DoJ-FTC Cancel Merger Review Plans

The Department of Justice (DoJ) and the Federal Trade Commission (FTC) are abandoning their controversial plan to alter their traditional merger review purviews. Both agencies have submitted letters to the U.S. Senate agreeing to drop their mid-January agreement granting DoJ merger approval for Internet and other media related mergers.

Consumer advocates favor FTC merger approval for those types of mergers, as does Sen. Ernest Hollings (D.-S.C.), the chairman of the Senate Appropriations subcommittee that has budget approval power over both the DoJ and the FTC. Hollings had threatened to slash the budgets of both agencies if they didn’t drop the plan.

In January, FTC Chairman Timothy J. Muris abruptly canceled a press conference calling for the FTC to concede anti-trust clearance review of all media, communications, publishing and entertainment industry mergers to the DoJ. According to press accounts and sources contacted by InternetNews, Muris and Charles A. James, assistant attorney general for the Antitrust Division for the DoJ, had been secretly meeting for some time to hammer out the agreement. Muris cancelled the press conference after criticism of the deal surfaced.

Under the Muris-James proposal, the FTC would retain anti-trust review over such industries as health care, oil, natural gas, electric power, computer hardware and biotechnology companies. The FTC would give up anti-trust review of all mergers involving Internet, software, telecommunications and entertainment companies.

However, in February it was revealed the DoJ had begun a review of the AT&T-Comcast merger, precluding FTC involvement in the proposed $40 billion deal that would create the nation’s largest broadband provider with 22 million subscribers in eight of the nation’s 10 largest markets. Under the Byzantine federal rules of merger approvals, either the FTC or the Department of Justice, but not both, review pending deals. Since then, Hollings has been vocal in his opposition to the actions of the FTC and the DoJ.

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