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Despite pleas from senators to be more aggressive in guarding against media consolidation, R. Hewitt Pate said Wednesday the Department of Justice will not block industry mergers unless they undermine competition. Addressing the Senate Judiciary Committee during his confirmation hearing to be assistant attorney general for antitrust, Pate said issues such as media diversity are outside the realm of antitrust law. “We have a different statutory mandate than the Federal Communications Commission,” Pate said. “The Sherman Act is different and focuses on competition.” The law requires the antitrust division to prove in court that a merger will harm consumers by resulting in higher prices, he said. For example, if a deal creates a bigger company but does not affect its power over advertisers, then the division would be unable to secure a court order blocking the transaction, he said. When a merger does pose competitive threats, the antitrust division will act quickly, Pate said, noting the agency’s recent decision to block EchoStar Communication Corp.’s acquisition of DirecTV. “We will be in place, and if there are transactions that pose anti-competitive consequences we will stop them,” he said. But Sen. Mike DeWine, R-Ohio, chairman of the Senate Judiciary antitrust subcommittee, said the antitrust division’s responsibilities will increase if the FCC proceeds with its plan to loosen restrictions on media mergers. “Consumers will look increasingly to the antitrust division to carefully scrutinize potential mergers and acquisitions in the television, radio, cable, news and entertainment markets,” DeWine said. “We must take care not to allow consolidation in these markets to harm consumer interests.” Sen. Herb Kohl, D-Wis., the ranking member of the antitrust subcommittee, was even blunter. Maintaining a diversity of ownership in the media sector is essential to protecting democracy, he said. He also noted that former Federal Trade Commission Chairman Robert Pitofsky supported applying a stricter standard to media mergers. “The antitrust division will stand as our last line of defense against excessive media concentration,” Kohl said. While Pate may have disagreed with the senators on such issues of agency jurisdiction, not a single lawmaker criticized the credentials of the former Hunton & Williams partner, who took over in December 2002 as acting assistant attorney general when Charles James resigned. “His impressive background and past government service make me confident that he will be a great asset to the Department of Justice, this committee and the American people,” Judiciary Committee Chairman Orrin Hatch, R-Utah, said. A congressional source said the Judiciary Committee is expected shortly after returning from the Memorial Day recess to forward Pate’s nomination with a favorable recommendation to the full Senate, which could confirm the nominee before the July 4 break. Kohl questioned Pate on News Corp.’s pending acquisition of DirecTV, noting that it would combine a major producer of programming with one of the more significant distribution vehicles. Pate declined to comment directly on the deal. “It involves obviously different issues than the merger of two direct competitors,” he said. “But we will look at it very closely.” A source said Wednesday the FTC has cleared the News Corp.-DirecTV deal to the antitrust division for review. In a brief interview, Pate said he has not met with News Corp. CEO Rupert Murdoch. DeWine said the subcommittee will hold a hearing in June on the merger. It also will hold a second hearing that month on the broader issue of media consolidation, he said. Agribusiness mergers also were a major topic at the hearing. Sen. Patrick Leahy, D-Vt., said that since the antitrust division cleared the Suiza Foods Corp.-Dean Foods merger last year, farmers are getting 25 percent less for milk despite stable shelf prices. He also questioned whether HP Hood Inc.’s plan to replace its acquisition of National Dairy Holdings LP with a joint venture would hurt competition. Pate said the antitrust division is “looking very closely” at the new structure, though he declined to comment on whether the department would challenge it. He also said the division will continue to ensure that farmers have multiple buyers for their products. “We are concerned with issues of so-called monopsony power,” Pate said. “There needs to be a choice of buyers.” Pate also pledged to continue to work closely with the states on antitrust investigations and vowed to remain vigilant in monitoring Microsoft Corp.’s compliance with the consent decree ending its antitrust case. He tried to deflect pressure from several senators, including Sen. Arlen Specter, R-Pa., to expedite the review of joint ventures, including the Orbitz online airline ticket site. “It is just as important to get the right answer as to move quickly,” he said. Copyright �2003 TDD, LLC. All rights reserved.

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