RealTime IT News

Regulators Looking at AOL-Netscape Merger

Federal antitrust regulators are reportedly seeking additional information from America Online Inc. and Netscape Communications Corp. about their pending merger.

According to published reports, the U.S. Justice Department has requested information under the Hart-Scott-Rodino antitrust act, although neither the government nor the companies would elaborate. That act requires all mergers to be submitted to the Justice Department's antitrust division and the Federal Trade Commission for review.

A merger can only proceed if no additional information is demanded by the government agencies within 30 days of the merger. If the government seeks additional information, regulators are giving 20 days after asking for it to try and block a deal.

The request is not an attempt to block the merger, but it does suggest the government will be giving it increased scrutiny.

The two companies agreed to a $4.2 billion marriage in November. However, the deal is now valued at $6.5 billion due to the increase in AOL's current trading price.

Justice's request comes as it is involved in a widescale antitrust investigation against Microsoft Corp. Microsoft's chiefs say AOL's acquisitions of Netscape, CompuServe and Mirabilis prove competition is working and that the antitrust trial is unnecessary.

Shortly after the AOL-Netscape deal was announced, U.S. District Judge Thomas Penfield Jackson, who's handling the antitrust trial, said the deal might cause "a very significant change in the playing field as far as this industry is concerned."