Bill Baer, Assistant Attorney General for the Antitrust Division, US Department of Justice gave a speech yesterday in London, England.  The title of the speech was “Politicization of Competition Policy: Myth or Reality?” Baer definitely came down on the side of “Myth.”  And he has a unique vantage point from which to offer an opinion.  Mr. Baer has had leadership positions in the Antitrust Division, the Federal Trade Commission and the defense bar in his long and distinguished career.  (No, I’m not pitching for a job :-)).

The speech outlined the philosophy of US antitrust policy in both Republican and Democrat administrations:

• “Competition policy and competition enforcement succeed where they are based on an unwavering commitment to the competitive process and to protecting consumer welfare. Enforcement decisions need to be fact-based, analytically sound, and legally grounded.”
• “We must not wield our substantial enforcement powers to protect or advance certain competitors or industries. We must call it like we see it, without undue influence from any quarter.”
• “[T]his commitment to sound antitrust enforcement must be paired with transparency and due process. If we don’t explain our analysis to the parties we are investigating, how will they have confidence that our enforcement decisions are indeed based on the facts and sound economic analysis?”
• “Antitrust officials – whether Republican or Democrat, whether at the Department of Justice or the Federal Trade Commission – have pursued fact-based and analytically sound enforcement, and demonstrated a commitment to transparency and fair process.”

I agree with this assessment based on my career with the Antitrust Division.  While I don’t have a cite handy, (and would appreciate if someone knows where I could find it), I once read that the year with the most criminal case filings occurred during the Reagan administration.  And one of the most important events in the development of international cartel enforcement occurred when Democrat appointee Anne Bingaman was Assistant Attorney General for the Antitrust Division and Gary Spratling was the Deputy for Criminal Enforcement.  Archer Daniels Midland was charged in the international lysine cartel.  The company was fined a then record $100 million and two of its executives were sentenced to jail.  The criminal prosecution of ADM, a company widely seen as very politically connected, showed our international partners that U.S. cartel enforcement would not show favoritism to domestic companies.  (And I have no doubt that the ADM case would have been prosecuted just the same if it had come up under any Republican appointee in charge of the Antitrust Division.)

The Antitrust Division’s revolutionary 1993 Corporate Leniency Policy was adopted under a Democratic administration.  But, in 2004, under a Republican administration, with Hew Pate in charge of the Antitrust Division, the Antitrust Criminal Penalty Enhancement and Reform Act (“ACPERA”) was passed. ACPERA bolstered the Corporate Leniency Program by raising criminal penalties and encouraging leniency applicants to cooperate with private plaintiffs.  Leniency, and the prosecution of criminal cases developed pursuant to leniency (or otherwise), has been a bi-partisan effort.

And, if one is inclined to think that Democrats were more pro-enforcement in the criminal arena, file this under “Be careful what you ask for.”  It was a Democratic administration that closed four Antitrust Division field offices that did primarily criminal work.  (Full disclosure: I was Chief of one of the closed office–but officially, I’m not bitter :-)).

Baer did note that there might be differences among reasonable people about cases at the margins. I think this applies in civil cases.  My observation (and there is nothing original about this) is that as a general rule, Republicans are more concerned about “false positives” (challenging an agreement as anticompetitive when it isn’t).  Republican administrations have confidence that the market will correct any mistakes in non-enforcement.  Democrats, on the other hand have more confidence that they will get it right, and are more troubled by the consequences to consumers during the time it might take for the market to fix “non-enforcement” mistakes.

In his speech Baer discussed a couple of cases that would make an interesting discussion on this point:  United States v. Apple and United States v. Amex.  Baer explained in his speech why the Division pursued these cases and the benefit to consumers.  But, I think it would be an interesting debate to consider whether a Republican administration would have brought either of these cases.  And if not, why?  Only 10 months until the next ABA Antitrust Spring meeting.  Can we get a panel on this?

Thanks for reading.

Reading to the end bonus!  This footnote is in the text of Baer’s written remarks:

RICHARD A. POSNER, ANTITRUST LAW ix (2d ed. 2001) (“Almost everyone professionally involved in antitrust today—whether as a litigator, prosecutor, judge, academic, or informed observer—not only agrees that the only goal of the antitrust laws should be to promote economic welfare, but also agrees on the essential tenets of economic theory that should be used to determine the consistency of specific business practices with that goal.”).