Judge Says His Merger Review Role Limited under Tunney Act
U.S. Dist. Judge Emmet Sullivan’s Tunney Act merger review (CD March 30 p1) not only upheld DoJ consent decrees leading to 2 major Bell mergers but also sought to define what such reviews require of judges.
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Sullivan ruled late Thurs. that the settlements in the SBC-AT&T and Verizon-MCI mergers, which included divestitures of high-capacity business lines, were in the public interest. His 56-page order chronicled his efforts to understand what a Tunney Act review should include. He concluded the review was limited strictly to determining whether the consent decrees are in the public interest. “This court… is not tasked with deciding whether these mergers as a whole run afoul of the antitrust laws,” Sullivan wrote: “This court’s role is much more limited.”
CompTel Gen. Counsel Jonathan Lee said his group was disappointed that Sullivan didn’t think the Tunney Act “gave him enough discretion to do more to challenge the Justice Department’s approval of the mergers.” But “by undertaking a thorough review of the merger consent decrees, Judge Sullivan sent a clear message that the Justice Department will be held accountable for its actions,” Lee said.
Sullivan’s order devotes many pages to the Act’s wording and judicial interpretation of it. “While amici argue that [Congress’s] 2004 amendments expanded the court’s scope of review under the Tunney Act, a close reading of the law demonstrates that the 2004 amendments effected minimal changes,” he wrote.
“Under the amended Tunney Act, the court cannot reject the proposed settlements merely because the government failed to address antitrust issues not raised in its complaints,” Sullivan wrote: “Further, the court must accord deference to the government’s predictions about the efficacy of its remedies, and may not require that the remedies perfectly match the alleged violations because this may only reflect underlying weakness in the government’s case or concessions made during negotiations.”
The order ends with a lengthy analysis of arguments against the consent decrees by competitors and public interest groups. The judge weighed them against the Tunney Act standard as he interpreted it, finding all lacking, either because they went beyond the scope of the Act or because DoJ’s responses were “reasonable.”
The Tunney Act review’s conclusion “is clearly a relief for the Bells,” although the market hadn’t “built in much risk from the proceeding,” analysts at Stifel Nicolaus said Fri. AT&T said it was “always confident” that the judge would find its consent decree to be in the public interest.
DoJ Antitrust Chief Thomas Barnett said his agency was pleased that after “a lengthy and thorough review of the settlements,” the court “confirmed the settlements negotiated by the Department are in the public interest by remedying the harms to consumers that the Department had concluded would otherwise have resulted from these mergers.”