Clinton Seen Continuing Obama Merger Crackdown

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By Alexei Alexis

July 29 — A Hillary Clinton victory would likely mean the same kind of vigorous antitrust enforcement seen under President Barack Obama, especially with regard to huge corporate mergers.

Clinton, the Democratic presidential nominee, supports pending Justice Department litigation to block two major deals in the health insurance sector—Anthem Inc.’s proposed $48 billion acquisition of Cigna Corp. and Aetna Inc.’s $37 billion bid for Humana Inc.

The Democratic candidate has also vowed to appoint aggressive antitrust regulators to take on the health care sector and other “concentrated” industries.

“I think we can assume that a Clinton regime would carry on with enforcement pretty much the same way it’s being done under the Obama administration—with the caveat that there’s been increased pressure to ramp things up a bit more,” Stephen Calkins, a law professor at Wayne State University, told Bloomberg BNA.

DOJ Praised by Clinton Camp

The proposed health insurance mergers would consolidate the nation's five biggest health insurers into three. DOJ sued to block the deals on July 21, saying they would raise health-care costs and reduce choice for consumers (141 ATD, 7/22/16).

“When these deals were first announced last year, Hillary Clinton called for careful scrutiny and said that she was ‘very skeptical of the claim that consumers will benefit from them,'” Ann O’Leary, a senior policy advisor for the Clinton campaign, said in an e-mailed statement. “Now, the Department of Justice has reached the same conclusion.”

O’Leary added that Clinton will continue to “fight to reduce health costs and strengthen antitrust enforcement to prevent corporations from gaining too much market power at the expense of fair competition and harming hard-working Americans and consumers.”

Clinton said in a statement last fall that she had “serious concerns” about the proposed mergers. As president, she said she would strengthen the antitrust enforcement arms of DOJ and the Federal Trade Commission and appoint “aggressive regulators to take on troubling concentration wherever it occurs in the health care industry, among other sectors.”

Similar themes were included in the Democratic party's 2016 platform.

“We support reinvigorating DOJ and FTC enforcement of antitrust laws to prevent abusive behavior by dominant companies, and protecting the public interest against abusive, discriminatory, and unfair methods of commerce,” the document said.

Pressure From Left

Antitrust enforcement has been a key issue for Sen. Bernie Sanders (I-Vt.), who was a tough challenger against Clinton during the Democratic primaries. The matter was also raised in a major speech by Sen. Elizabeth Warren (D-Mass.), who at one time was considered a potential running mate for Clinton.

Whether a victory by the Democratic nominee would lead to any significant changes in antitrust enforcement remains to be seen, observers told Bloomberg BNA.

“She has had to shift left on several issues, and I see that possibly happening with antitrust,” Seth Bloom, a Washington antitrust attorney told Bloomberg BNA. “Clearly, she’s under heavy influence from the liberal wing of the Democratic party.”

Clinton's 2015 statement suggests that she might take steps to create more competition in the health care space, but is otherwise vague, Bloom said. “Other than that, I'm not sure what to anticipate, because she hasn't said that much.”

While the Clinton statement raises concerns about troubling concentration patterns and appears to call for stronger enforcement, it does so without attacking Obama's record.

“If you accept at face value that she’s going to focus on concentrated industries, I would expect to see somewhat heightened enforcement, but she gave no hint that this would include changing the basic policy,” Kenneth Ewing, a partner at Steptoe & Johnson LLP, told Bloomberg BNA. “Given what we know about her as a thoughtful person, I'd expect her to appoint people who really understand antitrust laws, perhaps with a tilt towards greater enforcement—but of existing antitrust doctrine, which has been pretty stable” for decades.

Mixed Reviews on Obama

Before coming into office, Obama promised to reinvigorate antitrust enforcement in the U.S., and he blasted the record of his predecessor, George W. Bush. However, there are mixed views about how much has changed (105 ATD, 6/1/16).

The most dramatic shift has been on the merger front, particularly over the last two years, according to Bloom. Earlier this year, DOJ successfully stopped Halliburton Co. from acquiring rival oil-services firm Baker Hughes Inc., and the FTC was able to block a merger between Staples Inc. and Office Depot Inc.

“To the extent there's a perception that the administration wasn't as active as they should have been earlier on, I think they realize that time is running out to leave a legacy of strong antitrust enforcement,” said Bloom, a former Democratic staffer for the Senate Judiciary Antitrust Subcommittee.

The administration's record has remained weak when it comes to taking on monopolistic behavior in the technology sector and other industries, Bloom said. “Perhaps we could expect to see stepped up enforcement in that area” if Clinton is elected, he said. “We just haven't seen it under Obama.”

He cited the FTC's decision in 2013 not to bring a monopoly case against Google Inc., which has since faced heat from antitrust officials in Europe.

Competition Crisis?

Diana Moss, president of the American Antitrust Institute (AAI), a think tank, said that recent U.S. antitrust actions reflect a growing realization that enforcement has been inadequate for far too long, leading to a major competition crisis in the country that will need to be addressed by the next president, no matter who wins.

“Clearly, it has been identified that we have a problem with high levels of concentration in key markets,” Moss told Bloomberg BNA. “To somehow dampen or soften enforcement when it comes to mergers like the ones we’ve seen in the last year and half to two years—I don’t think that could be done without attracting a huge public outcry from proponents of the market system.”

The president's Council of Economic Advisers (CEA) raised concerns about signs of declining competition in a report released by the White House in April. Along with that, Obama issued an executive order calling on federal agencies to propose actions they can take to promote competitive markets (125 ATD, 6/29/16).

“I really do view it as a consciousness-raising exercise,” Moss said. “It identifies the problem; it emphasizes the importance of competition in the economy. But I really do think the action plan is the job for the next administration. I think the Obama administration is carrying the ball now, but it’s going to have to be passed to the next administration.”

AAI has asked the presidential candidates to provide their views on antitrust issues, Moss said. The group is also in the process of putting together a “national competition policy” to guide the next administration, she said.

To contact the reporter on this story: Alexei Alexis in Washington at aalexis@bna.com

To contact the editor responsible for this story: Tiffany Friesen Milone at tmilone@bna.com

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