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Justice, FTC in check

May 27, 2002  •  Post A Comment

Sen. Ernest Hollings has quietly put the Federal Trade Commission and the Justice Department on a short leash after their failed effort to revamp-and in his eyes weaken-their procedures for reviewing media mergers.
Citing pressure from the South Carolina Democrat, the agencies last week abandoned a controversial agreement under which the FTC had ceded its authority to scrutinize media transactions to Justice.
To prevent them from resurrecting the accord-or something similar-the lawmaker has instructed the agencies to report to Congress every six months on their antitrust investigations and other antitrust matters.
The senator, who heads the powerful Commerce Committee and a key appropriations panel, tucked the request into so-called report language accompanying a supplemental budget bill that’s expected to pass Congress. While the language is not law, it reflects the intent of Congress and will be heeded by the agencies.
The senator also slipped provisions directly into the bill barring the FTC and Justice from using government funds to carry out the now-abandoned agreement.
The arrangement would have made Justice the sole government entity responsible for evaluating the antitrust implications of pending media combinations. The Bush administration said the approach would streamline merger reviews, but Sen. Hollings accused the White House of trying to defang the FTC. He also was upset that the agencies never consulted with Congress on their plan.
Before the agencies caved, they offered a compromise in which the FTC would have examined one-third of all major media deals, but Senate Commerce rejected it. In the end, they backed down because Sen. Hollings was threatening them with budget cuts, staff reductions and hearings.
The FTC and Justice are now back to doing things the old way: They trade off on media reviews, depending on each agency’s experience and expertise.