II

Calendar No. 192

106TH CONGRESS

1ST SESSION S. 467

To restate and improve section 7A of the Clayton Act, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 25, 1999

Mr. DEWINE (for himself and Mr. KOHL) introduced the following bill; which

was read twice and referred to the Committee on the Judiciary

JULY 1, 1999

Reported by Mr. HATCH, with an amendment and an amendment to the title

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To restate and improve section 7A of the Clayton Act, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Antitrust Merger Re5 view Act’’.
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1 SEC. 2. RESTATEMENT AND IMPROVEMENT OF SECTION 7A

2 OF THE CLAYTON ACT.

3 (a) IN GENERAL.—Section 7A of the Clayton Act (15

4 U.S.C. 18a) is amended to read as follows:

5 ‘‘SEC. 7A. (a) Except as exempted pursuant to sub6 section (c), no person shall acquire, directly or indirectly,

7 any voting securities or assets of any other person, unless

8 both persons (or in the case of a tender offer, the acquir9 ing person) file notification pursuant to rules under sub10 section (d)(1) and the waiting period described in sub11 section (b)(1) has expired, if—

12 ‘‘(1) the acquiring person, or the person whose

13 voting securities or assets are being acquired, is en14 gaged in commerce or in any activity affecting com15 merce;

16 ‘‘(2)(A) any voting securities or assets of a per17 son engaged in manufacturing which has annual net

18 sales or total assets of $10,000,000 or more are

19 being acquired by any person which has total assets

20 or annual net sales of $100,000,000 or more;

21 ‘‘(B) any voting securities or assets of a person

22 not engaged in manufacturing which has total assets

23 of $10,000,000 or more are being acquired by any

24 person which has total assets or annual net sales of

25 $100,000,000 or more; or
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1 ‘‘(C) any voting securities or assets of a person

2 with annual net sales or total assets of

3 $100,000,000 or more are being acquired by any

4 person with total assets or annual net sales of

5 $10,000,000 or more; and

6 ‘‘(3) as a result of such acquisition, the acquir7 ing person would hold—

8 ‘‘(A) 15 per centum or more of the voting

9 securities or assets of the acquired person, or

10 ‘‘(B) an aggregate total amount of the vot11 ing securities and assets of the acquired person

12 in excess of $15,000,000.

13 In the case of a tender offer, the person whose voting secu14 rities are sought to be acquired by a person required to

15 file notification under this subsection shall file notification

16 pursuant to rules under subsection (d).

17 ‘‘(b)(1) The waiting period required under subsection

18 (a) shall—

19 ‘‘(A) begin on the date of the receipt by the

20 Federal Trade Commission and the Assistant Attor21 ney General in charge of the Antitrust Division of

22 the Department of Justice (hereinafter referred to in

23 this section as the ‘Assistant Attorney General’)

24 of—
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1 ‘‘(i) the completed notification required

2 under subsection (a), or

3 ‘‘(ii) if such notification is not completed,

4 the notification to the extent completed and a

5 statement of the reasons for such noncompli6 ance,

7 from both persons, or, in the case of a tender offer,

8 the acquiring person; and

9 ‘‘(B) end on the thirtieth day after the date of

10 such receipt (or in the case of a cash tender offer,

11 the fifteenth day), or on such later date as may be

12 set under subsection (e)(2) or (g)(2).

13 ‘‘(2) The Federal Trade Commission and the Assist14 ant Attorney General may, in individual cases, terminate

15 the waiting period specified in paragraph (1) and allow

16 any person to proceed with any acquisition subject to this

17 section, and promptly shall cause to be published in the

18 Federal Register a notice that neither intends to take any

19 action within such period with respect to such acquisition.

20 ‘‘(3) As used in this section—

21 ‘‘(A) The term ‘voting securities’ means any se22 curities which at present or upon conversion entitle

23 the owner or holder thereof to vote for the election

24 of directors of the issuer or, with respect to unincor25 porated issuers, persons exercising similar functions.
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1 ‘‘(B) The amount or percentage of voting secu2 rities or assets of a person which are acquired or

3 held by another person shall be determined by ag4 gregating the amount or percentage of such voting

5 securities or assets held or acquired by such other

6 person and each affiliate thereof.

7 ‘‘(c) The following classes of transactions are exempt

8 from the requirements of this section—

9 ‘‘(1) acquisitions of goods or realty transferred

10 in the ordinary course of business;

11 ‘‘(2) acquisitions of bonds, mortgages, deeds of

12 trust, or other obligations which are not voting secu13 rities;

14 ‘‘(3) acquisitions of voting securities of an

15 issuer at least 50 per centum of the voting securities

16 of which are owned by the acquiring person prior to

17 such acquisition;

18 ‘‘(4) transfers to or from a Federal agency or

19 a State or political subdivision thereof;

20 ‘‘(5) transactions specifically exempted from the

21 antitrust laws by Federal statute;

22 ‘‘(6) transactions specifically exempted from the

23 antitrust laws by Federal statute if approved by a

24 Federal agency, if copies of all information and doc25 umentary material filed with such agency are con-
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1 temporaneously filed with the Federal Trade Com2 mission and the Assistant Attorney General;

3 ‘‘(7) transactions which require agency approval

4 under section 10(e) of the Home Owners’ Loan Act

5 (12 U.S.C. 1467a), section 18(c) of the Federal De6 posit Insurance Act (12 U.S.C. 1828(c)), or section

7 3 of the Bank Holding Company Act of 1956 (12

8 U.S.C. 1842);

9 ‘‘(8) transactions which require agency approval

10 under section 4 of the Bank Holding Company Act

11 of 1956 (12 U.S.C. 1843) or section 5 of the Home

12 Owners’ Loan Act (12 U.S.C. 1464), if copies of all

13 information and documentary material filed with any

14 such agency are contemporaneously filed with the

15 Federal Trade Commission and the Assistant Attor16 ney General at least 30 days prior to consummation

17 of the proposed transaction;

18 ‘‘(9) acquisitions, solely for the purpose of in19 vestment, of voting securities, if, as a result of such

20 acquisition, the securities acquired or held do not ex21 ceed 10 per centum of the outstanding voting securi22 ties of the issuer;

23 ‘‘(10) acquisitions of voting securities, if, as a

24 result of such acquisition, the voting securities ac25 quired do not increase, directly or indirectly, the ac-
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1 quiring person’s per centum share of outstanding

2 voting securities of the issuer;

3 ‘‘(11) acquisitions, solely for the purpose of in4 vestment, by any bank, banking association, trust

5 company, investment company, or insurance com6 pany, of (A) voting securities pursuant to a plan of

7 reorganization or dissolution; or (B) assets in the or8 dinary course of its business; and

9 ‘‘(12) such other acquisitions, transfers, or

10 transactions, as may be exempted under subsection

11 (d)(2)(B).

12 ‘‘(d) The Federal Trade Commission, with the con13 currence of the Assistant Attorney General and by rule

14 in accordance with section 553 of title 5, United States

15 Code, consistent with the purposes of this section—

16 ‘‘(1) shall require that the notification required

17 under subsection (a) be in such form and contain

18 such documentary material and information relevant

19 to a proposed acquisition as is necessary and appro20 priate to enable the Federal Trade Commission and

21 the Assistant Attorney General to determine whether

22 such acquisition may, if consummated, violate the

23 antitrust laws; and

24 ‘‘(2) may—

25 ‘‘(A) define the terms used in this section;
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1 ‘‘(B) exempt, from the requirements of this

2 section, classes of persons, acquisitions, trans3 fers, or transactions which are not likely to vio4 late the antitrust laws; and

5 ‘‘(C) prescribe such other rules as may be

6 necessary and appropriate to carry out the pur7 poses of this section.

8 ‘‘(e)(1) The Federal Trade Commission or the Assist9 ant Attorney General may, prior to the expiration of the

10 30-day waiting period (or in the case of a cash tender

11 offer, the 15-day waiting period) specified in subsection

12 (b)(1), require the submission of additional information or

13 documentary material relevant to the proposed acquisition,

14 from a person required to file notification with respect to

15 such acquisition under subsection (a) prior to the expira16 tion of the waiting period specified in subsection (b)(1),

17 or from any officer, director, partner, agent, or employee

18 of such person.

19 ‘‘(2) The Federal Trade Commission or the Assistant

20 Attorney General, in its or his discretion, may extend the

21 30-day waiting period (or in the case of a cash tender

22 offer, the 15-day waiting period) specified in subsection

23 (b)(1) for an additional period of not more than 20 days

24 (or in the case of a cash tender offer, 10 days) after the

25 date on which the Federal Trade Commission or the As-
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1 sistant Attorney General, as the case may be, receives

2 from any person to whom a request is made under para3 graph (1), or in the case of tender offers, the acquiring

4 person, (A) all the information and documentary material

5 required to be submitted pursuant to such a request, or

6 (B) if such request is not fully complied with, the informa7 tion and documentary material submitted and a statement

8 of the reasons for such noncompliance. Such additional pe9 riod may be further extended only by the United States

10 district court, upon an application by the Federal Trade

11 Commission or the Assistant Attorney General pursuant

12 to subsection (g)(2).

13 ‘‘(f) If a proceeding is instituted or an action is filed

14 by the Federal Trade Commission, alleging that a pro15 posed acquisition violates section 7 of this Act or section

16 5 of the Federal Trade Commission Act, or an action is

17 filed by the United States, alleging that a proposed acqui18 sition violates such section 7 or section 1 or 2 of the Sher19 man Act, and the Federal Trade Commission or the As20 sistant Attorney General (1) files a motion for a prelimi21 nary injunction against consummation of such acquisition

22 pendente lite, and (2) certifies the United States district

23 court for the judicial district within which the respondent

24 resides or carries on business, or in which the action is

25 brought, that it or he believes that the public interest re-
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1 quires relief pendente lite pursuant to this subsection,

2 then upon the filing of such motion and certification, the

3 chief judge of such district court shall immediately notify

4 the chief judge of the United States court of appeals for

5 the circuit in which such district court is located, who shall

6 designate a United States district judge to whom such ac7 tion shall be assigned for all purposes.

8 ‘‘(g)(1) Any person, or any officer, director, or part9 ner thereof, who fails to comply with any provision of this

10 section shall be liable to the United States for a civil pen11 alty of not more than $10,000 for each day during which

12 such person is in violation of this section. Such penalty

13 may be recovered in a civil action brought by the United

14 States.

15 ‘‘(2) If any person, or any officer, director, partner,

16 agent, or employee thereof, fails substantially to comply

17 with the notification requirement under subsection (a) or

18 any request for the submission of additional information

19 or documentary material under subsection (e)(1) within

20 the waiting period specified in subsection (b)(1) and as

21 may be extended under subsection (e)(2), the United

22 States district court—

23 ‘‘(A) may order compliance;

24 ‘‘(B) shall extend the waiting period specified in

25 subsection (b)(1) and as may have been extended
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1 under subsection (e)(2) until there has been sub2 stantial compliance, except that, in the case of a ten3 der offer, the court may not extend such waiting pe4 riod on the basis of a failure, by the person whose

5 stock is sought to be acquired, to comply substan6 tially with such notification requirement or any such

7 request; and

8 ‘‘(C) may grant such other equitable relief as

9 the court in its discretion determines necessary or

10 appropriate,

11 upon application of the Federal Trade Commission or the

12 Assistant Attorney General.

13 ‘‘(h) Any information or documentary material filed

14 with the Assistant Attorney General or the Federal Trade

15 Commission pursuant to this section shall be exempt from

16 disclosure under section 552 of title 5, United States

17 Code, and no such information or documentary material

18 may be made public, except as may be relevant to any

19 administrative or judicial action or proceeding. Nothing in

20 this section is intended to prevent disclosure to either body

21 of Congress or to any duly authorized committee or sub22 committee of Congress.

23 ‘‘(i)(1) Any action taken by the Federal Trade Com24 mission or the Assistant Attorney General or any failure

25 of the Federal Trade Commission or the Assistant Attor-
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1 ney General to take any action under this section shall

2 not bar any proceeding or any action with respect to such

3 acquisition at any time under any other section of this

4 Act or any other provision of law.

5 ‘‘(2) Nothing contained in this section shall limit the

6 authority of the Assistant Attorney General or the Federal

7 Trade Commission to secure at any time from any person

8 documentary material, oral testimony, or other informa9 tion under the Antitrust Civil Process Act, the Federal

10 Trade Commission Act, or any other provision of law.

11 ‘‘(j) Beginning not later than January 1, 1978, the

12 Federal Trade Commission, with the concurrence of the

13 Assistant Attorney General, shall annually report to Con14 gress on the operation of this section. Such report shall

15 include an assessment of the effects of this section, of the

16 effects, purpose, and need for any rules promulgated pur17 suant thereto, and any recommendations for revisions of

18 this section.

19 ‘‘(k)(1) The consideration by the Federal Commu20 nications Commission of any application for a transfer of

21 license, or the acquisition and operation of lines, that is

22 associated with an acquisition subject to this section shall

23 be governed by the procedures set forth in this subsection.

24 ‘‘(2)(A) Upon receipt of an application referred to in

25 paragraph (1), the Federal Communications Commission
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1 may submit to the party or parties covered by the applica2 tion a request for any documents and information nec3 essary for consideration of the transfer of license, or ac4 quisition and operation of lines, addressed in the applica5 tion.

6 ‘‘(B) The Federal Communications Commission shall

7 submit a request under subparagraph (A), if at all, not

8 later than 30 days after receipt of the application in ques9 tion.

10 ‘‘(3)(A) A party subject to a request from the Federal

11 Communications Commission under paragraph (2) shall

12 submit to the Federal Communications Commission the

13 documents and information identified in the request.

14 ‘‘(B) At the completion of the submission to the Fed15 eral Communications Commission of documents and infor16 mation pursuant to a request under subparagraph (A), the

17 party submitting such documents and information shall

18 certify to the Federal Communications Commission wheth19 er or not such party has complied substantially with the

20 request.

21 ‘‘(4) Whenever consideration of an application re22 ferred to in paragraph (1) includes one or more requests

23 for documents and information under paragraph (2), the

24 Federal Communications Commission shall complete the

25 consideration of the application not later than 180 days
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1 after the date on which all parties covered by such re2 quests have certified to the Federal Communications Com3 mission under paragraph (3)(B) that such parties have

4 complied substantially with such requests.

5 ‘‘(5)(A) In any case in which the Federal Commu6 nications Commission does not request under paragraph

7 (2) any documents and information for the consideration

8 of an application referred to in paragraph (1), the Federal

9 Communications Commission shall approve or deny the

10 transfer of license, or the acquisition and operation of

11 lines, covered by the application not later than 30 days

12 after the date of the submittal of the application to the

13 Federal Communications Commission.

14 ‘‘(B) In any case in which the Federal Communica15 tions Commission requests under paragraph (2) docu16 ments and information for the consideration of an applica17 tion referred to in paragraph (1), the Federal Communica18 tions Commission shall approve or deny the transfer of

19 license, or the acquisition and operation of lines, covered

20 by the application on the date of the completion of consid21 eration of the application under paragraph (4).

22 ‘‘(C) If the Federal Communications Commission

23 does not approve or deny an application for a transfer of

24 license, or for the acquisition and operation of lines, by

25 the date set forth in subparagraph (A) or (B), whichever
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1 applies, the application shall be deemed approved by the

2 Federal Communications Commission as of such date. Ap3 proval under this subparagraph shall be without condi4 tions.

5 ‘‘(6)(A) Any party seeking to challenge the reason6 ableness of a request of the Federal Communications

7 Commission under paragraph (2) shall bring an action in

8 the United States District Court of the District of Colum9 bia seeking a declaratory judgment or injunctive relief

10 with respect to that challenge.

11 ‘‘(B) In seeking to challenge the compliance under

12 paragraph (3) of a party with a request under paragraph

13 (2), the Federal Communications Commission shall bring

14 an action in the United States District Court of the Dis15 trict of Columbia seeking a declaratory judgment or in16 junctive relief with respect to that challenge.

17 ‘‘(C) The period of an action under this paragraph

18 may not be taken into account in determining the passage

19 of time under a deadline under this subsection.

20 ‘‘(7) No provision of this subsection may be construed

21 to limit or modify—

22 ‘‘(A) the standards utilized by the Federal

23 Communications Commission under the Communica24 tions Act of 1934 (47 U.S.C. 151 et seq.) in consid25 ering or approving transfers of licenses, or the ac-
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1 quisition and operation of lines, covered by an appli2 cation referred to in paragraph (1); or

3 ‘‘(2) the authority of the Federal Communica4 tions Commission under that Act to impose condi5 tions upon the transfer of licenses, or the acquisition

6 and operation of lines, pursuant to such consider7 ation or approval.

8 ‘‘(8) Subsection (g)(1) shall not apply with respect

9 to the activities of a party under this subsection.’’.

10 (b) EFFECTIVE DATE.—(1) Except as provided in

11 paragraph (2), the amendment made by subsection (a)

12 shall take effect on the date of the enactment of this Act.

13 (2) Subsection (k) of section 7A of the Clayton Act,

14 as amended by subsection (a) of this section, shall take

15 effect 30 days after the date of the enactment of this Act,

16 and shall apply with respect to applications referred to in

17 such subsection (k) that are submitted to the Federal

18 Communications Commission on or after that date.

19 SECTION 1. SHORT TITLE.

20 This Act may be cited as the ‘‘Expeditious Action on

21 Telecommunications Merger Act’’.
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1 SEC. 2. SCHEDULE FOR CONSIDERATION BY FEDERAL COM2 MUNICATIONS COMMISSION OF CERTAIN AP3 PLICATIONS FOR TRANSFERS OF LICENSES

4 OR LINES.

5 (a) IN GENERAL.—The consideration by the Federal

6 Communications Commission of any application for a

7 transfer of license, or for the acquisition and operation of

8 lines, that is associated with an acquisition, whether direct

9 or indirect, of voting securities or assets shall be governed

10 by the schedule set forth in this section.

11 (b) DEADLINE FOR CONSIDERATION.—

12 (1) CERTAIN APPLICATIONS.—

13 (A) IN GENERAL.—In the case of an appli14 cation described in subparagraph (B), the Com15 mission shall complete the consideration of the

16 application not later than 180 days after the

17 date of the receipt of the application by the Com18 mission unless the Commission, by majority vote

19 of the members of the Commission, extends the

20 period of consideration of the application by not

21 more than 60 additional days.

22 (B) COVERED APPLICATIONS.—An applica23 tion described in this subparagraph is an appli24 cation referred to in subsection (a) as a result of

25 which the acquiring person would hold—
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1 (i) 15 percent or more of the voting se2 curities or assets of the acquired person; or

3 (ii) an aggregate total amount of the

4 voting securities and assets of the acquired

5 person in excess of $15,000,000.

6 (2) OTHER APPLICATIONS.—In the case of any

7 application referred to in subsection (a) other than an

8 application covered by paragraph (1), the Commis9 sion shall complete the consideration of the applica10 tion not later than 90 days after the date of the re11 ceipt of the application by the Commission unless the

12 Commission, by majority vote of the members of the

13 Commission, extends the period of consideration of the

14 application by not more than 30 additional days.

15 (c) FAILURE TO ACT.—If the Commission does not ap16 prove, approve with modifications, or deny an application

17 for a transfer of license, or for the acquisition and operation

18 of lines, by the date provided for the consideration of the

19 application under paragraph (1) or (2) of subsection (b),

20 whichever applies, the application shall be deemed approved

21 by the Commission as of such date. Approval under this

22 subsection shall be without modifications.

23 (d) CONSTRUCTION.—No provision of this section may

24 be construed to enhance, limit, or modify in any way—
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1 (1) the standards utilized by the Commission

2 under the Communications Act of 1934 (47 U.S.C.

3 151 et seq.) in considering or approving transfers of

4 licenses, or the acquisition and operation of lines, cov5 ered by an application referred to in subsection (a);

6 or

7 (2) the authority of the Commission under that

8 Act to impose conditions upon the transfer of licenses,

9 or the acquisition and operation of lines, pursuant to

10 such consideration or approval.

11 (e) APPLICABILITY.—

12 (1) IN GENERAL.—Except as provided in para13 graph (2), this section shall take effect 30 days after

14 the date of the enactment of this Act, and shall apply

15 with respect to applications referred to in such sub16 section (a) that are submitted to the Commission on

17 or after that date.

18 (2) PENDING APPLICATIONS.—If an application

19 described by subsection (a) is pending before the Com20 mission as of the date of the enactment of this Act,

21 subsections (c) and (d) shall apply with respect to the

22 application as if the application had been submitted

23 to the Commission on the date of the enactment of

24 this Act.

Amend the title so as to read: ‘‘A bill to establish

a schedule for the review by the Federal Communications
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Commission of certain applications for transfers of licenses, or for the acquisition and operation of lines, and

for other purposes.’’.

Calendar No. 192

106TH CONGRESS

1ST SESSION S. 467

A BILL

To restate and improve section 7A of the Clayton

Act, and for other purposes.

JULY 1, 1999

Reported with an amendment and an amendment to the

title