September 2, 2014

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Antitrust Enforcement in President Obama’s Second Term

New leadership at the antitrust agencies is unlikely to change policies or priorities.

Regardless of which political party wins a presidential election, the election cycle coincides with turnover in the leadership of federal agencies. This year is no exception. As President Barack Obama prepares for his second term, antitrust enforcement agency changes include the announced departure of Acting Assistant Attorney General Joseph Wayland and the rumored departure of Federal Trade Commission (FTC) Chairman Jon Leibowitz. These leadership changes, however, are unlikely to lead to any change in President Obama's approach to antitrust enforcement.

Antitrust Enforcement Under President Obama

As a candidate in 2008, President Obama stated that he would increase antitrust enforcement, in contrast to President George W. Bush's administration, which he said produced "the weakest record of antitrust enforcement in the last half century." Statistics from the FTC and the U.S. Department of Justice (DOJ) indicate that the Obama administration has increased the frequency of enforcement actions. For example, the Bush administration, in its second term, issued second requests for additional information for approximately 3% of all transactions reported under the Hart-Scott-Rodino (HSR) Act, while the Obama administration issued second requests for approximately 4% of transactions. The Obama administration also revised the Merger Guidelines and the merger remedy guidelines (to be more receptive to behavioral remedies), as well as the HSR Form—all of which facilitated aggressive merger enforcement.

Cartel enforcement has seen little change since the end of the Bush administration, as the DOJ's Antitrust Division has continued to pursue criminal antitrust violations aggressively. In 2011, the Antitrust Division filed 90 criminal antitrust cases—the most since 1987. The Division has also collected more than $500 million in criminal fines in each of the last three years.

While cartel enforcement has continued unchanged, there has been a shift in nonmerger civil enforcement policy. The Antitrust Division repudiated the Bush administration's monopolization guidelines and has expressed a greater willingness to challenge unilateral conduct and exclusionary business arrangements. Although the stated policy has shifted, the Antitrust Division has only brought one monopolization case during the Obama administration.

Leadership Changes in President Obama's Second Term

There will be some leadership changes within the antitrust agencies in the near future. The Antitrust Division has been led by acting assistant attorneys general for some time. The most recent acting head of the division, Joseph Wayland, recently departed, and the DOJ has not yet announced who will take his place. Additionally, President Obama has nominated William Baer to serve as Assistant Attorney General. That nomination awaits Senate confirmation. Baer was director of the FTC Bureau of Competition during Bill Clinton's administration, a period noted for aggressive enforcement at the FTC.

At the FTC, Chairman Leibowitz, a Democrat, has served as an FTC commissioner for eight years and as chairman for almost four years. As rumors circulate regarding Chairman Leibowitz's departure, President Obama must consider potential replacements. The president could appoint a new chairman from the sitting Democratic commissioners, or he could choose someone from outside the agency. President Obama has also recently nominated Joshua Wright, a Republican, to replace outgoing Republican commissioner J. Thomas Rosch, whose term expired in September. Commissioner Rosch has indicated that he will stay in his position until the Senate confirms Wright. Although no more than three of the FTC's five commissioners, who each serve seven-year terms, can be of the same political party, President Obama's reelection ensures a Democratic majority at the FTC. Three of the five FTC commissioners will continue to be Democrats, and the chairman, who appoints the directors of the Bureaus of Competition and Consumer Protection, will be a Democrat as well. Accordingly, there is little reason to expect a new direction in antitrust enforcement priorities.

Copyright © 2014 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

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Partner

Jonathan M. Rich is a partner in Morgan Lewis's Antitrust Practice. Mr. Rich's practice includes litigation and representation before the federal enforcement agencies, including grand jury investigations, mergers and acquisitions, and other civil investigations. His practice focuses on antitrust matters in a variety of industries, with a particular focus on financial institutions. Both at Morgan Lewis and previously at the U.S. Department of Justice, Mr. Rich has been involved in all of the major government antitrust investigations of the financial...

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David R. Brenneman is an associate in Morgan Lewis's Antitrust Practice. We handle the most complex antitrust issues that affect clients in all industries and throughout the global economy. Our lawyers advise clients regarding mergers and other filings; obtain clearance from national and international competition authorities; defend clients in government, private investigations, or litigation; provide antitrust counseling and negotiate with competition agencies; and help ensure that clients' business operations comply with—but are not unduly restrained by...

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Partner

Thomas J. Lang is a partner in Morgan Lewis's Antitrust Practice. Mr. Lang focuses his practice on antitrust litigation and merger reviews. His litigation experience includes class actions, price fixing, predatory pricing, intellectual-property-related antitrust issues, monopolization, state court indirect purchaser litigation, federal multidistrict litigation, and civil and criminal investigations by the Federal Trade Commission (FTC) and the Department of Justice (DOJ).

From 2006 to 2008, Mr. Lang served as Senior Litigation Counsel in the FTC's Bureau of Competition. In this...

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Morgan Lewis’s Antitrust Practice is one of the largest and most diversified in the world. Our Antitrust Practice is distinguished by its substantial scope and depth, our base of knowledge and experience, and our international capability. We provide the full spectrum of antitrust services, from preventive counseling to advice on complex issues to defense of "bet the company" litigation.

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