Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Department of Justice’s Baer touts antitrust litigation as enhancing competition, (Feb 6, 2015)

By Edward L. Puzzo, J.D.

The mission of antitrust law is not to regulate, or pick market winners and losers, but to protect free markets by removing impediments to competitive markets and protect market structures that facilitate competition, according to William Baer, Assistant Attorney General for the Department of Justice’s Antitrust Division, in a speech delivered today in Miami. Baer reviewed recent activity by the Department of Justice to illustrate this point.

Market disruption. Competition may lead to big winners and big losers in many markets, Baer observed. New business models may cause market disruption, such as the way ebooks transformed the publishing industry, or generic drugs challenged the pharmaceutical business. These create incentives for the challenged competitors to respond in anticompetitive ways or by seeking regulation that stifles competition. “Antitrust enforcers need to be vigilant in working with public officials to sort out calls for regulation that mask this sort of anticompetitive motivation and risk stifling innovation that benefits consumers,” Baer stated.

Remedies. In horizontal merger and Sherman Act cases, antitrust enforcement requires careful attention to remedies, according to Baer. Baer cited the remedies that arose when the DOJ challenged brewer Anheuser-Busch InBev’s effort to purchase Corona brewer Grupo Modelo, and when US Airways sought to merge with American Airlines. In both instances, Baer claimed, the structural remedies that resulted from DOJ litigation enhanced rather than lessened competition, which would have been the result had the transactions been unchallenged.

Remedies are important in conduct cases as well as structural cases, according to Baer. After DOJ’s ebooks investigation showed that book publishers and Apple had acted together to raise ebook prices and eliminate retail price competition, the judgments against the publishers included provisions designed to prevent them from hampering price competition by ebook retailers or sharing competitively sensitive information with each other.

Guidance. The Antitrust Division seeks to provide useful front-end guidance, such as the Horizontal Merger Guidelines produced in cooperation with the FTC. Sector specific guidance is also produced to inform market participants that competitive concerns would not lead the DOJ to challenge a proposed cyber intelligence data-sharing platform that would allow members to share threat and incident data about cyber attacks.

Baer’s remarks, “Reflections on Elements of Effective Antitrust Enforcement,” were prepared for delivery today at Global Competition Review’s Fourth Annual Antitrust Leaders Forum in Miami.

News: Antitrust AntitrustDivisionNews