Monday May 11, 08:38 PM
US to 'aggressively' pursue antitrust enforcement
By Rob Lever
WASHINGTON (AFP) - US authorities announced plans Monday to revamp antitrust enforcement with a new policy that calls for "aggressively pursuing" cases of monopoly abuse.
The announcement by President Barack Obama's administration marks a radical shift from the laissez-faire approach in antitrust policy of Obama's predecessor George W. Bush.
The Justice Department said it was withdrawing, effective immediately, guidelines on antitrust enforcement issued in September 2008 under Bush.
"Consumers, businesses, courts and antitrust practitioners should not rely on (the prior guidelines) as Department of Justice antitrust enforcement policy," according to a department statement.
The scrapping of the prior guidance "is 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," said the agency's antitrust chief Christine Varney.
"The division will return to tried-and-true case law and Supreme Court precedent in enforcing the antitrust laws."
The announcement came at a forum sponsored by the Center for American Progress, a Washington think tank which issued a report highly critical of the antitrust policy of the Bush administration.
In the Bush years, no antitrust actions were brought against dominant firms, and few challenges were lodged with mergers that could affect competition, the report said.
"A lack of merger enforcement has led to oligopolistic market structures, which foster coordination, higher prices, and diminished services," according to the report.
"Moreover, the lack of merger enforcement has created many entities that are 'too big to fail' and thus, candidates for government bailout."
The Bush policy also made it "easier for monopolists to fend off legal challenges and engage in exclusionary conduct that will dampen innovation and economic growth," according to the report.
Varney said that the Bush guidelines "advocated hesitancy in the face of potential abuses by monopoly firms" and were based on the notion that monopoly markets are self-correcting.
She added that the Bush policy "raised too many hurdles to government antitrust enforcement and favored extreme caution" in government action to prevent abuse of a monopoly.
"The recent developments in the marketplace should make it clear that we can no longer rely upon the marketplace alone to ensure that competition and consumers will be protected," she said.
"It's clear we have a new sheriff in town," said Ed Black, president of the Computer & Communications Industry Association that has pressed for tougher antitrust enforcement.
"There's so much that was left ignored by the last administration, so a main job will be catching up."
Some analysts said the shift in policy could affect key US technology giants including Google (NASDAQ: GOOG - news) , the Internet search giant.
Google has acknowledged that it has been contacted by the US Federal Trade Commission regarding potential legal conflicts caused by chief executive Eric Schmidt and director Arthur Levinson being on the Apple (NASDAQ: AAPL - news) board.
US regulators last year approved Google's purchase of online advertising tracking firm DoubleClick but stymied a planned advertising alliance with Yahoo (NASDAQ: YHOO - news) !.
Danny Sullivan at Search Engine Land said the main reason for targeting Google could be its dominance of Internet search and the related advertising market.
"Google potentially controls too many points along the Internet advertising ecosystem," he said.
Erick Schonfeld of the technology blog TechCrunch said Google and other tech firms may be in the crosshairs of the Justice Department.
"Varney needs a high-profile case to make her name, and all indications are that she is eying Google," Shonfeld said.
"Google, quite literally, is the new Microsoft (NASDAQ: MSFT - news) when it comes to antitrust scrutiny -- although, Microsoft itself is also still under the magnifying glass, as is Intel (NASDAQ: INTC - news) , at least in Europe."
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