WASHINGTON, March 11 (Reuters) – With Democrats in a strongposition to win the White House after eight years of Republicanrule, antitrust lawyers say any controversial corporate dealsshould be announced soon if they hope to get approval beforenext January.
Even relatively uncontroversial deals may face delays assenior antitrust regulators leave the Bush administration asthe election approaches.
Already the head of the U.S. Federal Trade Commission hassaid she will depart this month. The FTC and Justice Departmentcombine efforts to enforce antitrust law.
Phillip Zane of Baker Donelson PC argued that a Democraticadministration was more likely to take a tougher line on mergerreviews than the Bush team has during the past seven years.
"If I had any sort of close deal, I’d rather have it gonow," Zane said. "It may be that some of the airline deals areclose deals."
Record-high fuel prices and a weakening economy arepressuring large U.S. airlines to consider consolidation. Lastweek, pilots at Delta Air Lines and Northwest Airlinesrevived talks on merging their contracts, a key stepfor the carriers to proceed with merger talks.
A big airline merger would get antitrust scrutiny but couldbe hard for regulators to challenge, said Evan Stewart ofZuckerman Spaeder LLP.
"The profit margin is just so horrible, the cost of oil andother things, the union cost," added Stewart. "Some of thesecompanies are in such terrible shape … that we’re going tohave to have some consolidation. That’s gonna happen."
Antitrust experts disagreed over whether Microsoft Corp’sinterest in taking over Yahoo would be aclose call for regulators.
Zane said that Republicans and Democrats would likely havea similar view of a Microsoft takeover of Yahoo, potentially a$41.4 billion deal, because of rapid changes in the Internetsearch and advertising market.
"Traditional Republicans would have taken a very strongview of privacy but the new breed of Republicans (are lessconcerned)," Zane said.
But Stewart disagreed. "Yahoo-Microsoft, that’s one that’smore likely to have a political overtone to it," he said.
The last time a Democrat was in the White House, theClinton administration went after Microsoft for abusing itsdominance of the market for computer operating systems.
President George W. Bush’s Federal Trade Commission hasthus far declined to go after Intel, which Europeaccused of trying to squeeze out its main rival, Advanced MicroDevices Inc. However, the New York state attorneygeneral, a Democrat, has launched an investigation aboutIntel’s monopoly power.
Daniel Booker of the law firm Reed Smith had a differentconcern. "That’s a transaction that … rather than beingworried about approved or not approved, I’d be worried that Iwouldn’t be able to get a decision."
That’s because senior regulators often leave as a change inadministration approaches, slowing down decision-making. FTCChairman Deborah Majoras has said she would leave in late Marchto 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 thecredit crunch, Bruce McDonald, a lawyer with the Jones Day lawfirm and a former Justice Department deputy assistant attorneygeneral for antitrust during the current administration, saidDemocratic and Republican antitrust regulators would come tothe same conclusion about the vast majority of mergers.
"There … may be some difference but that difference, ifmuch at all, will manifest itself in the marginal case,"McDonald said.
President George W. Bush’s administration has been accusedby some critics of being less rigorous in enforcing antitrustlaw.
It approved, for example, Whirlpool Corp’s 2006acquisition of Maytag Corp, despite estimates the two companiesmade about 70 percent of U.S. washers and dryers.
But even if a Democratic administration wanted to challengemore mergers, it might lose the fight in court.
"If you went back 30 years, what you would see is a fairlylinear movement across administrations of less enforcement anda fairly linear movement of more hostile courts," said AndrewGavil, who teaches antitrust law at Howard University.
While regulators publicly insist that they press cases thatshould be litigated, they have lost major painful courtfights.
Bush’s Justice Department failed to prevent Oracle from acquiring PeopleSoft Inc, while the FTC failed to stop amerger of grocers Whole Foods Market Inc and WildOats.
"To some degree you have to take that into account," saidGavil. "It’s easy to say you should bring more cases but it’salso easy to say, ‘Bang your head against the wall.’"
(Editing by Brian Moss)
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