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Federal Trade Commission Chairman Deborah Majoras unveiled an initiative Thursday to aid companies involved in mergers by making the regulatory process less expensive and time-consuming. “I am not yet satisfied,” she said at an American Bar Association meeting on antitrust matters in Washington. Specifically, the process by which merging companies respond to government requests for more information on a deal, known as a “second request,” must be improved, Majoras said. Too much time now is spent collecting and evaluating documents that offer little insight into whether a merger hurts competition. Majoras said this wastes corporate resources and taxpayer dollars. “Either way, consumers lose,” she said. As part of the same package of nominees, the Senate is expected to approve Jonathan Adelstein to a full term at the Federal Communications Commission. President Bush gave both recess appointments in August. Without Senate confirmation, the two would have to leave the agency when Congress adjourns in 2005. The Senate failed to confirm Majoras this summer because of objections from Sen. Ron Wyden, D-Ore., over the FTC’s handling of oil company mergers. Majoras said Thursday that she will convene a panel of independent experts to evaluate a recent Government Accountability Office report that found six of eight oil industry mergers resulted in higher gasoline prices. FTC officials blasted the report at the time, contending that its assumptions and methods were flawed. The agency has said none of the deals violated antitrust law. Majoras said an independent review of the evidence is needed before the agency can decide whether or how to adjust its oil industry merger analysis. On the pre-merger reform effort, Majoras said the FTC will develop a new model second-request letter in an effort to further limit the number and type of documents it requests from companies involved in controversial mergers. The agency also will attempt to better define how companies can electronically search their databases for relevant documents rather than rely on legal staff to personally review every potentially relevant document. Electronic receipt of documents by the FTC also will be enhanced to make this a more viable option. “I am encouraging the staff to be flexible,” she said. But Majoras said these reforms will fail if the defense bar and their corporate clients attempt to prevent the FTC from conducting additional document searches if a merger challenge goes to court. Such a move would force the FTC back toward requesting all documents upfront. “I will work to improve the process, but it takes two to tango,” Majoras said. This is not the first time the agencies have attempted to streamline the second-request process. Assistant Attorney General Charles James and FTC Chairman Timothy J. Muris both endorsed reform initiatives when they took office in June 2001. Yet few companies appeared to take advantage of the changes, and antitrust lawyers said the pre-merger review process is more burdensome than ever. Majoras also said the FTC is working with the Department of Justice to develop a commentary that explains how the two enforcers interpret the federal merger guidelines, which detail how antitrust reviews are conducted. Copyright �2004 TDD, LLC. All rights reserved.

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