SENATE COMMITTEE TO REVIEW FTC-DoD MERGER REVIEW AGREEMENT

Senate Commerce Committee will conduct “formal review” of merger review agreement between FTC and Justice Dept. (DoJ), which has caused controversy in consumer advocacy circles and been criticized by committee chmn. Sen. Hollings (D-S.C.). In letter dated March 11 to Attorney Gen. John Ashcroft and FTC Chmn. Timothy Muris, Hollings expressed his disapproval of agreement, particularly provisions that give DoJ review authority over nearly all media mergers. “I view this as a substantial change in antitrust enforcement policy, and one which only Congress should determine,” Hollings said. He also criticized behind-scenes process that led to agreement: “These actions not only raise questions about possible conflict of interests, but clearly were inappropriate given the ramifications of the agreement regarding antitrust enforcement policy.” Merger review was to have been announced in early Feb., but was postponed to March 5 after Hollings raised concerns. After FTC and DoJ announced agreement, he said his concerns never were addressed adequately.

Letters asked FTC and DoJ to give committee “details of all meeting and proceedings held to craft the agreement.” Hollings requested names of all participants in meetings, including names and identities of all outside parties and consultants who provided recommendations and advice crafting agreement. Former FTC merger review officials Kevin Arquit and William Baer and DoJ officials Steven Sunshine and Joseph Sims were tapped by Muris and Charles James, head of DoJ Antitrust Div., to offer proposal on merger review agreement. Advice from now public-sector attorneys, some of which was incorporated into agreement, has brought criticism from watchdog groups that accord was developed without public participation by attorneys who had dealings with both agencies. Hollings also requested all documentation used to formulate agreement, including both internal memorandums and those submitted by outside parties and consultants, including e-mail. FTC released several documents Feb. 27, including proposal from 4 outside attorneys, but Hollings said materials didn’t cover full extent of information he was seeking.

Letters didn’t announce or address potential hearings on issue. However, Muris is scheduled to appear March 19 before Hollings, who will be in his capacity as chmn. of Senate Appropriations Subcommittee on Commerce, Justice, State and Judiciary (CJS). That panel has authority over FTC’s appropriations.