Emerging Trends/The Changing Faces of the Antitrust Guard
Emerging Trends is a regular feature from Kaye Scholer, answering crucial questions about emerging legal or business issues and the potential ramifications for companies operating in a particular space.
“The changing faces of the antitrust regulators at the Antitrust Division of the Department of Justice and the Federal Trade Commission will likely alter the government regulatory environment for antitrust in 2013.”— Kaye Scholer Partner Claudia Higgins, former Assistant Director at the FTC
Q. William Baer was recently sworn in as Assistant Attorney General for Antitrust at the Department of Justice. How will his arrival change the landscape at the DOJ?
A. The last AAG for Antitrust, Christine Varney, left the Antitrust Division for private practice more than 18 months ago. Since then, the Division has been in the hands of acting AAGs who, although quite capable, lacked the clout to exercise the kind of leadership of a fully confirmed AAG. In addition, none of the three acting AAGs held the office for more than a few months, making it even more difficult for them to put their own ‘stamp’ on the agency. Bill Baer’s arrival will bring an important sense of stability to the Antitrust division.
Q. What clues can we glean from Baer’s background about how he might approach matters as AAG?
A. Bill is a highly respected member of the antitrust bar whose capabilities are borne out in his record, both in the public and private sectors. His prior government background, as Director of the Federal Trade Commission’s Bureau of Competition during the Clinton Administration, indicates that he will employ both solid economic analytical principles and well-designed litigation strategies as he leads antitrust staff at the Department of Justice. The FTC’s successful challenge of the proposed mergers of four of the nation's leading drug wholesalers provide an excellent example. Bill established a litigation strategy based on economic data that ultimately blocked the transactions, while many experienced practitioners doubted whether the agency could prevail. Under Bill’s direction, the FTC litigation teams relied on robust econometric data, strong documents and smart litigation strategy to win their cases.
Most importantly, Bill has real world experience representing private businesses before the enforcement agencies in mergers and before the agencies and courts in litigation. As a result, he is likely to be sensitive to the cost of delayed decision-making. He understands that the cost of unnecessary investigation and litigation burden the economy without providing value in to consumers, whose economic interests the agencies seek to protect.
Q. What were some of Baer’s specific achievements during his tenure at the FTC, which might serve as a preview for his future efforts?
A. In addition to the litigation successes and significant settlements obtained during Bill’s tenure as Director of the FTC’s Bureau of Competition, the agency also adopted important additions to the Merger Guidelines that described how and when the agency would take into account merging parties’ claims that their transaction would bring efficiencies to the market. In other material changes, Bill made certain that the FTC provided greater transparency for its decision-making so that companies could better plan future conduct within the proper antitrust parameters. Bill worked hard as well to forge better relationships between antitrust enforcers at the FTC and DOJ, and then turned his attention to doing the same with states and other nations. I expect that he has important policy initiatives that he wants considered seriously by ‘his’ Division in the upcoming months.
Q. Of what other changes and/or new additions should companies and antitrust practitioners also be aware:
A. The FTC has two new Commissioners who will want to put their imprints on Commission dialogue and decisions. Both Maureen Ohlhausen and Joshua Wright are Republicans, and they join their sitting Democratic colleagues on this five-member body. The FTC can have no more than three commissioners from the same party.
Commissioner Ohlhausen was sworn in on April 4, 2012, returning to the FTC from private practice. From 2004-08, Commissioner Ohlhausen directed the agency’s Office of Policy Planning and previously she served as a law clerk on U.S. Court of Appeals for the D.C. Circuit. Much of her background has been focused on matters involving Internet, privacy and data protection.
Commissioner Wright, a George Mason University Law Professor, holds both a Ph.D. in Economics and a law degree. He was confirmed by the Senate on January 1, and he steps into Commissioner Tom Rosch’s position. He will be the only economist on the Commission.
Q. What are your expectations for these two new Commissioners, and how the Commission might change under their reign?
A. It is impossible to predict, of course, but together, Ohlhausen and Wright may bring more business-oriented arguments to the Commission’s decisions. Ohlhausen has already shown her willingness to openly criticize a decision involving competition enforcement (regarding the use of Section 5 of the FTC Act to claim that parties must repay ill-gotten gains in competition cases), and Wright has taken positions questioning some FTC investigations and criticizing what he views as overly aggressive antitrust enforcement against large companies. Wright also is predicted to be wary of expanding the use of Section 5 in competition matters. Where outgoing Commissioner Rosch (also a Republican) has often taken a pro-enforcement stance along with the three Democrats on the Commission, both Ohlhausen and Wright may be less inclined to do so. Because the Commission is a relatively collegial body, these two new faces, and their very capable persuasive abilities, can be expected to sway some decisions for the Commission as a whole more toward a defense posture.
Based in Washington, DC, Claudia Higgins is a Partner in Kaye Scholer’s Antitrust practice , where she advises numerous Fortune 500 companies in significant matters, particularly in relation to high-profile mergers, acquisitions, and joint ventures. She also defends clients under civil investigations by the Federal Trade Commission (FTC), the U.S. Department of Justice (DOJ), and numerous international regulatory agencies.
Claudia spent more than two decades at the FTC where she last held the title of Assistant Director for Regional Litigation with responsibility for the Commission’s regional office antitrust efforts throughout the United States. Working under Bill Baer when he was Director of the FTC’s Bureau of Competition, she was recognized for her outstanding accomplishments with the FTC on numerous occasions, most notably receiving the agency’s Distinguished Service Award and its prestigious Paul Rand Dixon Award, relating to her leadership roles in merger enforcement. She can be reached at claudia.higgins@kayescholer.com
