Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Antitrust chief discusses vigorous enforcement efforts and corresponding consumer benefits, (Jan 31, 2014)

By Jeffrey May, J.D.

William Baer, Assistant Attorney General in charge of the Department of Justice Antitrust Division, discussed the progress antitrust enforcement has made over the last five years, in remarks prepared for delivery to the New York State Bar Association yesterday. According to Baer, the record shows that the Antitrust Division has followed through on President Obama’s 2008 campaign pledge that his administration would vigorously enforce the antitrust laws.

Beginning with a discussion of the Antitrust Division’s criminal enforcement program, Baer noted the uptick in case filings in recent years. Since January 2009, the Antitrust Division has filed 339 criminal cases, a more than 60 percent increase over the prior five years. Prison sentences have increased as well. The average prison sentence has increased from 20 months in the period from 2000 to 2009 to 25 months during the years 2010 through 2013. In addition, $4.2 billion in criminal fines has been secured since the beginning of 2009.

Baer highlighted the Antitrust Division’s ongoing investigation into the auto parts industry. Twenty-four companies and more than two dozen individuals have been charged in the probe. Also noted was the government’s investigation of price-fixing conspiracies involving liquid crystal display panels. In that context, Baer noted the convictions of Taiwan-based AU Optronics’ its subsidiary, AU Optronics Corp. America; and three former top executives, as well as the record-tying $500 million fine imposed on AU Optronics. Baer also touted the government’s efforts to prosecute conspiracies to defraud municipalities across the nation through the manipulation of the competitive bidding process for the investment of tax-exempt bond proceeds.

Merger enforcement. With respect to merger enforcement, Baer said that “the last few years demonstrate that we will not hesitate to challenge in court anticompetitive transactions where that is the right course. He added that the government is always open to meaningful settlement offers that resolve our competitive concerns; however, the Antitrust Division “will continue to reject settlement terms that do not ensure consumers the benefit of a competitive market.”

As an example of a merger enforcement success story, Baer discussed the Antitrust Division’s recent victory at trial in its challenge to Bazaarvoice’s $168 million consummated acquisition of PowerReviews, its closest rival in the U.S. market for Internet product ratings and reviews platforms. The antitrust chief also pointed to the government’s successful efforts in 2011 to stop H&R Block from acquiring TaxAct—its competitor in the market for digital do-it-yourself tax preparation software.

Consumer benefits. Baer noted that these enforcement efforts have real consumer benefits. He suggested that AT&T’s decision to drop its proposed acquisition of T-Mobile in the face of an Antitrust Division challenge was a prime example. “Since AT&T terminated its effort to eliminate T-Mobile as a rival, T-Mobile has spearheaded increased competition in wireless services,” Baer explained.

Consumers also reaped the benefits of the Justice Department’s price fixing action against Apple Inc. and book publishers for conspiring to raise e-books prices and to end e-books retailers’ freedom to compete on price, according to Baer. “Current pricing data shows that since injunctions against Apple and its book publisher co-conspirators were entered, the average price of the top 25 best-selling e-books dropped from around $11 to around $6,” Baer reported.

“We look forward to the challenges the next few years will bring,” Baer concluded. “We aim to build on the energy, vigor and success in protecting competition that have marked antitrust enforcement these past five years.”

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