Obama DOJ Withdraws Bush Administration Antitrust Directive

BY CCIA Staff
May 11, 2009

Assistant Attorney General Christine Varney’s announced this morning at the Center for American Progress that the Department of Justice is withdrawing a 2008 Bush administration report that made it more difficult to police anticompetitive behavior.

Ed Black, the President & CEO of the Computer & Communications Industry Association spoke on the antitrust panel that followed Varney’s announcement. CCIA has been an advocate for strong, but fair antitrust enforcement for 36 years and was an early critic of the DOJ’s Section II report.

Sound antitrust enforcement is of particular importance to high-tech industries. Characteristics underlying technology markets— complicated patent portfolios, network effects, economies of scale, standardization and interoperability—make anticompetitive actions difficult to detect, harder to remedy, and more detrimental to innovation.

The following quotes can be attributed to Black:

“It’s clear we have a new sheriff in town. Companies who are tempted to abuse their market power will do some self-correcting. Antitrust enforcement, particularly in relation to monopolistic actions and dominant firm conduct, was virtually ignored in the last administration. It is refreshing to see Christine Varney appointed to head up the Justice Department’s antitrust efforts. The fact that she took such swift action to retract a deeply flawed report is definitely a positive omen.

“The biggest point for me that Christine made was that the US intends to return to being a leader in antitrust policy and enforcement. A year from now I hope to be congratulating her on being on the way to having a more coherent and congruent policy — particularly on Section II — with the rest of the world. My hope is that the era of different outcomes for companies depending on the venue of the antitrust investigation is gone.

“The EU and the US operated in similar ways in the 90’s, but the US at the beginning of the last administration really took a detour. This left the EU to take the lead on actively investigating new antitrust cases including those against big US tech companies like Intel and IBM. The impending European ruling against Intel illustrates how other jurisdictions have had to fill the enforcement void, even when anti competitive behavior was blatant. If US regulators promptly step up our own antitrust investigation of Intel, which the FTC initiated last year after other jurisdictions had taken serious notice of Intel’s bad behavior, it would be a signal to the world that the US is back on the beat.

“There are delicate issues in the tech industry that require a balance of aggressiveness and care. We believe that having a long track record working in the high-tech and Internet industries, Varney gets this dynamic. Being a big company with a large market share is not the problem – especially when the market is changing and that large market share possibly temporary. What could warrant investigation is when the dominant companies misuse their market power to lock-in customers, to create barriers to entry, and to harm innovation and choice.

“In this economy we need more innovation and a competitive marketplace not only brings better prices for consumers, but more innovation that boosts the overall economy. Most of the on-line world is very dynamic, competitive and innovative.”

 

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