Within the House's package of anti-monopoly proposals, the Merger Filing Fee Modernization Act of 2021 is the odd one out. It has a longer legislative history, stronger bipartisan support, is relatively incremental, and is not explicitly targeted at big tech. Despite some nay-saying from the peanut gallery, as well as a more fraught political environment following Lina Khan’s appointment to FTC chair, it’s a good proposal that should be implemented.
The proposal can be traced back to the Senate with the introduction of S. 1937 in 2019, sponsored by Sens. Chuck Grassley (R-IA) and Amy Klobuchar (D-MN). This year, it was reintroduced as S. 228 and favorably reported out of the Senate Judiciary Committee. It was subsequently attached to the Endless Frontier Act (S. 1260), which passed in the Senate with a 68-32 vote earlier this month.
The bill amends the section of the Clayton Act governing premerger notification and filing fees (15 U.S.C. § 18a), which originated with the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The changes would have the effect of reducing fees for smaller transactions, and increasing them for larger ones, as well as indexing future fee increases to inflation.
Leveraging new offsetting revenues from HSR fees, the bill also authorizes additional appropriations for two primary competition enforcement agencies: the Department of Justice’s Antitrust Division, and the Federal Trade Commission. This is likely designed to be cost neutral to attract Republican support.
This sets FY 2022 authorized appropriations for the DOJ Antitrust Division at $252 million. This would be a $50.8 million (or 25%) increase over its FY 2022 budget request of $201.2 million, or a $67.5 (37%) million increase over its $184.5 million enacted budget. And it sets FY 2022 authorized appropriations for the FTC at $418 million. This would be a $28.2 million (7%) increase over its FY 2022 budget request of $389.8 million, or a $67 million (19%) increase over its FY 2021 enacted budget.
It’s not clear to me why the DOJ is prioritized over the FTC for resource share, but this may be a selling point for some now. Additionally, because the funding increases were likely targeted to be cost neutral, these levels may not be sufficient to address capacity needs. Particularly if other bills are enacted that put new burdens on these agencies.
It will also be interesting to watch the markups coming up in the next few weeks to see if appropriators are inclined to take action on their own. FTC funding falls under the subcommittee on Financial Services and General Government, and DOJ funding falls under the subcommittee on Commerce, Justice, Science, and Related Agencies.
As we've previously argued, allocating additional resources for these agencies is both necessary and justified, since they face increased workloads, higher costs, complex technical challenges, and greater expectations from the American people. Of course, resources alone are not sufficient. For instance, both agencies have a revolving door incentive problem, which may necessitate stronger post-employment restrictions and increased salaries for senior officers (as found in some specialized regulatory agencies like SEC). They also face a range of other institutional challenges, including FTC’s Section 13(b) authority, lack of technical expertise, misaligned incentives, and other issues that may warrant a broader reauthorization and reform process.
Policy makers must also be careful not to inordinately go after mergers and acquisitions a political target of opportunity, as they play an important role in the innovation ecosystem, and may be instrumental to setting up future challengers to today's big incumbents.
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