FTC Postpones Suit Against AOL
The Federal Trade Commission has delayed plans to sue to block America Online Inc.’s proposed purchase of Time Warner Inc., sources close to the talks said Tuesday.
The five-member FTC voted late Monday to delay taking action on the deal, the second time the antitrust authority has postponed a decision as negotiations for a settlement drag out. The move came as the agency accelerated its preparations to sue AOL in federal court to halt the deal.
The commission staff has sent letters to several companies and consumer groups from which it has gathered information laying the groundwork for court action, one source said.
Documents may be used “in connection with an action in U.S. district court seeking to preliminarily enjoin the acquisition of Time Warner Inc. by America Online Inc.,” the FTC letter said, a copy of which was obtained by Reuters.
The companies were also told that, as is routine, the FTC would seek a court order to protect the confidentiality of the materials.
The shares of Dulles, Va.-based AOL and New York-based Time Warner were down sharply, parallel to drop-offs of other technology stocks Tuesday. AOL closed down $3.41 to $40.56, while Time Warner finished down $4.87 to close at $61, both on the New York Stock Exchange.
The FTC and AOL are trying to reach an agreement that would delay AOL from offering its high-speed Internet service over Time Warner cable until at least one competitor was able to offer service on the same lines.
Representatives of AOL and Time Warner declined to comment on the FTC’s action.
Time Warner made a giant leap last week in its attempts to win over the antitrust authority on this score when it reached a deal with EarthLink Network Inc. to carry that company’s Internet service across its cable lines.
After tense and at times contentious negotiations, EarthLink and Time Warner agreed to allow Internet service via cable lines during the second half of 2001, although specifics of the deal were not spelled out.
The FTC is negotiating terms for requiring the combined AOL-Time Warner to sign up, with pro-competitive provisions, two additional firms within 90 days of reaching a final pact with the antitrust authority, the sources said.
