Democratic senators criticized the Bush administration Wednesday for what they consider to be lax enforcement of U.S. antitrust laws, urging extra scrutiny of specific merger proposals in the airline and agriculture industries.
Sen. Herbert H. Kohl, D-Wis., said there is “an alarming decline” in the Justice Department’s “antitrust enforcement efforts across the board, particularly with respect to mergers.”
Investigations of proposed mergers by Justice’s antitrust division have declined 60 percent in the past four years, compared to the final four years of the Clinton administration, Kohl said during a Senate Judiciary Subcommittee hearing on antitrust, competition policy and consumer rights.
Congressional Democrats have vowed in recent weeks to step up their scrutiny of antitrust enforcement. Kohl charged that the administration’s “hands-off approach” has encouraged consolidation in a range of industries and hurt consumers by reducing competition.
“There’s been far too little oversight of the two antitrust agencies over the past six years,” said Sen. Russ Feingold, D-Wis., referring to Justice’s antitrust division and the Federal Trade Commission.
The House Judiciary Committee, chaired by Rep. John Conyers, D-Mich., has set up its own antitrust task force.
It’s first hearing on Feb. 28 focused on the proposed merger of XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc.
Kohl, who chairs the subcommittee, and other senators, criticized the Justice Department’s approval of Whirlpool Corp.’s acquisition of Maytag, which they said gave the combined a company a market share of 75 percent, and AT&T Inc.’s acquisition of Bell South.
Assistant Attorney General Thomas O. Barnett, who heads the Justice Department’s antitrust division, rejected the senators’ criticisms. The Bush administration challenged 16 mergers in 2006, he said, requiring changes or other steps. That was the highest number in the past five years, he added.
In addition, the number of merger filings has dropped by about half since the late 1990s, he said, making comparisons to that period misleading.
Under pressure from Kohl, Barnett promised to reconsider a transaction that the Justice Department had previously approved: AirTran Holdings Inc.’s proposed purchase of Milwaukee-based Midwest Air Group Inc.
Barnett said the antitrust division would look at any information provided by Kohl and “consider whether there is any appropriate antitrust concern there that we should pursue.”
Kohl has argued that an acquisition of Midwest by AirTran would diminish customer service and possibly lead to fewer flights from Milwaukee.
Feingold, meanwhile, urged Barnett to scrutinize Monsanto Co.’s proposed purchase of Delta & Pine Land Co., which makes cottonseeds. The transaction would reduce competition in both genetically modified and traditional seeds, Feingold said.
Monsanto agreed to purchase Scott, Miss.-based Delta & Pine Land in August for $1.5 billion in cash. Analysts estimate the deal would give Monsanto control of about 60 percent of the U.S. cottonseed market. Some of Monsanto’s competitors, such as DuPont Co., have opposed the deal.
Barnett said he could not comment on the transaction since it is still being examined by the department.
A hearing on the XM-Sirius Satellite Radio deal will go before the Senate Judiciary Committee’s antitrust panel on March 20.