Antitrust lawyers say any controversial corporate deals
should be announced soon.WASHINGTON, March 11 (Reuters) - With Democrats in a strong
position to win the White House after eight years of Republican
rule, antitrust lawyers say any controversial corporate deals
should be announced soon if they hope to get approval before
next January.
Even relatively uncontroversial deals may face delays as
senior antitrust regulators leave the Bush administration as
the election approaches.
Already the head of the U.S. Federal Trade Commission has
said she will depart this month. The FTC and Justice Department
combine efforts to enforce antitrust law.
Phillip Zane of Baker Donelson PC argued that a Democratic
administration was more likely to take a tougher line on merger
reviews than the Bush team has during the past seven years.
"If I had any sort of close deal, I'd rather have it go
now," Zane said. "It may be that some of the airline deals are
close deals."
Record-high fuel prices and a weakening economy are
pressuring large U.S. airlines to consider consolidation. Last
week, pilots at Delta Air Lines and Northwest Airlines
revived talks on merging their contracts, a key step
for the carriers to proceed with merger talks.
A big airline merger would get antitrust scrutiny but could
be hard for regulators to challenge, said Evan Stewart of
Zuckerman Spaeder LLP.
"The profit margin is just so horrible, the cost of oil and
other things, the union cost," added Stewart. "Some of these
companies are in such terrible shape ... that we're going to
have to have some consolidation. That's gonna happen."
CLOSE CALL?
Antitrust experts disagreed over whether Microsoft Corp's
interest in taking over Yahoo would be a
close call for regulators.
Zane said that Republicans and Democrats would likely have
a similar view of a Microsoft takeover of Yahoo, potentially a
$41.4 billion deal, because of rapid changes in the Internet
search and advertising market.
"Traditional Republicans would have taken a very strong
view of privacy but the new breed of Republicans (are less
concerned)," Zane said.
But Stewart disagreed. "Yahoo-Microsoft, that's one that's
more likely to have a political overtone to it," he said.
The last time a Democrat was in the White House, the
Clinton administration went after Microsoft for abusing its
dominance of the market for computer operating systems.
President George W. Bush's Federal Trade Commission has
thus far declined to go after Intel, which Europe
accused of trying to squeeze out its main rival, Advanced Micro
Devices Inc. However, the New York state attorney
general, a Democrat, has launched an investigation about
Intel's monopoly power.
Daniel Booker of the law firm Reed Smith had a different
concern. "That's a transaction that ... rather than being
worried about approved or not approved, I'd be worried that I
wouldn't be able to get a decision."
That's because senior regulators often leave as a change in
administration approaches, slowing down decision-making. FTC
Chairman Deborah Majoras has said she would leave in late March
to join Procter & Gamble as general counsel in June.
A new administration will take office in January 2009.
WHO IS TOUGHER?
While the pace of deal-making has slowed because of the
credit crunch, Bruce McDonald, a lawyer with the Jones Day law
firm and a former Justice Department deputy assistant attorney
general for antitrust during the current administration, said
Democratic and Republican antitrust regulators would come to
the same conclusion about the vast majority of mergers.
"There ... may be some difference but that difference, if
much at all, will manifest itself in the marginal case,"
McDonald said.
President George W. Bush's administration has been accused
by some critics of being less rigorous in enforcing antitrust
law.
It approved, for example, Whirlpool Corp's 2006
acquisition of Maytag Corp, despite estimates the two companies
made about 70 percent of U.S. washers and dryers.
But even if a Democratic administration wanted to challenge
more mergers, it might lose the fight in court.
"If you went back 30 years, what you would see is a fairly
linear movement across administrations of less enforcement and
a fairly linear movement of more hostile courts," said Andrew
Gavil, who teaches antitrust law at Howard University.
While regulators publicly insist that they press cases that
should be litigated, they have lost major painful court
fights.
Bush's Justice Department failed to prevent Oracle from acquiring PeopleSoft Inc, while the FTC failed to stop a
merger of grocers Whole Foods Market Inc and Wild
Oats.
"To some degree you have to take that into account," said
Gavil. "It's easy to say you should bring more cases but it's
also easy to say, 'Bang your head against the wall.'"
(Editing by Brian Moss)
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