Corporate & Securities Law

The Catfight Goes Mainstream: The MSM Picks Up on the DOJ-FTC Dispute over the Section 2 Report

By David Fischer

Both the Washington Post and the New York Times have articles about the disagreements between DOJ and FTC over DOJ’s Section 2 report.  The Washington Post reports:

Sen. Herb Kohl (D-Wis.), chairman of the Senate Judiciary Committee’s antitrust subcommittee, called the report an assault on the Sherman Act, the basis for much U.S. law on monopolies.

“If followed, the Justice Department’s interpretation of this fundamental law written nearly 120 years ago . . . could make it virtually impossible to prevent many forms of abusive conduct by dominant firms, such as predatory pricing and tying” goods to a sale, Kohl said in a statement. “This report represents another anti-competition and anti-consumer decision by this Antitrust Division.”

The report comes as the Justice Department has faced criticism for failing to take a more aggressive stance to foster competition and protect consumers in antitrust matters.

 The New York Times reports:

In a quick response to the Justice Department report, three of the four commissioners on the F.T.C. issued a statement saying that the policy was ?a blueprint for radically weakened enforcement? against anticompetitive practices. They said the Justice Department guidelines allowed monopolies to act ?with impunity? and ?would make it nearly impossible to prosecute a case.?

In nearly eight years under the Bush administration, the Justice Department has brought one case against a business on anticompetitive grounds, seeking to block the purchase of a West Virginia newspaper by a competitor.

Critics considered the new report an attempt, in the last months of the Bush administration, to make formal a pro-business approach to antitrust issues. The policy guidance is not binding on the next administration. Thomas Barnett, the head of the Justice Department?s antitrust division, said in an interview that the latest report provided ?clear standards? for determining whether certain types of conduct by big companies violated the Sherman Act and would harm competition.

…

The campaign of Senator Barack Obama, the Democratic nominee for president, said the Justice Department?s position reflected the need for a more aggressive approach to antitrust enforcement in the next administration.

?Four more years of the Bush-McCain approach to antitrust will only lead to higher prices for American consumers and a less competitive environment for smaller businesses to thrive,? said Jason Furman, economic policy director for the campaign.

The campaign of Senator John McCain had no immediate comment on the report.

…

Senator Herb Kohl, the Wisconsin Democrat who leads the antitrust subcommittee, called the report ?yet another example of this Justice Department?s unfortunate record of failing to vigorously enforce antitrust law.?

No matter which side is right in the dispute, ?this is part of a growing rift between the F.T.C. and the Justice Department,? said Herb Hovenkamp, an antitrust professor at the University of Iowa who testified as part of the hearings. ?It?s warfare, and the level of rhetoric is pretty high.?

Full post as published by Antitrust Review on September 09, 2008 (boomark / email).