The Federal Trade Commission (“FTC” or “Commission”) and the Antitrust Division of the Department of Justice (“DOJ”) share responsibility for merger enforcement under section 7 of the Clayton Act. However, differences in the enforcement process have created a perception that the playing field may tilt in favor of the FTC.
Among the differences, the DOJ is required to remain in federal district court for all stages of an enforcement proceeding, while the FTC moves on a dual track by filing a complaint before the Commission and proceeding to an administrative hearing (known as a “Part III” proceeding) after it obtains a preliminary injunction in federal district court. In addition, while the DOJ is held to all of the traditional elements required for a preliminary injunction, the FTC is not required to demonstrate a “substantial threat of irreparable harm” in order to obtain injunctive relief, but rather need only satisfy the somewhat lesser burden of showing that injunctive relief would be in the “public interest.”
The Standard Merger and Acquisition Reviews Through Equal Rules Act (also known as the “SMARTER” Act) is designed to eliminate these differences and harmonize merger enforcement among the federal enforcement agencies. This legislation, supported by the American Hospital Association and the U.S. Chamber of Commerce, has once again passed through the House of Representatives. The bill now moves to the Senate, where its fate is less clear.