In my column in today's Philadelphia Inquirer, I question how U.S. Attorney General Eric Holder can keep his pledge to "effectively and efficiently manage large investigations" in the Antitrust Division after shutting 4 of 7 regional offices, and losing 14 of 15 antitrust lawyers (mostly to the private sector or retirement) here in the Philly office, which opened in 1948 and closed last month.
Rutgers University Law School professor and antitrust textbook author Michael Carrier, writing from a broader perspective, says Obama's and Holder's department has actually stepped up antitrust enforcement compared to the George W. Bush administration. Writes Carrier:
"The shutdown of the Philly office is disappointing, but I think the big picture here is that there is modestly increased enforcement as compared to the previous administration.
"Given the weak economy, conservative judiciary, and long time it takes to develop the facts necessary for strong antitrust prosecutions, I don't think a radical turnaround was to be expected. And the prosecution of cartels (which the Bush DoJ also pursued) has continued in this administration. I see four main areas where there has been increased enforcement.
"1.Mergers: The DoJ was successful in getting AT&T to abandon its acquisition of T-Mobile, and received an injunction that blocked H&R Block from acquiring TaxACT. It is currently in discussions with Anheuser-Busch InBev after it agreed to modify its proposed merger with Grupo Modelo.
"2.Agreements: The DoJ challenged agreements between Apple and publishers, claiming that they colluded to raise the price of e-books (the publishers have settled). There also was a settlement with Visa and MasterCard that required the companies to refrain from blocking merchants' attempts to offer lower-cost alternatives.
"3.Monopoly: The DoJ filed suit against the United Regional Health Care System claiming monopolization.
"4.FTC Section 5 unfair methods of competition: The FTC entered into a settlement with Intel by which it promised to stop engaging in practices that harmed competitors in the market for graphic chips.
"In addition, there was continued vigorous opposition to reverse-payment settlements (currently in front of the Supreme Court), and a careful determination by the FTC on Google's antitrust liability."
Writes Edward Biester, partner at Duane Morris:
"On merger enforcement, which are civil cases, not criminal cases, the agencies (Department of Justice and Federal Trade Commission) have gotten more aggressive in challenging transactions after success in getting a court to enjoin the H&R Block merger with Tax Act based on the analysis in the revised 2010 merger guidelines, and forcing the abandonment of the AT&T-T-Mobile deal.
"Incoming Assistant Attorney General [William J.] Baer hit the ground running with a challenge of AB Inbev acquisition of Modelo (Corona beer is apparently viewed as providing price discipline on Bud & Miller/Coors.)
"In criminal enforcement (which is all through DOJ), enforcement has been active, but much of it is focused on international cartels, working through cooperation with enforcement agencies abroad and with the benefit of “leniency applicants” – participants in conspiracies cooperating with government investigations to obtain leniency in prosecution.
"The reassignment of local DOJ antitrust division offices, like that in Philadelphia, is billed as saving resources, and does not signal less overall criminal enforcement.
"However, these local offices have people with strong experience, and knowledge of local markets and industries, and institutional knowledge, and if they do not want to move to DC or NY, that is a loss for the DOJ.
"Just breaking up the office and disrupting it is, in my opinion, a loss for DOJ. Perhaps, in the long run, local bid-rigging type cases in this region will not be as easily detected and addressed without a local office."
UPDATE: In Pennsylvania, antitrust cuts will hit especially hard because the state is one of the few with no antitrust law of its own, writes Philadelphia attorney Basil Merenda:
"Prior to going to Harrisburg to work in the Rendell administration (2004-2011), I was a prosecutor with the New Jersey Attorney General's Office in the Criminal Division (1993-2003) with responsibility for prosecuting corruption and criminal and civil antitrust cases pursuant to New Jersey's state antirust statute. I therefore can attest to the effective work that the [United States Justice Department's] Antitrust Office had done on antitrust enforcement throughout the Philadelphia and Mid-Atlantic area...
"State antitrust law enforcement through the State Attorney General's Office, like the Pennsylvania, New Jersey and Delaware Attorney General Offices, can step into the void with the closing of the DOJ's Phila Antitrust office.
"But in order to more effectively conduct so called "state antitrust" enforcement here in Pennsylvania, we must enact a Pennsylvania State Antitrust statute with criminal jurisdiction.
"You should know that Pennsylvania is one of only two states that do not have a state antitrust state... I wrote about the need to enact a Pennsylvania Antitrust statute in an April 11, 2010 op-ed article that I wrote for the Harrisburg Patriot News
"I have been trying to convince... the office of newly elected Pa. Attorney General Kathleen Kane to make the enactment of a Pennsylvania Antitrust Act a legislative priority for her new administration."