FTC feeling Hollings’ heat on mergers

Apr 15, 2002  •  Post A Comment

The Federal Trade Commission, which only a month ago ceded its media merger review authority to the Justice Department in a controversial move blasted by Sen. Ernest Hollings, is quietly exploring ways to restore it.
Publicly, the FTC insists the decision was a sensible step that will streamline the merger review process and end jurisdictional squabbles between the two agencies.
But privately, Electronic Media has been told the FTC wants to appease the South Carolina Democrat and is discussing with Justice how it can do that.
“That’s not true,” said Justice spokeswoman Gina Talamona, who insisted there are no discussions.
Sen. Hollings has threatened the FTC with budget cuts, staff reductions and hearings if it doesn’t restore its authority, and as head of the influential Senate Commerce Committee and an appropriations panel, he has the power to act on his threats.
The senator recently asked the agency for a cost-benefit analysis of eliminating the FTC’s public affairs and legislative affairs offices as well as senior executive positions.
Meanwhile, Justice is reluctant to change the arrangement because it gained what it wanted and is not being criticized by the lawmaker, a source said on condition of anonymity.
A resumption of FTC reviews of media transactions would spell bad news for entertainment companies because the agency is bipartisan, officially independent of the Bush administration and consumer-focused.
By contrast, Justice is part of the administration and thus is headed only by Republicans, making it more of a mouthpiece for President George W. Bush’s policies and priorities.
Sen. Hollings and watchdog groups say the agreement, designed without their input but with the help of industry attorneys, is meant to accommodate media titans and make it easier for them to consolidate.
The public and private machinations of the FTC were on display last week at a House appropriations subcommittee hearing. FTC Chairman Tim Muris defended the merger review arrangement during testimony before the panel, headed by Rep. Frank Wolf, R-Va.
“This was an important agreement, and that’s why I think that officials from the last four presidents who’ve been at the agencies have signed a letter saying it was a good thing,” Mr. Muris said.
But following the hearing, when Mr. Muris didn’t realize reporters were still in the room, he could be overheard telling Rep. Wolf that his agency is feeling pressure from Sen. Hollings and is willing to restore some of its former responsibilities.
Talking to reporters moments later, he was asked whether the FTC might reinstate some media-related reviews. “That’s obviously a possibility,” he said, adding that the FTC on its own can’t make changes to the agreement with Justice.
Prior to their March accord, both the FTC and Justice were charged with reviewing the antitrust implications of media deals, depending on the nature of the deal.