She used to run the FTC's Bureau of Competition -- which includes
responsibility for all merger investigations -- during the Clinton
administration.
Varney's team also includes University of California, Berkeley,
economics professor Carl Shapiro, who has returned to a post he had
held at the beginning of the Clinton administration under former
Assistant Attorney General Anne Bingaman.
Joe Farrell, another UC Berkeley economics professor who has often
worked with Shapiro, headed the DOJ's Antitrust Division during the
late 1990s.
As first reported in The Deal, new FTC Chairman Jon Leibowitz
appointed him to head the FTC's economics branch. That department works
closely with merger lawyers on all investigations.
Because several repeat players are running the agencies, antitrust
lawyers in Washington think the biggest difference will certainly be a
more aggressive stance at the DOJ, where very few cases were litigated
during the past three years, although several mergers were approved
with mandatory divestitures.
Most importantly, according to several antitrust lawyers who
practice before both agencies and did not want to be named, the key
difference between Varney and her predecessor, Tom Barnett, is
"ideological."
"Both Christine and Molly have very liberal instincts," says one
lawyer. "They are very aggressive in their views of antitrust
enforcement." He says he's expecting them to map an aggressive agenda,
although that will depend on the sort of mergers that are proposed.
While the current Ticketmaster-Live Nation deal is under review, and
has already been subjected to stiff opposition on Capitol Hill, there
are not a large number of high-profile deals in the investigation
pipeline.
Nevertheless, the deals that are proposed will likely get closer scrutiny.
"Every merger case is ambiguous" when government officials open an
investigation, says one former official now in private practice. "Tom
[Barnett] always thought of a reason not to block a deal; Republicans
worry about intervening when it's not necessary. "Christine and Molly
will worry more about missing something," he predicts.
Shapiro, an economist whose work has generally been focused on
industrial organization and antitrust issues, is seen as someone more
likely to urge intervention. When hired as an outside consultant by the
Antitrust Division during Barnett's tenure to evaluate the merger of Whirpool Corp.
and Maytag Corp., he encouraged staff to challenge the deal. Barnett
rejected that recommendation and approved the deal without
modifications.
In the ensuing months, Shapiro co-authored a paper saying that
merger should have been challenged and argued that merger enforcement
during the Republican era was lax.
Another lawyer argues that Barnett's tenure at the agency was marked
by a high number of cases that were approved on the promise of narrow
divestitures. She says that the new leadership is less likely to
embrace that sort of "surgical" approach to removing the offending
overlap in a merger.
Instead, she says, the agency will likely be more inclined to
suggest that a narrow divestiture cannot adequately provide sufficient
competition.
One case where that might have been true is the deal that created newsprint behemoth AbitibiBowater Inc.,
which combined for more than 40% market share and which led a series of
price hikes that nearly doubled the cost of newsprint during the past
year.
That merger hurt newspapers, which have had to cut back on
newsprint. Last week, AbitibiBowater filed for bankruptcy protection.
Deputy Assistant Attorney General Phil Weiser is also returning to
the Justice Department, where he previously worked on
telecommunications matters. He will likely be involved in mergers in
regulated industries, though it's not clear how the responsibilities
will be divided among the deputies.
A new face in the office, William Cavanaugh Jr., joins the Antitrust Division from a successful New York litigation practice at Patterson Belknap Webb & Tyler LLP.
New to government service, he's a dark horse in terms of enforcement
theories but one with a proven track record in the courtroom, where
he's argued dozens of antitrust and intellectual property cases for a
range of clients, from pharmaceutical companies to credit card issuers.
With that sort of expertise, Varney may ask him to lead litigation
teams in court, says one Washington-based mergers and acquistions
lawyer. That could provide a boost to the DOJ, which has struggled with
its merger cases and has frequently turned to outside litigators on a
range of cases, including last year's proposed venture between Google Inc. and Yahoo! Inc., which was abandoned when the DOJ threatened to challenge the agreement.
Google is likely not out of the woods, according to one antitrust
expert. "Christine has made it clear that she regards Google as a
dangerous behemoth," he says.
Her past interest in Internet issues and recent statements that
monopolies could be better reined in by government intervention could
mean the company will be subjected to investigations into how it
competes and how it deals with its rivals.
Changes at the FTC are far less likely, in large part because, so
far, there's been no change among the commissioners. While lawyers say
that former head of the Bureau of Consumer Protection Jodie Bernstein,
a lawyer at Bryan Cave LLP, is likely to fill the current
vacancy on the commission, Leibowitz was generally among the majority
already. The agency has been taking cases to court and working to
update and rejuvenate its ability to challenge mergers through an
in-house litigation structure.
The new head of the Bureau of Competition, Rich Feinstein, is another alum and likely to work to keep the agency in the game.
Feinstein, who has also worked at the Justice Department and most recently was a partner at litigation powerhouse firm Boies, Schiller & Flexner LLP,
is know as a principled, thoughtful litigator who worked well with
staff when he ran the agency's healthcare division during the Clinton
administration.
The Obama administration is already hip-deep in a battle to change the business of government. For merger lawyers, there's a "back to the future" element that's hard to ignore. 
