FTC Chairwoman Ramirez Testifies Before Congress on Legislation That Would Alter the Agency’s Role in Adjudicating Merger Cases

In testimony presented to a subcommittee of the Senate Judiciary Committee the Federal Trade Commission described its work to promote competition, and its concerns about proposed federal legislation would eliminate the Commission’s role in adjudicating some merger cases.

Testifying on behalf of the FTC before the Subcommittee on Antitrust, Competition Policy and Consumer Rights, Chairwoman Edith Ramirez described the proposed legislation – known as the Standard Merger and Acquisition Reviews Through Equal Rules Act, or SMARTER Act – as an unnecessary step that would remove a key tool the Commission has used successfully for many decades to promote competition and advance consumer welfare.

“The current system has worked well for over one hundred years, and all indications are that it will continue to do so to the benefit of competition and consumers,” the testimony states.

Describing the Commission’s creation by Congress in 1914 as an independent, bipartisan agency, Chairwoman Ramirez noted its ability to consider and decide cases as an expert tribunal, subject to review by a federal court of appeals.

Over the last century, the FTC’s administrative process has advanced consumers’ interests, proving particularly valuable in complex cases, according to the testimony. In these cases, the Commission has used the combination of its research and law enforcement authority to develop a coordinated, well-considered approach to challenging anticompetitive conduct.

As an example, the testimony cites the FTC’s use of administrative process to revamp the agency’s approach to examining hospital mergers. That effort, which began with a retrospective study undertaken in 2002, laid the groundwork for a series of successful FTC challenges against anticompetitive hospital mergers that threatened higher prices and lower quality care. The testimony also identified other situations where the Commission has applied its expertise through the administrative process, including pay-for-delay patent settlements between branded and generic pharmaceutical companies and the scope of the state action doctrine.

The testimony concludes that the proposed SMARTER Act legislation could undermine the beneficial role the Commission plays in merger enforcement, and cites several reasons why the legislation is unnecessary, including because there is no evidence of a difference in outcomes between merger cases handled by the FTC and those handled by the Department of Justice.

The Commission vote approving the testimony and its inclusion in the formal record was 3-1, with Commissioner Ohlhausen voting no.

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