H.R. 4321, Minge Antitrust Enforcement Improvement Act of 2000, Endorsed by AAI

May 12 2000
Testimony and Interventions

Hon. David MingeUnited States House of RepresentativesWashington, DC 20515

Dear Congressman Minge:

The American Antitrust Institute is an independent education, research, and advocacy organization that supports a strong role for antitrust in our national economic life. In market after market, we see rising concentration and patterns of conduct that suggest that competition is not working for consumers as well as it should. While our federal antitrust agencies are hard-working and well-intentioned, Congress has not provided them the resources that are needed. In addition to dramatically increasing the appropriations for the Justice Department and the Federal Trade Commission, there is much that Congress can do to enhance the role of competition in our economy generally. One sector of the economy that is particularly troublesome in terms of competition is agriculture. There are things that Congress can do here, as well. In our view, it is time to stop and catch our breath, to think through exactly what values we as a nation wish to preserve in regard to food and agriculture, and to ponder the most effective ways to achieve our goals. We believe that your bill, H.R. 4321, would be an important step in facing up to the challenge of maintaining a competitive economy.

H.R. 4321 operates in four areas. First, it returns to consumers and other indirect purchasers the right to recover damages for injuries caused by antitrust violations. This right was taken away by the Supreme Court in its Illinois Brick ruling. Seventeen states which are active in the antitrust field have repealed Illinois Brick. Their consumers can, with varying limitations, bring state actions to recover damages. Other states are likely to follow suit as they come to realize that in such major price fixing scandals as the international vitamin cartel cases, where consumers were substantially overcharged, their consumers will be without remedy. As more states legislate their own repeals, it will be increasingly obvious that a single, federal solution is most appropriate. We support a federal repeal of Illinois Brick.

Second, H.R. 4321 proposes a new fee structure for premerger notifications, with the fee rising along with the size of the transaction. This makes sense and we endorse the concept.

H.R. 4321 also increases the penalty for criminal violations of the antitrust laws. The Justice Department has made public a videotape of conspiratorial activities revealed in the Lysine cartel case, in which the participants are literally laughing at the antitrust laws. While firms engaged in massive international cartels have in the past year paid very large fines and a few executives have been imprisoned, we believe that an increase in the statutory provisions will help deter criminal behavior.

Finally, H.R. 4321 addresses the agricultural and food sector. We support the idea of a study commission, which will bring together a blue ribbon group to focus on the goals and values that we want in this critically important part of our economy, and to make recommendations as to the role that antitrust should play. We have no comment on the proposals relating to the Packers and Stockyards Act, which we have not studied.

We would be pleased to offer more detailed comments at a later time.

Sincerely,Albert A. FoerPresident