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For antitrust lawyers, the year 2000 was a blockbuster. A record number of deals, including the just-approved merger between America Online Inc. and Time Warner Inc.; the Microsoft trial; and a little-noticed but crucial decision from a Washington, D.C. federal judge all combined to make this a milestone year in the field of antitrust. At the top of the list of megadeals is the $111 billion union of AOL and Time Warner. When the merger was announced in January, the conventional wisdom was that regulatory approval would be little more than a formality. Instead, it became a protracted battle, as consumer groups and competitors, led by the Walt Disney Co., pestered regulators to impose conditions on the transaction. On Thursday, the five FTC Commissioners unanimously approved the merger, but required AOL Time Warner to open its cable system to rival Internet service providers. Still in a holding pattern is the $4.3 billion United Airlines-US Airways merger, which has been pending before the Department of Justice for six months. Members of Congress continue to pressure the DOJ to reject the deal. “The merger is likely to trigger other mergers and reduce the industry to three mega-carriers with worldwide networks,” ranking House Transportation Committee member James Oberstar, D-Minn., wrote to acting antitrust chief Douglas Melamed on Oct. 27. In another difficult deal, BP Amoco and Arco eked out a settlement with the FTC on the eve of trial, agreeing to the largest dollar-value divestiture ever. MCI Worldcom and Sprint were not so lucky — in a brutal loss, they abandoned their $115 billion deal in the face of DOJ and European Union opposition. Overall, a whopping 4,900 corporate mergers with a combined value of $2 trillion required federal approval in FY 2000. For the Federal Trade Commission’s Bureau of Competition and the Justice Department’s Antitrust Division, keeping up with work was a difficult task indeed. “People are working tremendously long hours, nights, and weekends in order to keep up with the number of mergers coming in,” Bureau of Competition head Richard Parker told Legal Times in September. President Bill Clinton in his FY 2001 budget proposed a hefty $39.6 million increase in funding for the FTC and a $24 million bump for the Antitrust Division. In the Commerce-Justice-State appropriations bill expected to be sent to the president, Congress gave the FTC a more modest $22 million raise, funding the agency at $147.2 million, while the Antitrust Division will get $120 million. The approps bill also contains reform of the Hart Scott Rodino Act. The 1976 law requiring federal review of all transactions worth more than $15 million has been amended to raise the review threshold to $50 million. The move will reduce the number of deals requiring federal approval by half. Another antitrust proposal introduced in Congress this year would require the Department of Agriculture to review agribusiness mergers and determine whether they would harm family farmers. Two bills on the topic both stalled in committee. Without question, the single biggest antitrust story of the year was Microsoft. On June 7, U.S. District Court Judge Thomas Penfield Jackson ordered the breakup of the company, writing that Microsoft, “convinced of its innocence, continues to do business as it has in the past and may yet do to other markets what it has already done” in operating systems and Internet software. The case is scheduled for an en banc argument before the U.S. Circuit Court of Appeals for the D.C. Circuit in February. One issue raised by Microsoft in its Nov. 27 brief: whether to vacate Jackson’s order because he granted a series of interviews about his decision before he dealt with post-trial motions. The case also made a celebrity out of Antitrust Division chief Joel Klein — it was front-page news in The Washington Post and The New York Times when he announced his resignation on Sept. 19. Klein still has not revealed what he will do next, although members of the bar continue to speculate that he is leaning toward investment banking. Another Washington, D.C. court case also stands to have a major impact on the field of antitrust. The case involves a proposed merger between the nation’s second- and third-largest baby-food makers, H.J. Heinz and the Milnot Holding Corp.’s Beech Nut. The FTC voted 3-2 to oppose the transaction, noting that it would create a duopoly in the baby-food market. But in October, U.S. District Court Judge James Robertson shocked the antitrust bar by allowing the merger to go forward, ruling that the efficiencies created by the otherwise illegal $185 million union made up for its competitive harm. The case is now on appeal before the U.S. Circuit Court of Appeals for the D.C. Circuit, and will provide a once-in-a-decade opportunity for the court to weigh in on a merger case. Recently, attorneys general from 36 states filed an amicus curiae brief urging the court to overturn Robertson’s decision. Among the hottest ongoing issues is regulation of the business-to-business, or B2B, marketplace. As a test case, the FTC this year launched an investigation of Covisint, the proposed B2B backed by the General Motors Corp., Ford Motor Co., DaimlerChrysler AG, and Renault SA providing services to firms in the automotive industry supply chain. The agency gave the venture a green light in September, and issued a report on B2B competition policy in late October. “The antitrust concerns B2Bs may raise are not new,” said Chairman Robert Pitofsky. “The report does not warn of insoluble problems, but rather lays the foundation for identifying and addressing circumstances that warrant antitrust scrutiny.”

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