Sen. Herb Kohl Holds a Hearing On Oversight of the Enforcement of the Antitrust Laws

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Sen. Herb Kohl Holds a Hearing On Oversight of the Enforcement of the Antitrust Laws

SENATE COMMITTEE ON THE JUDICIARY, SUBCOMMITTEE ON ANTITRUST, COMPETITION POLICY AND CONSUMER RIGHTS HOLDS A HEARING ON OVERSIGHT OF THE ENFORCEMENT OF THE ANTITRUST LAWS

MARCH 7, 2007

SPEAKERS: SEN. HERB KOHL, D-WIS. CHAIRMAN SEN. PATRICK J. LEAHY, D-VT. SEN. JOSEPH R. BIDEN JR., D-DEL. SEN. RUSS FEINGOLD, D-WIS. SEN. CHARLES E. SCHUMER, D-N.Y. SEN. BENJAMIN L. CARDIN, D-MD.

SEN. ORRIN G. HATCH, R-UTAH RANKING MEMBER SEN. ARLEN SPECTER, R-PA. SEN. CHARLES E. GRASSLEY, R-IOWA SEN. SAM BROWNBACK, R-KAN. SEN. TOM COBURN, R-OKLA.

WITNESSES: THOMAS O. BARNETT, ASSISTANT ATTORNEY GENERAL, ANTITRUST DIVISION, DEPARTMENT OF JUSTICE

DEBORAH PLATT MAJORAS, CHAIRMAN, FEDERAL TRADE COMMISSION

[*] KOHL: Good afternoon, ladies and gentlemen. We're glad to have you here today.

Today's hearing marks the first time in more than four years that we have held an oversight hearing to examine the enforcement of our nation's antitrust laws.

Today, we will hear from Assistant Attorney General Barnett and FTC Chairman Majoras, both able and talented public servants.

We commend Chairman Majoras for her leadership and her efforts to bring more competition to the prescription drug market.

However, we are concerned with the direction that the Antitrust Division has taken under this administration. With the exception of criminal enforcement, there is an alarming decline in the Division's antitrust enforcement efforts across the board, particularly with respect to mergers.

Compared to the last four years of the Clinton administration, the number of merger investigations initiated by the Justice Department in the most recent 4 years has declined by nearly 60 percent and the numbers of mergers actual challenged has declined by 75 percent.

These are not just statistics. These are real cases affecting consumers in many sectors of our economy. Whether it is the Whirlpool-Maytag deal, AT&T's acquisition of BellSouth, or anticompetitive conduct in agriculture, this division has simply not done enough, in our opinion, to protect consumers.

As a result of this hands-off approach, the Division is encouraging even more consolidation, including companies who have lost their attempts to merge to try again in this environment.

To quote the "New York Times," merger policy, quote, "often appears to be little more than 'anything goes,'" unquote.

Now, while all of these issues are worthy of significant attention, the most important antitrust issue for me and my constituents in Wisconsin this year is AirTran's bid to acquire Midwest Airlines in a hostile takeover.

Midwest Airlines, which is based in Milwaukee, Wisconsin, is a true extraordinary success story.

Midwest Airlines is a unique company in the airline industry, home-owned and operated, an airline that offers the highest quality of service and is actually beloved by its customers.

Midwest Airlines has been recognized as the best domestic airline more than 45 times in the past 17 years by a variety of industry surveys.

Beyond this, Midwest Airlines is vital to the economy of Wisconsin and to the Greater Milwaukee area. It offers direct service to 33 key business centers every day from its hub in Milwaukee.

Should AirTran acquire Midwest Airlines and decide in the future to reduce service from Milwaukee, the negative consequences for the Wisconsin economy would be enormous.

Unfortunately, the business model of AirTran is very difficult for Midwest Airlines. It is a no-frills, discount airline...

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