Justice won’t easily give up media merger review

May 13, 2002  •  Post A Comment

The U.S. Justice Department is resisting efforts by the Federal Trade Commission to modify a media merger review agreement that’s drawing sharp criticism from Senate Commerce Committee Chairman Ernest Hollings, D-S.C.
That at least was the charge last week by an FTC source who spoke to Electronic Media on condition of anonymity. Any resistance by Justice is significant because the consent of both agencies is needed for the agreement to be changed.
Sen. Hollings is upset that the FTC ceded its power to scrutinize media deals to Justice in March as part of a larger Bush administration restructuring of merger reviews across several industries.
The agreement effectively makes Justice, an arm of the Bush administration headed by presidential appointees, solely responsible for analyzing the antitrust implications of media combinations. For years the agencies swapped responsibility for conducting these reviews, depending on the nature of each transaction and the agency’s expertise.
The senator thinks the FTC, an independent, bipartisan agency with considerable expertise on Internet- and cable-related issues, should continue to play a role in this area.
Justice Department spokeswoman Gina Talamona declined repeated requests for comment but did not deny the allegation that Justice is balking at changing the agreement.
Also declining comment was Andy Davis, spokesman for Senate Commerce, which is arranging a hearing on the issue and is investigating why the agencies never consulted with Congress about their plans for a new approach to media deals.
According to the FTC, Justice is reluctant to modify the accord because it received what it wanted and doesn’t want to give up the authority it gained. “If we get a role in media mergers, we’d have to give something back,” the FTC source said, adding that Justice would only make changes if it wins something else through horse-trading.
In addition, Justice can bide its time because Sen. Hollings has directed most of his criticism toward the FTC, threatening to slash its budget, cut staff and possibly remove FTC Chairman Tim Muris from his position.
At least one observer last week predicted that Mr. Muris would not cave in to Sen. Hollings but would instead put up with the criticism. “Muris actually doesn’t mind this back-and-forth,” the source said. “Muris actually enjoys it.”