H.J.Res.39 - Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Federal Trade Commission relating to Premerger Notification; Reporting and Waiting Period Requirements. (119th Congress)
Summary
H.J.Res.39 is a joint resolution introduced in the House of Representatives aiming to disapprove a rule submitted by the Federal Trade Commission (FTC) concerning premerger notification, reporting, and waiting period requirements. The resolution invokes Chapter 8 of Title 5 of the United States Code, which provides a mechanism for Congress to review and potentially disapprove agency rules.
The specific rule in question, published in the Federal Register on November 12, 2024 (89 Fed. Reg. 89216), relates to the FTC's oversight of mergers and acquisitions. If the resolution is passed by both the House and the Senate and becomes law, the FTC's rule would have no force or effect.
The resolution was submitted by Mr. Fitzgerald, Mr. Gooden, and Mr. Cline and referred to the Committee on the Judiciary.
Expected Effects
If H.J.Res.39 becomes law, the FTC's rule regarding premerger notification, reporting, and waiting period requirements would be nullified. This would likely lead to a situation where the previous regulations or practices regarding merger oversight would remain in effect.
Companies planning mergers and acquisitions would not be subject to the requirements outlined in the disapproved FTC rule. The FTC would need to either revert to previous standards or potentially develop a new rule, subject to further congressional review.
Potential Benefits
- Reduced regulatory burden: Companies would avoid the compliance costs and administrative hurdles associated with the disapproved FTC rule, potentially freeing up resources for investment and innovation.
- Increased flexibility for mergers: The absence of the rule could allow for quicker completion of mergers and acquisitions, as the waiting periods and reporting requirements might be less stringent.
- Potential for economic growth: Some argue that reduced regulation fosters a more dynamic business environment, leading to increased investment and job creation.
- Reinforcement of congressional oversight: Passage of the resolution would affirm Congress's role in checking the power of regulatory agencies and ensuring that rules align with legislative intent.
- Lower compliance costs: Companies may see lower legal and administrative costs associated with mergers and acquisitions.
Most Benefited Areas:
Potential Disadvantages
- Reduced scrutiny of mergers: Disapproval of the rule could lead to less thorough review of proposed mergers, potentially resulting in anti-competitive market consolidation.
- Increased risk of monopolies: Without the FTC's rule, there may be a higher risk of monopolies forming, which could harm consumers through higher prices and reduced choices.
- Weakened consumer protection: A less regulated merger environment could negatively impact consumers by allowing companies to engage in practices that harm competition and innovation.
- Uncertainty for businesses: If the FTC needs to create a new rule, this could create uncertainty for businesses planning future mergers and acquisitions.
- Potential for market instability: Reduced oversight could lead to increased market volatility and instability, as companies engage in unchecked merger activity.
Constitutional Alignment
This resolution is designed to utilize the Congressional Review Act (CRA), which allows Congress to review and disapprove agency rules. Article I, Section 1 of the Constitution vests all legislative powers in Congress, including the power to oversee and check the actions of executive branch agencies like the FTC.
The CRA itself is an exercise of Congress's legislative authority to ensure that agency rules align with the intent of the laws passed by Congress. By disapproving the FTC's rule, Congress is asserting its constitutional role in shaping policy and preventing regulatory overreach.
However, the specific merits of disapproving this particular FTC rule are a matter of policy debate, not necessarily a constitutional issue. The constitutionality lies in Congress's power to act, not in the wisdom of the action itself.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).