Trade Regulation Tidbits

This posting was written by Jeffrey May and John W. Arden.

News, updates, and observations:

 The Association of National Advertisers, a marketing industry trade group, sent a letter to the Justice Department on September 4, asking the government to block an advertising deal between Google Inc. and Yahoo! Inc. According to a September 7 news release, the group is concerned that the deal could raise the price of search advertising. It also is worried about the "concentration of power" that the alliance represents. The Google/Yahoo! agreement, announced in June, would give Internet search engine Google the right to sell search and other text ads on Yahoo! sites, sharing the revenue with Yahoo! Inc. According to Yahoo!, the non-exclusive agreement enables it to run ads supplied by Google alongside Yahoo!'s search results and on some of its Web properties in the United States and Canada. When Google and Yahoo! announced the agreement, they said that they had voluntarily agreed to delay its implementation for up to three and a half months to give the Department of Justice time to review the arrangement. On June 16, the American Antitrust Institute (AAI) issued "seven important questions that ... need to be answered before the Department of Justice and the public should decide what to do about the agreement between Google and Yahoo!" In a news release, AAI questioned, among other things, the deal's impact on competition among the Google, Microsoft, and Yahoo! platforms; how long a better method of searching the Internet might take to implement; whether the deal would create new barriers to entry; to what extent does search advertising compete with display advertising; and whether a combined Google-Yahoo! would produce a strong monopoly position in search advertising that would enable them to leverage themselves into a dominat position in display advertising.

 Meanwhile, the Justice Department is considering a court action against the Google-Yahoo! advertising deal, according to an article published in the September 9 issue of the Wall Street Journal. After “deposing witnesses and issuing subpoenas for documents to support a challenge to the deal,” the Justice Department has hired former antitrust chief Sanford M. Litvack to “examine the evidence gathered so far and to build a case if the decision is made to proceed,” says the Journal. Litvack, who served as Assistant Attorney General in charge of the Antitrust Division during the Carter administration, reportedly resigned last week from the Hogan & Hartson law firm.

 With the presidential race heating up, the candidates’ stands on antitrust issues are receiving more scrutiny. The American Antitrust Institute (AAI) has posted on its website a report on the presidential candidates’ positions on competition policy. “Perspectives on Antitrust: Comparison Between McCain and Obama (Aug. 08)” compiles statements made by the candidates and their campaigns on a number of issues. Senators Obama and McCain both have expressed a belief that antitrust laws should be vigorously enforced, have stated concerns about unchecked merger activity, and have questioned the DHL-UPS consolidation. They differ on the issue of network neutrality. Whereas Senator Obama “strongly supports the principle of network neutrality to preserve the benefits of open competition on the Internet,” Senator McCain’s campaign opposes “prescriptive regulation” like net neutrality, but “believes that an open marketplace with a variety of consumer choices is the best deterrent against unfair practices.” While Senator Obama has been extremely critical of the Bush Administration’s antitrust enforcement record, Senator McCain has not weighed in on the issue.

 As part of its ongoing agency initiative "FTC at 100: Into Our Second Century," the FTC will hold a self-assessment roundtable on Thursday, September 25 at Northwestern University School of Law in Chicago. The roundtable, which is free and open to the public, will focus on the agency's deployment of resources in its pursuit of its competition and consumer protection missions, including the use of enforcement and other available tools, as well as the effectiveness of the agency in pursuing its core missions. The over-arching goal of the self-assessment is to revisit fundamental questions about the possibilities for improvement prior to the Commission's 100th anniversary in 2014, to enable the FTC to be the strongest possible agency at that juncture. The initiative's first roundtable event was held in Washington, D.C. in July, and additional roundtables will be held in various domestic and international locations this fall. The Chicago roundtable will be held from 9:15 a.m. to 5:00 p.m. on Thursday, September 25 at the Searle Center at Northwestern University School of Law, located at Wieboldt Hall, 340East Superior Street, Chicago, IL. Pre-registration is not required. A full agenda for the roundtable, including a list of panelists, can be found here on the FTC website.