Developing legislation to stem the growing concentration of economic power in the hands of fewer and fewer corporations will be a major priority of the Senate Antitrust and Monopoly Subcommittee, its chairman, Edward M. Kennedy (D-Mass.), said yesterday.
"Ironically, the antitrust laws today clearly prevent mergers that increase a firm's dominance of a particular market, but generally fail to deal effectively with mergers that result in the increasing dominance of the entire economy by a few giant conglomerates," Kennedy told an American Bar Association meeting in his first major address to the antitrust legal community since taking on the subcommittee chairmanship last year.
Kennedy noted that antitrust enforcement officials have expressed concern about the steadily increasing percentage of assets controlled by the nation's top 200 firms but are not sure existing antitrust laws give them adequate authority to reverse the trend.
"I am especially concerned with the case with which the major conglomerates and the large multinational oil companies can swallow up major chunks in any other domestic industry," he complained. He noted that the merger of Mobil Corp. and Marcor Inc. combined the seventh largest industrial company with the seventh largest retailer.
"The potential for additional mergers and acquisitions is staggering," he said. "Exxon, for example, could tomorrow buy the J.C. Penney Co., Du Pont, Goodyear, and Anheuser-Busch using only its accumulated cash and liquid assets."
Kennedy said the subcommittee would begin a major investigation of the extent and effects of increasing economic concentration next month. If it is determined that existing laws are in fact inadequate. Kennedy said new legislation to limit concentration would be a subcommittee priority as well as one of is personal priorities in the foreseable future - presumably as chairman of the full Judiciary Committee which he is scheduled to head after the retirement of Sen. James O. Eastland (D-Miss.)
Kennedy listed three other priorities.
Legislation to improve the equity and effectiveness of the enforcement of existing antitrust laws. Included is legislation making clear the Sherman Act does not require "the elaborate search for corporate 'intent' that mires so many suits in a decade-long search for why something was done, instead of the far easier and more important fact of what was done," he said.
Legislation to reduce antitrust immunities and increase competition within important regulated industries like airlines and motor carriers.
Legislation to increase competition in the energy area. Kennedy said the emphasis has been shifted away from a "massive one-shot effort" to deal with the problems of vertical integration to examinations of the problems at each level looking for measures that can improve competition.
In another presentation to the meeting, John H. Shenefield, assistant attorney general in charge of the Antitrust Division, would not concede that current antitrust laws wouldn't reach some of the mergers some now consider inviolablellle but said legislation is needed "to remove all doubt."
Shenefield also noted that companies and their legal representatives are coming to the divisioion with greater frequency to admit violations of law have been discovered among their employees or suppliers among the penalties for the violations, and for not coming forward voluntarily and later being discovered, have been increased.
Federal Trade Commission Chairman Michael Pertschuk told the meeting the agency would soon give final approval to revised rules governing legal practice before the agency with a view to streamline cases, including giving law judges new authority to stem delaying tactics.
After a vigorous defense of the use of rulemaking to define anticompetitive behavior, Pertschuk said the commission would seek to make sure the rules reduce th edesired results. He noted the agency has earmarked $1 million this year to monitor the economic impact of regulations after they take effect and promised to "confess error" if they do not achieve their intended benefits.