November 18, 2011 9:24 pm

Antitrust chiefs cite transparency, tout growing tech prowess

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Acting Assistant Attorney General for the Department of Justice (DoJ), Sharis Pozen, and Federal Trade Commission (FTC) Chairman Jon Leibowitz, addressed the American Bar Association’s Antitrust Fall Forum, expounding on their approach to merger enforcement.

Pozen said there would be “vigorous antitrust enforcement of the antitrust laws, as well as transparency and certainty for consumers and businesses.” Leibowitz commented that “companies know the rules of the road because we strive to maintain consistency.”

The Commission is working to revamp its technology analytical aptitude, Leibowitz said, highlighting a number of efforts including the hiring of additional high-tech staff.

Drawing on the example of Google’s (NASDAQ: GOOG) purchase of Admob in 2009, Leibowitz said the FTC has “a duty to know as much about an industry as [companies] do themselves.” Initially, the Commission came very close to issuing a complaint and challenging this merger, he said. Instead, the Commission ultimately voted unanimously to close the investigation, based on evidence that Apple (NASDAQ: AAPL) was entering the market and was likely to emerge as a strong competitor to the combined Google/Admob entity.

Although the antitrust division plans to eliminate four regional offices, Pozen mentioned that “each and every investigation has the resources it needs so we can reach decision points quickly, efficiently, and effectively.”

In explaining resource allocation issues, Pozen noted that the number of Hart-Scott-Rodino applications increased from 1,166 in 2010 to 1,450 filings in 2011. This year, the DoJ cleared 98% of those transactions, issuing requests for additional information in only 2% of the filings, according to Pozen.

She explained that, of the remaining 2% of transactions, the DoJ determined that those proposed deals required enforcement action. In many of those matters, the parties proposed remedies that the DoJ agreed would solve the competition problem it had identified, and a consent decree was entered into with the parties.

However, she noted that in those deals where no remedies were proposed by the transacting parties that would effectively preserve competition, the DoJ went to court to block the transaction, such as the recently blocked deal between H&R Block (NYSE:HRB) and TaxAct and the upcoming suit to enjoin the merger between AT&T (NYSE:T) and T-Mobile.

The DoJ’s civil non-merger enforcement is robust as well, according to Pozen, who said the DoJ remains committed to challenges against American Express (NYSE: AXP) having already settled with Master Card (NYSE: MA) and Visa (NYSE: V) to eliminate anticompetitive merchant rules used by major credit card companies. Additionally, a settlement between the government and Morgan Stanley (NYSE: MS) has been reached and, if approved, will require the company to pay USD 4.8m to settle charges that it entered into an anticompetitive agreement with KeySpan that restrained competition in the New York City electricity capacity market.

Pozen reiterated that the DoJ “can and will take action when necessary to stop anticompetitive conduct and mergers.”


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