II

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

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’’.

6 SEC. 2. RESTATEMENT AND IMPROVEMENT OF SECTION 7A

7 OF THE CLAYTON ACT.

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

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

10 ‘‘SEC. 7A. (a) Except as exempted pursuant to sub11 section (c), no person shall acquire, directly or indirectly,
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1 any voting securities or assets of any other person, unless

2 both persons (or in the case of a tender offer, the acquir3 ing person) file notification pursuant to rules under sub4 section (d)(1) and the waiting period described in sub5 section (b)(1) has expired, if—

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

7 voting securities or assets are being acquired, is en8 gaged in commerce or in any activity affecting com9 merce;

10 ‘‘(2)(A) any voting securities or assets of a per11 son engaged in manufacturing which has annual net

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

13 being acquired by any person which has total assets

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

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

16 not engaged in manufacturing which has total assets

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

18 person which has total assets or annual net sales of

19 $100,000,000 or more; or

20 ‘‘(C) any voting securities or assets of a person

21 with annual net sales or total assets of

22 $100,000,000 or more are being acquired by any

23 person with total assets or annual net sales of

24 $10,000,000 or more; and
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1 ‘‘(3) as a result of such acquisition, the acquir2 ing person would hold—

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

4 securities or assets of the acquired person, or

5 ‘‘(B) an aggregate total amount of the vot6 ing securities and assets of the acquired person

7 in excess of $15,000,000.

8 In the case of a tender offer, the person whose voting secu9 rities are sought to be acquired by a person required to

10 file notification under this subsection shall file notification

11 pursuant to rules under subsection (d).

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

13 (a) shall—

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

15 Federal Trade Commission and the Assistant Attor16 ney General in charge of the Antitrust Division of

17 the Department of Justice (hereinafter referred to in

18 this section as the ‘Assistant Attorney General’)

19 of—

20 ‘‘(i) the completed notification required

21 under subsection (a), or

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

23 the notification to the extent completed and a

24 statement of the reasons for such noncompli25 ance,
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1 from both persons, or, in the case of a tender offer,

2 the acquiring person; and

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

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

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

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

7 ‘‘(2) The Federal Trade Commission and the Assist8 ant Attorney General may, in individual cases, terminate

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

10 any person to proceed with any acquisition subject to this

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

12 Federal Register a notice that neither intends to take any

13 action within such period with respect to such acquisition.

14 ‘‘(3) As used in this section—

15 ‘‘(A) The term ‘voting securities’ means any se16 curities which at present or upon conversion entitle

17 the owner or holder thereof to vote for the election

18 of directors of the issuer or, with respect to unincor19 porated issuers, persons exercising similar functions.

20 ‘‘(B) The amount or percentage of voting secu21 rities or assets of a person which are acquired or

22 held by another person shall be determined by ag23 gregating the amount or percentage of such voting

24 securities or assets held or acquired by such other

25 person and each affiliate thereof.
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1 ‘‘(c) The following classes of transactions are exempt

2 from the requirements of this section—

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

4 in the ordinary course of business;

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

6 trust, or other obligations which are not voting secu7 rities;

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

9 issuer at least 50 per centum of the voting securities

10 of which are owned by the acquiring person prior to

11 such acquisition;

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

13 a State or political subdivision thereof;

14 ‘‘(5) transactions specifically exempted from the

15 antitrust laws by Federal statute;

16 ‘‘(6) transactions specifically exempted from the

17 antitrust laws by Federal statute if approved by a

18 Federal agency, if copies of all information and doc19 umentary material filed with such agency are con20 temporaneously filed with the Federal Trade Com21 mission and the Assistant Attorney General;

22 ‘‘(7) transactions which require agency approval

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

24 (12 U.S.C. 1467a), section 18(c) of the Federal De25 posit Insurance Act (12 U.S.C. 1828(c)), or section
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1 3 of the Bank Holding Company Act of 1956 (12

2 U.S.C. 1842);

3 ‘‘(8) transactions which require agency approval

4 under section 4 of the Bank Holding Company Act

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

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

7 information and documentary material filed with any

8 such agency are contemporaneously filed with the

9 Federal Trade Commission and the Assistant Attor10 ney General at least 30 days prior to consummation

11 of the proposed transaction;

12 ‘‘(9) acquisitions, solely for the purpose of in13 vestment, of voting securities, if, as a result of such

14 acquisition, the securities acquired or held do not ex15 ceed 10 per centum of the outstanding voting securi16 ties of the issuer;

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

18 result of such acquisition, the voting securities ac19 quired do not increase, directly or indirectly, the ac20 quiring person’s per centum share of outstanding

21 voting securities of the issuer;

22 ‘‘(11) acquisitions, solely for the purpose of in23 vestment, by any bank, banking association, trust

24 company, investment company, or insurance com25 pany, of (A) voting securities pursuant to a plan of
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1 reorganization or dissolution; or (B) assets in the or2 dinary course of its business; and

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

4 transactions, as may be exempted under subsection

5 (d)(2)(B).

6 ‘‘(d) The Federal Trade Commission, with the con7 currence of the Assistant Attorney General and by rule

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

9 Code, consistent with the purposes of this section—

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

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

12 such documentary material and information relevant

13 to a proposed acquisition as is necessary and appro14 priate to enable the Federal Trade Commission and

15 the Assistant Attorney General to determine whether

16 such acquisition may, if consummated, violate the

17 antitrust laws; and

18 ‘‘(2) may—

19 ‘‘(A) define the terms used in this section;

20 ‘‘(B) exempt, from the requirements of this

21 section, classes of persons, acquisitions, trans22 fers, or transactions which are not likely to vio23 late the antitrust laws; and
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1 ‘‘(C) prescribe such other rules as may be

2 necessary and appropriate to carry out the pur3 poses of this section.

4 ‘‘(e)(1) The Federal Trade Commission or the Assist5 ant Attorney General may, prior to the expiration of the

6 30-day waiting period (or in the case of a cash tender

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

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

9 documentary material relevant to the proposed acquisition,

10 from a person required to file notification with respect to

11 such acquisition under subsection (a) prior to the expira12 tion of the waiting period specified in subsection (b)(1),

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

14 of such person.

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

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

17 30-day waiting period (or in the case of a cash tender

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

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

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

21 date on which the Federal Trade Commission or the As22 sistant Attorney General, as the case may be, receives

23 from any person to whom a request is made under para24 graph (1), or in the case of tender offers, the acquiring

25 person, (A) all the information and documentary material
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1 required to be submitted pursuant to such a request, or

2 (B) if such request is not fully complied with, the informa3 tion and documentary material submitted and a statement

4 of the reasons for such noncompliance. Such additional pe5 riod may be further extended only by the United States

6 district court, upon an application by the Federal Trade

7 Commission or the Assistant Attorney General pursuant

8 to subsection (g)(2).

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

10 by the Federal Trade Commission, alleging that a pro11 posed acquisition violates section 7 of this Act or section

12 5 of the Federal Trade Commission Act, or an action is

13 filed by the United States, alleging that a proposed acqui14 sition violates such section 7 or section 1 or 2 of the Sher15 man Act, and the Federal Trade Commission or the As16 sistant Attorney General (1) files a motion for a prelimi17 nary injunction against consummation of such acquisition

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

19 court for the judicial district within which the respondent

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

21 brought, that it or he believes that the public interest re22 quires relief pendente lite pursuant to this subsection,

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

24 chief judge of such district court shall immediately notify

25 the chief judge of the United States court of appeals for
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1 the circuit in which such district court is located, who shall

2 designate a United States district judge to whom such ac3 tion shall be assigned for all purposes.

4 ‘‘(g)(1) Any person, or any officer, director, or part5 ner thereof, who fails to comply with any provision of this

6 section shall be liable to the United States for a civil pen7 alty of not more than $10,000 for each day during which

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

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

10 States.

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

12 agent, or employee thereof, fails substantially to comply

13 with the notification requirement under subsection (a) or

14 any request for the submission of additional information

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

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

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

18 States district court—

19 ‘‘(A) may order compliance;

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

21 subsection (b)(1) and as may have been extended

22 under subsection (e)(2) until there has been sub23 stantial compliance, except that, in the case of a ten24 der offer, the court may not extend such waiting pe25 riod on the basis of a failure, by the person whose
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1 stock is sought to be acquired, to comply substan2 tially with such notification requirement or any such

3 request; and

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

5 the court in its discretion determines necessary or

6 appropriate,

7 upon application of the Federal Trade Commission or the

8 Assistant Attorney General.

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

10 with the Assistant Attorney General or the Federal Trade

11 Commission pursuant to this section shall be exempt from

12 disclosure under section 552 of title 5, United States

13 Code, and no such information or documentary material

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

15 administrative or judicial action or proceeding. Nothing in

16 this section is intended to prevent disclosure to either body

17 of Congress or to any duly authorized committee or sub18 committee of Congress.

19 ‘‘(i)(1) Any action taken by the Federal Trade Com20 mission or the Assistant Attorney General or any failure

21 of the Federal Trade Commission or the Assistant Attor22 ney General to take any action under this section shall

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

24 acquisition at any time under any other section of this

25 Act or any other provision of law.
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1 ‘‘(2) Nothing contained in this section shall limit the

2 authority of the Assistant Attorney General or the Federal

3 Trade Commission to secure at any time from any person

4 documentary material, oral testimony, or other informa5 tion under the Antitrust Civil Process Act, the Federal

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

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

8 Federal Trade Commission, with the concurrence of the

9 Assistant Attorney General, shall annually report to Con10 gress on the operation of this section. Such report shall

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

12 effects, purpose, and need for any rules promulgated pur13 suant thereto, and any recommendations for revisions of

14 this section.

15 ‘‘(k)(1) The consideration by the Federal Commu16 nications Commission of any application for a transfer of

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

18 associated with an acquisition subject to this section shall

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

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

21 paragraph (1), the Federal Communications Commission

22 may submit to the party or parties covered by the applica23 tion a request for any documents and information nec24 essary for consideration of the transfer of license, or ac-
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1 quisition and operation of lines, addressed in the applica2 tion.

3 ‘‘(B) The Federal Communications Commission shall

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

5 later than 30 days after receipt of the application in ques6 tion.

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

8 Communications Commission under paragraph (2) shall

9 submit to the Federal Communications Commission the

10 documents and information identified in the request.

11 ‘‘(B) At the completion of the submission to the Fed12 eral Communications Commission of documents and infor13 mation pursuant to a request under subparagraph (A), the

14 party submitting such documents and information shall

15 certify to the Federal Communications Commission wheth16 er or not such party has complied substantially with the

17 request.

18 ‘‘(4) Whenever consideration of an application re19 ferred to in paragraph (1) includes one or more requests

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

21 Federal Communications Commission shall complete the

22 consideration of the application not later than 180 days

23 after the date on which all parties covered by such re24 quests have certified to the Federal Communications Com-
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1 mission under paragraph (3)(B) that such parties have

2 complied substantially with such requests.

3 ‘‘(5)(A) In any case in which the Federal Commu4 nications Commission does not request under paragraph

5 (2) any documents and information for the consideration

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

7 Communications Commission shall approve or deny the

8 transfer of license, or the acquisition and operation of

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

10 after the date of the submittal of the application to the

11 Federal Communications Commission.

12 ‘‘(B) In any case in which the Federal Communica13 tions Commission requests under paragraph (2) docu14 ments and information for the consideration of an applica15 tion referred to in paragraph (1), the Federal Communica16 tions Commission shall approve or deny the transfer of

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

18 by the application on the date of the completion of consid19 eration of the application under paragraph (4).

20 ‘‘(C) If the Federal Communications Commission

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

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

23 the date set forth in subparagraph (A) or (B), whichever

24 applies, the application shall be deemed approved by the

25 Federal Communications Commission as of such date. Ap-
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1 proval under this subparagraph shall be without condi2 tions.

3 ‘‘(6)(A) Any party seeking to challenge the reason4 ableness of a request of the Federal Communications

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

6 the United States District Court of the District of Colum7 bia seeking a declaratory judgment or injunctive relief

8 with respect to that challenge.

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

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

11 (2), the Federal Communications Commission shall bring

12 an action in the United States District Court of the Dis13 trict of Columbia seeking a declaratory judgment or in14 junctive relief with respect to that challenge.

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

16 may not be taken into account in determining the passage

17 of time under a deadline under this subsection.

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

19 to limit or modify—

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

21 Communications Commission under the Communica22 tions Act of 1934 (47 U.S.C. 151 et seq.) in consid23 ering or approving transfers of licenses, or the ac24 quisition and operation of lines, covered by an appli25 cation referred to in paragraph (1); or
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1 ‘‘(2) the authority of the Federal Communica2 tions Commission under that Act to impose condi3 tions upon the transfer of licenses, or the acquisition

4 and operation of lines, pursuant to such consider5 ation or approval.

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

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

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

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

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

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

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

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

14 and shall apply with respect to applications referred to in

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

16 Communications Commission on or after that date.

Æ