FTC RELEASES DOCUMENTS ON MERGER REVIEW AGREEMENT
FTC released several documents related to proposed merger review agreement with Justice Dept. (DoJ), including accord itself and documents relating to information solicited from former govt. officials involved in merger reviews. Documents included: (1) Letter from the American Bar Assn. (ABA) that said powerful law organization agreed in principle with agreement, although it hadn’t seen details. (2) Similar letter from Business Roundtable. (3) Reports on number of enforcement actions and investigations by each agency. (4) Report on delays caused by clearance process. (5) Joint letter to agencies from former FTC and DoJ attorneys that detailed recommendations for clearance process review. (6) Agreement itself, which hasn’t been adopted. (7) Letter from former high-ranking FTC and DoJ officials supporting proposed agreement. Release follows questioning Tues. of Attorney Gen. John Ashcroft by Senate Commerce Committee Chmn. Hollings (D-S.C.) on issue (CD Feb 27 p4). Hollings’ initial objections caused 2 agencies to postpone announcement of agreement. Hollings and some consumer advocacy groups have expressed concern about agreement because DoJ would get review media mergers.
FTC said documents detailed “problems with the current clearance process” and laid out “proposed remedies.” Agency said problems included: (1) Blurring of historical lines of agency responsibility due to convergence of industries. (2) Duplication of agency expertise in identical or similar areas, leading to more frequent clearance disputes in those sectors. (3) Inefficient allocations of primary areas of responsibility due to ad hoc and sometimes arbitrary nature of historical clearance process. Issue repeated throughout documentation is delay caused by merger review clearance process. “The problems with the FTC-DoJ clearance process have been documented for many years,” FTC Chmn. Timothy Muris said. “We sought to fix the problem, and our proposed revamping of the process has garnered the support of antitrust experts as well as the business community. The proposed agreement is a good government initiative that will enhance the quality of antitrust enforcement, and will benefit businesses, consumers and taxpayers alike.”
Merger agreement includes some, but not all, of recommendations by 4 former govt. attorneys to FTC and DoJ, FTC said. It provides detailed specifics on which agencies shall review which industries. It also contains detailed criteria for negotiating disputed matters not covered by list. Muris and Asst. Attorney Gen.-Antitrust Charles James had asked former govt. attorneys William Baer Kevin Arquit (both former FTC) and Steven Sunshine and Joseph Sims (both former DoJ) for recommendations on agreement. Attorneys said recommendations served goal of reducing “potential friction points throughout the process and allow[ing] decisions to be made quickly and effectively, even when there are good-faith disagreements between the agencies.”
In another letter, dated Feb. 4, former high-ranking FTC and DoJ officials praised agreement, saying: “It is important that there be an efficient process for determining which agency will carry out any particular investigation and then enforce the law.” Letter said delays in reviews often lasted 2 weeks to a month and “potentially impair effective antitrust enforcement and can be costly or otherwise harmful to the parties involved.” Letter said it was a desirable goal to allocate industries to each agency, but also said officials took no position on which industries should be assigned to which agencies. Signers were former DoJ officials: Joel Klein, Stanford Litvack, Douglas Melamed, John Nannes, James Rill, Charles Rule, John Shenfeld, David Canton and Terry Calvani. Former FTC chmn. signed: Robert Pitofsky and James Miller. The documents are at www.ftc.gov.