DOJ/FTC -- really?

Danny Sokol (at antitrustprofs blog) posted a link to this WSJ article on squabbling between the DOJ and the FTC. This is an old story, but there are some twists to which I had not been privy. First, there are some ad hominem remarks that this reporter dug up by Commissioner Rosch. Second, although he may be taken out of context, I don't normally expect to see Commissioner Kovacic speaking loosely about these kinds of matters.

The author reprises the old saw that how your deal comes out depends on where it is reviewed. Maybe so, maybe not -- but his reference to the Whole Foods litigation is a wrong example. I sent the author this e-mail:

"Dear Mr. Catan:

There is a mistaken suggestion in the quoted paragraph below:

"One example: The FTC lost its initial effort to get a preliminary injunction from a federal court to halt Whole Foods Market Inc.'s purchase of Wild Oats Markets Inc. But it was able to continue to challenge the deal in its own courts anyway, eventually forcing the company to settle. If the Justice Department had been reviewing the deal, that court loss would likely have ended the matter. Whole Foods declined to comment, as did the two agencies."

Although you are correct that the FTC was able to continue with its administrative process after losing at the preliminary injunction stage in district court, the FTC did appeal its federal court loss to the court of appeals, which reversed the lower court. DOJ could have, and likely would have, done the same thing. With the reversal DOJ could have proceeded with a suit seeking a permanent injunction, which might have brought about the same settlement that the FTC was able to negotiate. DOJ and FTC might well have approached Whole Foods differently, and the agencies' different procedures can bring about different results in some cases, but Whole Foods is not the right example.

Thanks for this interesting article."

I've long believed the FTC should review all mergers. The agency has the institutional competence to do so and is more politically insulated (and mergers are political footballs). Merger policy potentially has more diplomatic ramifications than does conduct enforcement, and the continuity the FTC provides allows for better cross-border cooperation on that front. And merger review is the sort of first-order regulation for which an independent agency (like the FTC) is particularly well suited. Interestingly, the complaints by entities like the Chamber of Commerce about the unpredictability of review don't recognize that review can become much more predictable -- and, if recent years are an indication, more predictably interventionist -- by consolidating all matters in one agency, if you pick the FTC.