Antitrust Agencies Divvy Up Markets

In a move to defuse regulatory dueling and speed up merger reviews, U.S. antitrust agencies reached an unprecedented agreement to split the work by specific industries. For the first time, antitrust lawyers know exactly whether their filings go directly to the Federal Trade Commission (FTC) or the Antitrust Division of the Justice Department. Antitrust practitioners generally said that the accord would make life easier for them. They hailed it as a step that could telescope the screening process and prevent the two agencies from up-front hassling over which one should get a high-profile case. But the division of the caseload was not without controversy, drawing criticism from some lawyers that objected to the assignment of some industries to the Antitrust Division, particularly media and telecommunications. John Briggs, co-head of antitrust at the Washington-based law firm of Howry Simon Arnold & White, called the agreement “very helpful.” “It provides a high degree of certainty about where the regulatory analysis and the antitrust review are going to wind up,” he says. Briggs adds that in the past the two agencies sometimes wasted time sparring over which one would get a case. While a formalized division of work may save some time up front, Briggs notes that it does not a change the overall timetable, which may include a “second request” for information by an agency 30 days after the case initially has been filed. “It clarifies that first 30-day period,” he sys. “The competition issues will be the same no matter who gets the deal. After the 31st day, there won’t be any change.” Andrew Schwartzman, head of the public interest law firm Media Access Project was not happy that media and telecom deals were assigned to the Antitrust Division, although the FTC had “special expertise in that area.” “An independent regulatory commission, which is bipartisan, is more nearly an arm of Congress,” he notes. “In many ways, it is more appropriate and more accountable publicly than an assistant attorney general who is a presidential appointee. Media/telecom cases are politically sensitive ones, and there might be greater public confidence in a bipartisan agency doing them.” FTC chairman Timothy J. Muris, in announcing the agreement with Antitrust Division chief Charles A. James, claimed that his agency’s experience in media and entertainment is “more limited than DOJ’s” and not as grounded in the complex issues of current dealmaking. Muris and James said that the work generally was divided on the basis of an agency’s experience with a particular industry. Industries allocated to the FTC include airframes, autos and trucks, building materials, chemicals, computer hardware, energy, grocery manufacturing, grocery stores, health care, industrial gases, munitions, pharmaceuticals and biotechnology, professional services, retailing, satellite manufacturing and launch vehicles, and textiles. DOJ got aeronautics, agriculture and related biotechnology, avionics, beer, computer software, cosmetics and hair care products, defense electronics, financial services, insurance, securities and commodities markets, flat glass, health insurance, industrial equipment, media and entertainment, metals, mining and minerals, missiles, tanks and armored vehicles, naval defense products, photography and film, pulp, paper, lumber, timber, telecommunications services and equipment, travel and transportation, and waste management.