Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 742) to amend the Antitrust Modernization Commission Act of 2002, to extend the term of the Antitrust Modernization Commission and to…
Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 742) to amend the Antitrust Modernization Commission Act of 2002, to extend the term of the Antitrust Modernization Commission and to make a technical correction.
Mr. Speaker, I yield myself as much time as I may consume.
Mr. Speaker, I rise in support of this measure cosponsored with me by the distinguished ranking member of the Judiciary Committee, Mr. Lamar Smith, to extend the Antitrust Modernization Commission by 30 days so that it may have time to wrap up and finalize its report and shut down its operations.
This modernization commission dealing with antitrust has been in existence since 2002 and was created with the purpose of examining whether the need exists to modernize the antitrust laws. It began meeting in 2004 and for the past 3 years has been studying many aspects of antitrust law, including how these laws operate in a modern, information-driven economy.
Also, they were charged with examining the intersection between antitrust law and intellectual property law; about immunities and exemptions that are enjoyed under our current antitrust law; the relationship between the Federal and State antitrust law enforcement; the application of antitrust laws in regulated industries; and the merger review process. I look forward to reviewing the commission's final report, which is due in April of this year.
I anticipate that the Judiciary Committee will take a close look at the recommendations contained in the report and will continue to work with the commissioners even after the report is completed.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I continue to yield myself as much time as I may consume.
The reason we have this commission is because there are acknowledged to be some serious considerations, some problems that we need to examine in the area of antitrust law.
The antitrust laws were derived from the Sherman Act of over a century ago, and they are very important, and they have helped us in terms of developing an economy that is in some respects the envy of the entire planet.
But there has been so much activity in the antitrust area that there has been some concern whether or not we have gone overboard. This past year is the fourth largest in the history for
mergers. Since the Oracle merger, which the Department of Justice sued on and lost, the Department of Justice itself hasn't gone to trial to block a proposed merger in memory.
And we are having larger and larger mergers and acquisitions. They are troubling: SBC and AT&T, a $16 billion-valued merger; AT&T and BellSouth, an $86 billion merger; Verizon and MCI, an $8.5 billion merger; Sprint and Nextel, $36 billion; Cingular and AT&T Wireless, about $47 billion worth of coming together; Kmart with Sears, Roebuck; Hewlett-Packard and Compaq; NBC Universal and NBC and Vivendi; Morgan Chase and Bank One; Procter & Gamble buys $54 billion in new acquisition; the Bank of America with FleetBoston. We have got something that needs far more consideration.
And I want to praise the former chairman of the Judiciary Committee, the gentleman from Wisconsin, who helped us create the special outside committee to aid us, and we look forward to their reports. And I join the gentleman from Texas in helping to develop the time needed for us to get the report.
We on the Judiciary Committee feel this is a hugely important subject. And we want to particularly praise the vice chairman of the commission, Attorney Jon Yarowsky, who himself was a former member of the House Judiciary staff for a considerable number of years.
Mr. Speaker, the bill we are considering today is a modest one, but I want to emphasize that the issue it relates to is of utmost importance.
For over a century, the antitrust laws have provided the ground rules for fair competition. They are our economic bill of rights. Antitrust principles are necessary to preserve competition and to prevent monopolies from stifling innovation. Competition produces better products, lower prices, and wider choices--all to the benefit of consumers.
The cornerstone premise of our antitrust laws is essentially a conservative notion: that free and unfettered competition will produce the best results for consumers. To the extent that anticompetitive conduct or conditions have hindered this healthy process, the antitrust laws are there to arrest those violations and remedy the competitive harms.
In the Sherman Act, we prohibit contracts or conspiracies that restrain trade, and exclusionary or predatory conduct that sabotages the efforts of rivals. For egregious violations, there are high fines and prison terms. There are also treble damages for victims.
And we have supplemented those protections in the Clayton Act, by giving the antitrust enforcement agencies the power to challenge anticompetitive mergers in their incipiency, to prevent their harmful effects from ever taking place.
The competitive landscape in the United States has been undergoing dramatic change in recent years. Technological and market innovation has come at us at breakneck speed. We have witnessed a wave of consolidation in some of our key industries. According to Thomson Financial, this past year was the fourth largest in history for mergers and acquisitions.
At the same time, we have also seen familiar and novel forms of exclusionary conduct that interferes with the enterprising efforts of competitive businesses to cultivate and serve customers.
The telecommunications industry is one key industry that has experienced significant consolidation. This year, AT&T acquired BellSouth Corp.--after just last year acquiring SBC--in a deal that creates a telecom behemoth with $117 billion in revenue.
This has particular consequences in the area of net neutrality. For people who innovate in the area of technology, and for those who enjoy those innovations, this free and open access to the Internet has been a boon. New applications are being developed every hour and are able to be instantly distributed on the Web. These new applications--coupled with new content, such as broadband television--have the potential to offer a new array of choices to consumers.
Unfortunately, some telecommunications companies have a different vision for the Internet. They have floated the idea of charging websites for access. Those who pay will get faster and more reliable delivery of their content to web surfers. Those who do not will see the delivery of their content degraded.
The antitrust laws can help ensure that network neutrality, the bedrock of the growth of the Internet, remains in place.
In the media, the FCC's relaxed cap on ownership in national and local broadcast markets, and relaxed cross-ownership restrictions between broadcasters and newspapers, has enabled concentrated wealthy interests to control a large portion of the media in some areas. Consumers are thereby often deprived of a diversity of viewpoints and voices in news and entertainment.
Imagine a world where you wake up, read the local newspaper, turn on the television to watch the news, drive to work and listen to the radio, pass a few billboards containing advertisements, return home later at night and turn on your cable to watch a movie or some sports-- only to find that each of those media outlets is owned by the same company. It may sound farfetched, but it is not. This is the world we are evolving into. In this world, instead of ten voices with ten different viewpoints, there may only be three. The antitrust laws may be our only hope of preventing this.
The story is even bleaker for independent broadcasters, and for minority participation in the media industry. As of 2001, minorities owned only 3.8 percent of the full-power commercial radio and television stations in the nation, and only 1.9 percent of TV stations. If ownership of the media is controlled by four or five conglomerates, minority-owned stations and programming that appeals to minority interests could become a thing of the past.
In the home appliance industry, Whirlpool Corp., the largest maker of home appliances, merged with Maytag Inc., the third largest. The deal cost $1.8 billion and produced a company that manufactures much of Sears' Kenmore line as well as the brands Jenn Air, KitchenAid, Amana, and Magic Chef, and controls as much as 70 percent of the U.S. market for large home appliances such as washers and dryers.
In the oil industry, we've seen massive increases in gasoline prices. After Hurricane Katrina, the Washington Post reported price increases of as much as 88 cents per gallon in a single day. Some stations in Georgia were reported to be charging as much as $6 a gallon. In Illinois, prices reportedly shot up 50 cents per gallon overnight, and the state attorney general received more than 500 reports of price gouging. At first blush, it would seem that these increases go far beyond anything justified or relating to the market disruptions caused by Hurricane Katrina. The FTC's report on this phenomenon was less than satisfactory.
We have also seen significant consolidation in the health insurance industry. In recent years, Aetna agreed to acquire Prudential Health Care, the fifth largest for-profit health care company, at the same time it was in the midst of completing its purchase of New York Life. In 1996 Aetna was also permitted to acquire U.S. Health Care. As a result of these acquisitions, Aetna became the largest health care provider in the nation.
Recent years have seen more than a dozen health insurance competitors eliminated through mergers and acquisitions. A study of market concentration by the Robert Wood Johnson Foundation found that ``both the group and individual [health insurance] markets are heavily dominated by a relatively few large insurers.'' Business consumers of health care have become increasingly alarmed by this concentration, with Charles Blankenstein, a health expert at William Mercer Consulting, warning that employers are ``bear[ing] the cost of these acquisitions'' as ``choice in the marketplace is rapidly diminishing.''
In the airline industry, lagging profits have led to a marked trend toward further consolidation. Because air travel is a vital portion of the nation's transportation infrastructure, we can't simply turn a blind eye and chalk this up to economic bad times. Often these mergers have the potential to reduce the flight options available to consumers, and ultimately may lead to higher ticket prices.
In this environment, vigorous antitrust enforcement is particularly important. We need to be able to rely on the federal antitrust enforcement agencies--the Antitrust Division in the Department of Justice, and the Federal Trade Commission. We need to be able to have confidence that they are doing everything they should to protect competition in our economy and the benefits it brings to us all.
That is why active oversight of antitrust must and will be an important part of the work of the Judiciary Committee. We will ask these agencies about merger enforcement, and why they do not seem to be challenging an mergers. We will ask them about their policy on civil non-merger enforcement against monopolization and other anticompetitive business arrangements. And we will ask them about their commitment to prosecute criminal antitrust violations.
The Committee will also create a task force, as we did in the last Congress, so that we can more closely examine competitive developments in important industries, including telecommunications, pharmaceuticals, and insurance, as well as topics such as interoperability of new technologies, credit card interchange fees, and transparency in standard setting.
As we prepare for the work ahead in this vital area, we will look forward to reading the Antitrust Modernization Commission's final report, and reviewing its assessment of the state
of health of the laws we rely upon to preserve our economic liberty.
I thank the Antitrust Modernization Commission for all its work over the past few years. I urge my colleagues to support this measure.
Mr. Speaker, I yield back the balance of my time.
