• Antitrust Enforcement Agencies Allocate Industries For Review*
  • May 2, 2003 | Author: Wendelynne J. Newton
  • Law Firm: Buchanan Ingersoll & Rooney PC - Pittsburgh Office
  • After a false start in January, the Federal Trade Commission ("FTC") and the Antitrust Division of the Department of Justice ("DOJ") have entered into a Memorandum of Agreement this week, clarifying the lines of Agency responsibility for merger reviews and other antitrust matters. Over the years, disputes between the Agencies as to which Agency will review a particular matter have increased. Since FY 2000, one or both Agencies have sought clearance on approximately 1,250 matters. Twenty-four percent involved either formal contests or related issues, resulting in delays. The key import of this recent agreement is to allocate primary responsibility for industries in which both Agencies have expertise, aimed at a more efficient review process (while preserving each Agency's jurisdiction and independence on investigatory decisions).

    The agreement allocates to the DOJ aeronautics; agriculture and associated biotechnology; avionics; beer; computer software; cosmetics and hair care; defense electronics; financial services, insurance and stock, option, bond, and commodity markets; flat glass; health insurance; industrial equipment; media and entertainment; metals, mining and minerals; missiles, tanks and armored vehicles; naval defense products; photography and film; pulp, paper, lumber and timber; telecommunications services and equipment; travel and transportation; and waste.

    The agreement allocates to the FTC airframes; autos and trucks; building materials; chemicals; computer hardware; energy; grocery manufacturing; the operation of grocery stores; healthcare; industrial gases; munitions; pharmaceuticals and biotechnology; professional services; the operation of retail stores; satellite manufacturing and launch vehicles; and textiles.

    Additional enhancements to the clearance procedures for merger reviews and other antitrust matters include:

    • development of a clearance manual, to be posted on the websites
    • maintenance of a common pre-merger filings database
    • designated clearance officers and better communication
    • expedited review time frames
    • clearance dispute mechanisms

    The Agencies have committed to review the agreement, and in particular the industry allocations, in 4 years (telecommunications in 2 years). Grouping related products into one Agency's primary responsibility is intended to increase that Agency's enforcement expertise in the relevant industry. All criminal matters remain with the DOJ. Matters previously cleared to either Agency remain with that Agency.

    From a practical standpoint, companies involved in pre-merger review or other Agency antitrust reviews should experience less delay in the process, particularly up front, and more certainty ahead of time as to the identity of the reviewing Agency. Whether there will be marked improvement in the efficiency of the overall process is yet to be seen.

    *According to a Department of Justice press release issued on May 20, 2002, the DOJ will no longer be adhering to the agreement. Click here to view the DOJ press release.