BUSINESS likes certainty.
One thing is now for certain: Antitrust policy under President
Clinton has changed.
Since becoming assistant attorney general for antitrust policy
last year, Anne Bingaman has tacked the Antitrust Division of the
Justice Department onto a different course. The business community
says the shift leaves them confused.
Ms. Bingaman says the division wants to bring significant civil
cases to court and improve its litigation record in the merger
area. She has charged her staff to prepare for litigation earlier.
And she is beginning to define how the Justice Department will
apply antitrust law, which deals with anticompetitive behavior, to
such complicated areas as high technology and health care.
To back up a more ambitious agenda, Bingaman is adding 30 to 40
new lawyers and 40 to 60 new paralegals to the division.
"What she is talking about is a very significant change both in
terms of the reorganization, including the number of people, and
the redirection of focus," says Charles (Rick) Rule, who ran the
division from November 1986 to May 1989. "Compared to the Reagan
years, they are dramatic changes."
"Antitrust enforcement has been reenergized," says Art
Amolsch, editor of FTC:WATCH, a Washington-based newsletter.
Justice Department observers expect Bingaman to begin to
announce some major antitrust cases, perhaps as early as this
spring. Her moves will be watched closely by both the business and
legal communities. In an unprecedented move last August, for
example, Bingaman started combing through crates of documents
relating to Microsoft Corporation, the computer software giant in
Redmond, Wash. The Federal Trade Commission (FTC) had deadlocked
2-2 in July over suing Microsoft for anticompetitive behavior.
Bingaman's staff says she decided to act in place of the FTC's
fifth commissioner, who had recused himself.
Bingaman's office is also deeply involved in developing
antitrust policy as it relates to high technology. On Jan. 26,
Bingaman told the House Subcommittee on Economic and Commercial Law
that she had no problem with legislation that would allow the
regional Bell operating companies to enter the long-distance and
manufacturing businesses, as long as local telephone service was
opened up to competition.
In the months ahead, she will have to rule on the AT&T and McCaw
Cellular merger and the merger between Bell Atlantic Corporation
and TeleCommunications Inc. On Jan. 10, Bingaman indicated that
some of the big mergers may be justified if they result in faster
Until she decides these cases, the biggest change under Bingaman
is her announcement last Aug. 10 that the department would rescind
the "Vertical Restraints Guidelines" issued in 1985 by the Reagan
administration. Under former President Reagan, the department
established enforcement guidelines on how it would deal with the
tricky issue of resale price maintenance.
Shift in price controls
The free-market Reaganites essentially decided not to challenge
pricing arrangements between manufacturers and retailers. Thus, a
manufacturer of widgets could tell its distributors or retailers at
what price it wanted the widgets sold. The Justice Department under
Reagan was more concerned about price fixing between competing
In making the shift, Bingaman decided that the Justice
Department would treat vertical price fixing as illegal and
nonprice fixing restraints as subject to a meaningful analysis. For
example, a company that sets service requirements ("We only want
happy customers") may not be pursued. But a company that will not
sell its goods to a retailer stocking competing products could be
Prior to Bingaman's change, "everyone felt the vertical
restraint guidelines were a statement that manufacturers could do
whatever they wanted," explains Alan Silberman, an antitrust
specialist with Chicago-based Sonnenshein Nath and Rosenthal. …