HOLLINGS QUESTIONS ASHCROFT ABOUT MERGER REVIEW AGREEMENT

Sen. Hollings (D-S.C.) told Attorney Gen. John Ashcroft Tues. that Congress never intended Justice Dept. (DoJ) and FTC to divide up merger review responsibilities. In an appropriations hearing on DoJ budget, Hollings asked Ashcroft why 2 agencies were considering such an agreement. Ashcroft said overlapping jurisdiction on merger reviews created too much delay when agencies must negotiate over which would review each case. Hollings specifically highlighted his concerns with Justice’s being given authority over media and telecom mergers. Two agencies were set to announce agreement in Jan., but canceled announcement after Hollings raised concerns. Since then, DoJ staff has met with Senate Commerce Committee (of which Hollings is chmn.) to discuss problems, while several consumer groups have expressed concerns about agreement.

Ashcroft defended agreement and cited statistics to show that DoJ had a wealth of experience in media and telecom area. He said in last 4 years, Justice had reviewed 154 media or entertainment mergers and FTC just 22. He said that in last 5 years DoJ had reviewed 46 telecom cases compared with none by FTC. “Allocations should be based on merit and not on other considerations,” Ashcroft said, emphasizing that Justice had developed expertise on media subjects. But Hollings said role agencies shared was based on different nature of their respective missions. While Justice focuses on antitrust from a law enforcement perspective, FTC takes into account public interest issues, he said. “I can’t find anyone in Congress who thinks this is a good idea.”

Hollings also questioned manner in which agreement was struck, saying it “didn’t look up to snuff.” Neither members of Congress nor consumer advocacy groups were consulted about potential major change, he said. Ashcroft said DoJ had conferred with past chmn. of FTC and other former DoJ and FTC officials before developing agreement. He said past officials said such agreement would be better way to allocate 2 agencies’ antitrust resources. (Ashcroft didn’t name any of past officials.)

Both Center for Digital Democracy (CDD) and Consumers Union have expressed concerns over agreement and way it was reached. After FTC and DoJ had agreed to allow Justice to review Comcast’s proposed merger AT&T Broadband, both federal entities petitioned Congress to hold oversight hearings into how decision was reached. CDD Exec. Dir. Jeffery Chester said DoJ presented larger number of cases to Hollings, but FTC and DoJ still have roughly same level of experience with merger reviews. “It’s not a clear call,” Chester said. CDD has filed Freedom of Information Act (FOIA) requests with both DoJ and FTC to determine what role some former FTC attorneys played in developing agreement. Chester said he and other consumer groups met with FTC Chmn. Timothy Muris recently, but session didn’t result in “a meaningful exchange of views.” Consumer groups are concerned that DoJ won’t apply same analysis that FTC would to merger reviews. In a recent forum, William Kovacic, FTC gen. counsel, said both agencies took an economic approach to merger review and there was little difference between them.

Hollings has some oversight of issue, aide said, particularly if it results in budget change in Justice, since Hollings is chmn. of Senate Appropriations Subcommittee on Justice, State and Judiciary. As chmn. of Commerce Committee, Hollings also has influence over FTC, aide said. DoJ staff already has met with Commerce Committee staff, which has several questions for Justice that its staff needed more time to answer, aide said.