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Gov. George W. Bush’s top antitrust adviser said Monday he generally supports much of the Clinton administration’s record of handling mergers and other competition issues. “We agree much more than we disagree,” George Mason University law school Prof. Timothy J. Muris told the American Bar Association’s antitrust section. Muris said the Department of Justice and the Federal Trade Commission have been far less aggressive than he expected, given the record of the last Democratic administration under Jimmy Carter. “The antitrust terrain of 2000 bears little resemblance to the antitrust terrain of 1980,” Muris said. Muris’ view was shared by all eight competition experts on the ABA panel, which was charged with evaluating the Clinton administration’s antitrust record. “It has been a modest enforcement effort reflecting the consensus in antitrust,” said Joel Klein, assistant attorney general for antitrust at the Department of Justice. “We are probably in the mainstream of thinking.” The likely result: Merger reviews will remain consistent, regardless of whether Bush or Vice President Al Gore wins in November. “There will be a lot less change than people expect,” said Anne Bingham, who held Klein’s job before becoming chairman of Valor Telecommunications of Irving, Texas. “I wouldn’t expect the [handling of] mergers would be any different.” Yet Muris and others at the ABA annual meeting predicted there will be some significant differences along the margins. The biggest change could come on remedies. The FTC and Justice Department in the past year have increasingly demanded corporations identify buyers for divested assets up front. They also have become less inclined to accept the sale of a hodgepodge of assets, preferring companies instead to divest entire divisions or operating units. The divestiture policy is unlikely to be sustained by a Republican administration, said Charles A. James, a partner in the Washington, D.C., office of the Jones, Day, Reavis & Pogue law firm and a former deputy assistant attorney general in the Bush administration’s Justice Department. “I’d be surprised if we don’t see us going back to a process where the remedial process is opened up,” James said. Deborah Garza, a partner in the Washington, D.C., office of the Covington & Burling law firm, said it is often just too difficult to find an up-front buyer. “It is unrealistic for a large number of deals,” she said. That is one reason why Garza predicted a Gore administration would cause some companies to abandon mergers. “I would expect you would see more challenges to mergers and more abandonment of mergers,” Garza said. Muris singled out three cases where he said the Clinton administration overreached. None involved mergers. In a case involving Toys R Us and Price Club, the FTC sued after the toy chain threatened not to sell some toys that manufacturers were selling to Price Club, a warehouse store that charges below-retail prices. Muris said Toys R Us did nothing wrong in trying to protect its business, while the FTC claimed the threat to stop carrying some toys was anti-competitive. The case is on appeal. Also questioned was the FTC’s decision to sue Intel Corp. for refusing to share technology with a company that had sued it. Muris said the FTC staff used a very aggressive definition of anti-competitive behavior to justify its case. Finally, he objected to the AMR Corp. prosecutions. The Justice Department has charged that its American Airlines Inc. subsidiary used predatory pricing to kill off low-fare competition. Muris said he saw nothing wrong in American Airlines cutting prices in response to new competition. “You have to let the firms respond,” he said. “Entry should spark a price war,” he said. Still, Muris said there was more to agree on than dispute. For instance, he said he expected the Clinton administration would attempt to kill almost all vertical mergers. This was a prominent feature of Democratic antitrust enforcement policy in the 1960s and 1970s. “A major effort at retrenchment did not take place,” he said. FTC Chairman Robert Pitofsky said it is incredible how little disagreement exists. “The major theme coming out of this is that we have narrowed the zone of dispute,” he said. Pitofsky said the FTC’s reputation as an aggressive antitrust enforcer is undeserved. Companies are asking the agency to approve deals that never would have been attempted in the past, he said. “Do people think that we are so busy that we cannot afford to bring an additional case?” Pitofsky asked. Copyright �2000 TDD, LLC. All rights reserved. Visit Law.com’s ABA 2000 Convention Coverage

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