Schlumberger Limited

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IN THE MATTER OF SCHLUMBERGER LIMITED CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT AND SEC. 7 01; THE CLAYTON ACT Doket C--9025. Complaint, June 2:1, 1980-Deci, June 1980 This consent order requires, among other things, a New York City multinational company. engaged in various activities, including the manufacture of electrcal and electronic device, to divest all stock it owns in the Unitroe Corpration Unitrode ) within six months from the date of the order. Prior to such divesture, the order reuires that respondent treat Unitrode as an independent entity, and refrain from attempting to infuence or control Unitroe. Repondent is further prohibite from acuiring any Unitroe stock or asts without prior Commission approval for a period of ten yea. Appearances For the Commission: Godon YOU"nwo.

For the respondent: R. Brue Mac Whr and Stanley I. Rubnfeld Shearman Sterli"n, New York City. COMPLAINT The Federal Trade Commission, having reason to believe that respondent, subject to the jurisdiction of the Commission, has acquired Fairchild Camera and Instrument Corp. ("Fairchild"), a corpration, in C. 18) violation of Section 7 of the Claytn Act, as amended, (15 U. and Section 5 of the Federal Trade Commission Act, as amended, (15 C. 45), and that a proceeding in respect thereof would be in the public interest, hereby issues its complaint, pursuant to Section 11 of the Clayton Act (15 U. C. 21) and Section 5(b) of the Federal Trade Commission Act (15 U . C. 45(b)), stating its charges as follows: I. DEFINITIONS 1. For purposes of this complaint, the following definitions shall apply:

(a) "Respondent" shall mean Schlumberger Limited, a corpration and its subsidiaries, affiliates, successors and assigns; and (b) "Diodes" shall mean semiconductor products consisting of a twoelectrode device which passes current in one direction but not in the opposite direction.

Complaint 95 F.

II. RESPONDENT 2. Respondent is a corporation organized and doing business under and by virtue of the laws of the Netherlands Antilles, with its principal executive offices at 277 Park Ave., New York, New York. 3. Respondent is a multinational company with significant operations in the United States and Europe. Its primary activities are wireline services of oil fields, the drillng and servicing of oil wells and the manufacture of a multitude of electrical and electronic devices. In 1978, Respondent had total foreign and domestic assets of $2.95 billon and total sales of $2.7 billion.

4. At all times relevant herein, Respondent has been and is now engaged in commerce within the meaning of the Clayton Act, as amended, and is a corporation whose business is in or ' affecting commerce within the meaning of the Federal Trade Commission Act as amended.

III. UNITRODE CORPORATION 5. Unitrode Corporation ("Unitrode ) is a corporation organized and doing business under and by virtue of the laws of the State of Maryland, with its principal executive offices at 580 Pleasant St. Watertown, Massachusetts.

6. Unitrode is engaged in the manufacture of diodes and other electronic components. In fiscal year I979, Unitrode had total assets of $40.2 milion and sales of $48.4 million.

7. Since March 1978, Respondent has purchased approximately 496 000 shares of Unitrode common stock, which total constitutes 17. of all outstanding Unitrode shares. As of June 1979, Respondent was the largest holder of Unitrode common stock. S. From March 1978 to date, Respondent has had and now has substantial opportunities to influence the business operations of Unitrode.

9. At all times relevant herein, Unitrode has been and is now engaged in commerce within the meaning of the Clayton Act, as amended, and is a corporation whose business is in or affecting commerce within the meaning of the Federal Trade Commission Act as amended.

IV. FAIRCHILD CAMERA & INSTRUMENT CORPORATION IO. At the time of the acquisition, Fairchild was a corporation organized and doing business under and by virtue of the laws of the SCHLUMBERGER LTD. 915 913 Complaint State of Delaware, with its principal executive offices at 464 Ellis St. Mountain View, California.

Il. Fairchild's primary operations are in the manufacturing of diodes and other semiconductors, automatic test systems, and reconnaissance and surveilance systems. In 1978, its total assets were milion and its total sales were $534 milion. 12. At all times relevant herein, Fairchild has been and is now asengaged in commerce within the meaning of the Clayton Act, amended, and is a corporation whose business is in or affecting commerce within the meaning of the Federal Trade Commission Act as amended.

V. ACQUISITION 13. On May 19, 1979, Schlumberger and Fairchild entered into an agreement under which Respondent agreed to the purchase by Sehlumberger (California) Inc., a wholly-owned subsidiary of Respondent, of all outstanding Fairchild shares for $66 per share. The transaction was valued at $363 million as of June, I979. More than 97% of Fairchild shares were tendered. Respondent purchased the shares on June 30, 1979. Schlumberger has since acquired the remaining outstanding Fairchild shares.

VI. TRADE AND COMMERCE 14. For purposes of this complaint, the relevant lines of commerce are the manufacture and sale of diodes and suhmarkets thereof, and the relevant section of the country is the United States as a whole. 15. Sales of diodes in the United States arc substantial, amounting to 16.an estimatedFairchild$343andmillionUnitrodein 1977.are and have been for many years substantial and actual competitors in the manufacture and sale of diodes.

I7. In the year 1977, Fairchild had sales of diodes in the United States of $20.8 millon. Unitrode had sales of diodes in the United States of $23. 1 millon in 1978.

18. Concentration in the manufacture and sale of diodes is high. 19. Barriers to entry into the manufacture and sale of diodes are substantial.

VII. EFFECTS OF THE ACQUISITION 20. The effect of the acquisition of Fairchild by Respondent may be substantially to lessen competition or tend to create a monopoly in the Decision and Order 95 F.

manufacture and sale of diodes in the United States in the following ways, among others:

(a) Substantial actual and potential competition between Fairchild and U nitrode and other firms in the manufacture and sale of diodes has been eliminated;

(b) Already high concentration in the manufacture and sale of diodes has been increased; and (c) The likelihood of eventual deconcentration may be lessened. VII. THE VIOLATION CHARGED 21. The aforesaid acquisition constitutes a violation of Section 7 of the Clayton Act, as amended, and Section 5 of the Federal Trade Commission Act, as amended.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the Respondent named in the caption hereof, and the Respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Competition proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge Respondent with violation of the Federal Trade Commission Act and the Clayton Act; and The Respondent, its attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order an admission by the Respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settement purposes only and does not constitute an admission by Respondent that the Jaw has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the Respondent has violated the said Acts, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, and having duly considered the comments filed thereafter by interested persons pursuant to Section 2.34 of its Rules, now in further conformity with the procedure prescribed Section 2.34 of its Rules, the Commission hereby issues its complaint makes the following jurisdictional findings and enters the following order:

, ,:vllLoUlnll.lltu.l.t LTU. Y17 913 Decision and Order 1. Respondent Sehlumberger Ltd. is a corporation organized existing and doing business under and by virtue of the laws of the Netherlands Antil1es with its office and principal place of business located at 277 Park Ave., in the City of New York, State of New York. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER For purposes of this order Respondent" shall mean Schlumberger Limited, a corporation, and its subsidiaries, affiliates, successors and assigns.

It is ordered That Respondent, prior to a date not to exceed six (6) months from the date of service of this order, shall divest absolutely to an acquiror or acquirors, subject to the prior approval of the Commission, all stock and other share capital of U nitrode Corporation (Unitrode) held by Respondent, so as to establish Unitrode as a company independent of any other company manufacturing and selling diodes.

II.

It is furtlwr ordered That prior to sixty (60) days from the date on which Respondent is served with this order, Respondent shall present to the Commission:

(a) A final executory contract with an acquiror or acquirors consistent with Article I above, to divest all stock and other share capital of Unitrode held by Respondent, subject to the prior approval of the Commission; or (b) a plan for a public offering of all stock and other share capital of Unitrode held by Respondent, subject to the prior approval of the Commission, and reasonably assuring that no more than one percent of the outstanding stock or other share capital of Unitrode is acquired by a person not acceptable to the Commission.

III.

It is furtlwr ordered That, for a period of ten (10) years from the date on which Respondent is served with this order, Respondent shall not acquire, directly or indirectly, through subsidiaries or otherwise Decision and Order 95 F.

without prior Commission approval, any assets, stock or other share capital of Unitrode or its subsidiaries, affilates, successors and assigns; provided, however that this paragraph shall not apply to products manufactured by U nitrode in the normal course of its business that are held for sale by U nitrode to its customers and used by Respondent in the manufacture of its products.

IV.

It is further ordered That prior to the divestiture of Unitrode stock and other share capital required by Paragraph I of this order Respondent shall: .

(a) In all dealings with Unitrode, treat Unitrode on an arm s length basis as an entity independent of Respondent; and (b) not exercise or seek to exercise influence or control over U nitrode.

It is further ordered That Respondent notify the Commission at least thirty (30) days prior to any proposed change in Respondent which may affect compliance obligations arising out of the order, such as dissolution, assignment or sale resulting in the emergence successor corporations or the creation or dissolution of subsidiaries. EXXON CORP., ET AL. 919 919 Interlocutory Order IN THE MATTER OF EXXON CORP., ET AL.

Doket 893.4. Interlouto Orr, June 30, 1980 REGARDING SUBPOENAS TO CONGRESSIONAL RESEARCH SERVICE AND TO THIRTEI EXECUTIVE BRANCH AGENCIES AND THE GENERAL ACCOUNTING OFFICE Respondents in this matter, seeking discovery of documents relating to the oil production industry in the possession of thirteen Executive Branch agencies ' the Congressional Research Service of the Library of Congress, and the General Accounting Office, petitioned Administrative Law Judge James P. Timony for issuance of subpoenas to the above-named entities. Between February 15 and 21, I980, Judge Timony issued the requested subpoenas pursuant to Commission Rule of Practice 3.36. We stayed the return date on the subpoenas on February 28, 1980, to consider whether the Commission has the authority to issue them.

Both respondents and complaint counsel contend that Scetion 9 of the FTC Aet authorizes the subpoenas issued by Judge Timony. The Department of Justice, in a brief filed on behalf of all subpoena recipients, except the Federal Energy Regulatory Commission, the Department of the Treasury, and the Congressional Researeh Service disagrees and asserts that Section 8 of the Aet is the sole authority for the Commission to obtain information from Executive Branch ageneies, and that Seetion 9 may not be exercised for that purpose. The Congressional Research Service takes yet another view, and argues that its documents are not subject to Commission process because they are privileged under the eongressional immunity for speech or debate. In brief, we have determined that a request under Section 8 must be made before a subpoena to an Executive Branch agency may be issued though we hold that the Commission has the authority to issue such a subpoena pursuant to Section 9 if necessary and appropriate, and if a prior request for the material under Section 8 has proved unavailing. We further hold that the documents sought from the Congressional Research Service are beyond the Commission s subpoena authority. 1 The their1n nciC8 lire the Departments of Dcfcllc, j.;nerg, Commerce, Interior, Justice, TraflporttiOIl State and Tn: ury, the Internt.te Commerce r..mmia. ion I-;nvironmental Prtetion Agency, General Service Administration, Central Intelligence Agency, anri the Executive Office of the Prident. We I\llme that the brief filed by the Department of Justice emboies the position of the President in the matter. , Interlocutory Order 95 F. The Justice Department's argument rests upon its belief that Section 8 of the FTC Act' is the exclusive grant of authority by which the Commission may obtain access to records of Executive Branch agencies. It finds support for its conclusion in the legislative history of the FTC Act. In pointing out that Section 8 was added to enable the Commission to obtain materials possessed by agencies, the Justice Department cites House of Representatives debates on that section of the bill:

It appears that in time past there have ben jealousies in various departments and bureaus, and at times it was difficult to obtain information from one deparment of great value to another in work of investig-.ition. 51 Cong. Re. 888 (1914) (remarks of Rep. Knowland).

During further debate in the House, concern was expressed that confidential tax returns and census data submitted by companies would be made public under this section. In response, Representative Covington (a member of the committee that drafted the bil) conceded that this was true, but added that presidential control would provide an adequate protection against inappropriate disclosure of the information. He stated that the first draft of the section did not contain the phrase when directed by the President " but that the committee had reconsidered:

We then determined, however, that by limiting the authority to tur over such information by, direction of the President, all the safeguards that ought to surrund any class of information would be in the possession of the government. 51 Cong. Re. (1914).

It appears that Congress intended that the Commission have access to information it needed to carry out its mission, but that the President should serve as a "mediator" of interagency disputes and as a decisionmaker regarding the Commission s need for the information. Based on its belief that this represents Congress' intent, the Justice Department argues that Section 8 is an exclusive-grant of authority and, therefore, that Section 9 cannot be used as an alternate means of obtaining government documents because Section 9 contains no similar provision for presidential discretion. It sets up instead a system of judicial! enforcement of Commission subpoenas. Thus, if the Commis- . Section 8 of theFTC Act state:

The several departments and aus of the Government when direte by the Prident shal! furnish the CommiSlion, upon its reuest, aU reord, paper., and information in their pos8ion relating to any corprotion subject to IIny of the provisiol\ of this Act, and shah detail from time to time such officials and employee to the CommiSlion as he may direct. EXXON CORP., ET AL. 921 919 Interlocutory Order sion were able to compel production of documents pursuant to Section , the safeguard established by Executive review could be avoided by the Commission, and Congress' intent frustrated. This analysis has much force, and we agree that the grant of authority in Section 9 may not be exercised so as to make the Presidential prerogative in Section 8 a nullity. However, the Justice Department' s conclusion- that Section 8 is therefore the exclusive means by which the Commission may obtain information from Executive Branch agencies-does not necessarily follow. Indeed, such a conclusion would be inconsistent with Congress' intention in granting the Commission quasi-judicial authority and with the rights of respondents in an adjudication.

The Supreme Court long ago established that: The Federal Trade Commission is an administrative boy created by Congr to into effect legislative policies emboied in the statute in accordance with the legislative standard therein prescribed, and to perform other specified duties as a legislative or as a judicial aid. Such a boy cannot in any proper sense be characterize a.q an ann or an eye of the Executive. Its duties are performed without Executive leave and, in the contemplation of the statute, must be free from Executive control. Humphrey s Eucuto v. U.S. 295 U.S. 602, 628 (1935).

Foremost among the Commission s Hquasi-judicial" powers is the conduct of adjudications under Section 5(b) of the FTC Act. These proceedings are, of course, conducted strictly in accordance with the framework for adjudicatory decisionmaking later prescribed by Congress in the Administrative Procedure Act. The FTC Act and AP A alike ensure that an decisions in an adjudication are made by an administrative law judge, the Commission itself, or a Federal court in an enforcement or review action. Presidential involvement in any aspect of adjudicatory decisionmaking would be fundamentally inconsistent with this statutory scheme. Yet if the Justice Department' position were adopted, a President's decision to deny access to information necessary to a proceeding would amount to just such involvement.

Such Presidential involvement in an adjudication is the more problematic because it may infringe upon the rights of private parties. The Commission s discovery rules reinforce and amplify a respondent' right under the AP A to exercise the agency s subpoena authority in aid of its defense. See 5 D. C. 555(d). If, however, Section 8 were the exclusive means for access to Executive Branch information, a respondent would be able to obtain potentially exculpatory information only by grace of an exercise of Presidential discretion, the refusal of whicb would evidently be a discretionary act beyond judicial review. ), Interlocutory Order 95 F. Cf. Chicago Southern Air Lines v. Watermn S.S. Corp. 333 U.S. I02 (1948).

In these circumstances, we think that a proper reading of the interrelationship between Sections 8 and 9 must harmonize the competing considerations, so that Congress' intent be fully preserved that is with Presidential prerogative and adjudicatory independence alike maintained. This end may be achieved, we believe, if Section 8 is understood as a prerequisite to the potential use of Section 9. In this way the President will be afforded the opportunity initially to determine the extent to which requested documents will be made available. Should he decline to direct the furnishing of certain information or decline to involve himself in deciding one way or the other whether the requested material should be furnished, the Commission may thereafter determine, in its adjudicatory capacity, whether to issue a subpoena to the particular agency to obtain the information.

We emphasize that such a subpoena will be issued only in the most compelling circumstances. The applicable rule requires that a subpoena to another governmental agency not be issued unless the motion for issuance of the subpoena makes not only the showing required for any use of discovery but also "a specific showing that the information or material sought cannot reasonably be obtained by other means." Rules of Practice Section 3.36(b). If a party requests information of another government agency, the administrative law judge shall carefully consider the relevance of the requested information and its availability through other means. If, after consideration of these and other factors properly within his discretion, see Rules of Practice Section 3.31(c), the law judge believes that the request should be sent pursuant to Section , he shall certify the matter to the Commission. In the event that material requested by the Commission under Section 8 is not made available, and if a party thereupon moves for issuance of a subpoena the law judge may issue such subpoena if the requirements of the rule arc met.

II.

We next consider whether Section 9 ean be read to authorize subpoenas to the agencies served in this matter. With the exception of the Congressional Research Service, we decide that it can. Section 9 authorizes the Commission to issue subpoenas to "persons, partnerships or corporations. " Thus, service on an agency head brings such subpoenas within the scope of the statute. See, Machin v. Zuckert 316 F.2d 336 (D.C. Cir. cert. denied 375 U. S. 896 (1963) (Secretary of EXXON CORP., ET AL. 923 919 Interlocutory Order the Air Force served with subpoena under Federal Rule of Civil Procedure 45) and Boei.ng Airplane Co. v. Coggeshall 280 F.2d 654 (D.C. Cir. 1960) (Chairman of the Renegotiation Board served). Although agencies are not, and could never be, proper suhjects of FTC investigations, it is setted that that is not a prerequisite to issuance of a subpoena. See FTC v. Cockrell 431 F. Supp. 561 (D. 1977). Further, we can see no reason why a distinction should be drawn between agencies and any other third party holding relevant evidence for purposes of subpoenas. Accordingly, we agree with complaint counsel and respondents that Section 9 authorizes the subpoenas issued here, with the exception of the subpoena to the Congressional Research Service (CRS).

III.

Our interlocutory order In the Matter of Grand Union, Docket No. 9121, issued today, sets out our conclusion that the subpoena issued to a congressional committee must be quashed. The reasoning provided there applies equally to the subpoena issued to the CRS, a dependent branch or arm of Congress. In transforming the Legislative Reference Service into the CRS in 1970, Congress specified that CRS' duties were primarily to assist Congress and its committees in the "analysis appraisal, and evaluation of legislative proposals." 2 D. C. 166(d). The legislative history of the statute further reflects the view that Congress envisioned a close relationship between itself and CRS, in which CRS would playa supporting role for Congress' legislative function. The House Report states: "These analyses and appraisals (supplied by CRSJ wil be directed toward assisting committees in determining the advisability of enacting legislative proposals, of estimating the probable results of such proposals and alternatives thereto, and of evaluating alternative methods for accomplishing the results sought." H.R. Rep. No. 91-12I5, 9Ist Cong. , 2d Sess. (1970), reprinted in I970 D.S. Code Congo & Ad. News 4417, 44. The Fourth Circuit has noted that CRS performs a legislative function, even though the Library of Congress, of which CRS is a separate department, may have other nonlegislative functions. Eltra Ringer 579 F.2d 294, 30I (4th Cir. 1978). See also Kissinger 3 We think that the principle stated by the Supreme Court inu1!iU Sis v. Ni: 418 U.S. 6.18, 709 (1974), where it held that the President Wal subjectto a third pary judicial subpoena, is as pertinent in this context WI well: The nee to develop 811 relevant facts in the advcma system is both fundamental and oomprehcJlive. The ends of criminal! justice would be defeate jf judgments were to be founded on a paial or speulative prescntation of the facts. The very inteRrtyof the judicial sJlwm and publi cconfdencc in thesyswm depend on fun disclosure of aU the facts, within the framework of the Rules of Evidence. To erulUre that justice il done it is imperative to the functionof court thlltcompuloory pro be available for theprouction ofcvidence neededeitherhythcprosutionorbythedefenfI Interlocutory Order 95 F. Reporter s Committee for Freedom of the Press 48 D. W. 4223, 422 (March 3, 1978) (Lower court holding that Library of Congress not an agency" for purposes of the Freedom of Information Act not disturbed by Supreme Court).

Because of its essentially legislative function, documents requested by the Commission s subpoena would most likely be those produced by CRS on request of Congress and in aid of its legislative role. There can be litte argument that documents produced to aid Congress in making decisions regarding proposed or anticipated legislation are an integral part of Congress' lawmaking function, or that they would reveal motives behind individual legislators' votes. Therefore, we agree with CRS and decide that these documents are privileged under the doctrine of separation of powers and the speech or debate clause, and unohtainable by Commission subpoena.

Accordingly, it is ordered That the subpoena issued to the Congressional Research Service is hereby quashed.

It is further O'rdered That the su bpoenas issued to the thirteen Executive Branch agencies and to the General Accounting Office are hereby quashed. The matter is remanded to the law judge with instructions to treat the parties' requests for subpoenas as motions that the information be requested pursuant to Section 8. The law judge shall consider these motions in accordance with this order. This consideration shall take into account the arguments raised by the thirteen Executive Branch agencies and the General Accounting Office in their papers filed with the Commission, particularly as they concern the burden of compliancc, the relevance of the documents sought, and claims of privilege such as national security privilege. The law judge may order additional briefing if he deems it necessary. Should the law judge conclude that certain information ought to be requested under Section 8, he shall certify his recommendation in that regard to the Commission.

Finally, we note that respondent oil companies have again taken the opportunity to urge that this matter be withdrawn from adjudication to permit the Commission to reassess the merits of the current complaint.' Complaint counsel observe in reply that the administrative . The General Accounting Office aoo hold. a position in the government different from that of the other 5ubpool1 recipients. It performs iu dutie!inltrof alia auditing aU executive branch agencies and reporting speially to Congre! a3 an "agency of the Congr." 31 V. C- 65. In spite of this apparent role IL a supporting arm of Congr and with a duty to inform legislators concerning government expenditures, GAO, unlike CRS, ha. not asert any form of congrionsl immunity. lnate, it has aligned itself with the Executive Branch agencies in submitting a joint brief oppoing the suhponas on Section 8 grounds only.

For purpoac of the subpoena i3.ued here, then, we conclude that GAQ should be categorize with the Executive agencies that n.'Cived subponas.

5 Certin rellOndents have 31'Jmoved for placment on the public rent of "all written and ora communications received or gener..te hy the Commi ion which rel3te to the l..mmis.ion a Fehrnar 28 Order." We have EXXON CORP., ET AL. 925 919 Interlocutory Order law judge, in ordering respondents to make discovery in this matter has also established an October 31, 1980 deadline by which complaint counsel are to rc-assess and narrow the issues in the adjudication based upon the results of their discovery. It would appear that any reassessment of this matter by the Commission, whether it take the form of withdrawal from adjudication or modification of the complaint upon motion by a party, would be best undertaken shortly after complaint counsel's review of respondents' documents and October filing of the Statement of Issues required by paragraph 2(a) of Judge Timony s Order Re Pretrial Procedures, dated March 12, 1980. Therefore, the motions to withdraw from adjudication are denied. simultaneously with issuance of this order IW a matter of discretion, plac on the public rent, mcmoronda from personnel in the CommiililionsOffice of Genera! Counsel that reite converntioru- none in any repet violative of the Commi!lqion a Rules of Practice or otherwise improper- in connection with this matter. Inteal communications between the CommigsiOI1 and il. advisory personnel an, of cours, not a proper subject. for disdoou,, to either side in an adjudication.

, Interlocutory Order 95 F. IN THE MA'ITER OF THE GRAND UNION COMPANY T AL.

Doket 9121. Interlouto Orr, June 30, 1980 QUASHING SUBPOENA ISSUED TO THE JOINT ECONOMIC COMMITTEE OF CONGRESS On January 20, 1980, Chief Administrative Law Judge Ernest G. Barnes acting on respondent's request issued a subpoena duces tecum to Dr. John Alhertine, staff director of the Joint Economic Committee of Congress. The subpoena sought data in the Committee s possession that had been used by its consultant, Dr. Bruce Marion, in writing his report for the Committee entitled Thr Profit and Pre Performnce Leading Food Chains, 1970-1971. Respondents sougbt the data for the purpose of cross-examining Dr. Marion, who has been designated by complaint counsel as one of its trial witnesses in the field of economics. On January 22, I980, the Commission, acting pursuant to its Rule of Practice 3. , stayed tbe subpoena to consider whether the Commission has jurisdiction t.o subpoena a congressional committee. In Section 9 of the FTC Act, Congress granted the Commission broad subpoena power to compel testimony of witnesses and production of documents. We do not believe, however, that in drafting that section Congress intended to make its own documents subject to Commission process.

The "Commission is an administrative body created hy Congress to carry into effect legislative policies embodied in the statute in accordance with the legislative standard therein prescribed Humphrey s Executor v. United States 295 U. S. 602, 628 (1935). Ii would be anomalous indeed if Congress were to compromise its independence under the constitutional separation of powers by subjecting itself, its committees or its staff to any form of compulsion by the agency it created to carry out its will or by the courts in enforcement of agency process. We wil not infer such an intention absent a clear affirmative indication in Section 9's language or legislative history that Congress extended the Commission s subpoena authority to its own legislative activities. We find no such indication. The absence of such an indication is hardly surprising. For in conferring subpoena power on the Commission, Congress legislated in light of the immunities assured it by the speech or debate clause in Article 1, Section 6, Clause 1 of the Constitution. In our system the 1 'The Senators and &:pre.'!ntatives. . . shah. . . he privilege from art during their attendance at the aeion of their respective House.. . ; and for any speh or debate ineitber House thcyshaU not bequestioncd in any other place GRAND UNION CO., ET AL.

926 Interlocutory Order dause serves the additional function of reinforcing the separation of powers so deliberately established by the founders.''' Eastland United States Servicer=n s Fund 421 U. S. 491, 502 (1975). The clause has been held to protect various facets of the legislative process including a report issued by a eongressional subcommittee, Do v. McMiUan 412 U.S. 306 (1973), and issuance of an investigatory subpoena by a subcommittee Eastland v. United States Server=n Fund, supra. The Supreme Court has also held that it prevents Grand Jury questioning of a Senator s aide (or the Senator himself) concerning legislative acts of the Senator s subeommittee Gravel v. United States 408 U.S. 606 (1972).

These precedents also indicate that a Commission subpoena to Congress would be unenforceable by a court. See, Eastland, supra at 502 ("the purpose of the (speech or debate) dause is to insure that the legislative function the Constitution allocates to Congress may be performed independently,"); Gravel, supra at 617 ("central role" of the speech or debate clause is the prevention of "intimidation of legislators by the Executive and aceountability before a possibly hostile judicial- The eongressional immunity defined by these precedents applies to the documents sought by Grand Union, materials used in preparation of a committee report and obtained by legislative subpoena. The Joint Economic Committee s investigation was patently a proper subject of congressional interest, and the report itself is therefore an integral part of the legislative process. It is in any event beyond the scope of our authority under Section 9.

Accordingly, it is ordered That the subpoena issued by Judge Barnes to the Joint Economie Committee of Congress on January 20, 1980, is hereby quashed.

In deciding the reach of our subpna authority under Section 9, we ar not authorize to deteine whether the infonnation !!ught rcateto a legitimate legislative function. Our point is rather that Congt never intended to authorize us to make such an inquiry beull it legi..date on the asumption that the docne of sepstion of powers and the speech or debate dause forelos the iluan of Commi!!ion 5ubjlOn8 to the Congr.