Federal review of all future energy mergers for compliance with antitrust laws will rest entirely with the Federal Trade Commission (FTC), according to a memorandum of agreement (MOA) worked out between the FTC and the Department of Justice’s antitrust division.

Under the MOA, the two federal agencies have divided up their responsibilities for reviewing mergers according to industries. Energy — natural gas, electricity and crude oil-related companies — was one of 16 industries that was allocated to the FTC, while the DOJ was assigned responsibility for mergers in 21 other industries.

The MOA is a truce of sorts to the “frequent and time-consuming” turf wars between FTC and DOJ over which agency had jurisdiction for reviewing specific mergers, which the agencies conceded often delayed the start of investigations into mergers by up to a month.

In an analysis of merger-review delays issued in February, the FTC found that since the start of fiscal year 2000, 300 merger reviews were delayed on average by three weeks due to agency disputes over jurisdiction, while some experienced delays of several months. Under the terms of the MOA, more than 80% of the disputed merger reviews would have been resolved in two business days, the agencies said.

With less time devoted to disputes, the FTC and DOJ said they will be able to enforce the antitrust laws more effectively.

Previously, the responsibility for reviewing a merger went to the agency that had the most historical experience with a commercial sector. But as the boundaries separating individual sectors became blurred in the face of technology changes, and as deregulation measures allowed companies to diversify, this clearance method for merger reviews began to break down, the FTC and DOJ noted.

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