Thursday, July 07, 2011

Antitrust Chief to Leave Justice Department for Private Practice

This posting was written by John W. Arden.

Christine Varney, Assistant Attorney General in charge of the Department of Justice Antitrust Division, is stepping down from her government post on August 5 to return to private practice.

Varney joined the Justice Department in April 2009, after being confirmed by the Senate. She previously served as Federal Trade Commissioner from 1994 to 1997. She is reportedly joining the law firm of Cravath, Swain & Moore LLP.

“Christine Varney led the Antitrust Division with great distinction through a period when the department confronted a number of proposed mergers and other matters that could have led to higher prices, lower quality products and less innovation in a recovering economy,” said Attorney General Eric Holder. “There is no doubt that her tireless work helped protect consumers and businesses from anticompetitive conduct and preserved competition in America’s economy. I will miss her leadership.”

The Assistant Attorney General came to the job after the Obama administration pledged to reinvigorate antitrust enforcement. During confirmation hearings, she set out three main areas of focus: (1) the rebalance of legal and economic theories in antitrust analysis and enforcement; (2) a renewed collaboration between the Antitrust Division and the Federal Trade Commission; and (3) continued cooperation with worldwide antitrust authorities.

When asked whether strong antitrust enforcement was appropriate during an economic crisis, Varney responded that “clear and consistent antitrust enforcement—protecting competition and thus consumers while being conscious of the need for economic stability—is essential to a growing and healthy free market economy.”

Sherman Act, Section 2 Enforcement

Soon after her confirmation, Varney made news by withdrawing the Antitrust Division’s September 2008 report (“Competition and Monopoly: Single-Firm Conduct Under Section 2 of the Sherman Act,” CCH Trade Regulation Reporter ¶50,231), which examined how specific types of single-firm conduct violate Section 2 of the Sherman Act. When issued, the report was severely criticized by three FTC Commissioners, who called it “a blueprint for radically weakened enforcement” of monopoly law.

Varney said that withdrawing the report was “a shift in philosophy and 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.”

Merger Guidelines

Her desire to work in collaboration with the FTC may be seen in the agencies’ update to the Horizontal Merger Guidelines (CCH Trade Regulation Reporter ¶13,100), issued in August 2010. The joint guidelines, which hadn’t been thoroughly overhauled since 1992, were intended to outline for merging parties, courts, and antitrust practitioners how the federal antitrust agencies evaluate the likely competitive impact of mergers and whether those mergers comply with U.S. antitrust law.

According to both the FTC and the Antitrust Division, the revised guidelines better reflected the agencies’ actual practices, providing more clarity and transparency to the process.

Just last month, the Antitrust Division issued an update to its 2004 guidance on merger remedies. The Policy Guide to Merger Remedies (CCH Trade Regulation Reporter ¶13,172) is used by Antitrust Division staff in analyzing proposed remedies in merger matters and is intended to provide transparency into the Division’s approach for the business community, antitrust bar, and the broader public.

Merger Enforcement

In a June 24 speech examining “whether the Antitrust Division has been steadfast in ensuring vigorous enforcement of the antitrust law, as I promised upon confirmation," Varney highlighted the Division’s merger enforcement efforts. The Antitrust Division was committed to going to court “where the parties have been unwilling to resolve the anticompetitive aspects of their transactions,” she said.

She cited two current merger challenges: H&R Block Inc.’s proposed acquisition of the maker of TaxACT do-it-yourself tax preparation software and the combination of point-of-sale (POS) terminal sellers VeriFone Systems Incorporated and Hypercom Corporation. She also noted the recent settlement of a third matter involving the acquisition of a Tyson Foods Harrisonburg chicken processing complex by George’s, Inc.

Varney also discussed mergers that involved vertical theories, including Ticketmaster Entertainment’s acquisition of concert promoter Live Nation, Inc.; a joint venture between Comcast Corp. and General Electric Co.’s subsidiary NBC Universal Inc.; and Google’s acquisition of ITA Software Inc.

The Antitrust Division reviewed these vertical transactions "in light of their specific facts and market conditions and evaluated the competitive harms," said Varney. "In each case, we concluded that the transactions, as proposed, would give rise to competitive harm, and while we were prepared to sue, the parties agreed to consent decrees that addressed our concerns."

Partnerships with Other Agencies, Governments

Varney also focused on her efforts to strengthen partnerships with other federal agencies, state agencies, and other governments, particularly those foreign countries with emerging economies. The Division worked collaboratively and provided input on competition issues with the Department of Transportation, the Federal Energy Regulatory Commission, the Securities and Exchange Commission, and the U.S. Commodities Futures Trading Commission, she said. The Division cooperated with states and foreign governments in pursuing civil and criminal investigations and in competition policy matters.

"I am grateful for my two and a half years of service as Assitant Attorney General of the Antitrust Division," said Varney. "From the start of my time here, it has been a tremendous privilege to work with the department's leadership and the dedicated professionals in the Antitrust Division."

A news release announcing the Assistant Attorney General’s departure from the Justice Department appears here on the Antitrust Division’s website.

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