Post by pj on Oct 2, 2007 17:37:56 GMT -5
Competing Regulators
Published: September 30 2007 19:15 | Last updated: September 30 2007 19:15
Leave it to the US to have competing competition regulators. Both the Federal Trade Commission and the Department of Justice’s antitrust division scrutinise mergers and corporate practices to prevent monopolies and anti-competitive behaviour. Only the DoJ can file criminal charges, but when it comes to approving mergers and bringing civil cases, the agencies have overlapping jurisdiction. In 1993, the FTC was famously in deadlock on whether to charge Microsoft with abusing its Windows near-monopoly, so the DoJ took over.
In recent years, the two agencies have divided their world into spheres of influence, but a 2002 move to formalise the split along industry lines fell apart. Since then, the two agencies have occasionally tussled over who will review particular mergers. That division has created an odd imbalance. Both agencies start from the same set of written guidelines. However, it has often been harder to get mergers approved by the FTC, which is legally required to be bipartisan, than by the currently Republican-controlled DoJ. So antitrust hurdles appear higher for some deals than others, depending on which agency does the review.
The US often defends regulatory competition as a way to prevent agencies from becoming too cosy with the industries they oversee. But the division of antitrust enforcement appears to be a historical anomaly with none of these benefits. The split dates back nearly a century – the FTC was founded in 1914 by reformers annoyed that the DoJ was not doing more to “bust the trusts”.
So far there is no big constituency pushing for an overhaul. Those who favour less regulation worry that major changes could give broader powers to the FTC, while those who want more government intervention fear that the DoJ could end up as the dominant regulator.
Congress held routine oversight hearings on antitrust enforcement this week. But it should take the radical step of rethinking the entire structure. The recent Microsoft ruling reaffirmed that the European Union is a global player in competition policy. The US should reduce the regulatory clamour by speaking with one voice.
Copyright The Financial Times Limited 2007
www.ft.com/cms/s/1/41225b8c-6f80-11dc-b66c-0000779fd2ac,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html
Published: September 30 2007 19:15 | Last updated: September 30 2007 19:15
Leave it to the US to have competing competition regulators. Both the Federal Trade Commission and the Department of Justice’s antitrust division scrutinise mergers and corporate practices to prevent monopolies and anti-competitive behaviour. Only the DoJ can file criminal charges, but when it comes to approving mergers and bringing civil cases, the agencies have overlapping jurisdiction. In 1993, the FTC was famously in deadlock on whether to charge Microsoft with abusing its Windows near-monopoly, so the DoJ took over.
In recent years, the two agencies have divided their world into spheres of influence, but a 2002 move to formalise the split along industry lines fell apart. Since then, the two agencies have occasionally tussled over who will review particular mergers. That division has created an odd imbalance. Both agencies start from the same set of written guidelines. However, it has often been harder to get mergers approved by the FTC, which is legally required to be bipartisan, than by the currently Republican-controlled DoJ. So antitrust hurdles appear higher for some deals than others, depending on which agency does the review.
The US often defends regulatory competition as a way to prevent agencies from becoming too cosy with the industries they oversee. But the division of antitrust enforcement appears to be a historical anomaly with none of these benefits. The split dates back nearly a century – the FTC was founded in 1914 by reformers annoyed that the DoJ was not doing more to “bust the trusts”.
So far there is no big constituency pushing for an overhaul. Those who favour less regulation worry that major changes could give broader powers to the FTC, while those who want more government intervention fear that the DoJ could end up as the dominant regulator.
Congress held routine oversight hearings on antitrust enforcement this week. But it should take the radical step of rethinking the entire structure. The recent Microsoft ruling reaffirmed that the European Union is a global player in competition policy. The US should reduce the regulatory clamour by speaking with one voice.
Copyright The Financial Times Limited 2007
www.ft.com/cms/s/1/41225b8c-6f80-11dc-b66c-0000779fd2ac,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html