ABA Antitrust Section Offers Recommendations for Incoming Administration

This posting was written by Darius Sturmer, Editor of CCH Trade Regulation Reporter.

The American Bar Association Section of Antitrust Law on November 25 submitted a transition report to President Elect Barack Obama, offering its views on the current state of federal antitrust and consumer protection enforcement, as well as recommendations regarding prospective policies and initiatives.

The Section’s overall assessment of the current state of enforcement is that both the FTC and the Department of Justice “generally have been effective in their efforts to pursue their missions in a manner consistent with mainstream bipartisan principles.”

The report cited the Justice Department’s “vigorous” criminal enforcement and the FTC’s “very active” consumer protection enforcement and lauded both agencies for their efforts at merger reform, continued participation and leadership in international cooperation efforts, and attempts to provide greater guidance to the public through hearings, workshops, and other statements or reports.

The Section did note that a debate existed about whether the agencies were striking the right balance between under-enforcement and over-enforcement and expressed concern as to an actual or perceived divergence between the agencies regarding enforcement standards.

The report offered the new administration recommendations in 12 topical areas that were identified by the Section’s Transition Report Task Force as being the most important overall to the success of the administration.

The recommendations included the following:

Investigatory processes. The report encouraged merger process reform, transparency, and engagement between agency staff and subject parties. It also suggested that the agencies should require timelines for certain investigations.

Resources and capabilities of agencies. The Antitrust Section stressed the importance of funding the agencies, staffing them with expert personnel and officials, and engaging outside counsel or consultants when needed to prepare or try cases.

International cooperation initiatives. Recommended initiatives ranged from “soft” cooperation and bilateral/multilateral agreements to providing translations of key guidelines to assist the work of developing competition jurisdictions.

Criminal enforcement. It was suggested that the new administration review the Antitrust Division’s policy of insisting on the public naming of “carve outs” at the time parties’ enter into corporate plea agreements.

Retrospective analyses. The Section recommended that the agencies undertake retrospective analyses of their efforts at merger enforcement, civil non-merger enforcement, competition advocacy, administrative litigation, and consumer protection.

Substantive merger reform. The agencies should consider ongoing revisions to the Merger Guidelines, improve application and understanding of unilateral effects theories, increase the consideration given to certain efficiencies when evaluating proposed mergers, clarify the role of market definition in coordinated effects cases, and improve the remedies process.

Civil non-merger enforcement. The Obama administration was urged not to depart from the FTC’s long-standing restraint in bringing FTC Act, Section 5 cases, and the agencies were encouraged to provide more clarity regarding truncated rule of reason analysis.

Monopolization. The report encouraged clarity, transparency, and adoption of common international standards for evaluating unilateral conduct under Section 2 of the Sherman Act.

Intellectual property/antitrust. The agencies should study several aspects of the IP/antitrust interface, including those relating to standard setting, patent reform, pharmaceutical patents, and international convergence.
Health care. Under the new administration, the agencies should consider competition law in the context of national health care policy, coordinating their competition advocacy efforts in the upcoming health care reform debate and providing more guidance on the legality of mergers and other joint activity in the industry.

Federal, state, private party cooperation. The report recommended that the federal agencies examine the effectiveness of current federal/state coordination, work with the state attorneys general to formulate and apply consistent merger guidelines and appropriate protocols, and allow cooperation by Leniency Program applicants and civil plaintiffs under the Antitrust Criminal Penalty Enhancement and Reform Act in certain circumstances.

Substantive reform. The agencies should support reform of repeal of the Robinson-Patman Act, continue their opposition to exemptions and immunities from the antitrust laws, offer guidance regarding minimum resale price maintenance analysis in the wake of the U.S. Supreme Court’s Leegin decision, and oppose legislative proposals to overturn that ruling.

The 77-page transition report and a letter from James A. Wilson, Section Chair, appear at the American Bar Association web site.