Media and Tech Merger Oversight Plan Halted

Federal antitrust authorities abruptly canceled plans Thursday to announce changes in the way they review media and technology company mergers after some members of Congress and the Federal Trade Commission voiced concern over the reorganization.

Industry and government officials close to the FTC had said earlier that the Justice Department planned to assume sole responsibility for reviewing mergers of companies in the software, telecommunications and entertainment businesses.

The FTC, meanwhile, would have been given authority for health care, oil, natural gas, electric power and computer hardware makers. The reorganization was aimed at streamlining the duties of policing competition in private industry.

But the agencies appeared headed back to the negotiating table after an FTC commissioner and some Capitol Hill lawmakers criticized FTC Chairman Timothy J. Muris and Justice Department antitrust division chief Charles A. James for crafting a reorganization plan without their input.

They said they wanted to get a detailed explanation about a plan that could cause a sea change in antitrust oversight of the powerful media and technology industries.

“Before you make wholesale changes, I think this is a matter worth some discussion,” FTC Commissioner Mozelle W. Thompson said in an interview. He added that “I’m not sure this agreement was the answer.”

Mozelle contended that the FTC already has substantial experience examining many media mergers, including the one that created AOL Time Warner Inc.

Capitol Hill aides confirmed that Senate Appropriations Committee staff members planned to meet with Justice and FTC officials over the next few days to discuss the reorganization.

But some political observers close to the FTC said the reorganization plan may already be dead.

“We were all a little surprised that the administration was moving forward with little or no input from Congress,” said Ken Johnson, a spokesman for Rep. W.J. “Billy” Tauzin (R-La.), chairman of the House Commerce Committee, which oversees the FTC. “It was probably going to go over like a lead balloon.... Obviously if they try to move forward again, we will want to get our two cents in.”

The proposed reorganization would have changed an informal but contentious half-century-old arrangement under which the FTC and the Justice Department decided case by case which agency would review a merger. The decision often was based on which agency had the most industry expertise.

Three years ago, the two agencies fought over an investigation of computer chip giant Intel Corp. Later they vied over the deal that created AOL Time Warner--a battle won by the FTC.

But with the Telecommunications Act of 1996 still triggering consolidation in the telephone and cable industries, some former government officials said a clearer division of labor between the two agencies might be warranted.

“As a general matter, it’s a good thing to reduce uncertainty and avoid duplications so the agencies can focus on enforcing the laws,” said Jeffrey H. Blattner, a former top deputy in the Justice Department’s antitrust division in the Clinton administration.