FTC TURNS OVER MEDIA ANTITRUST OVERSIGHT TO JUSTICE DEPT.

Senator Angered at Deal; Critics Say Media Mergers Will Increase

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WASHINGTON (AdAge.com) -- In an agreement between the Justice Department and the Federal Trade Commission that quickly drew the ire of the chairman of the Senate Commerce Committee, the Justice Department will now have sole oversight of entertainment and media mergers.

Both departments have until now shared responsibility for media mergers, but the FTC is regarded as being less friendly to some media deals and more insulated from political pressure than the Justice Department.

Critics immediately suggested the move would speed approval of controversial media and entertainment industry deals.

The plan to

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switch oversight was the result of an agreement between FTC Chairman Timothy Muris and Charles James, assistant attorney general for antitrust.

Congressional complaints
A news conference to announce the deal was scheduled for Jan. 17 but was called off at the last minute after congressional leaders complained they hadn't been consulted of the plan.

In statements today, Messrs. Muris and James said they had waited six weeks to find both congressional and private-sector support for their plan, offering statements from the National Association of Manufacturers and Sens. Herb Kohl, D-Wis., and Mike DeWine, R-Ohio, though they couldn't mollify their biggest critic on the Hill, Sen. Fritz Hollings, D-S.C.

Messrs. Muris and James justified their plan by saying it would expedite "time-consuming" disputes in merger matters.

"The agreement allocates primary responsibility for antitrust enforcement in the media and entertainment industry to the Department of Justice because its expertise in this area far outweighs that of the FTC," Mr. Muris said in a statement,

Not as experienced
Mr. Muris added that his office is also not as experienced in "the complex vertical [integration] raised by media mergers in the last few years."

Sen. Hollings, who is chairman of the Senate Commerce Committee and head of the Senate Appropriations Committe, accused Mr. Muris and Mr. James of making the change without proper congressional authorization.

"I believe this is in violation of appropriations law, which states that we be consulted," Sen. Hollings said. "For some reason, this administration doesn't like government. Under the law, they're supposed to submit their restructuring proposal to Congress. We have yet to receive anything in black and white. We were in the middle of discussions on how to proceed, and they just moved forward on their own."

Sen. Hollings called the agreement "a tricky way to forego consultation," and warned "we have our tricks, too."

The agreement also drew quick fire from a consumer group.

'Massive media deregulation'
"The agreement will ultimately hurt consumers, competitors and citizens," said Jeff Chester, director of the Center for Digital Democracy. "This deal eliminates the critical role that the FTC has played in overseeing media and Internet-related mergers. ... Now all such mergers will be under the supervision of a presidential appointee. Given the Bush administration's apparent support for massive media deregulation, one can only surmise that today's announcement sends a strong signal to big special interests that they will get easy treatment."

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