[Federal Register Volume 62, Number 73 (Wednesday, April 16, 1997)]
[Notices]
[Pages 18630-18631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9820]
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FEDERAL TRADE COMMISSION
Notice of Policy of Disclosing Investigations of Announced
Mergers
AGENCY: Federal Trade Commission.
ACTION: Notice of revised policy.
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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 government body. In those limited
circumstances, the Commission authorizes public disclosure of whether
the agency is investigating the transaction or proposal under Section 7
and 11 of the Clayton Act. Inquires seeking disclosure under this
authority should be addressed to the Commission's Office of Public
Affairs.
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 type of investigations.
EFFECTIVE DATE: April 16, 1997.
FOR FURTHER INFORMATION CONTACT:
Victoria A. Streitfeld, Office of Public Affairs, 202-326-2718, or
Stephen Calkins, General Counsel, 202-326-2481.
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 weight 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 investigation'' (where
particular targets are not identified), and of particular
investigations that involve significant risk of economic harm or risk
of public health or safety.
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 the 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 government 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 confirms closely with that of the Antitrust
Division of the Department of Justice, with which the Commission shares
enforcement of the Clayton Act.
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. Inquires seeking disclosure under this authority should
be addressed to the Office of Public Affairs.
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 disclosure any details
about those investigations. In particular, because the Commission
considers the HSR Act to restrict disclosure of whether a party to
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 to 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.
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
[[Page 18631]]
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.''
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\1\ In 1977, the Commission reaffirmed its then-current policy
of maintaining 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 filing of a petition to quash compulsory process, 16 C.F.R.
Sec. 4.9(b)(4), on filing of an application for clearance, 16 C.F.R.
Sec. 4.9(10(ii), or on publication in the Federal Register of a
notice of early termination under the Clayton Act, 15 U.S.C.
Sec. 18a(b)(2).
\2\ Id. See also Exemption 7A to the mandatory public disclosure
requirements of the Freedom of Information Act, 5 U.S.C.
Sec. 552(b)(7)(A); and Exemption 7A to the open meeting requirements
of the Government in the Sunshine Act, 5 U.S.C. Sec. 552b(c)(7)(A).
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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 entity because the policy presumably would not result in
the harm the Commission identified in 1977.\3\ Nevertheless, I would
have preferred to seek comment on this aspect 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 for 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 to
seek public comment, I dissent.
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\3\ See note 1.
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[FR Doc. 97-9820 Filed 4-15-97; 8:45 am]
BILLING CODE 6750-01-M
