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Louis Jacobson
By Louis Jacobson November 24, 2009
Back to Strengthen antitrust enforcement

Obama appointees change tone on antitrust policy

Not even four months into President Barack Obama's term, the new administration openly broke with the Bush administration on antitrust policy.
 
In a May 11, 2009, speech before the liberal Center for American Progress, Christine A. Varney, the new assistant attorney general overseeing the Justice Department's Antitrust Division, announced that the department was "withdrawing, effective immediately," a Bush-era policy that "raised too many hurdles to government antitrust enforcement and favored extreme caution" in antitrust activity.
 
The policy's withdrawal was the "clearest way to let everyone know that the Antitrust Division will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers," Varney said. "The division will return to tried-and-true case law and Supreme Court precedent in enforcing the antitrust laws."
 
The withdrawal has been the most high-profile administration action -- but not the only one -- that seeks to "reinvigorate antitrust enforcement," as Obama promised during the campaign.
 
The Antitrust Division hired several new officials with pro-consumer backgrounds, including Philip J. Weiser as deputy assistant attorney general for international, policy and appellate matters; and Gene Kimmelman as chief counsel for competition policy and intergovernmental relations. Weiser had advised Varney's Clinton administration predecessor, Joel Klein, who was the point man in the government's antitrust lawsuit against Microsoft Corp. Kimmelman spent years in senior positions with Consumers Union and the Consumer Federation of America and began his career as a staff attorney for Public Citizen's Congress Watch. All three of the groups Kimmelman worked for represent consumers and have often sparred with industry groups.
 
Varney, a former commissioner at the Federal Trade Commission and White House Cabinet secretary during the Clinton administration, has made a series of speeches in which she's outlined an aggressive approach to antitrust enforcement. In addition, during congressional testimony, she echoed the contention by many Democratic lawmakers that repealing the insurance industry's antitrust exemption could improve the health insurance market. Meanwhile, the Antitrust Division is working with government agencies to "insulate procurement, grant and program funding processes from collusion and fraud" in the awarding of economic stimulus funds.
 
Still, the way antitrust enforcement works, bold statements by the head of the Justice Department's Antitrust Division do not necessarily translate into action -- at least not immediately.
 
"We haven't seen the filing of any big cases, but that could be because it takes time to develop those cases, and they're still working on them," said Daniel Crane, a law professor at the University of Michigan. In addition, other institutions beyond Varney's division shape antitrust policy, including the Federal Trade Commission -- which is filled by presidential appointment but which is not directly controlled by the administration -- as well as judges and state attorneys general.
 
So, while Varney has offered bold rhetoric that would seem to "reinvigorate antitrust enforcement," experts we spoke to agreed that it's premature to assume that the administration's changed approach to antitrust policy will produce tangible results. So for now, we'll rate this promise In the Works.

Our Sources

Justice Department, "Justice Department Withdraws Report on Antitrust Monopoly Law" ( news release ), May 11, 2009
 
Justice Department, "Antitrust Division Senior Leadership Named" ( news release ), April 22, 2009

Justice Department, "Antitrust Division Announces Initiative to Help Protect Recovery Funds from Fraud, Waste and Abuse" ( news release ), May 12, 2009
 
New York Times , " Obama Takes Tougher Antitrust Line ," May 12, 2009

New York Times , " Obama Threatens Insurers" Anti-Trust Exemption ," Oct. 18, 2009

E-mail interview with D. Daniel Sokol, assistant law professor at the University of Florida, Nov. 19, 2009
 
E-mail interview with Phillip C. Zane, of counsel at the law firm Baker Donelson, Nov. 19, 2009
 
E-mail interview with Daniel Crane, law professor at the University of Michigan, Nov. 19, 2009