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House Antitrust Subcommittee chairs Reps. Thomas Massie and Lou Correa assembled a staff-only briefing to inform members about new merger guidelines finalized last year.
The Biden administration’s aggressive set of antitrust enforcers have created powerful enemies: in big business, in media, in academia, and in Washington. For the most part, the main antagonists of the Federal Trade Commission and the Department of Justice’s Antitrust Division have been Republicans, though there are a few Khanservatives. But now, pro-corporate Democrats are getting in on the act, targeting an obscure but critical policy designed to give enforcers the information they need to judge proposed corporate mergers.
On Monday afternoon, House Antitrust Subcommittee chairs Rep. Thomas Massie (R-KY) and Rep. Lou Correa (D-CA) assembled a staff-only briefing to inform members about the new merger guidelines, finalized by FTC and DOJ last year, as well as a proposed rule still in the works that would modify implementation of the Hart-Scott-Rodino Act. Though lesser-known, the new HSR rule would essentially require businesses filing for a merger to answer a set of detailed questions informing antitrust authorities about the nature of the deal, the acquisition target, and the rationale for the move. This gives enforcers the ability to quickly assess the legality of mergers, rather than spending time and resources trying to figure out what the merger would do.
The panel, moderated by staffers from both Correa and Massie’s offices, was bipartisan in its conclusions. According to individuals in the room, panelists offered industry talking points intended to scare members about the impacts of the new rules on business activity. They fear-mongered about stronger antitrust enforcement spurring job losses and reducing innovation.
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While most of the public doesn’t know about the HSR rule, business groups and corporate lawyers have loudly decried it and have been working to undermine it since it was announced. They see it as an unnecessary burden on business conduct. In particular, private equity despises a new requirement that filers have to disclose all their acquisitions in the past five years. PE often rolls up specific industries in a series of acquisitions that are too small to have to disclose under the HSR threshold, so this rule would make them more exposed to regulators.
Based on timing and details about the briefing provided to the Prospect, it appears that the meeting was intended to thwart the antitrust efforts, at the behest of regulators’ corporate adversaries. The presence of both Massie and Correa is intended to signal that both parties have concerns about antitrust enforcers’ approach, particularly on the HSR proposed rule, sources explained. And the effort seeks to indoctrinate staff into that mindset, with an eye toward a future bipartisan letter of opposition.
The lead panelist was Maureen Ohlhausen, former commissioner and acting chair of the FTC during the Trump administration, who now works for a law firm, Wilson Sonsini Goodrich & Rosati, that represents Google. Ohlhausen has personally represented Amazon in antitrust investigations and has consulted for Facebook since leaving the FTC. During her time as commissioner, she was a defender of the consumer welfare model and stymied efforts to increase antitrust scrutiny into Big Tech and other firms.
She was joined by Squire Servance, who currently works in biotech and used to be a general counsel for Baxter, the pharmaceutical manufacturer that has a virtual monopoly over IV bags. Servance has actually appeared on congressional panels in the past that favored more anti-monopoly enforcement, as an entrepreneurial voice. But though he understands competitive pressure in the private sector, he’s not an antitrust expert. Nor was the third panelist, who also comes from the private sector: Drew Schiller, CEO of electronic health records company Validic.
According to staffers in attendance, the panelists warned about future workforce implications and limits to innovation that these rules could bring. The implication was that by putting resources toward their legal teams to file onerous paperwork, companies couldn’t make other investments in their workforce or in growth. Along with being annoying to companies, the panelists even claimed that the Federal Trade Commission and DOJ Antitrust Division were not properly staffed to review all the new documents they were demanding of the private sector.
Staffers noted to the Prospect that such an argument could equally be made as a rationale for giving antitrust regulators more resources to actually carry out their basic duties and obligations.
Correa ascended to become ranking Democrat on the Antitrust Subcommittee after Rep. David Cicilline (D-RI) resigned last year. Massie took the top slot after it was denied to Rep. Ken Buck (R-CO), who recently left Congress. Both Cicilline and Buck were strong anti-monopoly reformers; neither Correa or Massie carry on the tradition.
A former investment banker and real estate broker who was endorsed by the U.S. Chamber of Commerce in 2022, Correa represents the heavily Latino community of Santa Ana, as well as Anaheim, home of the Disneyland theme park. The district is 65 percent Latino. But Correa really is a representative of the California delegation, which has a significant role on the Antitrust Subcommittee with four Democratic seats. The delegation, led by senior Democrat and Silicon Valley Rep. Zoe Lofgren, is strongly pro–Big Tech, and opposed to stronger antitrust enforcement more generally. Not only did Correa oppose the tech antitrust bills in the last Congress, he voted against increasing merger filing fees and devoting more resources to the FTC and DOJ, a bill that eventually passed Congress.
There is no timetable for finalizing the HSR rule, but regulators are racing against the clock to get all major rules completed before a deadline that would make them eligible for reversal under the Congressional Review Act (CRA) in the next Congress, when Republicans could control both chambers and the presidency. That deadline is sometime in late May, depending on the congressional calendar.
Massie and Correa appeared hopeful that the staff-only briefing could stir up enough opposition to the rule to force hesitation at FTC and DOJ and push them past the CRA deadline for finalizing it. Unfortunately for them, the briefing was poorly attended.
While Congress plays defense for their corporate benefactors, both FTC chair Lina Khan and assistant attorney general for antitrust Jonathan Kanter spoke Monday at the Enforcers Summit, a gathering for competition enforcement officials, listing their recent actions and court victories tackling issues from housing to health care and food costs. The contrast between the two governing bodies and what they’re trying to accomplish could not be starker.
