Assistant Attorney General for Antitrust
The Antitrust Division is pleased to provide its annual Spring Update for 2019. What a year it has been working with the Division’s fine attorneys, economists, and support staff!
This has been a tremendously productive year at the Antitrust Division. We tackled a number of industry-changing mergers such as Bayer/Monsanto, Disney/Fox, and CVS Health/Aetna, each of which were resolved through structural remedies rather than behavioral relief. We also completed a historic trial and appeal in United States v. AT&T/Time Warner. In addition, the Division enhanced its competition advocacy efforts through a dramatic expansion of its amicus program: in 2018, we filed nine amicus briefs in courts of appeals and district courts, and in 2019, so far, we have filed four briefs, with more to come.
This newsletter features these and other accomplishments and new initiatives. I will highlight a few of our proudest achievements from the past year, and offer a preview of a few exciting developments on the horizon.
Revitalizing Section 4A of the Clayton Act to Recover Damages on Behalf of the U.S. Taxpayer: The Korea Fuels Cases
The Division made history this past fall when it announced the first three global resolutions of civil charges and criminal claims in its Korea Fuels investigation, arising from a decade-long bid-rigging conspiracy that targeted fuel supply contracts to U.S. military bases in South Korea. This month, we announced global settlements with two additional companies. In total, the five South Korean petroleum and refinery companies agreed to pay over $150 million in criminal fines and an additional $200 million in civil damages.
These civil recoveries are the largest the Antitrust Division has obtained under Section 4A of the Clayton Act, which permits the United States to obtain treble damages when it has been injured by an antitrust violation. Those recoveries would not have been possible without careful coordination among the Antitrust Division, the Civil Division, and the Federal Bureau of Investigation, and between the Division’s civil and criminal sections. Most importantly, these cases will serve as a blueprint for future cooperation efforts within the Department as it expands its Section 4A recovery efforts. Where antitrust violators target the United States Government—and, by extension, the U.S. taxpayer—we will not hesitate to bring civil and criminal charges and seek damages using these tools.
Progress on the Multilateral Framework on Procedures, Highlighting Historic Cooperation Among Antitrust Enforcers from Around the Globe
In June 2018, the Division made a major announcement that it was launching the Multilateral Framework on Procedures: an initiative aiming to establish fundamental due process norms for antitrust enforcement and to achieve commitment from participating agencies to abide by these norms. The proposal identifies approximately a dozen universal principles that are widely accepted across the globe. The proposal complements these substantive provisions with strong adherence, cooperation, and review mechanisms designed to ensure meaningful compliance.
The MFP sparked an unprecedented movement among competition enforcers worldwide. The United States has held meetings and discussions with over 50 competition agencies from around the globe, and we have reached broad consensus on the fundamental due process principles set forth in the proposal. Over the last few months we have worked closely with our partners to evaluate the most productive ways to implement our initiative through paralleled tracks in both the International Competition Network (ICN), and through other bilateral and multilateral efforts including for those international partners who may not be ICN members yet. This force-multiplying effort has borne great results. We now have a text that resulted from the multilateral process through our efforts with our important ICN partners. This text, called the Framework on Competition Agency Procedures, incorporates the principles and review mechanisms of the MFP. We are proud to have led this effort and proud of the result working with the ICN Steering Group Chair, Andreas Mundt of the German antitrust agency, and expect it to be adopted by a broad group of the ICN membership this spring. We will continue, of course, to promote the MFP in addition to the ICN Framework for those agencies that are unable or unwilling to sign the ICN Framework.
It is notable that similar efforts to achieve agreement on procedural norms have been offered in the past, but failed. The success of the MFP, by comparison, could not have been achieved without the tireless efforts of our partners abroad, including the support of Chairman Matthew Boswell of Canada, Commissioner Jill Walker of New Zealand, Chair Rod Sims of Australia, and of course ICN Steering Group Chair Mundt, among many others who worked in partnership to draft and negotiate the initial principles. We are eager to continue working with them and other competition agencies around the world as we continue our efforts to broaden the antitrust procedural consensus.
The “New Madison” Approach Fosters Vigorous Debate and Policy Change
The antitrust laws and patent laws all share the common goal of fostering innovation and dynamic competition that benefits consumers. With this central premise in mind, the Division has advanced its “New Madison” approach, consistent with proper legal interpretations, over the last year through public advocacy, fostering a robust debate among academics, practitioners, and other commentators. We are grateful for this civil debate, nationally and internationally, and we hope it continues to advance.
As the Division enters its second year of this advocacy, we hope to advance this pro-innovation policy with our sister agencies and in the courts. Late last year, for example, the Division announced the withdrawal of its assent to the 2013 DOJ/PTO “Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments.” Early this year, the Division announced its intent to file a statement of interest in u-blox v. InterDigital, a case raising allegations that a patent holder’s supposed violations of a FRAND commitment amount to unlawful monopolization. We hope to file a full statement of interest in the near future. The Division is hard at work on advancing these projects, and plans to take further steps this year to advocate for the proper role of antitrust law in the context of intellectual property disputes.
The “Legacy” Judgment Termination Initiative Gains Momentum
Over the past year, attorneys in all of the Division’s civil sections and offices have carefully reviewed over 1300 “legacy” antitrust judgments still in effect in nearly 80 judicial districts, to determine whether the United States should move for their termination. That project is now gaining momentum, as the comment periods on decrees in over 70 judicial districts have now closed. As of this week, the United States has moved to terminate decrees in 11 judicial districts, courts have granted motions to terminate decrees in eight judicial districts, and in the coming months, the United States plans to file motions to terminate hundreds of judgments in several dozen more judicial districts.
The Division’s goal in conducting this review is to ensure that regulatory decrees do not stand in the way of the free market functioning as it should, especially when competitive conditions have changed. It is important to remember, however, that the termination of a legacy decree does not mean that the conduct previously prohibited will be completely permissible under the antitrust laws. Far from it. If a company takes actions previously prohibited by decree, and those actions harm competition and consumers in violation of the Sherman Act or Clayton Act, then antitrust enforcers—public and private—should bring suit to end the unlawful conduct.
Protecting the Per Se Rule for the Criminal Prosecution of Naked Horizontal Agreements Among Competitors
In recent years, defendants in criminal prosecutions have sometimes argued that the per se rule should not apply. The criminal sections and the Appellate Section have worked closely to rebuff these efforts. Most recently, in February 2019, the Division achieved a major victory in United States v. Kemp & Associates , capping off its effort to appeal a district court’s ruling that the rule of reason should apply in a criminal prosecution against a market allocation scheme between two competing heir location services. The Tenth Circuit agreed that such a scheme should be tried under the per se rule, but found that it lacked jurisdiction to reverse the district court’s ruling. Our Chicago-led trial team then moved for reconsideration of the district court’s original rule-of-reason order, which the court granted, restoring the per se rule to its proper place.
Protecting American Workers Through No-Poach Initiative
The antitrust laws target unlawful conduct that harms the competitive process, thereby injuring consumers or—in many instances—workers. The Division has launched a major effort to combat “no-poach” agreements among competitors that target American workers and deprive them of competitive wages. I appointed one of our most experienced no-poach prosecutors, Doha Mekki, as a Counsel to the Assistant Attorney General, to help oversee our Division-wide efforts and expand this initiative spanning multiple fronts: merger review, conduct investigations, public advocacy, and court filings.
Most recently, the Division has filed several statements of interest in no-poach litigations pending in federal district courts around the country: In re Railway Industry No-Poach Antitrust Litigation (W.D. Pa.); Seaman v. Duke University (M.D.N.C.); Stigar v. Dough Dough, Inc. (E.D. Wa.); Richmond v. Bergey Pullman Inc. (E.D. Wa.); Harris v. CJ Star, LLC (E.D. Wa.). These filings confirm that the per se rule applies when competitors enter into no-poach agreements with each other that are not ancillary to a separate, legitimate venture, and that the rule of reason applies to vertical arrangements that include no-poach provisions, such as franchise agreements.
Honoring Women in Antitrust Leadership
The month of March is Women’s History Month, and we at the Division are proud to honor the role of women in antitrust leadership by formally dedicating The Anne K. Bingaman Auditorium & Lecture Hall, at the Department of Justice’s Liberty Square Building. The Honorable Anne Bingaman was the first female Assistant Attorney General (AAG) for the Antitrust Division, serving from 1993 to 1996. We are grateful for her help reinvigorating the Division’s enforcement efforts during her tenure as AAG, as well as her inspiration to future generations of female antitrust attorneys. If you see the former Assistant Attorney General at this year’s Spring Meeting, please offer her your congratulations for this great milestone!
New Attorney Development Opportunities
In early 2019, the Division offered two new opportunities for attorneys to develop and deploy their skills. First, the Division offered an “open season” opportunity for attorneys throughout the Division’s offices to transfer to different sections or offices. Second, the Division launched a new initiative for trial attorneys to gain exposure to the Division’s policy and advocacy efforts by spending a year rotating through the Appellate, International, and Competition Policy and Advocacy Sections. These initiatives received significant interest, and we expect to repeat them in the coming years.
Policy Roundtable and Workshops at the Frontier of Antitrust Law
In the next two months, the Division will hold two public events to help advance discussion and debate about pivotal issues in our criminal and civil enforcement programs.
First, on April 11, the Division will hold a public roundtable to discuss the impact of the Antitrust Criminal Penalty Enhancement & Reform Act (ACPERA). That statute stands as one of the most important features of the Division’s criminal programs, by offering incentives to members of criminal antitrust conspiracies to come forward for leniency in exchange for a reduction in follow-on civil damages exposure. The ACPERA Roundtable will provide a public forum for the Antitrust Division to engage with the antitrust community and gain insight from judges, attorneys, economists, academics, the business community, and other interested stakeholders on the topic of ACPERA.
Second, on May 2-3, the Division will hold a two-day workshop on local broadcast advertising, to assess whether online advertising should be considered in assessing the local television marketplace. It is a common refrain that the media marketplace is constantly evolving and that new advancements in technology have reshaped consumer viewing behavior. This workshop will explore whether the Division’s existing toolbox and approach to analyzing market definition, competitive effects, and innovation should be updated to reflect the latest developments in online advertising.
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In early March 2019, the Division announced this year’s Antitrust AAG Awards, and I encouraged those in attendance to take a moment to remember what they commemorate first and foremost: victories for the American consumer. Those victories did not come easy. Each of the Division’s attorneys answered the call to public service. They worked long and often unpredictable hours in the office, on the road, and in the courtroom. Every time, though, they came back eager for the next opportunity to do what they do best: represent the United States of America in its mission to enforce the antitrust laws. As we embark on the next year of antitrust enforcement, that mission will carry on.