December 23, 1996

FTC gun ad probe remains alive

Nearly ten months after the agency received petitions calling for a halt to gun ads hyping self-protection, the FTC investigation of those ads remains open, and researchers from Johns Hopkins University continue to forward new information to agency investigators.

Although FTC sources believe that the most troublesome ads have not run for at least 3 years, others say ads similar to those pegged by consumer and public health groups as deceptive and unfair are still running, leaving the Commission to determine whether consumers …

December 2, 1996

FTCs settlement with Time Warner – Turner draws publics derision

New York States attorney general has opened his own investigation, issuing subpoenas and alerting the FTC to complaints the State has received about Time Warner.

The head of C-SPAN says one part of the consent agreement announced in September constitutes a breathtakingly wrongheaded intrusion of government into the news and information business. Fox Television accuses Time Warner of withholding information from the FTC while the merger with Turner Broadcasting was under investigation and says the agencys proposed order actually …

November 18, 1996

FTC to appeal Michigan hospital merger case, offer expedited trial

District Court judges rarely see a merger they dont like, Antitrust Division Operations Director Constance K. Robinson said last month. Even in the 60s, when the government won most of its merger cases, they were seldom won at the district court level.

The FTC has encountered that phenomenon in recent challenges to hospital mergers in South Carolina, Missouri and Michigan. A federal district judge in South Carolina said issuing a preliminary injunction would threaten his neighbors property values (overturned on …

November 4, 1996

Music video sellers tell court Antitrust Division is out of bounds

Seven digital radio and music video program suppliers told U.S. District Judge Harold H. Greene (D.D.C.) last week that the Foreign Trade Antitrust Improvements Act bars the Antitrust Division from investigating their overseas activities because those activities dont spill over to have any impact on prices in the U.S. Reason: the Act says spill over applies only to prices and the program suppliers dont charge for their product in the U.S.

The suppliers say they give their programming to …

October 21, 1996

Radio station merger false starts
violate Hart-Scott-Rodino Act, risk fines

Its always interesting to watch deregulated industries try to adjust to the antitrust laws, especially if Congress doesnt give them special dispensation, as happened with the air lines (The Transportation Dept. had initial merger authority; in the 1980s, DOT Secretary Elizabeth Hanford Dole let them all go through) and the railroads (a gaggle of conservative Republican senators abolished the Interstate Commerce Commission and then reconstituted it for the railroads as the Surface Transportation Board, a subset of the Transportation …

September 30, 1996

International antitrust investigation
captive in federal judges chambers

While the FTC has been wrestling with competitive problems arising from the Merger of Time Warner and Turner Broadcasting, a Justice Dept. investigation of Time Warner and six other parties in connection with suspected cartelization and price-fixing in the digital radio and music video business. [FTC:WATCH No. 428, February 13, 1995] has literally disappeared into the chambers of U.S. District Judge Harold H. Greene (D.D.C.).

The Antitrust Division served civil investigative demands on Time Warner, Sony Corp. of America, EMI Music, Inc., …

September 16, 1996

FTC reworks administrative adjudication: new rules create
fast track for mergers, limit interrogatories, modify depositions

The Commission late last week voted to dramatically change the way its administrative cases are handled, setting strict deadlines and creating new fast track procedures for merger cases. The changes take effect immediately, and are designed to silence criticisms that the agencys administrative process is long, slow and burdensome.

Under new agency rules, administrative law judges (ALJs) would have only one year from the filing of a complaint to complete a trial and issue an …

August 5, 1996

Merger Watch
Senate Committee proposes three-tier HSR fee schedule

The Senate Appropriations Committee has approved a funding scheme for the Federal Trade Commission that provides a fiscal year 1997 budget of $104 million to be financed entirely by Hart-Scott-Rodino filing fees produced by a new, three-tier fee schedule.

Since the agency routinely returns millions of dollars in civil penalties to the federal treasury, the scheme, if adopted by Congress, would make the FTC a net federal profit center.

Under the scheme approved just before Congress departed Washington for an August recess, …

July 15, 1996

Merger Watch

The FTC Commissioners will take up the merger of Time Warner and Turner Broadcasting at a closed door meeting on the afternoon of July 19, but with no assurance that the issue will be resolved, FTC:WATCH has learned.

According to one agency official, they may not even vote. At press time on July 15, the merging parties had not notified the FTC that the rolling two-week extension of the Hart-Scott-Rodino waiting period they agreed to earlier was withdrawn. At the same time, consideration of the merger comes …

July 1, 1996

Merger Watch

Lets see… what of interest is pending out there?

Time Warner-Turner Broadcasting? Heres the latest: the trade magazine Advertising Age reports that TCI, which owns a chunk of Turner, has agreed to divest its Turner holdings over time. A source very familiar with the FTC negotiations says that report is not, repeat not, true.

OK. A well-informed FTC:WATCH source says the FTC has fastened its attention on the combined programming resources that a united Time Warner Turner would command and wants a big chunk perhaps all of …

June 17, 1996

Merger analysis: the shadow of Baker Hughes and Syufy

A shadow … has fallen over the treatment of entry in merger analysis under Clayton Act 7, and sooner or later, the Supreme Court must remove it.

The shadow is the failure of two circuit courts, the Baker Hughes and Syufy merger cases, to recognize the difference between committed and uncommitted entry.

Parties trying to persuade the FTC to give their mergers a pass should expect to encounter this position when dealing with the agencys Bureau of Economics.

The quotations are from a …

June 3, 1996

Agencies to re-examine role of efficiencies in merger analysis

The commissioners have directed FTC antitrust enforcement officials to re-open the 1992 DOJ/FTC Horizontal Merger Guidelines to determine if they sufficiently take into account efficiencies claimed by merging parties, FTC:WATCH has learned.

The commissioners acted last week to implement one of the recommendations in a staff report derived from the Global Competition Hearings the FTC held last fall.

The staff report also concludes that innovation competition in global markets may be as important as price competition.

[C]ompetition today includes not only the price …

May 20, 1996

FTC Commissioners to decide if Toys R Us
restrained deep discounters

The Commissioners have scheduled a vote for a May 22 morning meeting on a staff recommendation that the agency charge the Toys R Us retail chain with coercing manufacturers into refusing to sell to so-called deep discounters such as The Price Club, FTC:WATCH has learned. The meeting is closed to the public. [See FTC:WATCH No. 456, 449 (January 29) and 445, (November 20, 1995)]

Existence of the investigation surfaced when Hasbro, fighting off a takeover bid from Mattel, disclosed …

May 6, 1996

4As chief says politicians are demeaning advertising, wants FTCs help

The chairman of the American Association of Advertising Agencies says an epidemic of political attack advertising is causing the American people to sour on all advertising to the detriment of agencies and their clients and wants the FTC to help him create a system of self-regulation similar to the one that oversees commercial advertising.

Burt Manning, who is also chairman and CEO of the J. Walter Thompson advertising agency, told FTC:WATCH last week that he is working up a presentation …

April 22, 1996

FTC staff proposes “fast track” for administrative merger cases

A task force studying FTC adjudicative practices has recommended that merger cases be completely tried in as little as nine months, FTC:WATCH has learned. That’s nine months from the filing of an administrative complaint all the way through an Administrative Law Judge’s initial decision to a Commission order.

Under “fast track” procedures proposed in a report sent to the Commission late last month, the task force — spearheaded by the FTC General Counsel Steven Calkins — parties in merger …

April 8, 1996

FTC staff proposing expedited administrative trials

FTC staff studying the agencys adjudicative practices under Part III of the Rules has recommended that administrative law judges be instructed to try all cases within one year of the Commission issuing a complaint, FTC:WATCH has learned.

The recommendation comes as the Commissioners themselves turned around the only case pending before them on appeal, California Dental Association, in five months, by recent agency standards an astonishing accomplishment. On the other hand, it also comes as the Commissioners continue to be paralyzed by an April, …

March 25, 1996

FTC staff recommends Commissioners reject tobacco divestiture

The staffs of the FTC’s Competition and Economics Bureaus have recommended that the Commissioners disapprove B.A.T. Industries’ proposed divestiture of American Tobacco Co. brands to Lorillard Tobacco Co., FTC:WATCH has learned.

In April, 1995, an FTC consent order agreed to by B.A.T. to settle allegations that its acquisition of the American Tobacco Co. was anticompetitive became effective. The order, agreed to in December, 1994 after the FTC failed to persuade a U.S. District Court judge to issue a preliminary injunction blocking the transaction, …

March 11, 1996

Horizontal price-fixing in cyberspace: FTC eyeing the MBAs

Business students are taught explicitly how to put prices up to where they would be if they were conspiring with their competitors, but in a way that makes it difficult for courts to infer an agreement so they will not land in jail, FTC Economics Bureau Director Jonathan Baker said last week. By standardizing product definitions, distributing price books and committing to most favored customer protections, executives try to beat the antitrust laws.

But the FTC is going to do the …

February 29, 1996

Merger Watch

Contract divestiture a new defense-merger remedy

The Navy’s Aegis destroyer contract could be jeopardized by Litton Industries, Inc.’s $425 million acquisition of PRC Inc. from Black and Decker, the Commission ruled this month. To remedy concerns the Commission has proposed a divestiture, the first in a defense case, and the Navy will maintain the power to veto proposed acquirers of the divested contract.

Litton is one of only two contractors sharing the contract for the Aegis destroyer, a shipboard system used to destroy guided missiles and planes. General …

February 12, 1996

Antitrust Division presses music video investigation

Asserting additional evidence of collusion by six music video producers to fix the price of programming, Antitrust Division lawyers have asked U.S. District Judge Harold H. Greene to rule on a motion to enforce civil investigative demands at his “earliest convenience” or set a hearing date on the motion the Division filed more than a year ago, on November 3, 1994. [FTC:WATCH No. 428, February 13, 1995]

The February 5 motion requesting a ruling or a hearing notes that “Directorate General IV (DG-IV) of …

January 29, 1996

Senate pondering changes in antitrust damages law

Senate Antitrust Subcommittee Chairman Strom Thurmond (R-S.C.) is inviting comments about claims reduction proposals to limit the liability of some defendants in private treble-damage cases and to modify the Antitrust Divisions criminal amnesty program, FTC:WATCH has learned.

The basic notion behind claims reduction, according to sources familiar with developments, is to prevent whip-saw settlements where plaintiffs pursue a whole industry, then, during discovery, identify the most culpable defendant, offer it a discount settlement and shift the full damages under the doctrine of joint …

January 15, 1996

Merger Watch: end of the line for pipeline deal

Hours after the FTC entered federal court to block Questar Corporation from acquiring a 50 percent interest in Kern River Gas Transmission Company from Tenneco, Inc., the parties called off the deal. In the past, the parties would nevertheless be facing a lengthy administrative trial, the price for having forced the FTCs hand. But under the Commissions new enforcement policy, the matter is now moot.

The $226 million transaction would have given Questar a monopoly over natural gas transmission services in …