Justice denied as Hollings prevails

After a prolonged and contentious tug-of-war with Sen. Fritz Hollings (D-S.C.), the Department of Justice and the Federal Trade Commission have scrapped a new agreement that sent all media-merger reviews to Justice.

Hollings, chairman of two relevant Senate committees, had been bucking the change ever since word leaked last January. After five months of battling, the agencies last week finally gave in to Hollings' demands and scuttled the plan.

Hollings couldn't be more pleased. "I think it's appropriate that they abandoned this agreement," he said. "The FTC has broad discretion to protect consumers in merger reviews, whereas the Justice Department is looking for crime. The FTC protects the public interest."

But Charles James, assistant attorney general in charge of the DoJ's antitrust division, still feels merger reviews would be completed more quickly had the two agencies been allowed to proceed as planned.

"The Department stands by its view that the agreement was good public policy working to make antitrust enforcement more effective," James said. "Since the agreement became effective, antitrust investigations were being commenced within a matter of days, and there were no clearance disputes between the agencies." The FTC had no official comment.

In January, the two agencies were prepared to announce they would pre-assign industries so that, when a merger came along, they'd have predetermined the reviewer. Having a process in place would eliminate inter-agency battling over mergers and save time, the agencies said.

But before they could make the announcement, the agencies ran into trouble on Capitol Hill. Hollings, chairman of the Senate Commerce Committee, made clear he didn't like the fact that James and FTC Chairman Timothy Muris had hammered out the deal without Congress's knowledge. Hollings also was unhappy that all reviews of media mergers would automatically fall to DoJ's antitrust division.

James and Muris went ahead with their plan in March, still without Hollings' blessing. They then encountered nothing but grief from Hollings, who publicly threatened to cut both agencies' budgets. Hollings also is chairman of the Senate Appropriations Subcommittee on the Commerce, Justice and State Departments; that panel plays a key role in funding the DoJ and the FTC.