Token Antitrust Reform Package Will Cost Pretty Penny

Congress has a lot it needs to focus on this week, having procrastinated to the point of being less than a few days away from a government shutdown. However, rather than Congress’ agenda being filled with deliberations on how to keep the government running, they managed to find time in their schedule to consider a handful of antitrust bills including the Merger Filing Fee Modernization Act and the State Antitrust Enforcement Venue Act. This legislative package would funnel money into the coffers of the Department of Justice (DOJ) and Federal Trade Commission (FTC), as well as give the government a leg up in judicial proceedings.

According to estimates, this bill would raise the budget allocations for the FTC and the DOJ’s Antitrust Division to $418 million and $252 million respectively. These figures represent significant increases over the current baseline. At a time when both government spending and inflation are running rampant, spending increases like this make very little sense and will ultimately do more harm than good.

Mergers and acquisitions are key means through which many businesses grow and innovate, not to mention compete. Much of America is still dealing with residual impacts from the COVID-19 pandemic and the lingering economic aftershocks. Mergers will serve as an effective solution for a number of businesses and encouragement for new investment. However, this bill would increase the exorbitant fees already paid by businesses just to have their merger considered by a government panel. This legislation would increase fees as high as $2.3 million in some cases – and that is before the merger is even approved. It will serve as a deterrent to crucial economic activity.

Another drawback of this legislation is that it increases the unfair advantage government has in these considerations. The legislative package gives activist Attorneys General the ability to select their venues to hear antitrust cases. This upends our understanding of the rule of law, shifting the burden away from government by effectively granting it home field advantage. Proponents spin this as “preventing monopolists from moving cases to friendly courts.” In actuality, however, this erects another obstacle to the approval of consumer-friendly, innovative mergers by giving further deference to regulators.

Businesses are already put on the back foot, having to pay high fees, not to mention legal costs, just to have their business decisions scrutinized, with no promise of approval. It’s a small wonder anything gets done in this economy.

While this bill seems a small deal given that it’s being ushered through under the radar with a looming government shutdown, it will have destructive effects on the economic health of the nation and set down a dangerous path in terms of the rule of law. It will increase spending at a time where inflation is at record highs. It will stifle business innovation while many are struggling, and it will impose unnecessary costs where flexibility is needed. Make no mistake, this is a bad legislative push at an even worse time.