UNITED STATES OF AMERICABEFORE FEDERAL TRADE COMMISSIONCOMMISSSIONERS:Deborah Platt Majoras, ChairmanThomas B. LearyPamela Jones Harbour Jon Leibowitz

)In the Matter of))THE PROCTER & GAMBLE)Docket No. C-4151COMPANY, a corporation; ))File No. 051-0115and))THE GILLETTE COMPANY, )a corporation.))

COMMENT OF THE VOLUNTARY TRADE COUNCIL

The Voluntary Trade Council (VTC), acting under 16 C.F.R. § 2.34 and a Federal Registernotice dated October 6, 2005

, hereby files the following public comment in response to theFederal Trade Commission’s proposed Decision and Order in the above-captioned matter.

Introduction

This comment will address the procedures employed by the Commission in approving itsComplaint and proposed Decision and Order against Procter & Gamble (P&G) and Gillette.Specifically, VTC will discuss whether the Commission had the legal authority to act in thiscase given the recusal of two commissioners. Because this comment has been prepared beforeVTC has had the opportunity to review the substance of the Commission’s complaint andproposed order, we reserve the right to file additional comments later addressing the merits.

170 Fed. Reg. 58,411-58,414.

Summary of Relevant Facts

On January 17, 2005, P&G signed an agreement to acquire complete control ofGillette through an exchange of common stock valued at $57 billion.

Shortly thereafter,P&G and Gillette each filed required pre-merger notification reports with theCommission pursuant to the Hart-Scott-Rodino Act, 15 U.S.C. § 18a(a). This began astatutory waiting period preventing P&G and Gillette from completing their merger.On or about March 25, the Commission, acting under 15 U.S.C. § 18a(e), issued arequest for additional information about the merger.

Such “second requests” aregenerally a prelude to enforcement action, and this case was no exception. OnSeptember 29, the Commission issued a Complaint alleging the merger violated Section7 of the Clayton Act, 15 U.S.C. § 18, and by extension Section 5 of the Federal TradeCommission Act, 15 U.S.C. § 45. The Complaint said the merger, as proposed, wouldillegally reduce competition in several markets, including “at-home teeth whiteningproducts” and “adult battery-powered toothbrushes.”

To appease the Commission’s objections, P&G and Gillette agreed not to contest theComplaint, and they signed an Agreement Containing Consent Orders that includedthe proposed Decision and Order. Under the Agreement, P&G will sell product linesand make additional concessions to preserve the status quo in the markets identified by

2Chris Isidore, “P&G to buy Gillette for $57B,” CNN/Money (Jan. 28, 2005) <available athttp://money.cnn.com/2005/01/28/news/fortune500/pg_gillette/>.3Procter & Gamble news release (March 22, 2005) <available athttp://www.pginvestor.com/phoenix.zhtml?c=104574&p=irol-newsArticle&ID=687902&highlight=>.4Compl. ¶ 21.

the Commission. The Commission issued a separate order that requires P&G to“maintain the viability” of the product lines to be sold until they are transferred to abuyer approved by the Commission. The Commission also appointed an interimmonitor to guarantee P&G’s compliance with the proposed Decision and Order and theorder to maintain assets.On September 30, the Commission issued a press release announcing the adoptionof the four documents discussed above—the Complaint, the proposed Decision andOrder, the Order to Maintain Assets, and the Interim Monitor Agreement—by a vote of2-0-2. Commissioners Thomas Leary and Jon Leibowitz voted in favor of the orders,and Chairman Deborah Majoras and Commissioner Pamela Jones Harbour wererecused. There is one vacancy on the Commission.

The Commission’s Amended Quorum Rule

At the time that the Commission commenced its investigation of the P&G-Gillettemerger, Rule 4.14(b) of the Commission’s rules of practice stated: “A majority of themembers of the Commission, constitutes a quorum for the transaction of business.”Until the departure of Commissioner Orson Swindle on June 30, 2005, this meant aquorum was three of the five serving commissioners. With only four commissioners inoffice since July 1, a quorum under the above rule would still be three commissioners.This would be the case even if one or more commissioners were recused from, orotherwise did not participate in, a particular matter.

5President Bush nominated William Kovacic to fill the vacancy on July 28, 2005. The Senate has yet toact on this nomination.