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Seething over the government’s handling of America Online Inc.’s acquisition of Time Warner Inc., a top Republican lawmaker Friday proposed replacing the current antitrust regime with a system that requires regulators to make a much faster assessment of a deal’s competitive effects. Rep. Billy Tauzin, R-La., the frontrunner to be the next House Commerce Committee chairman, proposed giving antitrust agencies 90 days to decide whether to block a merger. Right now, regulators have 30 days from the time a company has filed for antitrust clearance to issue a second request, which is a formal demand for more information. A company can take as long as it wants to fulfill that request. Once it has done so, regulators have to act within 20 days. Thus, deals can go on for months before being completed. Agencies would be barred from conditionally approving a merger under Tauzin’s plan. They would have to decide “yes” or “no” on each transaction. If the agency votes no, it would issue a detailed opinion that the company could challenge in court. Eliminated would be consent decrees, the most typical way the Federal Trade Commission and the Justice Department resolve merger cases. With consent decrees, a company voluntarily agrees to divest certain assets or change business practices in exchange for the regulator’s approval. For instance, Philip Morris Cos. agreed Thursday to sell gelatin and mint businesses in order to win FTC approval to acquire Nabisco Holdings Corp. The current Hart-Scott-Rodino process does have time limits. But companies are free to extend those deadlines, and most do rather than risk forcing the FTC to challenge a deal in court. The merger bill will be one of the first pieces of legislation the Commerce Committee addresses this year, Tauzin said. “Perhaps someone on the Judiciary Committee would consider similar reforms for the Justice Department,” he said. Prospects for enactment appear slim. While Tauzin enjoys support among Commerce Committee members, no one on the Judiciary Committee or in the Senate has rallied to his side. That did not deter Tauzin, who said it is wrong for the government to force companies to divest assets to win approval to merge. “They shake people down,” Tauzin said in a luncheon address to the Freedom and Progress Foundation. “It is blackmail.” Antitrust lawyers said the plan would not work. Former FTC Commissioner Mary Azcuenaga, a partner in the Washington office of the Heller, Ehrman, White & McAuliffe law firm, said Tauzin would make it harder for companies to get mergers approved. “A lot of companies will not want to relinquish consent decrees,” she said. “It gives companies the opportunity to get a deal through that if the answer was yes or no it would be a no.” Copyright (c)2000 TDD, LLC. All rights reserved.

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