Thursday, May 22, 2003

Antitrust News: Pate Aces Confirmation Test

I'll have more to say later today on the confirmation hearing of R. Hewitt Pate, the soon-to-be permanent head of the DOJ's Antitrust Division. For now, here's the Washington Post's take:

R. Hewitt Pate yesterday moved closer to becoming the permanent chief of the Justice Department's antitrust division when he breezed through a Senate confirmation hearing.

Pate, 40, has been acting assistant attorney general for antitrust since November, when Charles A. James left the job. Pate is less of a lightning rod than James, whose handling of the government's settlement with Microsoft Corp. was criticized by some technology companies and members of Congress.

Pate was asked few controversial questions at yesterday's two-hour Judiciary Committee hearing. Senators repeatedly implored Pate to guard against a spate of media mergers and acquisitions after the Federal Communications Commission relaxes ownership rules in the industry, as it is expected to do next month.

"The antitrust division will stand as our last line of defense against excessive media concentration," said Sen. Herb Kohl (D-Wis.).

Pate stressed that the Justice Department, under the Sherman Antitrust Act, would narrowly review such deals for their potential economic impact on local markets, rather than for their effect on television and radio programming.

"I can certainly assure you we will be in place and if there are transactions that present anticompetitive problems we will stop them," Pate said. "When we step in, that may, as a byproduct, also preserve a diversity of voices and that's all for the good."

Sen. Arlen Specter (R-Pa.) pressed Pate to speed up an investigation of Orbitz LLC, which runs a discount travel Web site controlled by five major airlines. Three years ago, the antitrust division opened an investigation of Orbitz, citing a guarantee that airlines would offer their lowest fares on the site.

"Sounds to me on its face like a restraint of trade," Specter said.

Pate said upheaval in the airline industry and "the post-September 11 environment" complicated the antitrust review. "I can assure you we're not sitting on it," he said. "It's just as important to get the right result as to move quickly in those investigations."

Pate said the division will "continue to be vigilant" in making sure that Microsoft lives up to the terms of its settlement. He declined to discuss about other pending cases, including a review of a $6 billion deal that would give News Corp., one of the world's largest owners of television networks, control of Hughes Electronics Corp.'s DirecTV, the biggest U.S. satellite television service.

The Judiciary Committee could vote today on Pate's nomination. Sen. Orrin G. Hatch (R-Utah), the committee chairman, signaled that confirmation was not in question. "I'm totally in support of your nomination," Hatch said. "It's one of the best nominations we could possibly have."

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