[11216] in Public-Access_Computer_Systems_Forum
FTC Will Disclosed Announced Mergers, Accept Email on Mergers (fwd)
daemon@ATHENA.MIT.EDU (James Love)
Mon Apr 14 21:37:40 1997
Date: Mon, 14 Apr 1997 19:50:32 -0500 (CDT)
From: James Love <love@tap.org>
To: Multiple recipients of list PACS-L <PACS-L@UHUPVM1.UH.EDU>
Reply-To: Public-Access Computer Systems Forum <PACS-L@UHUPVM1.UH.EDU>
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Info-Policy-Notes - A newsletter available from listproc@tap.org
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INFORMATION POLICY NOTES
April 11, 1997
FTC to enhance public role in merger review process
James Love (love@tap.org, 202.387.8030)
Today the FTC issued a "Notice of Policy of Disclosing Investigations."=20
The Notice reversed longstanding FTC policy of refusing to disclose any
mergers reviewed under Hart-Scott-Rodino Act. This practice had created
an unnecessary level of secrecy for agency merger reviews, making it more
difficult for citizens to participate in the merger review process.
Today's decisions permits the FTC to disclose basic information regarding
the existence of a merger view process, and mechanisms for communicating
with the FTC about the merger review, when the merging companies have
disclosed information about the merger to the press, or in a publicly
available filing, such as in an SEC disclosure document.
This will pave the way for the agency to disseminate more information
about the merger review process to the general public. For example, under
today's decision, the FTC could publish on its Web page the names of every
publicly disclosed merger review, with agency contact information for each
publicly disclosed merger. This would enhance the public opportunity to
learn which mergers are pending, and how one could communicate with the
FTC to inform its deliberations.
In a related development, the FTC has established two new email address
for contacting the FTC. To contact the FTC on a matter concerning
antitrust (including a merger review) send email to: antitrust@ftc.gov (no
period). To contact the FTC on a matter involving consumer protection,
send email to consumerline@ftc.gov (no period). =20
Both steps were taken in response to a request sent to the FTC on March 5,
1997, by CPT and more than 100 pubilc interest groups, businesses,
professors and citizens who asked the FTC to use the Internet to enhance
the public's participation in the merger review process. (See:
http://www.essential.org/antitrust/march51997.html). The FTC first
accepted electronic mail in the Staples/Office Depot merger. Today the
FTC reported that it had received about 2,500 comments on the Staples
merger by electronic mail. The FTC and several states are now seeking to
block this merger.=20
Four members of the FTC voted for the change in policy. Commissioner Mary
L. Azcuenaga agreed in part, and dissented in part. The FTC's notice and
Commissioners Azcuenaga's dissent are attached.=20
Jamie
[Billing Code 6750-01]
FEDERAL TRADE COMMISSION
Notice of Policy of Disclosing Investigations of Announced Mergers
AGENCY: Federal Trade Commission.
ACTION: Notice of revised policy.
SUMMARY: The Federal Trade Commission is revising its policy concerning
disclosure of investigations. The Commission's policy is to conduct its
investigations on a nonpublic basis. In the past, the Commission has
established some narrow exceptions to that policy. The Commission is now
establishing an additional exception for circumstances in which a party to
a merger or other transaction has publicly disclosed the existence of a
transaction or proposed transaction in a press release or in a public
filing with a governmental body. In those limited circumstances, the
Commission authorizes public disclosure of whether the agency is
investigating the transaction or proposal under Sections 7 and 11 of the
Clayton Act. Inquiries seeking disclosure under this authority should be
addressed to the Commission's Office of Public Affairs.=20
This change of policy will more closely conform the Commission's practice
in such matters with that of the Antitrust Division of the Department of
Justice. The change of policy does not alter the Commission's
confidentiality policies or practices with respect to documents and
information submitted to or developed by the agency in connection with
such investigations, or with respect to information concerning the course
of such investigations. The change of policy also does not affect the
Commission's confidentiality policies or practices regarding any other
types of investigations.=20
EFFECTIVE DATE: [Insert date of publication in the FEDERAL REGISTER].=20
FOR FURTHER INFORMATION CONTACT: Victoria A. Streitfeld, Office of Public
Affairs, 202-326-2718, or Stephen Calkins, General Counsel, 202-326-2481.=
=20
SUPPLEMENTARY INFORMATION: The Commission's policy is to hold confidential
the existence and targets of law enforcement investigations, until either
the Commission issues or authorizes a complaint or the matter is closed.
See 42 FR 64135, Dec. 22, 1977. The Commission believes generally that
public disclosure of pending investigations and identification of targets
before the Commission has had an opportunity to weigh the evidence may
unjustifiably harm the companies investigated and interfere with the
conduct and successful resolution of such matters. The laws applicable to
the Commission do not, however, require confidential treatment of the
existence of investigations, and the Commission's policy has long included
narrow exceptions for disclosure of "industrywide investigations" (where
particular targets are not identified), and of particular investigations
that involve significant risk of economic harm or risk to public health or
safety.=20
The Commission is now establishing a further exception, permitting
disclosure of whether the agency is investigating a proposed or
consummated merger or other transaction under Sections 7 and 11 of the
Clayton Act, 15 U.S.C. 18, 21, where a party to the transaction has issued
a press release or made a public filing with a governmental body that
discloses the existence of the transaction. The Commission considers the
concerns underlying the general policy of nondisclosure to have little
application in these instances. Furthermore, while the Hart-Scott-Rodino
("HSR") Act prohibits the Commission from making public (except in
specified circumstances) "information or documentary material filed with
the . . . Commission pursuant to" that Act, 15 U.S.C. 18a(h), nothing in
the HSR Act prevents the Commission from publicly disclosing information
that has already been made available to the public by a party, even if
that information is also included in an HSR filing. Accordingly, where a
party has issued a press release or made a public filing with a
governmental body that discloses the existence of a transaction or
proposed transaction, the Commission authorizes public disclosure of
whether the agency is investigating the matter. This approach conforms
closely with that of the Antitrust Division of the Department of Justice,
with which the Commission shares enforcement of the Clayton Act.=20
Regardless of whether a transaction or proposed transaction is reported by
the media, however, the agency will disclose an investigation under this
authority only after the Office of Public Affairs (or another designated
office) has confirmed that a party has in fact disclosed the existence of
the transaction or proposal in the manner stated. Inquiries seeking
disclosure under this authority should be addressed to the Office of
Public Affairs.=20
The Commission is not changing its treatment of any other information
relating to mergers or similar transactions. Thus, the authority granted
here to disclose the existence of certain investigations does not include
authority to disclose any details about those investigations. In
particular, because the Commission considers the HSR Act to restrict
disclosure of whether a party to a proposed transaction has filed a
notification under that Act, the agency will not, except as permitted by
that law, reveal whether a filing under HSR has been made. The Commission
will continue to keep confidential, as appropriate under its existing laws
and policies, documents and information submitted pursuant to the HSR Act
or relating to an investigation under that Act. The policy revision also
does not affect the confidentiality treatment of other types of
investigation under the Commission's antitrust or consumer protection
authority.
By direction of the Commission.=20
Donald S. Clark
Secretary
----------------------------------------------------
Statement of Commissioner Mary L. Azcuenaga
Concurring in Part and Dissenting in Part
On Decision to Authorize Public Disclosure of
Certain Merger Investigations
The policy the Commission announces today in most, perhaps all, respects
comports with common sense and is long overdue. The policy enables the
Commission to confirm certain otherwise nonpublic information after it has
been confirmed (reliably, as defined in the policy) by third parties. The
policy also enables the Commission to confirm certain nonpublic information
that has not been confirmed by third parties. Under the new policy, the
Commission will confirm the fact that it is investigating a transaction
after the transaction itself has been made public and regardless of whether
the fact of the investigation has been made public by third parties.
The Commission long has followed a policy of declining to confirm the
existence of its investigations until it issues or authorizes filing of a
complaint, or until the matter is closed.(1) This policy is based on the
premise that public disclosure of pending investigations and identification
of targets can interfere with the conduct and successful resolution of such
matters.(2) The Commission concluded in the 1977 Policy Statement that
"disclosure of the identities of businesses under investigation would cause
those businesses severe economic injury even before the Commission
determines whether there is reason to believe the law has been violated."
I have been informed that the business community will have no objection to
having the Commission confirm the fact that it is investigating a
transaction even if the parties have not confirmed the fact of the
investigation. I do not know the basis for this information. Assuming the
information is correct, I support the new policy in its entirety because th=
e
policy presumably would not result in the harm the Commission identified in
1977.(3) Nevertheless, I would have preferred to seek comment on this aspec=
t
of the new policy before adopting it. Good reasons support the Commission's
long standing policy not to confirm or deny the existence of a nonpublic
investigation, and the Commission has been able to live with that policy fo=
r
many years. It seems appropriate and not unduly burdensome for the
Commission to seek public comment on this aspect of the proposal for thirty
days before adopting it. To the extent that the Commission has chosen not t=
o
seek public comment, I dissent.
1. In 1977, the Commission reaffirmed its then-current policy of maintainin=
g
the confidentiality of most nonpublic investigations. See FTC Policy
Statement, 42 Fed. Reg. 64,135 (Dec. 22, 1977)("1977 Policy Statement").
This Policy Statement sets forth exceptions for industrywide investigations
and investigations involving "significant risk of economic harm or risk to
public health or safety." In addition, certain investigations may become
public by operation of law or the Commission's Rules, for example, on filin=
g
of a petition to quash compulsory process, 16 C.F.R. =A7 4.9(b)(4), on fili=
ng
of an application for clearance, 16 C.F.R. =A7 4.9(10)(ii), or on publicati=
on
in the Federal Register of a notice of early termination under the Clayton
Act, 15 U.S.C. =A7 18a(b)(2).
2. Id. See also Exemption 7A to the mandatory public disclosure requirement=
s
of the Freedom of Information Act, 5 U.S.C. =A7 552(b)(7)(A); and Exemption=
7A
to the open meeting requirements of the Government in the Sunshine Act, 5
U.S.C. =A7 552b(c)(7)(A).
3. See note 1.
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