Merger Filing Fee Modernization Act of 2022
Floor Speech
BREAK IN TRANSCRIPT
Mr. NADLER. Mr. Speaker, pursuant to House Resolution 1396, I call up the bill (H.R. 3843) to promote antitrust enforcement and protect competition through adjusting premerger filing fees, and increasing antitrust enforcement resources, and ask for its immediate consideration in the House.
The Clerk read the title of the bill.
BREAK IN TRANSCRIPT
Mr. NADLER. 3843.
Mr. Speaker, H.R. 3843 is bicameral, bipartisan legislation that consists of three distinct titles, each of which would make modest, but important improvements to modernize our antitrust system and to help protect competition.
Title I of the bill updates the filing fees that merging parties pay to the Federal antitrust enforcers that review their transactions. These fees have not been updated in two decades, which has left these agencies in desperate need of more resources to complete their increasingly heavy workload.
This bill raises the fees that parties pay for large transactions and lowers the fee that parties pay for small- and medium-sized transactions, which ensures that larger deals pay their fair share.
Critically, this legislation raises revenue to support necessary antitrust enforcement while also saving taxpayers $1.4 billion over the next 5 years.
Title II of the bill requires merging parties to notify the antitrust agencies if they are subsidized by countries or entities that are strategic or economic threats to the United States.
This notification requirement gives the agencies immediate access to the information they need to assess the full competitive consequences of subsidized transactions and enables them to better protect U.S. economic interests when they review proposed mergers.
Title III of this legislation ensures that States do not have to waste precious time and taxpayer dollars when they litigate antitrust suits in Federal courts. It does this by exempting State enforcement of the Federal antitrust laws from the often time-consuming and costly multidistrict litigation process. Federal antitrust enforcement agencies are already exempt from this process, and the bill simply puts State antitrust enforcement on equal footing with the Federal Government.
Each element of this legislation enjoys bicameral, bipartisan support. Titles I and II have already passed the House as part of the America COMPETES Act, and title III passed the Senate by unanimous consent.
Together, they would help ensure that our antitrust agencies have the resources they need to protect competition, would provide important disclosures about foreign economic adversaries, and would strengthen State enforcement of our antitrust laws.
I thank Mr. Neguse for sponsoring this important package of bipartisan legislation. I also thank Mr. Cicilline and Mr. Buck, the chair and ranking member of the Antitrust Subcommittee, for their leadership on these bills and on competition issues generally.
I urge all Members to support this legislation, and I reserve the balance of my time.
BREAK IN TRANSCRIPT
Mr. NADLER. Lofgren).
BREAK IN TRANSCRIPT
Mr. NADLER. Madam Speaker, I must confess I am a little puzzled at some of the remarks of Mr. Johnson. He says the FTC sics the FBI on parents or whatever. The FTC has no jurisdiction over the FBI and has nothing to do with them. The FTC is part of--never mind.
Mr. Speaker, it is interesting to see that Mr. McClintock's argument is against all antitrust laws. Consumers make choices, so what do you need antitrust laws for is essentially what he is saying.
Companies buy other companies not just for good reasons. They buy other companies to reduce the competition, and thereby enable them to charge higher monopolistic prices. That is why we have antitrust laws.
Jackson Lee), a member of the Judiciary Committee.
Ms. JACKSON LEE. Mr. Speaker, I thank the chairman and sponsors of the bill for their hard work. Let me say, the reason is obvious why I rise in support of H.R. 3843, the Merger Filing Fee Modernization Act of 2022.
Does anybody know the word ``consumers''? Do I need to spell it out on the floor of the House?
Ultimately, mergers, in many instances, have a detrimental impact on consumers, either by way of cost or loss of services. Read the history books.
Does anybody know that in years past there were opportunities for many, many flights across America? The aviation industry has been changed by mergers. That is a prime example.
This particular legislation updates the filing fees that merging parties may pay to the Federal antitrust enforcers. It requires merging parties to disclose any subsidies from countries or entities that are strategic or economic threats to the United States.
The people of the United States are consumers, Mr. and Mrs. Jones walking and working every day to make ends meet.
As Democrats have done in the Inflation Reduction Act and the reduction in healthcare costs and insulin costs, we are bringing down fees. But there is something about justice that is involved in this, as well.
We strongly support this. And the National Association of Attorneys General and every single State attorney general wrote a letter urging Congress to pass the bill's amendments to the multidistrict litigation statute ``as soon as possible so that our citizens benefit from more efficient, effective, and timely adjudication of antitrust actions.''
Merging fees are to provide the extra resources that are needed, and the administration feels that to vigorously enforce the antitrust laws, the DOJ and the Federal Trade Commission need the resources to do their job.
And, again, who do we represent but the people of the United States?
Who are they? Consumers.
What happens when mergers come?
Lack of services, lack of opportunity, lack of a more fiscally responsible commercial scheme, if you will, so that they can get resources, goods, and services without having enormous expense.
Mr. Speaker, I ask my colleagues to support H.R. 3843 because this helps consumers, and it brings justice to this system. This is a bill that is long overdue, and I thank those who sponsored it.
BREAK IN TRANSCRIPT
Mr. NADLER. Schakowsky).
BREAK IN TRANSCRIPT
Mr. NADLER. Mr. Speaker, I agree with Mr. Issa. We should never have passed the Sherman Act to deal with those newfangled railroads.
BREAK IN TRANSCRIPT
Mr. NADLER. Mr. Speaker, we do know how the money is going to be spent. It is going to be spent on antitrust enforcement.
BREAK IN TRANSCRIPT
Mr. NADLER. Mr. Speaker, when I listen to Mr. Gohmert and Mr. Jordan, I am really amazed that every single Republican Senator voted for this legislation.
Mr. Speaker, may I inquire how much time each side has remaining.
BREAK IN TRANSCRIPT
Mr. NADLER. Madam Speaker, I yield the gentleman from Rhode Island an additional 30 seconds.
BREAK IN TRANSCRIPT
Mr. NADLER. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I find it amazing that the gentleman from Ohio would argue we shouldn't give appropriations to the Department of Justice. Congress votes appropriations for every department, and if you think the Department of Justice is not being run properly, well, there is a Presidential election coming up. That is the purpose of elections.
At the present time, the American people 2 years ago elected Joe Biden President and Kamala Harris Vice President, and the President appointed the Secretary of Justice and the chairman of the FTC, both of whom I think are doing an excellent job. But it is a matter of debate which can be decided in the next Presidential election.
To argue that we should starve agencies of the United States Government so that they cannot do the job for which Congress passed statutes mandating them to do the job is absurd.
All that the increase in fees does is update, because the last increase of fees was I don't know how many years ago, and there has been inflation. We need the enforcement against the large Big Tech companies because, as Mr. Jordan already earlier acknowledged, they represent a threat. I think he thinks they represent a different threat from the one I think they represent, but everybody agrees they represent a threat and that their power must be properly supervised by proper enforcement of the antitrust laws.
BREAK IN TRANSCRIPT
Mr. NADLER. Madam Speaker, I yield 2 minutes to the distinguished gentleman from Colorado (Mr. Neguse), who is a member of the committee.
BREAK IN TRANSCRIPT
Mr. NADLER. Madam Speaker, this bicameral and bipartisan legislation is supported by a broad coalition of labor, consumer, and public interest groups.
As the Biden-Harris administration noted in its Statement of Administration Policy on this bill, H.R. 3843 would advance its ``critical mission'' to ``combat the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony.''
Every single United States Senator--every Democrat, every Republican--agrees with this. It is only in this House that there are some people who, for unfathomable reasons, disagree.
Madam Speaker, this bill is squarely in the tradition of the Sherman Act, the Clayton Act, and the Celler-Kefauver Act, and it should be passed.
Madam Speaker, I urge all Members to support this important legislation, and I yield back the balance of my time.
Ms. JACKSON LEE, Madam Speaker, I rise in support of H.R. 3843, the ``Merger Filing Fee Modernization Act of 2021,'' a bill to ensure fair treatment of small- and medium-sized businesses that are engaged in a merger.
This bill enhances fairness by incentivizing mergers between small and medium-sized enterprises while simultaneously disincentivizing monopolization from larger corporations.
Small and medium-sized enterprises, also known as SMEs, are integral to the U.S. economy. According to the Office of the United States Trade Representative, over the past decade, SMEs have created approximately two-thirds of new private sector jobs, greatly expanding the job market and providing new financial opportunities for hardworking families and individuals.
However, current merger filing fees have impeded businesses that are looking to merge because steep fees may be unaffordable for these SMEs.
Meanwhile, large corporations benefit from disproportionately smaller merging fees that enable them to dominate marketplaces by absorbing smaller companies.'
This bill intends to modify and expand the schedule by establishing graduated merger filing fees and requiring that such fees are adjusted each year based on the Consumer Price Index.
To ensure a fair market for the public, the Merger Filing Fee Modernization Act of 2021 adjusts the fees made during the merger process based on the aggregate total amount of the merger, considering the adjusted price at the beginning of the fiscal year.
The Merger Filing Fee Modernization Act of 2021 intends to directly solve this issue by amending the aggregate total brackets utilized to determine the filing fee of the merger, where larger aggregate totals incur greater fees.
This legislation would amend the merger fees by decreasing them from $45,000 to $30,000 for the first bracket. The criteria to qualify for this bracket are also adjusted. The bracket qualification has been increased to include aggregate total amounts of up to $161,500,000 from the previous value of $100,000,000.
Similar adjustments are made to the next two brackets, decreasing the meger fee for companies in the second bracket from $125,000 to $100,000 and decreasing the fee of the third, and formerly highest, bracket from $280,000 to $250,000.
Finally, the bill will add a fourth, fifth, and sixth bracket for the largest companies which have aggregate total amounts that exceed $1,000,000,000, $2,000,000,000, and $5,000,000,000 respectively. In this way, larger mergers are less incentivized as they must pay a larger fee than before.
According to Texas Economic Development, the state of Texas is home to 3 million small businesses. Texas is home to diverse and numerous small businesses committed to technological discovery and economic stimulation, ranging from scientific development to agriculture and forestry.
Allowing SMEs to thrive without the extra pressures of merger fees is integral to safeguarding the economic freedoms these businesses need in order to grow and compete against large corporations who seek to dominate and monopolize the marketplace.
Overall, these changes accomplish two goals in promoting a fair marketplace for small- and medium-sized companies.
First, the adjusted merger fee has been decreased for smaller firms, and the qualifying aggregate total has been increased, which encourages mergers among medium-sized companies. By decreasing the fees required for mergers, medium-sized businesses will have more financial resources to reallocate towards developing their workforce, acquiring needed materials, and reinvesting.
Second, this bill hopes to discourage mergers between larger businesses by establishing larger brackets such that businesses whose aggregate total accounting for more than $1,000,000,000, $2,000,000,000, and $5,000,000,000 will not be grouped together. These businesses will be required to pay a larger fee, ideally discouraging monopoly formations.
Additionally, this bill seeks to provide oversight of foreign transactions that may potentially influence the U.S. market. Merging companies must disclose any subsidies received from foreign economic competitors.
The Merger Filing Fee Act of 2021 promotes mergers between medium- sized businesses by adjusting the fee for merging based on the 2022 fiscal year, while also disincentivizing larger-sized businesses from forming monopolies by creating higher brackets with greater fees.
A fair marketplace can be fostered through the implementation of this bill, encouraging small and medium-sized businesses to look for growth opportunities and mitigate extra pressures added by foreign economic imbalances.
Madam{ Speaker, I urge my fellow Congressmembers to support this bill dedicated to ensuring a fair marketplace for ambitious and innovative American companies by eliminating cost hurdles and establishing fairness in relation to large corporations.
BREAK IN TRANSCRIPT
Source