The colorful Mobil-Marathon confrontation has put a unique set of pressures on the Federal Trade Commission and its new chairman, James C. Miller III, while the combination of genuine concern about the long-run implications of the merger and political opportunism has helped send Capitol Hill into a frenzy.
For the FTC and Miller, faced with tottering staff morale and concern from Congress and consumer groups over the agency's direction, the case is an opportunity to demonstrate to skeptics that the FTC is equipped during a time of political transformation to take on the complex and politically explosive $5.1 billion merger.
Similarly, the stakes are substantial for several members of Congress critical of the takeover attempt. Sen. Howard Metzenbaum (D-Ohio), who has not enjoyed strong political support in the Findlay, Ohio, area and who faces a bitter challenge from the political right next year at home, was able to transform himself into a town hero. Rep. Clarence Brown (R-Ohio), who is running for governor in Ohio, was quick to jump in by proposing legislation to stymie the deal. So was Rep. Toby Moffett (D-Conn.), who is running for the Senate and who is holding hearings this morning. Rare joint House-Senate hearings will follow next Monday.
There is a populist legacy of fear and loathing of the large oil companies that finds its natural expression in Congress. The combination of the country's second-largest and 17th-largest oil companies would produce an enormous company, and Mobil has projected substantial growth both for itself and for Marathon in the near future. "I don't believe that putting big oil companies together is good for the economy," Metzenbaum said the other day.
Part of the congressional furor arises from serious concern that antitrust enforcement be preserved as a safety net--a final barrier against untrammeled corporate power in this age of deregulation. The merger also is bound to provoke a reexamination of some of the steps Congress has taken in the past few years--including oil deregulation--to aid the U. S. energy industry.
In addition, in light of the Reagan administration's efforts earlier this year to strip the FTC of its antitrust authority--a power now shared with the Justice Department--the case may become a test of the agency's commitment to its politically popular antitrust powers. Opposition to the plan from Republicans and small business concerns forced the White House to withdraw it.
Mobil denies that it is attempting to test the antitrust policy of the FTC under a Reagan appointee. Appearing on The MacNeil-Lehrer Report this week, Herbert Schmertz, Mobil's vice president for public affairs, said that the charge is part of the "fear and intimidation tactics used" by Mobil's critics and said the buy-out is "clearly" permitted under the 1968 Justice Department merger guidelines.
But congressional critics want to know why Mobil hasn't taken the fruits of recent breaks for the oil industry and plowed them into exploration and development rather than trying to buy domestic reserves that already exist. The questions about concentration in the energy industry and how energy companies deploy their resources may produce a measure of discomfort for oil companies that has nothing to do with the Mobil-Marathon takeover fight.
Two specific questions are being asked about the proposed Mobil-Marathon combination. One is the impact it would have on independent gasoline retailers. Marathon supplies them; Mobil has not. Schmertz said the company has not supplied independents because Mobil "has not had the crude back-up to supply them."
The other is the extent to which it would reduce competition at the gas pump in the midwestern states where Marathon competes with Mobil. Metzenbaum says the deal will hurt consumers, while Mobil argued to a federal judge that he and the government must focus on the nationwide impact of the purchase rather than the impact on particular regions such as the Midwest.
The antitrust issues will get more than enough airing. Besides the congressional focus on the impact of the merger and the FTC's inquiry, the same issues are being hashed out in several courtrooms.
In one courtroom, Mobil is trying to enjoin enforcement of antitrust statutes in five states. In another, it is arguing the constitutionality of a bill just adopted by the Ohio legislature that would bar the takeover. In still another proceeding, Mobil will have to defend itself against charges by Ohio's attorney general that the takeover violates the state's antitrust statutes.
The main courtroom confrontation is going on in federal court in Cleveland, where Mobil is defending itself against Marathon's attempt to block the takeover by winning an injunction on the grounds that it would violate federal antitrust laws.
A sentence in The Washington Post's Regulatory Beat of Nov. 5, 1981, implied that Jeffry Perlman had told consumer groups that other consumer organizations had signed on to change the independent status of the Consumer Product Safety Commission. The thrust of Perlman's remarks was that consumer groups had shown an interest in discussing such a change.