Antitrust Chief Takes Aggressive Stance

The antitrust chief at the Justice Department, Christine A. Varney, is preparing to take on major corporations in a complete reversal of public policy. In a speech before the Center for American Progress in May, Varney said that the Bush Administration “lost sight of an ultimate goal of antitrust laws—the protection of consumer welfare.”

Legal guidelines adopted by in September 2008 made it difficult to pursue antitrust cases against corporations that elbowed out smaller competitors. Proponents argued that business ran more efficiently and ultimately did not harm consumers. Now, the Obama administration is encouraging smaller businesses to bring their complaints about potentially illegal business practices to the Justice Department.

Companies under Varney’s Scrutiny

Varney is examining reports that cable operators like Cablevision and Cox Communication are preventing Verizon and AT&T from purchasing television programs that the cable companies produce. She’s also taking on agreements that the Federal Trade Commission say discourage pharmaceutical companies from marketing generic drugs. Financial services and the wireless phone industries could also be impacted: the antitrust division is looking into whether it is legal for manufacturers to offer a model like the iPhone only to one phone carrier.

Varney is looking into a settlement between Google and book publishers and authors to make more books available online. Google may be receiving more attention from the division in the near future: “I think you are going to see a repeat of Microsoft,” Varney said in 2008, suggesting that Google is exhibiting the same expansionist behavior that landed Microsoft and Intel in trouble in the 1990s.

Too Soon?

While senior Democratic lawmakers are in favor of Varney’s crusade, some administration officials fear that the crackdown is arriving on the heels of the recession. Corporate America has already experienced a great deal of setbacks. The stricter policy of enforcement is being met with resistance by several agencies, including the Transportation Department.

The Transportation Department approved an antitrust immunity request involving a global alliance of nine airlines, after Continental Airlines wanted to join. The Justice Department felt that immunity was unnecessary and could lead to rates rising from 6 to 15 percent for many flight routes. Transportation officials maintained that the industry agreement would be more efficient, and suggested that relationships with international aviation partners and the ability to reach new Open-Skies agreements could be compromised if the immunity request was denied.

Senior Democrats on the House Judiciary Committee will soon hold a hearing to resolve the issue. However, Varney’s call to action will most likely ruffle more than a few feathers as she continues to identify abuses of business practices.

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