DOJ’s Approach to Antitrust Violations: We Know Them When We See Them 

Amidst all the controversy surrounding the Federal Trade Commission, the Department of Justice’s Antitrust Division has received comparatively little scrutiny. At one level, this makes sense.  The agency's staff has not resigned en masse; with different authorities, the DOJ has not embarked on a rulemaking binge; and its leader, Assistant Attorney General Jonathan Kanter, has meaningful experience in the private sector and has shown a willingness to engage with the business community.  

Nevertheless, the DOJ has repeatedly signaled that its approach to antitrust law is every bit as controversial as that of the FTC. It has refused to recognize the consumer welfare standard within antitrust, been coy about merger remedies, withdrawn merger and health care guidelines, and repeatedly refused to provide any guidance regarding its new push to criminalize what have historically been civil antitrust cases.  

Standardless Antitrust Enforcement 

Mr. Kanter himself has sought to remove constraints on the agency’s ability to enforce the antitrust laws according to its policy preferences.  Speaking before the Chamber, Mr. Kanter repeatedly declined to endorse the consumer welfare standard as a touchstone of antitrust enforcement because, in his view, that standard means different things to different people.   

Instead, Mr. Kanter proclaimed that the DOJ would focus on what he sees as the “market realities” to evaluate business conduct. For their part, Mr. Kanter suggested to companies that they could “intuit” whether or not they were in a competitive marketplace.  Unfortunately, this approach will only remove the transparency and objectivity that have become the hallmarks of antitrust enforcement.   

Although reasonable people may well disagree about the precise contours of the consumer welfare standard, in general, that standard disciplines the antitrust agencies by forcing them to show that anticompetitive conduct harms consumers.  The DOJ cannot win a case by showing that the challenged conduct harms a competitor, makes a company too big, or offends some other amorphous policy goal.  By ignoring the consumer welfare standard in favor of undefined “market realities,” Mr. Kanter appears to want to abandon the need to show evidence of competitive harm. 

Uncertainty Surrounding Merger Remedies 

On Mr. Kanter’s watch, the agency has also altered its approach to remedies in ways that increase the agency’s discretion. In speeches, Mr. Kanter has stated that he would rather block mergers than entertain behavioral remedies or even structural remedies, such as partial divestitures, because competition is “dynamic, complex and often multidimensional.”  Instead, remedies must “account for market realities and the future.”  These statements seem to suggest that the DOJ is now unwilling to negotiate consent decrees to resolve its competitive concerns about transactions. 

In reality, however, there are reports within legal circles — which have made their way into client memos — That the DOJ is negotiating with merging parties to induce them to commit to certain remedies, such as a partial divestiture, without filing a lawsuit or entering into a consent decree. This practice allows the agency to maintain the public fiction that it opposes consent decrees even as it negotiates settlements as part of its “fix it first” doctrine. To the degree this is happening – and Congress should investigate – the DOJ's practice would sidestep the Tunney Act, which was established to ensure judicial review of agency antitrust settlements.  

Adding to the uncertainty, the DOJ has repudiated numerous guidance documents, and declined to issue others, that ground its enforcement efforts in impartial criteria.  Recently, the DOJ partnered with the FTC to withdraw the 2010 merger guidelines, a bipartisan guidance document that had been widely embraced by the courts, the business community, and the agencies themselves.  

Although the agencies are working on new guidance, based on their various statements, it is likely that the new guidelines will give the agencies far more discretion to enforce the antitrust laws. Indeed, the USC Gould School of Law’s recent practitioner survey revealed that both the DOJ and the FTC are perceived as less transparent, less fair, and more combative in their interactions with merging parties. 

In the same vein, the DOJ withdrew three antitrust policy statements related to enforcement in healthcare markets. The statements, two of which dated from the 1990s, had helped companies structure their agreements on information sharing and other matters. Although the DOJ deemed the statements “outdated” and “overly permissive,” the agency declined to articulate its concerns in any detail or to indicate that they will update them. In a press release, Mr. Kanter said that “The Antitrust Division will continue to work to ensure that its enforcement efforts reflect modern market realities,” without, unfortunately, deigning to provide any insights into how its view of those market realities will impact its enforcement efforts.  

Most troubling, the DOJ has repeatedly refused to provide any guidance regarding its views on criminal enforcement. For decades, criminal antitrust enforcement has been reserved for traditional per se offenses of the law, which typically involve price-fixing, customer allocation, bid-rigging, or other cartel activities among competitors. The agency treated unilateral conduct cases as civil matters because such cases usually raise close issues of fact and law, and overly aggressive criminal enforcement could both chill healthy competition and run afoul of constitutional safeguards that require advance notice of criminal law.  

Enforcement Record  

Despite these attempts to create uncertainty, the courts are already rejecting DOJ’s approach to the antitrust laws. Federal courts have rejected the DOJ’s challenges to a health care company’s proposed purchase of a technology company, a sugar company’s purchase of a rival, and a government contractor’s purchase of a cybersecurity company. Although the DOJ persuaded one district court to block a merger in the market for the “U.S. publishing rights to anticipated top-selling books,” in most cases, courts are rejecting the DOJ’s legal theories as they rely on artificial measures of competition, ignore the pro-competitive aspects of mergers, and fail to show how the challenged conduct harms consumers.  

Although the DOJ may want to enforce the antitrust laws using its concept of “market realities,” the legal and economic reality is that antitrust enforcement must continue to focus on consumers. Because of the DOJ’s discretionary approach to antitrust law, Congress should use its oversight authority to ensure the DOJ returns transparency, objectivity, and predictability to antitrust enforcement.  

About the authors

Sean Heather

Sean Heather is Senior Vice President for International Regulatory Affairs and Antitrust.

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