Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Antitrust Division not targeting technical violations of antitrust laws, agency head asserts, (Sep 26, 2013)

By Jeffrey May, J.D.

When investigating horizontal agreements among competitors, the Department of Justice Antitrust Division is focused on conduct that has anticompetitive effects, William Baer, Assistant Attorney General for Antitrust, reassured attendees of Fordham Law School’s 40th annual international antitrust law and policy conference this morning. The focus is the substance of the violation and its impact on consumers. Whether the agreement is a per se violation of the antitrust laws or would be evaluated under more detailed rule of reason analysis is not the Antitrust Division’s concern at the outset of the investigation, according to Baer.

Even where conduct appears to be per se illegal, the Antitrust Division investigates a conspiracy’s impact on consumers, he said. The agency does not lose sight of the agreement’s competitive effects.

The Antitrust Division assesses the competitive landscape and the nature of the conduct alleged. It considers the agreement’s purpose and whether it is ancillary to a proper business purpose. Some agreements serve no purpose other than to suppress competition, Baer noted. Whether the parties to the agreement collectively have market power also is considered.

Baer cited the recent case against Apple for conspiring with publishers to fix e-book prices as an example of the Antitrust Division’s work to lay out the competitive effects of agreements in enforcement actions. The Antitrust Division convinced the federal district court in New York City that consumers suffered from the scheme to eliminate retail price competition for e-books. The court has ordered injunctive relief, and a trial on damages in the joint federal/state action will begin in May 2014.

Baer noted that, where there is harm to consumers as in the Apple case, it is important for consumers to be compensated. The publishers have already put over $160 million in a fund for reimbursement to consumers for overcharges.

The Antitrust Division’s attention to consumer harm can be observed in both litigated actions and actions resolved by consent decree. Even where the Antitrust Division reaches a settlement with participants of an alleged conspiracy to restrain trade, the agency has and will provide an explanation of the anticompetitive effects of the challenged conduct, Baer noted.

The antitrust chief also explained the Antitrust Division’s decision to pursue rule of reason theories even where the conduct appears to be per se illegal. The rule of reason analysis informs the court of the anticompetitive effect of the challenged conduct. It also gives the court the option of assessing the evidence in a rule of reason context in the event the court disagrees with the per se approach, he added.

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