Statement of Sen. Patrick Leahy, Ranking Member, Senate Judiciary Committee, Senate Judiciary Committee Hearing On Antitrust Oversight

March 22, 2000

Mr. Chairman: Thank you and Senator Kohl for holding this oversight hearing. Also, I want to thank General Klein for appointing a Special Counsel for Agriculture.

As you know, I will be introducing a major bill soon with Senator Daschle and many other senators to enhance competition in rural America and to better protect farmers and ranchers from unfair and deceptive practices by large agribusinesses.

Even with a scorecard, it is hard to keep track of who is buying whom, and who owns what. And why not, since companies can buy companies for "free" by using stock. I worry that we are at the stage now where one merger sets off a string of "defensive" mergers with companies buying companies to stop other companies from buying companies -- all fueled by high stock prices.

General Klein, I sent you a letter recently about a company that is in a buying frenzy -- Suiza Foods of Texas. I know you filed a complaint against them in Kentucky because you were concerned about potential higher school lunch milk prices. In the "Competitive Impact Statement" filed by the Department of Justice in that case, you mentioned that Suiza had acquired a company with a "history of school milk bid rigging" – Flav-O-Rich.

I certainly remember that case because I introduced a bill to ensure that dairies convicted of school lunch bid rigging would be debarred from continuing to participate in the school lunch program. That bill is now the law of the land.

I know that dairy farmers in New England are rightly concerned about the unyielding market power of Suiza Foods. I am very worried about any serious threat to dairy farmers, or consumers, whether it is in Vermont or in California. Acquisitions by Suiza Foods and the closing of processing capabilities could reduce the options available to milk producers in New England.

As you know, my letter to you mentioned that when Congress debated the landmark Sherman Antitrust Act more than a century ago, Senator John Sherman attacked that "kingly prerogative" of those with "concentrated powers." Senator Sherman said that "[w]e will not endure a king over the production, transportation, and sale of any of the necessaries of life."

We should keep Senator Sherman's words in mind when we review the record of Suiza and similar firms, and what these mergers mean for farmers and consumers.

Chairman Pitofsky, thank you for being here. The FTC is very busy these days. You are going to have the pleasure of looking at the AOL\Time Warner merger. This proposed merger has important implications not only for the companies and shareholders involved, but also for the choices we have in both what and how we access content. This is an exciting time for technology and antitrust policy but we have to make sure we get it right. The FTC is also busy providing important resources to policy makers on online privacy. The commissioner has already completed important work in this area with its workshops on consumer privacy in 1996 and its surveys of commercial websites posting privacy notices. I commend you for that work and want to explore with you the questions I have about the limitations of self-regulation.

Finally, I am interested in the views of both of our distinguished witnesses today on the need for reform of the Hart-Scott-Rodino Act.

I have concerns over the limitations on document production under the bill introduced by Chairman Hatch, Senator Kohl and Senator DeWine, but I do agree with them that we should increase the size of the transaction thresholds and adjust the fee structure and will work with them on those issues.