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The government’s effort to streamline the merger review process will produce few concrete results unless merging companies and their lawyers improve cooperation with regulators, warned Federal Trade Commission Chairman Deborah Platt Majoras. “I am ever amazed at the unproductive and unprofessional conduct of some members of our bar or their clients,” Majoras said during a speech to the American Bar Association Aug. 6 in Chicago. “We can implement new procedures at the FTC … but if we do not have a reasonable level of assurance that parties are dealing in good faith, new rules and process reforms will be, I fear, dead on arrival.” Corporations and their attorneys often create an atmosphere of animosity by dragging their feet or even refusing to provide market data and other information requested by FTC or Department of Justice regulators who must sign off on a merger. The ill will could have detrimental impact on reform, she said. “We continue to see some lawyers — not most, but some — who take a hostile, noncooperative approach to their dealings with the agencies,” Majoras said when asked to elaborate Monday. Although she would not give specific examples of bad behavior, antitrust lawyers point to a few recent deals in which companies and their lawyers rankled federal officials reviewing transactions. For instance, in Blockbuster Inc.’s thwarted attempt to purchase Hollywood Entertainment Corp., the FTC took Blockbuster to court, claiming lawyers for the movie rental company had not provided sufficient data to “substantially comply” with a second request for information. Blockbuster provided more than 1,900 boxes of documents and 83 compact discs of electronic information, but the FTC claimed more than half of the approximately 120,000 data points were inaccurate. Simple cooperation will go a long way in improving the relations between regulators and industry, Majoras said. “First of all, it is very useful if the private bar is willing to voluntarily provide data we request in the first 30 days of review.” Being up front early in the review process can save companies the time and money of a second request for information, she explained. If data is lacking, however, agency staff has no choice but to make a second request for information, a step that can add months to a merger review. Lawyers in the private bar counter that clients’ ability to defend a deal in court can be hurt if too much information is provided up front. At some point, the staff reaches a point where they stop reviewing a deal for approval and begin compiling a case to block the deal. “We have a cooperative as well as adversarial system,” said Bob Schlossberg, an antitrust partner at Freshfields Bruckhaus Deringer’s Washington office. Although Schlossberg said reform is a good idea, Majoras’ warnings have the familiar ring of efforts that have fallen short in the past. “It’s like d�j� vu all over again — and again.” Copyright �2005 TDD, LLC. All rights reserved.

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