ORGANIZATION FOR COMPETITIVE MARKETS

P.O. Box 6486

Lincoln, NE 68506

Web site: www.competitivemarkets.com

Date: August 23, 2002 For Immediate Release

Contact: Fred Stokes: 662.476.5568

Michael C. Stumo: 860.379.6199

Steve Cady: 402.792.2320

OCM Tells Senate Judiciary Committee to Strengthen Antitrust Review

The Organization for Competitive Markets presented written testimony today to the Senate Committee on the Judiciary calling for a stricter analytical approach to efficiency claims by industry. OCM also asked for legislation making merger reviews by the Department of Justice more transparent and subject to public scrutiny. Lastly, OCM requested strong consideration of legislation limiting the ability for meat packers to manipulate livestock markets. The full testimony is available on the OCM website by choosing “What’s New.”

“The U.S. antitrust laws are being effectively repealed by some courts and by the administration,” says OCM. “The major problem with the antitrust analysis engaged in by some judges and the current administration is that undue weight is given to amorphous, unproven efficiency claims as a justification for an otherwise anticompetitive merger or business practice.”

OCM requested that legislation be enacted to provide analytical rigor to claims by dominant firms that mergers and business practices which may be anti-competitive are justified by pro-competitive effects such as efficiency gains.

1. Claims of pro-competitive impacts must be articulated, supported by direct evidence rather than speculation, and proven by clear and convincing evidence.

2. Second, claims of pro-competitive impacts must be shown as directly connected to the merger or allegedly anti-competitive practice at issue.

3. Third, the proponent of claims of pro-competitive impacts must show that there are no alternative ways to achieve such impacts other than engaging in the merger or anticompetitive practice at issue.

4. Fourth, the proponent of such claims must show that the pro-competitive effects of the merger or practice at issue are highly likely to be passed on to consumers (where seller power is the concern) or to suppliers (where buyer power is the concern).

OCM also requested greater transparency in the merger review process. Merging parties seeking approval for a merger from antitrust authorities generally claim efficiency gains that the government often fails to scrutinize. If those claims, along with the data and analysis justifying the efficiency allegations, are made public, citizens and companies that may be negatively affected by the merger will have a greater opportunity to present opposing evidence. The process will provide more information to antitrust authorities and lessen the likelihood of shoddy merger reviews.

Lastly, OCM detailed the motive and opportunity for meat packers to manipulate the livestock markets using captive supplies. Legislation is required to combat that manipulation. OCM spoke favorably of three pending bills. First, the packer ownership ban, co-sponsored by Senators Johnson, Grassley, Harkin, Wellstone, and Thomas, that would prohibit meat packers from owning livestock. Second, a bill by Senator Enzi that would require livestock contracts to be traded in an open, public bid market. Third, a bill by Senators Grassley and Feingold that will increase market transparency by limiting the amount of overall captive supply livestock that meat packers may slaughter each day.

The Organization for Competitive Markets is a multidisciplinary, nonprofit group of farmers, ranchers, academics, attorneys, and policy makers dedicated to reclaiming the agricultural marketplace for independent farmers, ranchers and rural communities.

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