Conferees Urged by AAI-led Coalition to Approve Increased Antitrust Budgets. 32 Organizations Send Letters to Senate and House Appropriations Conferees

Sep 16 1999
Testimony and Interventions

The Honorable Judd GreggChairmanSubcommittee on Commerce, Justice,

State, and the JudiciaryCommittee on AppropriationsUnited States SenateWashington, D.C. 20510

The Honorable Ernest F. HollingsRanking MemberSubcommittee on Commerce, Justice,

State, and the JudiciaryCommittee on AppropriationsUnited States SenateWashington, D.C. 20510

Dear Chairman Gregg and Senator Hollings:

The Conference Committee will be considering bills relating to the federal antitrust budget. We are pleased to transmit to you a joint statement of organizations endorsing a substantial increase in the funding for the enforcement of the antitrust laws.

On June 14, the Senate passed S. 1217, providing the Department of Justice Antitrust Division with $112,318,000 for FY 2000, an increase of nearly $14 million above current appropriations and slightly more than $2 million below the Presidential request. The House on July 22 passed H.R. 2670, providing the Division with $105,167,000, an increase of $6,900,000 over the current level, but $9,206,000 below the request.

The Federal Trade Commission received from the Senate bill $133,368,000, nearly $17 million above current funding levels and on target with the administration request. The House granted the FTC only $116,679,000, the same as this year and a decrease of $16,689,000 from the request.

In a "white paper" provided to you earlier in the year, the American Antitrust Institute reviewed the history of antitrust since 1970, concluding that it has become a matter of urgency to expand the resources available to the federal antitrust mission.

Among the reasons to support a substantial increase are the following:

  • In 1998 there were 4,728 reportable U.S. merger transactions-compared to 3,087 in 1996 and 1,529 in 1991. The total value of U.S. mergers completed in 1998 exceeded $1.2 trillion - in an economy with a gross domestic product of $8.4 trillion! The merger wave continues unabated.
  • Mergers, which must be dealt with under a statutory time frame, have taken over the workload of the antitrust agencies. Merger investigations increased from 36% of the Antitrust Division's caseload in 1970 to 76% in 1998, driving out much of the non-merger law enforcement.
  • Resources have not kept pace with the growing economy. Between 1977 and 1997, the total budgets of the FTC and the Antitrust Division decreased by 7% in constant dollars while the GNP grew by 112%. Mergers have increased by 550% since 1992.
  • Even with the White House budget, authorized workyears would have trailed the 1980 levels. The Antitrust Division would get an increase in authorized FTE's from 819 to 943, still below the 1980 level of 982. FTC workyears would increase from 900 to 1,042 (compared to 1,719 in 1980!).
  • Many antitrust challenges remain. Health care is not sufficiently competitive. Airlines monopolize hub terminals and other deregulated and deregulating industries are becoming more concentrated rather than more competitive. International cartels cost consumers dearly. Price fixing and bid rigging are a continual abuse of the system. New technologies are creating persistent monopolies that can control the global flow of information. Agricultural, meatpacking, and food retailing industries are unduly concentrated. And mergers are restructuring the economy without sufficient oversight.
  • A single antitrust case can save consumers millions of dollars. E.g., when the FTC stopped the Staples/Office Depot merger, economists calculated the savings at $200 million per year (approximately the combined federal antitrust budget last year).
  • Antitrust is a great public bargain. Because funding of the agencies will be 100% paid for by premerger filing fees paid by merging companies, money for antitrust does not displace expenditures for other public programs. The agencies also generate millions of dollars for the treasury in the form of criminal and civil penalties. The Justice Department has collected over $1 billion in criminal fines in 1999, largely in connection with international cartel activity.

Antitrust has served the American public well for over a hundred years. The need for antitrust has not declined. We still need to work at maintaining competitive markets, perhaps more than ever as the economy continues to change. Yet today's federal antitrust mission is substantially underfunded and understaffed. It is critically important that the Conference Committee adopt the higher figures already approved by the Senate.

Sincerely,

Albert A. FoerPresidentAmerican Antitrust Institute

Cc: Senators Stevens, Domenici, McConnell, Hutchison, Campbell, Cochran, Inouye, Lautenberg, Mikulski and Byrd

Enclosure: Statement of Organizations Endorsing Increased Antitrust Funding

STATEMENT

The undersigned strongly support the federal antitrust mission. We recognize the tremendous challenges that face the Department of Justice Antitrust Division and the Federal Trade Commission as they strive to maintain competition as the fundamental engine of our market economy. We call upon Congress to appropriate and authorize a substantial increase in the funding available to the antitrust agencies. We endorse the President's proposed increases as a reasonable and necessary step in the right direction and we pledge to work to assure that the American people understand that a robust antitrust policy is a bargain that repays the public many times over.

Air Carrier Association of America American Antitrust Institute American Booksellers Association American Public Power Association American Society of Travel Agents Association for Local Telecommunications Services Burlington Coat Factory Warehouse Corp. Business Travel Coalition Cattlemen's Legal Fund Center for Health and Environmental Justice Computer and Communications Industry Association Consumer Federation of America Earth Island Institute Essential Action Friends of the Earth Greenpeace Grey Panthers Independent Bakers Association Institute for Local Self Reliance Kansas Cattlemen's Association National Catholic Rural Life Conference National Consumers League National Farmers Organization National Farmers Union National Hispanic Association on Corporate Responsibility National Rural Electric Cooperatives Association Organization for Competitive Markets Project on Governmental Oversight Public Citizen Sierra Club Utility Consumers Action Network U.S. PIRG

As of September 16, 1999