Now, when an agency denies clearance, it simply notifies the other agency: "denied". The agency whose clearance is denied must start another round of inquiry to ascertain the reasons for the denial. Under the recent proposal, when an agency denies a request it will also state the reasons for its decision. In this way, the process will be shortened. The agencies have also recently agreed to have their staff's meet on a weekly basis, if necessary, to eliminate any outstanding clearance requests and conflicts. Differences which remain are to be referred to higher levels.

We applaud these initiatives and urge the agencies to implement them as quickly as possible. Adoption by the agencies of the additional recommendations set forth above will help to improve the liaison process still further.

c. Recent developments

The liaison process, specifically, and the relationship between the two agencies, generally, appears to be entering a new era. In recent months, the two agencies have seen more conflict-yet at the same time more cooperation-than in many years.

One example of recent conflict involved an Antitrust Division decision to issue civil investigative demands (CIDs) to major steel companies. The FTC objected to the issuance of the demands, pointing to a 1951 consent order it had obtained from the steel companies. Because of this order and the Commission's continuing interest in the area, the FTC argued, the Commission should pursue the investigation. The Department of Justice found the FTC's arguments unpersuasive and decided to issue the CIDS anyway.

In another recent instance, the liaison process faltered seriously in connection with the Antitrust Division's planned international oil investigation. In June 1977, the Department of Justice asked the FTC for clearance for the Department's investigation involving Persian Gulf crude oil. The FTC delayed in giving clearance because it feared. that the Justice Department probe could affect its case against Exxon and seven other oil companies. The Exxon case has international aspects, and FTC attorneys feared that the Antitrust Division's civil investigative demands might give the oil companies new grounds to delay the already lengthy proceeding. Representatives of the two agencies met to discuss these concerns. The FTC requested a copy of the specifications on the CID's the Division was planning to issue and also the Division's backup memo on the topic.

The Justice Department refused to turn over those materials. While admitting the theoretical possibility of delay in the FTC proceeding because of the Department's investigation, the Department thought the Commission's arguments were insubstantial, and were unduly delaying the investigation. The Department, therefore, decided to go ahead.

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After the Justice Department indicated its intention to proceed, the FTC sent a letter to the Department in which it agreed to grant clearance if certain conditions were met. Those conditions were: (1) the FTC receive the background papers it had originally sought; (2) the Department make any information that it received through use of

ANTITRUST & TRADE REG. REP. (BNA) A-2 (Aug. 4, 1977).

the CID's available to the FTC, and (3) the FTC be consulted before the Department makes any final decision in the case. The Commission and the Department of Justice are still involved in discussions concerning those conditions.

Ironically, these conflicts have come at a time when the relationship between the heads of the FTC and Antitrust Division appear to be more amicable than that of many of their predecessors. Indeed, as mentioned above, the two agencies have recently agreed on measures to improve the liaison process. In addition, they have agreed to more high level consultation, coordination, and planning.

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Despite the recent conflicts the committee sees no cause for concern at the present time. Some conflict is inevitable between the agencies and, as discussed below, may be desirable: while we encourage close cooperation the agencies need not march in lock-step. At the same time, the agencies should take care that their new-found cooperative spirit is not eroded by a series of small conflagrations. And Congress should make sure that the agencies' recent pronouncements on coordination do not obscure the schism that could develop between the two agencies if a trend toward unilateral action grows unchecked.

C. REEXAMINING THE DIVIDED STRUCTURE

Some critics of dual antitrust enforcement have pointed to the "horsetrading" and the extra expenditures of time and money as arguments for consolidation of antitrust enforcement responsibility into one agency. Other arguments made against dual jurisdiction are that it results in waste, encourages agency shopping by private parties, prevents the accumulation of enough resources in one agency to enable it to prosecute the "big" cases, and results in conflicting enforcement policies.65 The committee examined these contentions, along with the justifications of dual jurisdiction, and has concluded that consolidation of antitrust jurisdiction would be unwise at this time. The reasons for our conclusion are set forth below.

1. The Question of Waste

As mentioned above, the liaison arrangement itself requires some minimal additional expenditures that are attributable directly to dual jurisdiction. Consolidation might save this money and it might also help to achieve some economies of scale. For example, fewer supervisory personnel might be needed if all antitrust enforcement were in one agency. Computer use by one agency rather than two might be more economical. Economic analysis of whole industries might be more efficient.

Consolidation of the two agencies could, however, result in diseconomies of scale. The Antitrust Division has nearly 900 employees while the FTC's "maintaining competition" mission required the expenditure of 594 man years in 1976. Efficient operation of those giant "law firms" is difficult enough now. Consolidation might result in an even more extended chain of command than exists within either agency, making management more difficult and delays more likely.

See text accompanying notes 101-103, infra.

See e.g. Roll supra, note 23 at 2082.

See Green et al., The Closed Enterprise System, 434 (1972).

Even assuming that consolidation would result in some monetary savings, those savings may well be insubstantial, especially when compared to the almost $50 million spent on antitrust by the agencies. 2. The Question of Agency Shopping

With two agencies, it is argued, a prospective antitrust defendant might be able to pick his reviewer. Naturally a defendant will choose an overseer who is less inclined to prosecute vigorously.

In the FTC-Justice context, however, the opportunities for "agency shopping" are minimal. The Federal Trade Commission will give advisory opinions to private parties indicating the Commission's views on the parties' proposed course of conduct. Similarly, the Antitrust Division issues business review letters stating the Division's present enforcement intentions with respect to proposed business conduct. A private party may come to the FTC or the Antitrust Division to ask for a merger clearance and find out whether that agency intends to proceed against it.

Although this arrangement presents an opportunity for a private party to agency shop," it is an opportunity that is apparently little used. In 1976, the Department of Justice issued only 29 Business review letters and the FTC only 25 Advisory Opinions only 2 of the latter dealing with planned mergers. The reasons for this are obvious. As a private antitrust practitioner advised his colleagues: "The difficulty with initiating the review procedures within either the Department of Justice or the Federal Trade Commission is that you are inviting a very thorough examination of the proposed acquisition and you are committed to furnishing any information which is required." A party runs the same risk even when trying to get an informal indication of the agencies' intentions. In addition, as the procedures and the competence of the two agencies have converged, the private litigant has less to choose from. Furthermore, under the Hart-Scott-Rodino Act 67 large mergers must automatically be reviewed by both agencies, leaving less room for litigant choice. Finally, even when a private party does decide to seek approval for his proposed course of conduct by a particular agency, there is no guarantee that his chosen agency will handle the case. Once a merger is announced it will be allocated to one of the agencies through the liaison procedure. In short, under the current dual enforcement structure, agency shopping has not presented a serious problem.

3. Is a Critical Mass Available?

Another criticism of dual jurisdiction is that it prevents an accumulation of a "critical mass" of resources that would allow either agency to pursue the "big" antitrust cases.68 Although this criticism may have been valid at one time, it certainly is not now. Both agencies' budgets have increased substantially in recent years.69 Currently both agencies are involved in big cases. The FTC is litigating the Kellogg and Exxon cases while the Justice Department has filed suit against

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66 Reycraft, Dealing with Enforcement Agencies Prior to Filing Suit, 39 ANTITRUST L.J. 174, 176 (1969).

67 Public Law 94-435.

The Closed Enterprise System, supra note 65 at 434 (1972).

Their budgets have increased over 50 percent in the last two years.

70 FTC Docket No. 8883.

FTC Docket No. 8934.

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IBM 72 and AT&T. Although these cases account for large portions of the agencies' budgets," they have not shied away from pursuing them. It is clear that each agency has the "critical mass” to pursue such big cases if it chooses to do so.

4. Conflicting Enforcement Policies and Actions

With two antitrust agencies there exists the possibility of conflict in enforcement policies and actions. As discussed earlier, the liaison system has effectively eliminated the double enforcement burdens on businesses. The possibility of inconsistent policy pronouncements has not materialized into a serious problem.

One major area of conflict in enforcement policy involves the Robinson-Patman Act. The Justice Department has taken the position that the Robinson-Patman Act is at odds with the basic tenets of antitrust doctrine and does not enforce it. The FTC-either by default or because of a true commitment to the intent of the law-has for years been the sole enforcer of the Robinson-Patman Act. This particular difference in antitrust policy had little practical effect on private litigants; they have not had to worry about conflicting interpretations of the law by the agenices. With the Justice Department out of the picture, only the Federal Trade Commission's enforcement policies mattered.

Another area of potential conflict involves industry guidance. The Antitrust Division has issued Merger Guidelines and the FTC has published industry guides. The Merger Guidelines are broad and indicate under what circumstances the Antitrust Division will challenge a merger. The industry guides are much more specific, focusing on practices within industries that the Commission has had extensive experience with. Although the potential for conflict has existed for over a decade,75 in fact no serious conflict appears to have arisen, Indeed, the FTC's merger screening committee takes into consideration the Division's Merger Guidelines when considering which mergers the Commission should challenge.

Some interagency differences in interpretation of the law have occurred, just as there have been differences in interpretation within each agency. A private antitrust attorney recently complained: "Just this week I'm negotiating the disposition of an antitrust case with the Department of Justice in which they charge that a certain conspiratorial conduct was illegal, when at the same time the Federal Trade Commission is proposing a rule that the industry do exactly what the Department has charged to be illegal." 76 These interagency differences have not occurred frequently on major legal issues, though."

There have, of course, been differences in emphasis and in the exercise of prosecutorial discretion. There have been instances where one agency has closed its inquiry into a particular business or industry and the other agency thought it worthwhile to commence its own investigation. The recent clearance to the FTC of the auto industry

72 69 Civ. 200 (S.D.N.Y.).

73 Civ. 74-1698 (D.D.C.)

The Exxon case, for example, will cost the FTC 30 percent of its antitrust budget in fiscal year 1978.

C. Areeda. Antitrust Analysis: Problems, Text, Cases, 35 n. 63 (1967).

See Hearings, supra note 59 (testimony of Maxwell Blecher) at 72.

"The agencies have conflicting policies on disclosure of documents during consent decree negotiations. See ANTITRUST & TRADE REG. REP. (BNA) A-19 (Apr. 13, 1976).

is an example of such an instance. But these differences have not been frequent nor have they, apparently, subjected businesses to undue burdens. It might even be said that these differences are a virtue of the dual enforcement system. As discussed below, the notion of two agencies engaged in healthy competition implies some policy conflicts.

D. MAINTAINING DUAL JURISDICTION

An absence of serious problems is not the only basis for continuing dual jurisdiction; the present structure affords some important benefits. In our view, the current antitrust arrangement is one area in Government organization in which concurrent jurisdiction is presently warranted. The present structure encourages fresh antitrust perspectives, allows for the transfer of politically sensitive cases to another body, and permits cross-fertilization of antitrust and consumer protection policies. In addition, since talk of merging the two agencies usually means stripping the FTC of its antitrust responsibilities, maintenance of the present structure would preserve for the administrative agency its unique role in antitrust.

1. Fresh perspectives

One commonly stated justification for continuing dual jurisdiction is that it promotes healthy competition between the two agencies. Competition between agencies charged with maintaining a competitive economy does have a certain logic. But the liaison arrangement has to some extent resulted in a "division of markets" rather than complete competition. In fact, the "competition" that has existed between the two agencies has not been entirely healthy. Bureaucratic jealousy and backbiting persists. There is still "much rancor beneath the veil of civility."

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Yet competition has had some salutory effects. Competition between the two agencies has contributed to an esprit de corps in each agency. It has also resulted in pressure on the agencies to bring the most productive cases. Knowing that its performance will be judged against its competitor gives each agency an incentive to bring the most productive

A biproduct of dual jurisdiction is the encouragement of fresh ideas and different perspectives. To some extent a new perspective is introduced every time a new assistant attorney general in charge of the antitrust division or a new FTC Chairman is appointed. The permanent presence of the FTC, however, enhances the likelihood of fresh antitrust initiatives; there is an additional institutional source of innovative antitrust approaches. Without dual jurisdiction such innovative actions as the cereal 81 and oil 82-shared monoply"-cases might not be in litigation.

There are those who doubt the wisdom of bringing the shared monopoly cases. They would argue that "either a case should or should

78 See Posner. Dissenting View: Do We Really Need an FTC! 3 ANTITRUST L. & ECON. REV. 65, 73 (1970).

7 CLOSED ENTERPRISE SYSTEM, supra, note 65 at 431.

80 It may also mean the agencies want to bring the flashiest, headline-grabbing case even though it may not be the most productive in terms of its contribution to a competitive economy.

FTC Docket No. 8883. 82 FTC Docket No. 8934.