DOJ, FTC share media merger oversight

Plans to change current operation scrapped

WASHINGTON — Bowing to intense pressure from an influential Capitol Hill Democrat, the Bush administration has officially scrubbed a plan to give John Ashcroft’s Dept. of Justice sole authority for reviewing media mergers.

This means that the DOJ and the more consumer-oriented Federal Trade Commission will resume their habit of dividing up merger reviews on a case-by-case basis.

FTC chair Timothy Muris said weeks ago (Daily Variety, 3/27/02) that he was willing to defer to Sen. Ernest Hollings (D-S.C.) and back off the merger restructuring plan, but didn’t make it official until Monday when sending a letter to the pol.

The DOJ sent a similar letter to Hollings, according to Capitol Hill staffers.

Hollings flexes muscle

Hollings, who chairs the committee overseeing the FTC’s budget, was so angered at the plan to rearrange the merger review process that he threatened to cut top salaries at the agency.

The senior Democrat said Muris and Asst. Attorney General Charles James had no authority to make the change without first notifying Congress.

For decades, the DOJ and FTC have shared responsibility for reviewing corporate mergers, assigning them on a piecemeal basis. Muris and James said it made more sense to divide up industries between the two agencies from the outset, with the media/entertainment biz going to DOJ.

Solon backs move

“I think it’s appropriate that they abandoned this agreement. The FTC has broad discretion to protect consumers in merger reviews, whereas the Justice Dept. is looking for crime. The FTC protects the public interest,” Hollings said.

The FTC and DOJ declined comment Tuesday, but in the past have bristled at the suggestion that the consumer isn’t taken into account by a DOJ review.

In reality, the Justice Dept. has reviewed more media mergers than has the FTC over the years. The two media mergers currently on the table — the EchoStar/DirecTV deal and the Comcast/AT&T deals — are both being eyeballed by antitrust staffers at DOJ.

Staffers for Hollings said the pol would continue working with the FTC and DOJ to discuss ways to bolster the merger review process, so as to address concerns raised by Muris and James.