Tuesday, July 28, 2009

Some Administration Officials Oppose DOJ's Antitrust Enforcement Efforts: News Report

This posting was written by John W. Arden.

Christine Varney, who has pledged stricter antitrust enforcement during her tenure as chief of the Department of Justice Antitrust Division, is “finding some resistance from officials within the administration,” according to a front page story in the Sunday, July 26, New York Times.

Varney has begun investigations in the telecommunications, agricultural, and pharmaceutical industries and is examining the competitive effects of the Google book search settlement agreement, according to Times reporter Stephen Labaton.

However, some of these efforts are being opposed by administration officials who “fear that the crackdown is coming at a bad time, as corporate America is reels from the recession” or believe that “larger companies and industry alliances can provide consumer benefits by making their businesses more efficient,” the story said.

One example of the differences in opinion cited by the story involved Continental Airlines’ attempt to join the Star Alliance, a global airline network. Against some of the Antitrust Division’s recommendations, the Transportation Department granted antitrust immunity to Continental to join the alliance and approved a new joint venture among four of the alliance’s members.

The Antitrust Division had filed comments indicating that the applicants failed to demonstrate the required elements for the broad immunity sought and suggesting that the Department of Transportation grant a more limited immunity.

This conflict “became so heated that the president’s chief economic adviser, Lawrence H. Summers, was called in to mediate,” the article stated.

Proposed legislation to eliminate the antitrust exemption for commercial railroads (The Railroad Antitrust Enforcement Act of 2009) also was referenced as the subject of potential disagreement. Although the proposal (H.R. 233, S. 146) is supported by senior Democrats, the administration has not taken a position.

In addition, the administration’s proposal to overhaul financial regulation rejected antitrust enforcement “as a way to reduce the size of large companies considered too big to be allowed to fail,” Labaton wrote.

The article (“Antitrust Chief Hits Resistance in Crackdown”) appears here on the New York Times website.

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