July 20, 2005

California (et al.) Uber Alles

posted by Will Wilson @ 1:40 pm

Chevron CEO David O’Reilly wrote recently, “Even if CNOOC were to ultimately enter into a firm agreement with Unocal, it would still face a complex and uncertain government review process, including congressional hearings and inquiries by four state attorneys general that will focus on antitrust, national security, pension, environmental and fair-trade issues. Chevron, by contrast, has already cleared all the necessary regulatory hurdles” (”Chevron’s Pitch,”Wall Street Journal, July 12, 2005).

Noting this article, James Tierney asks, “How can he be so sure? Isn’t it possible that those four attorneys general (or other attorneys general) are not likewise questioning Chevron’s merger application?”

Mr. Tierney’s question is right on the money-and distressing. Has the upside-down federalism of the states’ attorneys general made mergers a state ratification process? Will every merger now require a sign-off from not only the FTC and DOJ-folks doing national merger regulations already-but also fifty AGs?

Mr. Tierney continues, “In our integrated world economy, it is essential that an AG who is doing his/her job keep a sharp eye out on national and international corporate behavior.”

In truth, the manifold complexities of the “integrated world economy” are an argument against decentralized antitrust, an argument fully examined in Competition Laws in Conflict.