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Next 4 Years: Same Antitrust Approach, New Agency Leaders

Sharis A. Pozen and Sara L. Bensley, Law360, November 2012.

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With the election results in and President Obama the victor, the general consensus is that U.S. antitrust enforcement will be largely unchanged from the last four years, although there will be new leaders at the U.S. antitrust enforcement agencies. And as antitrust practitioners know, each new leader brings his own style and priorities.

At the U.S. Department of Justice, Joe Wayland will continue as acting assistant attorney general, with Bill Baer, currently Arnold & Porter LLP’s antitrust group leader and President Obama’s nominee to be assistant attorney general for antitrust, likely to be moved ahead in his confirmation process now that the election is over. Baer has been approved by the Senate Judiciary Committee, and is awaiting a confirmation vote by the U.S. Senate. With Obama continuing in the White House, that could occur in the coming weeks.

Joe Wayland has continued to rack up a number of enforcement and policy successes in his tenure as acting AAG, with several civil and criminal enforcement actions. In telecom, he challenged Verizon’s acquisition of spectrum and certain ancillary arrangements with a number of cable companies. The Antitrust Division entered into a consent agreement to resolve the concerns raised by the arrangements. Wayland also oversaw the sentencing and the ongoing appellate process in the AU Optronics criminal prosecution.

Under his watch, a number of competition policy issues have been explored, including through the DOJ’s and Federal Trade Commission’s workshop on most-favored nation clauses and the upcoming Dec. 10 workshop on the intersection of intellectual property and antitrust.

Baer, the nominee to be AAG, is an experienced antirust practitioner, with extensive governmental and private practice experience. However, Baer’s governmental experience was at the Federal Trade Commission, and the DOJ has a very different culture and tradition than the FTC. Baer will undoubtedly go through a bit of an adjustment to DOJ, an executive branch agency.

Baer is known for his strong management style, his expertise in both civil and criminal antitrust, as well as his focus on international competition issues. He has stated that he will also be focused on economic analysis. During his confirmation hearing, Baer said: “I think sound economic analysis is fundamental to good antitrust enforcement. That means being able to articulate a theory of harm that has occurred from past behavior or is likely to occur from future behavior.”

In addition, Baer would be one of the first AAGs in decades to arrive on the job with extensive criminal antitrust experience, which may well lead him to pay particular attention to the Antitrust Division’s criminal program. He will also oversee the Antitrust Division staff, which has just completed one of its most successful litigation periods, in both its criminal and civil programs. The question is open as to whether this will embolden Baer and the DOJ’s career staff to see litigation risk through this lens of success and file lawsuits that might not have been filed in the past, or have the opposite effect — worry that the current record of success could be unduly tarnished by the loss of a close case.

He will also inherit a fairly heavy litigation docket, with the DOJ’s cases against two publishers and Apple Inc. (the e-books case), American Express Co., and Blue Cross Blue Shield of Michigan all with upcoming trial dates. In addition, the administration, along with the FTC, recently filed petitions for certiorari in a pharmaceutical reverse payment case (FTC v. Watson Pharmaceuticals Inc.) and a case involving the state action (FTC v. Phoebe Putney Health System Inc.), so the U.S. Supreme Court may be active on these antitrust issues.

Turning to the FTC: In recent years, the FTC has maintained a strong record of antitrust enforcement, and will likely continue this record. President Obama nominated Josh Wright, a professor at George Mason University, to take Commissioner J. Thomas Rosch’s Republican spot on the bipartisan FTC. Wright will undergo a confirmation hearing and then will need to be approved by the U.S. Senate before he can serve as a FTC commissioner.

Commissioner Rosch has gained a reputation as a vigorous law enforcer, bringing his litigation expertise to the FTC. Wright, his replacement, has both a J.D. and Ph.D. in economics, and has written extensively about recent law enforcement by both the FTC and DOJ, largely criticizing those actions. Thus, as a member of the FTC that has striven to achieve bipartisan results, if confirmed, and if Wright’s writing represent his views on reducing competition enforcement, a question remains as to whether we will see more dissents and less bipartisan results from the FTC on law enforcement matters.

In the second term of the Obama administration, the likely scenario for antitrust is more of the same: vigorous enforcement of the antitrust laws. Any changes may be slight and reflect subtle changes in focus and prioritization, and will undoubtedly reflect the leaders’ style.

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