Will antitrust change if Democrats take White House?

By Diane Bartz

WASHINGTON (Reuters) - With Democrats in a strong position to win the White House after eight years of Republican rule, antitrust lawyers say any controversial corporate deals should be announced soon if they hope to get approval before next January.

Even relatively uncontroversial deals may face delays as senior antitrust regulators leave the Bush administration as the election approaches.

Already the head of the U.S. Federal Trade Commission has said she will depart this month. The FTC and Justice Department combine efforts to enforce antitrust law.

Phillip Zane of Baker Donelson PC argued that a Democratic administration was more likely to take a tougher line on merger reviews than the Bush team has during the past seven years.

"If I had any sort of close deal, I'd rather have it go now," Zane said. "It may be that some of the airline deals are close deals."

Record-high fuel prices and a weakening economy are pressuring large U.S. airlines to consider consolidation. Last week, pilots at Delta Air Lines (DAL.N) and Northwest Airlines NWA.N revived talks on merging their contracts, a key step for the carriers to proceed with merger talks.

A big airline merger would get antitrust scrutiny but could be hard for regulators to challenge, said Evan Stewart of Zuckerman Spaeder LLP.

"The profit margin is just so horrible, the cost of oil and other things, the union cost," added Stewart. "Some of these companies are in such terrible shape ... that we're going to have to have some consolidation. That's gonna happen."

CLOSE CALL?

Antitrust experts disagreed over whether Microsoft Corp's (MSFT.O) interest in taking over Yahoo (YHOO.O) would be a close call for regulators.

Zane said that Republicans and Democrats would likely have a similar view of a Microsoft takeover of Yahoo, potentially a $41.4 billion deal, because of rapid changes in the Internet search and advertising market.

"Traditional Republicans would have taken a very strong view of privacy but the new breed of Republicans (are less concerned)," Zane said.

But Stewart disagreed. "Yahoo-Microsoft, that's one that's more likely to have a political overtone to it," he said.

The last time a Democrat was in the White House, the Clinton administration went after Microsoft for abusing its dominance of the market for computer operating systems.

President George W. Bush's Federal Trade Commission has thus far declined to go after Intel (INTC.O), which Europe accused of trying to squeeze out its main rival, Advanced Micro Devices Inc (AMD.N). However, the New York state attorney general, a Democrat, has launched an investigation about Intel's monopoly power.