Justice Department quietly pushes antitrust law enforcement

Antitrust Staff Advance Business Practices Investigations At Apple Inc.,

Alphabet Inc.

Google (which is already facing an antitrust lawsuit from the Department of Justice) and Visa Inc.

The department’s antitrust division is also examining some large pending mergers in depth. These include a deal in the publishing industry in which Penguin’s parent company Random House is looking to buy Simon & Schuster and UnitedHealth Group Inc.

planned acquisition of healthcare technology company Change Healthcare.

Attorney General Merrick Garland, speaking at the New Yorker Festival on Monday, described the antitrust division as “energized and eager to move forward,” saying the department had ongoing issues “involving everything from agriculture to banking, to real estate “.

“We believe that ensuring fair competition is an essential part of our obligation to ensure that justice is done,” he said.

The department’s work comes at a time when President Biden has made promoting economic competition and verifying corporate dominance a priority. He signed an executive order in July that encouraged U.S. agencies to adopt policies that push back industry consolidation and business practices that could stifle competition in ways that hurt consumers and workers.

Some prominent business groups have expressed concern that the administration’s plans are cumbersome and could interfere with the economy, although views are mixed, with small businesses, traders and farmers. generally supporting efforts to make markets more open.

The lion’s share of the Department of Justice’s antitrust work is carried out by career staff during an unusually long transition period for the antitrust division, which is typically headed by a senior political candidate by the Senate. The Biden administration, however, didn’t announce its candidate – longtime antitrust lawyer Jonathan Kanter – until July, and he just received a confirmation hearing on Wednesday. It could be the end of the year before the Senate votes on him.

Antitrust staff, whether it is the department or the FTC, tend to be biased in favor of legal action, although they are sometimes also averse to bold actions that could be challenged in court. . This year, career justice officials have been empowered by senior officials in the department to move forward when there is a case to be made.

“We have to be prepared to carry tough cases – and we are,” one official said.

The ministry’s recent airline costume is one example. American and JetBlue, which agreed last year to begin marketing their mutual flights on certain routes, say their partnership has served to boost competition in the Northeast and they say they have the data to prove it. The Justice Department says the airlines’ plans to compete with established carriers under the partnership are in fact less ambitious than what American and JetBlue each intended to do independently. The case is pending in federal court in Boston, although no trial date has yet been set.

In the Aon-Willis Towers case, the department refused to agree to a settlement that would have allowed the deal if the companies had sold certain assets. European antitrust authorities had accepted this approach, but the Justice Department did not believe it would do enough to protect competition. The companies accused the department of misunderstanding the market, but chose not to fight in court.

The ministry separately plays an advisory role on competition issues with other government agencies, including the Surface Transportation Board, which effectively reversed a $ 30 billion rail merger project in August, relying heavily on l ministry analysis. The Justice Department is also responsible for enforcing antitrust laws and currently has nearly 20 pending cases alleging violations such as bid-rigging, price fixing and employer collusion to limit competition for workers. .

In the absence of a politically appointed chief, the antitrust division is closely overseen by the Office of Deputy Attorney General Vanita Gupta, the No.3 in the Department of Justice. In a speech at Georgetown Law School last month, she pointed to a broad antitrust enforcement program spanning sectors such as agriculture, healthcare, labor markets and technology.

Andrew Finch, who served as the acting head of the antitrust division during the early months of the Trump administration, said that while the department’s efforts have been consistent with the Biden administration’s overall antitrust approach, “in many ways it’s business as usual”.

“The work of the antitrust division has not slowed down, and it normally would not be, even without a successful candidate,” said Mr. Finch, partner at Paul, Weiss, Rifkind, Wharton & Garrison. “I would expect them to keep doing what they are doing.”

Part of the department’s current portfolio spans work started under the previous administration, including scrutiny of the U.S. meat industry and an effort to bring criminal charges against employers who agree not to poach other people’s workers.

The department also filed a major complaint against Google last year, alleging that the company is using anti-competitive tactics to preserve a monopoly over its flagship search engine and related advertising business. The Biden DOJ, working with a group of state attorneys general on the case, is preparing for a trial – not scheduled until 2023 – and considering bringing an additional case targeting Google’s dominance in the advertising market digital.

The department is separately considering challenging Apple’s policies for the management of its App Store, an investigation initiated under the last administration but which has gained momentum this year, people familiar with the matter said. Decisions on these two issues related to the technology sector are expected in the coming months.

In other areas, the department has clearly broken with the actions of the Trump years. In July, he withdrew from an antitrust settlement reached last year with the largest trading group in the real estate industry over brokerage commissions. The agreement, with the National Association of Realtors, included terms designed to increase transparency and deter misrepresentation regarding brokerage commissions. In withdrawing, the department said the regulations do not protect its right to investigate further conduct by the trade group that could affect competition and harm home buyers and sellers. NAR is now contesting a summons she recently received from the court.

The department should also adopt policies that give companies less leeway to use their intellectual property rights to limit competition. And the DOJ recently signaled that it had concerns about the adequacy of new guidelines released last year that govern how it and the FTC review so-called vertical mergers of companies that are not directly in business. compete with each other.

The five-member FTC voted 3-2 along partisan lines last month to officially withdraw the guidelines. The new commission chair, Lina Khan, is a leading progressive advocate for overhauling antitrust law enforcement. She has set the stage for changes to the commission as she settles into the job, but has yet to spearhead major new cases.

Write to Brent Kendall at [email protected]