Tech Industry Response To News Of Varney’s Departure

BY CCIA Staff
July 6, 2011

Assistant Attorney General Christine Varney is leaving as head of the antitrust division at the Department of Justice next month to join a law firm, according to various news reports. After a decade of inaction on antitrust cases, Varney’s appointment by President Obama was seen as a sign that the government would once again take action when companies use their market power to eliminate competitors and crush competition.

The high-tech sector is frequently the focus of antitrust scrutiny and one of the most important and complex sectors of the U.S. economy, so an understanding of the new economy would be important for the next Assistant Attorney General for Antitrust. The Computer & Communications Industry Association has been an advocate for strong, but fair antitrust enforcement for 39 years.

The following can be attributed to CCIA President & CEO Ed Black:

“As Assistant Attorney General, Christine Varney proclaimed a strong, positive enforcement role. By rescinding the Bush Administration’s weak interpretation of monopoly enforcement policy and committing to active intervention when necessary, she moved to reinvigorate the beleaguered Antitrust Department. Key investigations are reaching maturity and major cases are waiting to be brought, and it is unclear what impact her leaving now will mean.”

“The next year is when the Obama administration’s antitrust reputation will be forged and Varney and the new Assistant Attorney General will be the blacksmiths.

“The Obama administration’s antitrust legacy depends on its ability to appoint a new leader who can deliver on Varney’s promise to reinvigorate antitrust enforcement and resolve critical pending antitrust cases involving the tech and telecommunications industry. The Justice Department should enforce the law – not become a regulatory agency overseeing business conduct in multiple industry sectors.

“The Obama administration must look for a new chief antitrust cop who is committed to strong enforcement and not afraid to stand up to powerful, connected companies when the evidence is solid.  The DOJ has several key investigations in the queue and current economic conditions, including the ample amount of corporate cash on hand, means that we are in open season for mergers and acquisitions.

“As other parts of the administration struggle with budget issues, we hope they do not overlook the importance of good, balanced antitrust enforcement to commercial innovation and economic growth. We are at a critical, historic crossroads as yet another administration is being asked to deal with issues involving AT&T’s proposed merger and IBM ’s behavior toward competitors. How these issues were resolved during past Democratic and Republican administrations paved the way for economic growth and innovations including the software industry, the Internet and cell phones. We hope that the new antitrust chief can ensure pending cases such as IBM and AT&T are resolved so that the next wave of innovation for the 21st Century is unleashed.

“We hope the Obama administration will appoint a strong antitrust chief who understands the new economy and how competition spurs innovation and economic growth. Sound antitrust enforcement is particularly critical to the tech industry. Characteristics underlying tech markets — complicated patent portfolios, network effects, economies of scale, vertical integration, standardization, interoperability and standards lock in — may make anticompetitive actions difficult to detect, harder to remedy, and more detrimental to innovation.”

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