US Antitrust Law Gets Energizing Tune-Up after 12 Years of Emphasis on Free Markets, a New Focus on Anticompetitive Behavior Leaves Some Businesses Confused Series: BUSINESS GOES TO COURT. Antitrust Laws Gain Vigor under Clinton Administration. Part 3. First of 2 Articles Appearing Today

By Ron Scherer, writer of The Christian Science Monitor | The Christian Science Monitor, February 8, 1994 | Go to article overview

US Antitrust Law Gets Energizing Tune-Up after 12 Years of Emphasis on Free Markets, a New Focus on Anticompetitive Behavior Leaves Some Businesses Confused Series: BUSINESS GOES TO COURT. Antitrust Laws Gain Vigor under Clinton Administration. Part 3. First of 2 Articles Appearing Today


Ron Scherer, writer of The Christian Science Monitor, The Christian Science Monitor


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. High-technology mergers

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 innovation.

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 brands.

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 in trouble.

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. …

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US Antitrust Law Gets Energizing Tune-Up after 12 Years of Emphasis on Free Markets, a New Focus on Anticompetitive Behavior Leaves Some Businesses Confused Series: BUSINESS GOES TO COURT. Antitrust Laws Gain Vigor under Clinton Administration. Part 3. First of 2 Articles Appearing Today
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