OPENING STATEMENT OF THE HONORABLE J. RANDY FORBES ANTITRUST TASK FORCE

HOUSE COMMITTEE ON THE JUDICIARY

LEGISLATIVE HEARING ON H.R. 1086, the "NATIONAL COOPERATIVE STANDARDS DEVELOPMENT ACT OF 2003"

APRIL 9, 2003

The Committee will come to order.

Today's meeting marks the inaugural hearing of the House Committee on the Judiciary Antitrust Task Force. We convene today to conduct a legislative hearing on H.R. 1086, the "National Cooperative Standards Development Act of 2003." This legislation would foster the critical role of standards development organizations while strongly reaffirming the central role of our Nation's antitrust statutes in preserving and promoting free market competition.

Standard development organizations play a pivotal role in promoting

free market competition. Technical standards form the basis of product competition by ensuring a common interface between technically-substitutable products.

Standards development in the United States is conducted largely by private, not-for-profit standards development organizations which are best suited to keep pace with rapid technological change. The standard-setting process is governed by principles of openness, balance, transparency, consensus, and due process in a nonexclusionary manner that permits the views of all interested parties to be fully considered.

In 1996, Congress passed legislation requiring the use of voluntary consensus standards in federal procurement and regulatory activities. While this legislation has encouraged government use of privately-developed standards, it has also increased the vulnerability of private standards developers to antitrust litigation. The frequency in which standards developing organizations are named in lawsuits hampers their efficiency and effectiveness.

H.R. 1086 remedies this problem. It must be stressed that this bill would not immunize standard development organizations from scrutiny under the antitrust laws; rather it limits recovery against these organizations to actual economic damages while codifying the "rule of reason" for antitrust scrutiny of their activities.

To further address the potential for anti-competitive misconduct, H.R. 1086 requires standard development organizations to disclose the nature and scope of their activities to the Department of Justice and to the Federal Trade Commission in order to come within the protections of the legislation.

I am pleased that this legislation, introduced by Chairman Sensenbrenner and cosponsored by Ranking Member Conyers and 12 members of this Committee, continues the bipartisan tradition of striking the proper balance between pro-competitive activity while ensuring the active role of federal antitrust agencies in the preservation and promotion of competition in our market economy.

I look forward to the testimony of our distinguished panel, and now yield to Ranking Member Conyers for his opening remarks.