A Senate subcommittee yesterday killed at least until spring a controversial proposal that would have barred the Federal Trade Commission from ordering divestiture in antitrust actions.
Faced with the opposition of all Republican members of the full Senate Commerce subcommittee, the Carter administration's chief trust-buster, and the small business community, Sen. Wendell Ford (D-Ky.), chairman of the subcommittee on consumer affairs, postponed consideration of the plan.
The amendment to an FTC funding bill was proposed by Sen. Howell Heflin (D-Ala.) and would have dramatically cut the FTC's powers and, according to FTC officials, would have effectively killed the agency's case against the nation's leading oil companies and cereal manufacturers.
"The Heflin amendment," Ford, said, "involves a major change in the direction of antitrust enforcement policy in this country and it casts a cloud over five major cases currently in litigation.
"I fear that one day of hearings provides too little time to study this change and its effects."
At a hearing on the amendment yesterday, Heflin defended his proposal, calling the question "an issue of whether property can be taken from a person by a governmental agency action or court action."
"Congress never conferred authority upon the Federal Trade Commission to dismember industries or to break up companies because of monopolization," Heflin said.
Robert Pitofsky, an FTC member, calling the Heflin amendment "one of the most significant changes in antitrust policy in recent years," said the plan would rob the commission of its most effective remedy in cases involving monopoly power.
John Lewis, president of the National Small Business Association, said the FTC has been "overzealous" in some of its work, but said that a "wave of anti-regulation emotion should not be converted into anti-antitrust emotion."
The Republican members, in a statement put together by Bob Packwood (R-Ore.), said they were prepared to vote against the Heflin amendment.
"Some of us disagree with the abbreviated nature of these proceedings while others of us are philosophically disclined," Packwood said.
The amendment, he said, "would effectively disarm one of the two major agencies of the government acting on antitrust cases . . . I cannot condone any weaknening in the enforcement of antitrust laws."
The FTC funding bill, including a series of controversial amendments, now faces a test before the full Senate.