US Media Mergers Transferred to Justice Department Remit

06 March 2002

Responsibility for federal scrutiny of media and entertainment mergers will pass solely to the Justice Department under a new agreement with the Federal Trade Commission.

The move was unveiled by FTC chairman Timothy Muris and assistant attorney general Charles James in a memorandum setting out which sectors would be governed by which agency.

Until now, the two bodies have decided between them which will handle each case, usually based on which had more experience in the relevant field.

However, this process, known as 'clearance', has become protracted and "increasingly contentious", according to Muris, partly because large media groups now straddle several sectors. Although the Justice Department has handled many media mergers, the combination of AOL and Time Warner was overseen by the FTC.

The shift of all such acquisitions to the Justice Department met a frosty reception among some consumer groups and lawmakers, who argued that the Justice Department –appointed by President Bush – is less likely to block dubious combinations than the FTC, an independent body.

Attempts to push through the new arrangement were hindered in January by opposition from Ernest Hollings (Democrat, South Carolina), chairman of the Senate Commerce Committee. Hollings is expected to interview Muris and other federal officials thoroughly in a Senate hearing on the issue this month.

Other sectors affected include computer software, financial services, travel and telecommunications (all to be handled by the Justice Department), and pharmaceuticals, autos, retail and energy (to be overseen by the FTC).

Data sourced from: The Wall Street Journal Online; additional content by WARC staff