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 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."
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 entirety 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.
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. § 4.9(b)(4), on filing of an application for clearance, 16 C.F.R. § 4.9(10)(ii), or on publication in the Â鶹´«Ã½ Register of a notice of early termination under the Clayton Act, 15 U.S.C. § 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. § 552(b)(7)(A); and Exemption 7A to the open meeting requirements of the Government in the Sunshine Act, 5 U.S.C. § 552b(c)(7)(A).
3. See note 1.