FTC may keep media reviews

Apr 1, 2002  •  Post A Comment

In a major shift, the Federal Trade Commission is signaling a willingness to resume reviews of media mergers after recently ceding the responsibility to the Justice Department.
“If Congress wants the FTC to have an involvement in the media merger clearance process, of course we will,” FTC spokeswoman Cathy MacFarlane said last week.
The development comes amid growing threats from Sen. Ernest Hollings, D-S.C., to take harsh action against the FTC unless it backs out of an agreement with Justice ending the FTC’s authority in this area.
The accord is part of a larger Bush administration restructuring of the government’s approach to scrutinizing transactions across several industries. Until recently, the FTC and Justice traded off on evaluating the antitrust and competitive implications of media deals.
After vowing to slash the FTC’s budget and launching a “formal review” into the matter, Sen. Hollings is now seriously considering hearings before his high-profile Senate Commerce panel.
“The potential is significant. It’s something we’re looking into,” committee spokesman Andy Davis told Electronic Media.
Congress is in Easter recess, with the upper chamber scheduled to reconvene April 8.
The strategy of threatening hearings worked well for both Sen. Hollings and Rep. Billy Tauzin, R-La., last month when they used the tactic to help force NBC to stop airing hard-liquor ads.
Only a few weeks ago, the FTC was holding hard to its position that the new merger review policy was the best approach. FTC Chairman Tim Muris, a Republican, argued at a March 19 hearing before a Hollings appropriations panel that even without the agreement, Justice would be scrutinizing media transactions because it has more experience in the area, something the senator disputes.
`The reality, Mr. Chairman, is that we have two antitrust agencies enforcing the same antitrust law with the exact same standards,” Mr. Muris testified. He said the process wastes time because the agencies often squabble over who should review a deal.
But late last week, cracks began to emerge in the FTC’s hard-line stance. The agency now says that Mr. Muris-while still supportive of the new policy-is ready to meet with Sen. Hollings and address his concerns. At deadline, no meetings had been scheduled. The agency is also willing to provide a counterproposal if Congress asks it to submit one.
Two of the FTC’s five commissioners-Democrats Mozelle Thompson and Sheila Anthony-think the agency should continue to play a role in reviewing media deals, but they think the process that was in place should be streamlined.