I also want to express my thanks to the Chairman 

and the Ranking Member and all the Members of the Subcommittee who have taken time out of their busy schedule to appear today, and also thank you for your strong statements in support of free markets and antitrust laws as a way to preserve free 

markets and keep the American economy growing and going. 

I am going to be summarizing my statement very briefly and focusing more on the question of administrative litigation as opposed 

to the injunction standard, which I understand my colleague, Rich 

Parker, is going to address in some considerable detail. 

The first point I want to make is that the basic thrust of the bill 

in removing administrative litigation at the FTC as an option for 

cases where the FTC has failed to win an injunction in court is 

pretty much what the situation is today. When President Clinton 

appointed Professor Bob Pitofsky, an extremely distinguished antitrust scholar and practitioner, to be chairman of the FTC back in 

the 1990’s, one of the very first things he did was to have the FTC 

issue a statement and establish as policy that, in general, the Commission would always reconsider whether administrative litigation 

was appropriate to carry forward if the Commission lost the merger 

case in court. And in practice, the way that has worked out is exactly the way that the FTC merger cases would work out under 

this bill, because as far as I am aware, no case in which the FTC 

had lost an injunction suit was carried forward in administrative 

litigation. I was able to find two cases where the Commission, having lost a couple of cases in court, the Refining case, Western Refining, and a couple of other cases, declined to carry forward an administrative litigation. 

I believe that Chairman Pitofsky was right in persuading the 

Commission to adopt that policy because the Commission had I 

think justly been criticized for conducting very extensive litigation, 

administrative litigation, following court losses under circumstances where it was very difficult to argue that the public interest had been served. 

In the one case, even though the Commission had won in court 

and the target of the acquisition had been sold to other interests 

and had been disposed of in other ways, the Commission continued 

that litigation for 9 years. Eventually that litigation was settled 

under Chairman Pitofsky, who settled I think on relatively lenient 

terms, and justly so. 

And the other case, and perhaps the leading example is the R.R. 

Donnelley case, where the Commission lost its case in court, persisted in administrative litigation for 5 years, only to conclude that 

the transaction, the merger was lawful. So essentially, that administrative litigation had continued to really no good effect. 

I think that the Committee is right, even those who expressed 

some reservation about this approach. They are right to be concerned about the unique tools available to the Commission and the 

unique role that the Commission has in forwarding antitrust doc-
24 

trine. But I don’t think the ability to conduct administrative litigation in a merger case where the Commission was unsuccessful in 

court has much to do with preserving that uniqueness. 

The FTC has many unique elements that Congress put into the 

original legislation and enacted since, the so-called 6(b) authority 

to conduct industry investigations, which is now being used to examine the whole issue of patent controls. The Commission under 

Chairman Ramirez was extremely constructive in bringing harmony to the whole idea of how the antitrust laws apply to horizontal restraints, which culminated in the so-called Three Tenors 

decision and which has been followed in a number of other circuits. 

It was a very valuable contribution to a very uncertain area of the 

law. 

I don’t think that this one modest reform to prevent the kinds 

of delay and expense that occurred in the cases that I alluded to 

earlier will at all harm or diminish the Commission’s ability to do 

good and to advance antitrust law. 

Finally, I see that I am heading to the end of my time, but I 

wanted to ask you to consider one other dimension which is addressed in the last paragraph of my testimony. The last time I appeared before this Committee it was actually a hearing Chaired by 

Mr. Johnson, who conducted a very interesting proceeding on the 

subject of how the new Chinese anti-monopoly law was influencing 

American business, and a number of concerns were expressed. I 

think there was some cautious optimism, but there was also concern that the Chinese antitrust law might be enforced in a way 

that would obstruct American business or be uncertain or unduly 

burdensome. 

Today we have a situation where Chinese anti-monopoly law approval for mergers is usually the slowest boat in the merger notification convoy. In 1976, the U.S. was the very first country to have 

mandatory premerger notification. We now have over 80 jurisdictions around the world. They all look to the United States as a 

model for how to enforce antitrust law. And given that the burden 

and expense and complexity of complying with the antitrust laws 

in 100 jurisdictions around the world is so much greater than it 

was formerly, I think it behooves us to exercise leadership. 

The United States should exercise leadership and make sure that 

its processes are rational and as efficient as possible, and everything we do in the antitrust sphere is echoed in those other 100 

jurisdictions, and that is why we should constantly reconsider 

whether we should really be required to conduct these kinds of proceedings. That is why I favor the thrust of the bill. 

Thank you very much. 

[The prepared statement of Mr. Lipsky follows:] 
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Mr. BACHUS. Thank you, Mr. Lipsky. 

Mr. Parker? 

TESTIMONY OF RICHARD G. PARKER, 

PARTNER, O’MELVENY & MYERS LLP 

Mr. PARKER. Mr. Chairman, Mr. Ranking Member, thank you. 

Is it on? 

Mr. BACHUS. I am not sure. Is it working? 

Mr. PARKER. I want to thank you for the opportunity to express 

my views to the Committee. I have personally tried merger cases 

in Federal court both for the FTC and against the FTC, won some, 

lost some. 

And so I bring—I don’t think mine is working. All right. I will 

just talk with it right here. Can you hear me better? All right. 

Thank you. 

As I have said, I have tried these for both sides, and I hope I 

can bring some practical advice here and suggestions to the Committee. 

I have heard the comments of particularly Mr. Johnson and Mr. 

Conyers talking about the importance of administrative litigation, 

and I believe you touched it also, Mr. Chairman, and I totally agree 

with that. I agree that administrative litigation is a very good way 

to deal with monopolization issues, with conduct issues, for the 

simple reason that you have an expert agency and you can get six 

or 7 weeks for a trial to really build a record and look at something. 

I am in Federal court every day, and if I said to the Federal 

judges I am in front of ‘‘I need six or 7 weeks to try this case,’’ they 

would say ‘‘Mr. Parker, you have one,’’ because they are doing immigration cases and criminal cases and everything else. So that is 

very important. 

My point here is that I do not believe the administrative process 

works in a narrow area in Hart-Scott-Rodino merger review. I don’t 

believe that it is practical, and let me just take you through two 

examples. 

I was privileged to represent the airlines in the DoJ versus U.S. 

Airways-American Airlines case. I was the lead counsel for the defense there, okay? And so we were sued in the middle of August. 

We went to the DoJ and said we really don’t need a preliminary 

injunction. We will agree to that, but we want an early trial date. 

We got a trial date in November, 4 months. The trial would have 

been over before Christmas, and the judge, Judge Colleen KollarKotelly—who is an outstanding judge, by the way—committed to 

rule by the middle of January. We would have had our day in court 

as the airlines, and a ruling, within 5 months. That works. Now, 

this case settled a week or two before trial, so we never got to trial, 

but that is a procedure that works. 

Now, I was also in a case called FTC v. CCC/Mitchell, and that 

was one that we went to court on, and I will tell you painfully that 

I lost that case, but I am over it, I am over it. And here is the situation. We got sued sometime in November. It was a preliminary injunction. But we couldn’t collapse that with a permanent injunction 

because the permanent injunction was going to be held administratively. So we went to court only on a preliminary injunction in Jan-
31 

uary, and we tried that case for about 2 weeks, and the judge ruled 

in March, and we lost. 

Well, okay, let’s go to the administrative proceeding. It would 

have taken us 8 or 9 or 10 months to get a ruling, and then to go 

to the Court of Appeals for another year. We had financers, we had 

banks, we had investment bankers you can’t hold together. That is 

the problem. So our only day in court was that preliminary injunction day. That was it. That was the whole deal. Up or down, that 

is it. 

The other problem was that the district judge—and she is an 

outstanding district judge, Rosemary Collyer. She is superb. They 

have a lot of good judges in this town. But she interpreted the 

Whole Foods decision reasonably as setting forth a lower standard 

for the FTC. 

So in the airlines case, we would have gotten a full-blown trial 

under Section 7 and done it in 6 months, and here the only day 

we had in court, the only day, was under a preliminary injunction 

standard that is more reduced from the standard equitable test 

that we learned in law school. 

All I am suggesting is—and the FTC, this is not going to affect 

the FTC’s role. I know these people, and they are very good trial 

lawyers. They can go to court, and they can stand up against the 

best of them, and they do not need any special rule in the preliminary injunction, and they ought to do the exact same thing that the 

Department of Justice does, and I will tell you, they will win most 

of their cases, painfully, because I am on the other side. But that 

is what I believe. So I think this is an intelligent procedure. 

My other point is this. You try to explain to a chief executive officer why, if he had a DoJ-regulated industry, he would have a better time in court than an FTC case, and you will get—you could 

imagine how hard it is to explain that, and we just have to eliminate that because it serves no purpose. It only creates unfairness, 

and it does not affect the mission of the FTC one iota because they 

can stand up in Federal court as well as the DoJ can and will win 

most of their cases. 

I would be happy at the appropriate time to entertain any questions you might have. 

[The prepared statement of Mr. Parker follows:] 
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Mr. BACHUS. Thank you. 

Professor Kirkwood? 

TESTIMONY OF JOHN B. KIRKWOOD, PROFESSOR OF LAW, ASSOCIATE DEAN FOR STRATEGIC PLANNING AND MISSION, 

SEATTLE UNIVERSITY SCHOOL OF LAW 

Mr. KIRKWOOD. Thank you very much, Mr. Chairman and Ranking Member, and the other Members of the Subcommittee, for inviting me here. 

This draft bill proposes to equalize the powers of the FTC and 

the DoJ in merger challenges through two principal methods. The 

first is to equalize the standards for granting a preliminary injunction. As my co-members of this group of testifiers have indicated, 

there is a substantial case, in general, for having the same preliminary injunction standard. The agencies divide which merger cases 

they look at based on industry expertise, and there is no justification for giving the FTC an easier ability to challenge mergers in 

industries where the FTC has expertise rather than where the Justice Department has expertise. So as a general matter, equalizing 

the preliminary injunction standards does make a lot of sense. 

I see a couple of possible objections. One is that the existing preliminary injunction standard is in 13(b) of the FTC Act, and that 

also governs the Commission’s authority to obtain preliminary injunction in other FTC cases. And by changing the standard for 

mergers, you wouldn’t want to change the standard for other cases. 

Now, maybe that can be handled by very careful drafting, by precise and clear legislative history, but it is an issue that the Commission will raise and needs to be considered. 

The other objection is more substantial. In some merger cases, 

there may be a need for a relaxed preliminary injunction standard 

and administrative litigation. In a non-routine merger case, in a 

case where, say, the FTC doesn’t have a great deal of expertise in 

a particular industry or where the industry is changing rapidly and 

so a more sustained look is necessary to determine whether or not 

the merger will create market power or lessen competition, there 

may well be a reason to give the FTC the opportunity to look in 

more depth to give it a more relaxed standard and the ability to 

use sustained administrative litigation. Maybe. 

Now, it may be difficult to separate those cases out from the 

standard kinds of cases that Rich litigates. So it may be that this 

is simply a cost of equalizing the standards, but it is a potential 

cost of certain cases that wouldn’t be heard. 

The second method the discussion draft uses is to completely 

eliminate administrative adjudication in merger cases. The strongest justification is the one that Tad gave you, that if the FTC has 

lost in court, both at the district court level and at the appellate 

court level, what sense does it make to allow them to engage in administrative litigation too? It may not make any sense. In fact, 

since the 1995 policy statement, my understanding is the FTC has 

never taken a case through administrative litigation after it lost in 

the Federal courts, and Tad is nodding. 

But there is the kind of case I mentioned, the non-routine merger 

case where the FTC hasn’t lost. And more important, there are consummated mergers where the FTC isn’t seeking a preliminary in-
41 

junction at all but is seeking to undo a transaction that has already 

occurred, and there, there may be benefit for administrative litigation. 

The FTC showed this benefit in the hospital merger area. That 

is perhaps the strongest example of the constructive pro-consumer 

use of administrative litigation. Both agencies, Justice and FTC, 

had been unsuccessful in a series of hospital merger challenges. 

They lost something like six in a row. And the FTC decided to take 

a careful look at both the economic studies and health care analysis 

of this area and determined that there was a consummated merger 

near Chicago that had resulted in higher prices. They challenged 

that merger in administrative litigation and, in an extensive and 

thoughtful opinion, held it to be anticompetitive. 

The result of that effort was to make it easier in future cases to 

challenge them in court. If the FTC had been unable to do that 

kind of administrative litigation, that result might not have occurred, and the ability to keep health care costs down might have 

been lost. 

So there is real value in administrative litigation, at least in 

some contexts. And, as Mr. Johnson and Mr. Conyers have already 

mentioned, if you take the FTC’s administrative litigation power 

away, you are taking a step toward ending dual enforcement. 

Thank you. 

[The prepared statement of Mr. Kirkwood follows:] 
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Mr. BACHUS. I appreciate all the testimony. Obviously, we have 

three witnesses that make a strong case in favor of the law, and 

I think, Professor, you don’t believe that it would be a good change, 

or you believe it would have some good, some bad. Is that correct? 

Mr. KIRKWOOD. I think it is correct that, at least as a general 

matter, equalizing the preliminary injunction standards does make 

sense, the first part of the legislation, but that part can be handled 

simply by adjusting the preliminary injunction standard in Section 

13(b), equalizing it to the standard the Justice Department has to 

meet. I raised a couple of possible objections to that, but on balance, it is probably a good idea. 

Mr. BACHUS. The legislation? 

Mr. KIRKWOOD. The second part of the legislation, the part that 

would remove from the Commission’s Section 5 authority its ability 

to challenge mergers through the administrative process, that is 

much more questionable. 

Mr. BACHUS. Thank you. 

You know, I was sitting here listening to testimony, and I have 

to sort of go—I represented railroads. When you go to my office, 

you see trains all over my office. And some of what Mr. Lipsky and 

Mr. Parker were saying recalled to me the history of the Rock Island Railroad, which was really the biggest disaster of the 20th 

century and railroading where some 12,000 miles of rail was abandoned, and many businesses that depended on that railroad went 

out of business, and it was all unavoidable. It was the result of 10 

years, from 1964 to 1974, of administrative proceedings, which finally approved in 1974 the proposal that was made in 1964. But 

by that time, the Union Pacific Railroad had made other plans and 

they didn’t go forward with the merger. So for another 6 years you 

had derailments, you had interruptions in services, and finally in 

1980 several thousand employees lost their jobs and we lost some 

important competition in the rail industry, and it was as a result 

of administrative decisions. 

I sort of come with that. People have actually said that that 

weakened the entire industry across the country. It discouraged 

mergers, abandonments of unproductive rail lines, and led to really 

somewhat of a deterioration in rail all over the country, which then 

resulted in New York Central-Pennsylvania merger to try to stave 

off that. But by then it was too late and we really had a disaster 

in railroads until we moved to really more unregulating parts of 

the railroad industry. Today it has finally recovered. 

I almost think about the idea of double jeopardy. Of course, we 

apply that in criminal cases. But you go to court, you have your 

day in court. In civil cases, that is the Seventh Amendment. And 

then you have to start all over again. Somehow, that just doesn’t 

seem to square with your ideas of taking your case to court, having 

your day in court, and litigating for some months at a time, highly 

skilled people on both sides, capable judges, and then having to 

start all over. 

You mentioned the American Airlines. I think had that drug on 

for two or 3 years, with American Airlines in the shape they were 

in, I am not sure that it would have survived. I think you would 

have had kind of a repeat of what you saw with the Rock Island 

or some of these other mergers. People just finally give up, because 
49 

that airline was—it would have strengthened both of them, and ultimately, I think, it will increase competition. That is the usual. 

But I do want to say in closing I think you have all expressed— 

and let me say this. There is no one on this Committee that does 

not appreciate the need for strong antitrust enforcement and the 

need to guard against monopolies, cartels, or behavior that lessens 

competition. But often, in disapproving transactions, you actually 

reduce competition. That may not sound natural, but it often does. 

And in looking at this legislation, I would say to my colleagues, 

the former Chairman and Ranking Member of the Subcommittee, 

that I have great respect for both of you, but I think maybe you 

are construing this in your opening statements that there is a 

much broader sweep to this bill. I think it is not nearly as comprehensive in making changes as you think it is. 

So, with that, I will yield to the Ranking Member. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Mr. BACHUS. I usually have questions. That is probably the first 

time I hadn’t. But I think all my questions were answered by the 

testimony. 

Mr. JOHNSON. Thank you. 

Ms. Garza, in a 1989 report on the role of the Federal Trade 

Commission, the American Bar Association’s Antitrust Law Section 

recognized that merger enforcement was probably the FTC’s most 

important antitrust role. Do you agree with that ABA assessment? 

Ms. GARZA. I don’t know if it is the most important. It certainly 

is one of the important roles that the Federal Trade Commission 

has today, to review mergers. I think the Federal Trade Commission has a number of important roles. They have a uniquely important role in looking at antitrust and helping to develop antitrust 

policy in other ways. They have a uniquely important role, as Tad 

Lipsky explained, and I think Rich Parker, with respect to conduct 

cases, to take a deeper look, and to do it through their administrative hearing process. They have a very important role to play in the 

way they use their 6(b) authority to look at industries and look at 

issues like patent assertion entities and really bring some light to 

issues. 

So I think it has a lot of important roles. Some of them are 

unique. Those are the ones that are unique, and those are the ones 

that I think their administrative proceedings and their special 

hearing tools can help with. On the merger side, obviously, they 

share that with the Justice Department. It is also important. My 

testimony and the AMC report wasn’t based on any understanding 

that that was an unimportant part of what their agenda is. 

Mr. JOHNSON. You would agree, though, that it is a—— 

Ms. GARZA. It is important. 

Mr. JOHNSON. It is an important—— 

Ms. GARZA. I agree it is important. 

Mr. BACHUS. George, for a minute, would you step back in for a 

second? I want to recognize two of our former staff members that 

are in the audience that I think have given a great deal of service 

to the country and to this Committee that are here, George Slover, 

who is our former parliamentarian, and Will Moschella. Would you 

raise your hand a little? Who have also given us technical assist-
50 

ance on this because of their expertise in dealing with these matters before. 

I meant to introduce you when I introduced the panel, but I 

wanted to acknowledge your years of service and your continued 

importance to this Committee. So, thank you. 

It is very important that we have resources of stored knowledge 

and experience, and we appreciate both of you all making yourselves available to the Committee from time to time. 

So, with that, I will come back to you without a loss of time. 

Mr. JOHNSON. Thank you, thank you. 

Mr. BACHUS. And I will even let you mention the Koch brothers. 

Mr. JOHNSON. Well, since I am talking to Mr. Lipsky, I was not 

going to ask him about the Koch brothers, but he did talk about 

free markets, which is something that the Koch brothers stand for, 

which many of us do also. But the question is, what is the extent 

of government involvement in those free markets? 

But I would ask you, Mr. Lipsky, do you agree that merger enforcement is probably the FTC’s most important antitrust role? And 

before you answer, if you could maybe give me a yes or no. 

Mr. LIPSKY. No. 

Mr. JOHNSON. You do not. 

Mr. LIPSKY. Because I would adopt Deb Garza’s answer to that 

question, that it is an extremely important function. But I mentioned, for example, the development of the policy toward horizontal restraint, which had been a huge puzzle that had 

flummoxed antitrust lawyers and judges and the agencies themselves for decades, and I think through their case selection and the 

way they articulated the legal standard in this Three Tenors case 

that I mentioned—I think the technical name of the case is In re 

Polygram Holdings—but they did a tremendous service to antitrust 

in clarifying the law and making it easier to comply. 

So I can’t agree that merger enforcement is the most important. 

I think it is very important, but it is not the most important. 

Mr. JOHNSON. Okay. Do you agree also, Mr. Parker? Because I 

have a follow-up. I know that you all know it is coming, but I am 

going to run out of time, so don’t filibuster me. 

Mr. PARKER. The answer is yes, sir, I totally agree with you. 

Mr. JOHNSON. All right. And Professor Kirkwood? 

Mr. KIRKWOOD. I am not sure it is the most important. It is 

clearly major. 

Mr. JOHNSON. Okay. 

Mr. KIRKWOOD. Clearly a major responsibility, but they have 

done substantial other things. 

Mr. JOHNSON. Do you, Professor Kirkwood, agree that this bill 

would create a slippery slope to ending joint enforcement of antitrust law by both FTC and DoJ because it eliminates FTC authority to adjudicate permanent injunctions of mergers, acquisitions, 

and the like? 

Mr. KIRKWOOD. It would take a step down the slippery slope, yes, 

because it—— 

Mr. JOHNSON. Okay. 

Mr. Parker, yes or no? 

Mr. PARKER. No. 

Mr. JOHNSON. Okay, it does not take us down. 
51 

Mr. PARKER. If I thought that this was going to eliminate dual 

enforcement, I would not be in favor of the legislation. This is very 

narrow in one area where I think the FTC can play its role. 

Mr. JOHNSON. I got you, I got you, in the Hart-Scott-Rodino 

cases. 

Mr. PARKER. Yes. 

Mr. JOHNSON. It is a narrow area, as you see it? 

Mr. PARKER. It is an important area. For the FTC, it is a very 

important area. When I was there, it was the merger wave, and it 

most certainly was the most important area, but it can be performed very well in Federal court, in my opinion. That is what I 

said. 

Mr. JOHNSON. Okay. What do you think about the second objection that Professor Kirkwood enunciated, say, a merger in an area 

that the FTC may not have the kind of expertise to meet a higher 

standard and may need a lesser standard just to take the opportunity to study and marinate, if you will, on the ramifications of 

the merger? You don’t see that as a legitimate objection? 

Mr. PARKER. No, sir. I believe the FTC can handle any merger 

on the face of the earth. 

Mr. JOHNSON. Okay. And, Mr. Lipsky, being the free market proponent, I would assume that you would agree with Mr. Parker. 

And also, Ms. Garza, you yourself probably agree with Mr. Parker 

as well. 

Ms. GARZA. I do, sir. 

Mr. LIPSKY. Absolutely. 

Mr. BACHUS. Okay. Thank you. 

I think maybe just for clarification, you said merger enforcement. 

Of course, you are talking about enforcing the monopolistic or antitrust provisions, which may in some cases be approving mergers. 

It may be in other cases to deny. But merger enforcement doesn’t 

always mean stopping mergers. 

Mr. JOHNSON. Well, but if you don’t stop it before it happens, 

then you lose the ability to stop it. 

Mr. BACHUS. At this time, Mr. Marino is recognized for 5 minutes, the gentleman from Pennsylvania, or Mr. Holding, whoever 

wants to go first. 

Mr. MARINO. Good afternoon, folks. Thanks for being here. Let’s 

get right to the point. 

I have a special place in my heart for the Department of Justice. 

I worked there as a United States Attorney and a prosecutor in my 

state before that. So I have the utmost confidence in DoJ. By the 

same token, I have the utmost confidence in the people at the Federal Trade Commission, all extremely cream-of-the-crop individuals 

I refer to them as. 

But, Professor Kirkwood, if you would be so kind to explain to 

me why you think, given our judicial system the way it is, civil and 

criminal, why someone should have a second bite at the apple if 

they don’t like the way the first ruling went. 

Mr. KIRKWOOD. I think that if the FTC loses in district court and 

loses on appeal as well, it would be a rare case, if ever, where they 

should get a second bite. So I think I agree with where you are 

coming from. In fact, as we discussed here, since the FTC’s policy 
52 

statement in 1995, they have never taken a merger case to administrative litigation after losing in Federal court. 

Mr. MARINO. Okay. I am going to use your slippery slope argument, then, to counter that. What if? You say, well, you will have 

the beginning of a slippery slope, and what is next? It doesn’t mean 

that the FTC would not in the future take that case to another 

level. And why have the two standards? 

Mr. KIRKWOOD. I think I am much more in sync with where you 

are coming from. There are possible objections. But in general, 

there should be a single standard, and you can make that change 

without eliminating the FTC’s administrative adjudication power. 

You can simply say that when either agency seeks a preliminary 

injunction, they have to show a reasonable likelihood of success. 

Mr. MARINO. Right. 

Mr. KIRKWOOD. That could be handled. 

If you are worried that the FTC might sometime attempt to take 

a second bite at the apple, you could prohibit that without removing the FTC’s power to do administrative adjudication in mergers. 

There are consummated mergers, and there might be these kind 

that Rich and Tad have just denied. There might be these novel 

ones where the FTC needs to look more carefully. 

Mr. MARINO. What does the administrative procedure through 

the FTC have over the traditional judicial system? 

Mr. KIRKWOOD. That goes to the reason that the Congress created a bipartisan administrative body that is committed to developing competition law and develops expertise in it, as opposed to 

a district court judge who, on the one hand, may be excellent at 

antitrust but, on the other hand, may not have seen it before. 

So the FTC’s administrative role makes more sense in the more 

challenging kinds of cases. 

Mr. MARINO. Well, then why wouldn’t you—I am sorry. Go 

ahead, sir. 

Mr. KIRKWOOD. As in the hospital merger case, as in the pay-fordelay settlement cases. 

Mr. MARINO. Then why don’t we—let’s get back to the traditional 

judicial system with Federal judges. Why do we not, then, divide 

Federal judges up? Why don’t we have judges that just hear criminal cases? And let’s even go a step or two further than that. Why 

do we not have judges that hear capital murder cases as opposed 

to judges that hear sexual abuse cases or pornography cases? And 

let’s flip over to the civil side of the issues as well. There could be 

a myriad of areas where we could put judges into specialties. But 

that is my concern, a specialty, because having knowledge of other 

judicial concepts I think is critically important no matter what 

judge or panel of judges are making a decision. 

Just let me jump to one more thing, Professor. How do you justify, then, what appears to be the inordinate time it takes for the 

FTC to resolve a case? As a prosecutor, I have to agree with Mr. 

Parker. In Federal court, I knew that if I were going to ask the 

judge for a continuance or extra time, I had better say the rosaries 

before I do that because it is going to be extremely difficult to get 

that. Doesn’t that hurt competition? And, in effect, if it hurts competition, it hurts the consumer? 
53 

Mr. KIRKWOOD. The FTC has long been worried about the time 

that it takes for administrative litigation, so you are absolutely 

right to be concerned. Even with the stepped-up procedures, it still 

takes a year. So that is a concern. If you equalize the preliminary 

injunction standards, there would be fewer of the cases that would 

go to the FTC so that you would have that problem less. To go all 

the way to eliminate administrative adjudication creates other 

costs. 

Mr. MARINO. I see my time has expired, so I yield back. 

Mr. BACHUS. Thank you. 

Mr. John Conyers, the Ranking Member of the full Committee, 

is recognized. 

Mr. CONYERS. Thank you, Mr. Chairman. I enjoy the discussion 

that is going on after the statements. 

I begin by asking Attorney Parker, did the Congress, in your 

view, create the Federal Trade Commission as an independent 

agency? And if your answer is they did so because they wanted to 

get more expertise, wouldn’t this draft proposal called SMARTER 

end up eliminating the administrative adjudication provision? 

Mr. PARKER. That was—yes, sir, that was a principal reason in 

forming the FTC. But, no, the FTC would—the answer to the second part of your question is no, because the Commission would 

bring its experience to bear in the investigation of the merger and 

in the decision whether or not to challenge it. 

All I am saying is that the FTC can do its function there, and 

I am saying for very practical reasons, given the need for speed in 

merger matters, they ought to have it adjudicated in a Federal 

court. But the investigation and the decision, the FTC can bring its 

full experience and expertise to bear on that, and they do. 

Mr. CONYERS. Could I ask the same of you, Attorney Lipsky? 

Mr. LIPSKY. I basically adopt Rich Parker’s answer. Remember, 

the FTC has some very considerable resources to bring to bear on 

its knowledge and expertise. We mentioned the 6(b) authority. It 

has a huge—well, it has a substantial staff of very talented academic economists, I think most of them with Ph.D.’s who write research papers related to their work, who are very serious about advancing the frontiers of antitrust analysis, and those are very dedicated and smart and committed people, and that is, I think, part 

of what gives Mr. Parker the confidence to express what he has expressed, and I join him in that answer. 

Mr. CONYERS. Attorney Garza, do you have a different view? 

Ms. GARZA. I don’t have a different view. I have the same view. 

I would only add that the FTC has been very important in developing merger policy, along with the Justice Department. 

The only thing I would add is that the number of mergers, most 

mergers, the vast majority, 90-some percent, never get challenged. 

A small amount actually get investigated. The ones that we are 

talking about here are a very small number of cases that either 

agency feels the need to challenge. But it is in those cases, I think, 

only where we are saying that the FTC and the DoJ, when they 

do move to challenge a transaction, should do so on the same basis. 

Mr. CONYERS. Professor Kirkwood, your views? 

Mr. KIRKWOOD. I think that administrative adjudication is sometimes valuable. In the vast bulk of merger cases—Mr. Parker 
54 

thinks it is all merger cases. I am not sure it is all of them, but 

in the vast bulk of merger cases, the FTC uses expertise to decide 

whether to challenge and how to litigate, and that is sufficient, 

ought to be on the same preliminary injunction standard. But there 

are some times, as in the hospital merger case, where that extra 

expertise is reflected not only in the development of the investigation but in the decision to go forward and in the opinion the FTC 

writes, and that is valuable. 

Mr. CONYERS. Is it the view of the four of you that it is important 

that the Federal Trade Commission retain its ability to use administrative adjudication for merger challenges? 

Mr. PARKER. I would say it is important for them to keep their 

administrative ability for everything but merger challenges would 

be my position, sir. 

Mr. CONYERS. All right. 

Okay, Mr. Lipsky. 

Ms. Garza? 

Ms. GARZA. I would agree with that. I would just note that the 

Antitrust Modernization Commission recommendation, just for the 

record, did not ask Congress to preclude the use of administrative 

proceedings for consummated transactions. 

Mr. CONYERS. Professor Kirkwood? 

Mr. KIRKWOOD. Yes. I disagree for the reason I just mentioned, 

that it shouldn’t be completely eliminated. As Ms. Garza just mentioned, in consummated transactions, it is particularly appropriate. 

Mr. CONYERS. Thank you, Mr. Chairman. I yield back any time 

that may be remaining. 

Mr. BACHUS. Thank you, Mr. Conyers. 

At this time, Mr. George Holding, the gentleman from North 

Carolina, is recognized. 

Mr. HOLDING. Thank you, Mr. Chairman. 

Since we have such a wealth of practical antitrust litigation experience, I want to switch gears a little bit and look ahead and explore some related issues. These questions are for all of you, and 

we will kind of go in seriatim. 

In your general experience in the merger review process, have 

you ever run across where the FTC or DoJ has used that process 

to extract or impose any extraneous concessions that aren’t necessarily part of the antitrust or other concerns in the merger? 

Ms. GARZA. I can tell you that when I was at the Justice Department, we religiously avoided that. I have never had a contrary experience at the Federal Trade Commission. I will note that in the 

U.S. Airways-American Airline case, the Justice Department did 

state that in their relief, they got some relief that helped to address 

broader issues preexisting in the industry, and that did somewhat 

surprise me, but I don’t know if I would use the word ‘‘extort’’ or 

‘‘extract’’ or whatever the words you used. But I do think in that 

case, that indicated that there may have been some notion of getting relief that you might not have been able to get from a court 

of law. 

Mr. HOLDING. Sure. 

Mr. Lipsky? 

Mr. LIPSKY. I think I can say I haven’t run across that phenomenon in my personal experience. The closest is there were some 
55 

cable television merger cases some years ago where I believe it was 

the Federal Trade Commission articulated in a somewhat similar 

fashion to what Ms. Garza has referred to in the airlines case that 

there should be some independent consideration to media diversity 

or the diversity of editorial voices to play a role in the assessment 

of that merger. But I was not personally involved in that case, so 

I can’t claim that. 

Mr. HOLDING. Sure. But would any of you all say that it is a 

problem for either DoJ or FTC to use this opportunity of review to 

extract some other concessions? Perhaps there is some behavior of 

the company that they haven’t liked in the past. They haven’t been 

able to dissuade them from engaging in this behavior through other 

means, other court process. You have a merger review here. You 

have them as kind of a supplicant, you know, you are going to approve this merger or not. Would it be appropriate to extract that? 

Mr. PARKER. My view is that when I was at the FTC I told the 

staff you get what you need to solve the competitive problem of the 

merger, and if you don’t you go to court, and you don’t ask for anything else. I think that is the appropriate policy. 

Mr. HOLDING. Anyone want to disagree with that? 

Mr. KIRKWOOD. I would not. 

Mr. HOLDING. Do you think it would be a problem to make clear 

in this statute as we are trying to do some good government legislation here and clarify this standard, so in addition to make clear 

in this statute that agencies in reviewing a merger may not impose 

such extraneous conditions unrelated to the merger itself, go ahead 

and codify what you all are saying would be a good practice, or is 

a practice? 

Mr. PARKER. That, I believe, is the practice, and I don’t see any 

harm in codifying that. No, sir. 

Mr. HOLDING. All right. Mr. Chairman, I yield back. 

Mr. BACHUS. Thank you. 

I do want to note that Anant Raut is in the audience, and I appreciate your attendance, a former staffer on the Democratic side. 

Mr. Jeffries, 5 minutes. 

Mr. JEFFRIES. Thank you, Mr. Chair. 

Let me thank the witnesses for your appearance and your testimony here today. 

I want to start with Mr. Parker. It is my understanding that you 

spend a significant amount of time working at the FTC; is that correct? 

Mr. PARKER. I was there for approximately 3 years. At one point 

I was head of the Bureau of Competition. 

Mr. JEFFRIES. And I think you mentioned in your testimony that 

the agency greatly benefits the United States in terms of its enforcement efforts; is that right? 

Mr. PARKER. As a citizen and as an alum, I am very proud of the 

work the FTC does. I think it is very good for the United States, 

absolutely. 

Mr. JEFFRIES. And so you would agree that it continues to play 

a very important role, a substantial role in terms of our anticompetitive efforts in the United States, which also is good for the 

country? 

Mr. PARKER. Yes, sir. 
56 

Mr. JEFFRIES. Now, as I understand it, in terms of the legislation 

that has been placed before us, there are largely two arguments as 

it relates to limiting the administrative litigation ability of the 

FTC. The first is that somehow it is unfair for the FTC to get a 

second bite of the apple. Is that your perspective? 

Mr. PARKER. Yes. My perspective is really one of fairness, that 

if the FTC gets a second bite of the apple, it kills the deal, and that 

the parties to the deal have really not had a fair opportunity to 

present it because of the low preliminary injunction standard. And 

the idea you are going to be vindicated, then, in an administrative 

trial is impractical because the banks will walk away and your deal 

will fall apart. 

Mr. JEFFRIES. Now, theoretically it certainly seems like that has 

some merit. But in practice, am I correct that this administrative 

litigation ability actually has been rarely used by the FTC? 

Mr. PARKER. When I was there—I am sounding like an old guy 

talking about the good old days—we would slug it out in Federal 

court, and in the event of a loss, we would not pursue administrative litigation. I understand that policy has changed, and I disagree 

with that policy. But when I was there under Chairman Pitofsky, 

we went to court, we slugged it out. If we lost, that is it. 

Mr. JEFFRIES. But over the last few years, I believe it has not 

been used in terms of the merger context; correct? 

Mr. PARKER. It has been threatened to be used. It has been—but 

the problem is that they will say, okay, we are going to Part 3, and 

the parties will say, well, I am dead. I mean, there is no deal, so 

there is never any Part 3. Why? Because the deal went away. So 

my position is all about fairness. 

Mr. JEFFRIES. Understood, and I appreciate that. 

Ms. Garza, it is my understanding that the second criticism that 

has been put forth of the process in order to justify support for this 

bill has been the notion that the FTC essentially is superseding the 

court system through this administrative process. Is that a criticism that you share? 

Ms. GARZA. I don’t know that that is the way I would put it. I 

think the way that I would describe the problem is to ask you to 

take a look at the Inova Hospital transaction and what happened 

there, because that was an example of where I think the FTC 

switched its policy, the policy that had been put in place by Chairman Pitofsky around 1995, and it illustrates what happens and 

what the FTC is doing. In that case, I think Professor Kirkwood 

had said there had been numerous losses in hospital merger cases 

by both the DoJ and the FTC. So the FTC, in order to help to ensure that it would prevail in the Inova case, did some remarkable 

things. One of the things it did was it signaled to the court that 

it filed an administrative proceeding about the same time that it 

went into court for the preliminary injunction, signaling that no 

matter what you do, court, we will have an administrative hearing. 

No matter what the court does, the parties, we will be in an administrative hearing, and then persuaded the—— 

Mr. JEFFRIES. Ms. Garza, I don’t want to cut you off, but my time 

is limited, so let me just follow up on that point that you are raising. 

Ms. GARZA. Okay. 
57 

Mr. JEFFRIES. Isn’t it also the case, however, that the FTC’s administrative process, when that is concluded, is appealable to the 

Federal Court of Appeals? 

Ms. GARZA. It is, but it could be one or 2 years later. So we will 

never get to that point is the problem. To say what other people 

have said, the deal won’t hold together. So it is an easy or cheap 

way of killing a deal, through process rather than on the merits. 

Mr. JEFFRIES. Okay. I certainly understand that argument. It is 

a fair argument. But I also just want to make sure it is clear on 

the record that in terms of going outside the Article 3 jurisdiction, 

essentially, even if the FTC pursues its administrative process, 

aside from the practical considerations, it is not extra-judicial, that 

at the end of the day Article 3 Federal courts or the Court of Appeals has an opportunity to consider it. 

Mr. PARKER. That is correct. 

Ms. GARZA. Right. 

Mr. JEFFRIES. Thank you. 

Mr. BACHUS. All right. Thank you, the gentleman from New 

York. 

At this time, we will go to the gentleman from Georgia, Mr. Doug 

Collins. 

Mr. COLLINS. Thank you, Mr. Chairman. 

Ms. Garza, you refer to the AMC report statement, the existence 

of two different preliminary injunction standards may undermine 

public confidence in antitrust enforcement measures. Could you expand on that point a little bit? 

Ms. GARZA. Well, the concern is that the Antitrust Modernization 

Commission thought it was really very important to a vigorous 

antitrust enforcement regime that there be broad consensus, that 

even if you might disagree with decisions, particular decisions, that 

everybody believes it is a reasonable system, it is a fair system, it 

is an understandable system. 

So our concern was anything that appeared to be hard to explain, 

where it looked unequal, where it looked as though process was 

being stacked against you, where it looked like you as a practical 

matter would not get your day in court, that can’t help but to undermine consensus and the need for strong antitrust enforcement. 

If you have a lot of that, then you have your constituents coming 

to you and saying antitrust enforcement is unfair, merger enforcement is too stringent. It may not be an issue of merger enforcement 

or merger enforcement standards, but it is an issue of process, and 

it is an issue of parties not feeling that they have been unfairly 

treated and allowed to have a true day in court. So that is why we 

think the process is really important to making sure that you can 

go forward with a strong enforcement program. 

Mr. COLLINS. It is amazing to me that the word ‘‘process’’ that 

you used seems to be the key element in a lot of things that we 

do up here, especially when it comes to regulatory issues and rule 

reform, that the process is the biggest thing. Many people complain 

about the end result, but the problem is the process. The problem 

is what most people end up seeing. 

Do you think the SMARTER Act will make obtaining antitrust 

approval easier or more difficult, or merely more transparent and 

predictable? Which do you think it would do? 
58 

Ms. Garza, or anybody who wants to take it up would be fine. 

Ms. GARZA. I really don’t think it will affect the merits. What it 

does is it takes a little bit of the thumb off the scale, but I don’t 

think it will inhibit the FTC’s ability, as Mr. Parker has been explaining, inhibit their ability to stop mergers that should be 

stopped, to obtain relief where they should obtain it. So the idea 

here is not to change the merits or to change the numbers of transactions that on the merits get through or not. The whole idea is 

simply to make the process more transparent and clear and perceived as being fair. 

Mr. COLLINS. Mr. Parker, do you agree with that, since you were 

brought up? 

Mr. PARKER. I believe it will make it more fair. That will be the 

change. Yes, sir. 

Mr. COLLINS. Okay, good. 

Mr. Lipsky, have you personally encountered an FTC administrative litigation that has persisted in spite of a contrary judicial ruling? 

Mr. LIPSKY. Personally I have not, no. 

Mr. COLLINS. Okay. 

Anybody? 

[No response.] 

Mr. COLLINS. Okay, okay. 

Mr. Parker, do you believe that the FTC can effectively perform 

its antitrust enforcement responsibilities under a preliminary injunction standard that will be applied following the enactment of 

the SMARTER Act? 

Mr. PARKER. Yes, I certainly do. These people used to work for 

me. They are very good. They can function in Federal court with 

the best of them. Yes, sir. 

Mr. COLLINS. Does anybody else want to comment on that from 

your perspective? 

Mr. KIRKWOOD. One issue that has been surfaced by the comments just made here is whether equalizing the standards would 

make any difference. If it wouldn’t make any difference, even 

though the FTC has a lower stated standard, the outcomes would 

all be the same, so there is less need for this legislation. It doesn’t 

mean I oppose that aspect of it, but it is an interesting issue 

whether any mergers have been stopped that wouldn’t be stopped 

if you equalized the standards. 

Mr. COLLINS. Okay. So I think the questions that are coming 

here and looking at the process, Ms. Garza, do you think the DoJ 

is any less effective at antitrust enforcement than the FTC because 

of its inability to use administrative litigation? Ms. Garza? 

Ms. GARZA. No, no. 

Mr. COLLINS. I think this is an interesting topic, and I think especially when you—and I love what you said, Ms. Garza, about 

process. This goes back to a process issue, and I think many times 

the perception of process, whether the end result is one way or the 

other, the perception of process, I know at least from my part of 

Georgia, perception is reality. If you want to argue people’s perceptions, then you are going to have a lot of problems. You have to 

educate on the process, and I think this is what is good about that. 

Mr. Chairman, with that, I yield back. 
59 

Mr. BACHUS. Thank you. 

I think this will conclude our hearing at this time. I really appreciate the witnesses’ testimony. 

Each of your written statements will be entered into the record 

in their entirety. 

With that, this concludes today’s hearing. 

Ms. GARZA. Thank you. 

Mr. BACHUS. Without objection, all Members will have 5 legislative days to submit additional written questions for the witnesses 

or additional materials for the record. 

This hearing is adjourned. 

[Whereupon, at 2:32 p.m., the Subcommittee was adjourned.] 

(61) 

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Georgia, and Ranking Member, 

Subcommittee on Regulatory Reform, Commercial and Antitrust Law 

Thank you, Mr. Chairman. 

Today’s hearing is an important opportunity to consider the Federal Trade Commission’s role in developing and enforcing antitrust law. 

When Congress first established the Federal Trade Commission in 1914, it sought 

to safeguard consumers against anti-competitive behavior by breathing new life into 

antitrust enforcement. Unlike its predecessor—the Commerce Department’s Bureau 

of Corporations—Congress specifically empowered the Commission with adjudicative 

authority to enforce, clarify, and develop antitrust law. And unlike generalist courts 

of that era, the Commission also had the mission to study and enunciate the law 

as an expert tribunal through its research and information-gathering authority. 

A century later, the Commission continues to advance antitrust law. Under the 

process for administrative litigation—also known as Part 3 litigation—the Commission may seek permanent injunctions in its own administrative court in addition to 

its ability to seek preliminary injunctions in federal district court. This additional 

authority is a unique mechanism that takes advantage of the Commission’s longstanding expertise to develop some of the most complex issues in antitrust law. It 

is critical to the Commission’s mission to promote competition and consumer welfare. 

Today, this Subcommittee will consider the ‘‘Standard Merger and Acquisition Reviews Through Equal Rules,’’ or SMARTER Act. This bill would create a uniform 

standard for preliminary injunctions and eliminate the Commission’s century-old 

authority to adjudicate the permanent injunctions of mergers, acquisitions, joint 

ventures, or similar transactions. 

The stated goal of the SMARTER Act—to create a uniform process for merger review between the Federal Trade Commission and Department of Justice—is not 

without appeal. 

I consider myself a man of the law and strong supporter of the third, co-equal 

branch of government, the federal judiciary. I understand the objective of reserving 

power for the federal courts instead of agencies, and creating symmetry in antitrust 

enforcement. 

I also understand the concerns associated with administrative litigation. But I 

would point out that these concerns are hardly new and have existed for decades 

without serious proof of actual harm or unfairness. 

The American Bar Association expressed concerns with the FTC’s ‘‘twin role as 

prosecutor and judge’’ in a landmark report twenty-five years ago, but ultimately 

concluded that the benefits of this enforcement regime outweighed these concerns. 

Likewise, when the ABA revisited this question seven years ago, it continued its 

support of administrative litigation with an important exception: In the rare case 

of the FTC pursuing administrative litigation after a federal court denies a preliminary injunction. 
62 

I am comfortable with creating parity in the standard for preliminary injunctions, 

or perhaps tinkering with Part 3 litigation in a pragmatic, even-handed way that 

does not undermine competition or consumer protection. 

But the prospect of completely eliminating the FTC’s adjudicative authority—a 

practice that has expertly guided our nation’s antitrust laws for a century—raises 

serious concerns. 

I cannot stand by and support legislation that would dismantle government and 

a century of progress under the guise of symmetrical enforcement. 

Although I welcome today’s hearing, I sincerely hope that we can work to find an 

even-handed solution that does not throw the baby out with the bath water. After 

all, if we can all agree that anti-competitive mergers pose serious threats to consumers and the marketplace, the overriding goal of this legislation should be to preserve competition. 

I thank the Chair for holding this hearing and yield back. 

f 

Prepared Statement of the Honorable John Conyers, Jr., a Representative 

in Congress from the State of Michigan, and Ranking Member, Committee on the Judiciary 

The draft bill that we consider today—the ‘‘Standard Merger and Acquisition Reviews Through Equal Rules Act of 2014’’ or SMARTER Act—would make the Federal Trade Commission adhere to the same merger enforcement procedures as the 

Justice Department’s Antitrust Division. 

While certain aspects of this proposal have a logical appeal, I have several serious 

concerns as well. 

Most importantly, by making the FTC like the DoJ, this proposal would weaken 

the FTC’s independence, which contravenes Congress’s original intent in establishing the FTC. 

Without question, Congress established the Commission to be an independent administrative agency for good reasons. 

In particular, Congress was dissatisfied with the failure of the Sherman Antitrust 

Act of 1890 to stop the merger wave and corporate abuses that occurred over the 

course of the 24 years following its enactment 

It should be noted that Congress created the FTC in 1914 notwithstanding the 

fact that the Justice Department’s antitrust enforcement authority had already been 

in existence and fully functional at that time. 

So, the FTC was established by Congress to function as a body of experts that 

could develop antitrust law and policy comparatively free from political influence, 

and particularly executive branch interference. 

To effectuate these purposes, Congress gave the FTC broad investigative and reporting powers as well as the authority to use an administrative adjudication process to enforce the antitrust laws rather than try cases before a federal judge. 

Unfortunately, the SMARTER Act, by eliminating distinctions between the FTC 

and the DoJ in merger enforcement procedures, threatens to undermine Congress’s 

original intent in creating the Commission. 

Particularly problematic in this regard is the bill’s provision eliminating in merger cases the administrative adjudication process under section 5(b) of the FTC Act. 

This provision fundamentally changes the character of the FTC in the merger context, transforming it from an independent administrative agency into just another 

enforcement agency like the Antitrust Division of the Justice Department. 

Additionally, eliminating the FTC’s ability to conduct administrative adjudication 

would harm the FTC’s ability to protect consumers. 

Administrative adjudication, by which the agency and the merging parties litigate 

their case in front of an agency administrative law judge, allows for a less formal 

adjudication process before a panel of experts, in contrast to litigation before a generalist judge in a federal court. Moreover, the administrative process allows the testing of novel theories and the development of expertise in new industries in a way 

that a generalist court is less well-suited to handle. 
63 

Moreover, although the legislation purportedly is limited to merger enforcement, 

certain provisions appear to curtail the FTC’s administrative litigation authority beyond merger cases, which could jeopardize the FTC’s independence. 

In particular, the SMARTER Act would exclude from the FTC’s authority to use 

administrative adjudications not just for a merger or acquisition, but also for a 

‘‘joint venture’’ or ‘‘similar transaction.’’ 

Moreover, it would exclude from the FTC’s authority to administratively issue 

cease-and-desist orders ‘‘any activity in preparation for a merger, acquisition, joint 

venture, or similar transaction’’ that may result in an unfair method of competition. 

The clear import of this provision, which reaches conduct beyond mergers and acquisitions, would be to further curtail the FTC’s administrative authority in the future. 

Finally, our preeminent goal here should be to strengthen, not weaken, antitrust 

enforcement in order to protect consumers, which is why FTC Chairwoman Edith 

Ramirez wrote to this Subcommittee raising concern about the SMARTER Act. 

As Chairwoman Ramirez pointed out, the bill would have ‘‘far-reaching immediate 

effects’’ and ‘‘fundamentally alter the nature and function of the FTC, as well as the 

potential for significant unintended consequences.’’ 

Therefore, any effort to lessen the FTC’s independence and thereby weaken its 

ability to vigorously enforce antitrust laws must be viewed with great skepticism. 

Unfortunately, antitrust scrutiny of mergers has been woefully deficient over the 

past 30 years, although there has been some modest improvement recently. 

The very fact that many industries are now dominated by just a handful of very 

large firms attests to this failure of aggressive scrutiny. 

Fewer and more dominant firms within an industry forces consumers to pay higher prices and to accept suboptimal products or services. 

As I noted at the outset, the SMARTER Act has some logical appeal. I do not foreclose working with my colleagues on a narrower proposal that does not touch administrative adjudication. As currently drafted, however, I cannot support this measure. 

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