On January 29, 2015 I attended a program hosted by the Heritage Foundation: Obama Administration Antitrust Policy: A Report Card. The program was free and held in the Allison Auditorium. The program had three panels that focused on 1) the FTC; 2) the DOJ, and 3) Antitrust Abroad.   The panels were outstanding and included speakers who were either current or former senior members of the FTC or the Antitrust Division.

The consensus of the speakers was that it is too early to give an overall Antitrust grade to the Obama administration. It can take years to conduct a proper retrospective of how decisions and priorities have played out. Overall, however, there were a number of “high marks” or “good job” given by each of the panels. The DOJ, however was given one failing grade for (my words) “Plays Well With Others.”  Typically when a new administration takes over, new management speaks well of their predecessors, even though they may have a different approach in some areas. This happened with the Bush to Obama transition at the FTC. It did not at the DOJ. Several panelists noted Obama administration DOJ officials were uncharacteristically critical of their immediate predecessors with remarks such as the “antitrust is open for business”[1] and comments made when, in May 2009, the new administration withdrew the September 2008 Section 2 report on monopolization.

The DOJ panel was of particular interest to me.  In my 33 years at the Antitrust Division I worked for both Democratic and Republican Administrations. The panel was moderated by Hill Wellford and the speakers were: The Honorable Douglas Ginsburg, James Rill, J. Mark Gidley, and Thomas Barnett. I had worked under all of them when each was either Assistant Attorney General or Acting Assistant Attorney General at the Division.

The program will be available both in video and audio but these are some of my impressions of the remarks relating to cartel enforcement. Overall, there was a consensus that there had been a high degree of continuity in the criminal cartel program characterized by ever-increasing fines and jail sentences fueled by a focus on international cartels.  Regardless of administration, the focus on criminal antitrust enforcement has been high. For example the panel praised the Division’s Corporate Leniency program, which was revised in 1993 under Anne Bingaman.   Under Hew Pate the Antitrust Criminal Penalty Enhancement and Reform Act (“ACPERA”), expanded leniency to private damage suits and also increased the maximum Sherman Act fine to $100 million and the top jail sentence to 10 years. The panel also noted that the increased level of cooperation with foreign competition authorities has been a bipartisan effort across all recent administrations. This has led to the very successful export of leniency programs and the global view that “cartels are the supreme evil of antitrust.”

The panel had a caution on leniency programs; while hugely important it is equally important that enforcers be vigilant to grant leniency only to hard-core cartel conduct. It was noted that a leniency applicant may have incentive to take a grey area such as information exchange and puff it up to a price-fixing conspiracy. It is possible for a company to use “leniency” as a weapon; get a free pass for itself an its employees, while its competitors get hammered. It was noted, however, that the Division has rejected leniency applications when the applicant hasn’t “confessed a crime.”  There have also been occasions where the Division granted leniency, but did not follow-up with any prosecutions because the evidence was weak. I would add my observation that even the Antitrust Division leniency applicant isn’t quite a free pass.

The DOJ panel covered topics other than cartels, as did the FTC and Antitrust Abroad panels.  The keynote speech by William Kovacic was informative and entertaining.  The program should be online shortly.

 

[1]   While not cited at the program, this speech may be one example that panelists alluded to. See Sharis Pozen, Acting Assistant Attorney General, Antitrust Division, USDOJ, Remarks Before the Brookings Institute, April 23, 2012. http://www.justice.gov/atr/public/speeches/282515.pdf