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 Former antitrust officials Thursday warned members of the Washington antitrust bar that the next administration could take a more skeptical view of mergers, and they warned future officials to work hard to make certain that antitrust is part of the solution to the nation's current economic woes.
The American Bar Association hosted a conference to examine the role of antitrust enforcement in President-elect Barack Obama's administration. A panel of Republican officials who worked at the Federal Trade Commission and the Justice Department's antitrust division warned that a return to excessive government regulation would be fraught with problems for the business community. "There's a real possibility people will be losing faith in free markets," said former FTC Commissioner Tom Leary. "We've benefited tremendously from a general trend of deregulation that began under President Carter." Later, he added that "pervasive government controls are not the solution to the economic problems the nation is now facing." A strong movement to replace antitrust enforcement with bright-line rules could actually harm businesses seeking to use mergers to change direction, Leary warned. He urged Obama administration officials -- whomever they might be -- to use market incentives to get the nation back on its feet. Assistant Attorney General Deb Garza echoed Leary's sentiment, urging future antitrust officials to insist that sound antitrust enforcement should be part of the solution, and reminded the audience that free markets are important for innovation, which is frequently cited by antitrust officials as a critical element required for national economic growth. And, Leary warned, there's likely to be a change in how mergers are viewed, and even how to factor in the underlying arguments intended to support mergers. As an example, Leary noted that in many cases the efficiencies lawyers project will accrue to businesses in the wake of a merger usually exceed the actual cost savings after the merger is consummated. With a more skeptical eye on efficiency arguments, businesses may find it more difficult to get mergers through. The current administration, especially at DOJ, has been criticized for not blocking mergers. That's in part because officials believe that challenging too many mergers could hurt the economy. She said the next administration is likely to embrace a paradigm shift toward more intervention. Still, it's hard to know whether more mergers will be blocked until there's a sense of whether more mergers are proposed, a question that has many private antitrust lawyers on tenterhooks. Moreover, until people know who the new officials will be, it's too soon to predict what role merger enforcement will play in the changes in the current economy. - Cecile Kohrs Lindell See Dealscape: An independent Harbour at the helm of the FTC? Cecile Kohrs Lindell is a senior reporter in The Deal's Washington bureau. CategoriesComments Deal Video
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The Republicans really have fallen for their own rhetoric about Obama. Clearly his economic policy is not as liberal-minded as his social policies as typified by the economic advisers he surrounds himself with. One of your own stories highlights the likelihood that he'll call upon former Clinton staffers, and unless my memory fails me, dealmaking flourished during the 1990s.