DOJ Antitrust Enforcers to Pay ‘Careful Attention’ to ‘Meaningful’ Remedies

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By Yin Wilczek

Feb. 6 — The Department of Justice's Antitrust Division will continue to pursue “meaningful” structural remedies in its enforcement actions, a senior official said Feb. 6.

“Sound antitrust enforcement requires careful attention to remedies,” Assistant Attorney General of the Antitrust Division Bill Baer said. “Remedies in our horizontal merger and Sherman Act cases should maximize competition—existing or new—and minimize the need for ongoing regulatory involvement in decisions better left to the market.”

Baer cited successful structural relief that the division sought regarding the merger of US Airways and American Airlines, among others.

Need for ‘New Competition.'

The DOJ sued with the goal of introducing “new competition” into airports where the airlines—two of the top five in the U.S.—had no incentive to compete aggressively, Baer said. Because of the lawsuit, the airlines ultimately agreed to “significant divestitures,” including 104 takeoff and landing slots at Reagan National Airport (DCA), 34 slots at New York's LaGuardia Airport, and gates and associated facilities at other U.S. airports, he said.

Although it still is early, the benefits from those divestitures are beginning to be felt, Baer said. These include an increase in traffic and services, as well as bigger planes, he said.

“At DCA the low cost carriers that acquired the divested slots have introduced more than 40 additional departures each day out of DCA, including service to 14 new airports,” he said. “This spring we anticipate there will be more than 10 percent more seats available on flights from DCA than the average first quarters for the last ten years.”

Mergers and Acquisition, Conduct Cases 

Meaningful structural relief also is important in merger and in conduct cases, Baer continued. In the conduct arena, he cited the division's action against Apple and book publishers for fixing ebook prices. 

“Our remedy went beyond telling the publishers to ‘go forth and sin no more,'” Baer said. “The judgments against the publishers included provisions designed to prevent them from hamstringing price competition by ebook retailers or sharing competitively sensitive information with each other—either directly or using an intermediary, like their co-conspirator Apple.”

Moreover, the division will continue to demand civil penalties and disgorgement to ensure that those that engage in antitrust misconduct do not profit from their wrongdoing, Baer said.

In January, the DOJ announced that the division collected more than $1.86 billion in fines and penalties stemming from antitrust prosecutions during fiscal year 2014. The amount is one of the largest annual collections for the division and includes payments of penalties from five companies that exceeded $100 million.

To contact the reporter on this story: Yin Wilczek in Washington at ywilczek@bna.com

To contact the editor responsible for this story: Ryan Tuck at rtuck@bna.com

The text of Baer's speech is available at http://www.justice.gov/opa/speech/assistant-attorney-general-bill-baer-delivers-remarks-global-competition-review-fourth.