The Reagan administration has decided to eliminate antitrust enforcement by the Federal Trade Commission over the next three years by cutting off funding for the agency's Bureau of Competition, sources said yesterday.
The decision by the Office of Management and Budget, delivered late yesterday to FTC officials, appears to be the first indication of the administration's intention to shape regulatory policy through OMB's central control over federal spending. Significantly, this budget directive involves one of the independent regulatory agencies, which historically are viewed as arms of Congress.
Simultaneously, OMB has asked the Consumer Product Safety Commission to find cuts totaling 30 percent in its fiscal 1982 budget, sources said. The commission met "well into the evening" attempting to carry out the OMB directive, a source said.
An FTC official said the OMB action goes far beyond budget issues and, in effect, appears to be an administrative repeal of the 1914 Clayton Antitrust Act and the Robinson-Patman Act -- the two key statutes used by the FTC in attacking monopolies and regulating competition and merger agreements.
OMB directive assumes an "orderly" transfer of the FTC's antitrust responsibilities to the Department of Justice. Sources said, however, that the Justice Department's antitrust division apparently will not be expanded.
The FTC budget for the current fiscal year is $73 million and the Carter administration proposed an increase to $77.9 million. Instead, the OMB proposal would reduce the 1981 figure to $67.7 million, with a further reduction to $59.4 million in fiscal 1982. By fiscal 1985 the FTC budget would be down to $41 million under the OMB plan.
OMB intends to close the 10 FTC regional offices, although the timetable for this is not known.
The report on FTC prepared by the Reagan transition team headed by James C. Miller, III, now director of the White House task force on regulatory relief, was critical of the FTC. "To business it is a 'bully;' to an increasing number of consumers it is a 'national nanny,' and to Congress, it is an agency largely out of control," the report said.
The task force urged that the FTC be redirected to concentrate its enforcement on cases of collusion between competitors where there is substantial economic injury and where normal competition does not offer a remedy. It citicized the commission's investigation of possible shared monopolies, such as the action against the major breakfast cereal manufacturers, saying the enforcement theories behind the cases are "weak." Also citicized were the FTC's attempts to regulate conglomerate mergers.
THE OMB decisions are presumably binding on agencies, although it will be up to the Congress, ultimately, to set funding levels for the FTC and other independent agencies and allocate funds for specific major programs, federal officials said. "This is just the first salvo," said an FTC official.