Plan to Ease Antitrust Regulations Unveiled
The Reagan Administration on Wednesday formally launched its campaign to get Congress to overhaul the nation’s antitrust laws, contending that the move is long overdue to help American businesses compete abroad.
However, the Administration’s formal unveiling of its legislative package on Capitol Hill met immediate resistance from congressional critics who contended, among other things, that the reforms could lead to unwarranted mergers with potentially harmful effects on consumers.
In unveiling the Reagan package, Atty. Gen. Edwin Meese III, Commerce Secretary Malcolm Baldrige and Budget Director James C. Miller III stressed that the proposals primarily codify antitrust policies that the Administration has applied consistently since 1981.
Sherman, Clayton Acts Old
“This is a modernization of the antitrust laws, not a repeal of the antitrust laws,” cautioned Miller, who helped shape the package while he was head of the Federal Trade Commission.
Meese added: “Many American industries now compete in global markets and cannot afford to be shackled by outmoded, unduly restrictive antitrust rules.” The Sherman and Clayton acts--venerable mainstays of current antitrust law--are 96 and 72 years old, he noted.
Baldrige, meanwhile, claimed authorship of the package’s two most far-reaching proposals. One would allow up to five years’ relaxation on antitrust strictures on mergers for industries injured by imports; the other would clarify the Clayton Act to declare that mergers are not permissible only if a market-controlling monopoly would result.
Limit Damages
Currently, the Clayton Act bars mergers if they might “tend to create a monopoly”--language so open to varying legal interpretation as to “chill pro-competitive mergers and leave them in the board room,” Baldrige said.
Another key feature of the proposal--primarily the brainchild of Meese’s antitrust chief, Assistant Atty. Gen. Douglas H. Ginsburg--would limit to actual damages the compensation that plaintiffs could win against competitors whose aggressive pricing or efficient production may have aided consumers but injured other businesses.
Treble damages, the current remedy, would be applied only to punish price-fixing conspiracies that raise consumer prices or under-compensate suppliers. Ginsburg said this proposal is designed to eliminate “a perversion of the original intent of the antitrust laws.”
Since last fall, the broad outlines of the package have been widely reported and discussed and opposition on Capitol Hill has already begun to form.
In particular, House Judiciary Committee Chairman Peter W. Rodino Jr. (D-N.J.) reportedly has rejected any easing of controls on mergers. And Sen. Howard M. Metzenbaum (D-Ohio) last month unveiled an antitrust bill of his own that is designed to tighten penalties, impose more regulatory guidelines and expand enforcement.
Baldrige on Wednesday somewhat airily dismissed opposition to the Administration’s program as unfounded on any solid reasoning. The main argument is simply that “big is bad, somehow,” he declared, saying he joins Ginsburg in believing that some mergers are “pro-competitive and pro-consumer.”
He added: “The other argument seems to be mostly reverence for the antitrust laws as they are, like the Holy Grail. They’ve stood us in good stead for a great number of years, and nobody’s denigrating them. But after 70 years, it’s time to modify them to keep up with the drastic changes in competitiveness around the world.”
Baldrige said he had discussed the main thrust of the Administration proposals with Rodino and had received assurances “that he would keep an open mind--and I believe him.”
Rodino, however, released a statement saying: “The relaxed antitrust enforcement of the past five years has already promoted record-shattering merger activity. It is a cruel hoax to suggest that more mergers will solve any of these problems.”
