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By Liz Crampton
President Donald Trump’s nominee to lead the Department of Justice’s antitrust division provided the most comprehensive look yet of his antitrust views in answers submitted this week in response to Senate Judiciary Committee questions.
Nominees who are being vetted by Senate committees routinely respond in writing to follow-up questions that panel members weren’t able to ask at the formal confirmation hearing.
Makan Delrahim didn’t have a chance to elaborate at length about his positions at his brief confirmation hearing May 10, which had already been delayed because of a paperwork snafu. When the hearing finally happened, Delrahim shared time with two other nominees, and much of the attention that day was focused on Trump’s firing of former Federal Bureau of Investigation Director James Comey.
The committee is scheduled to vote on his nomination May 25. He then must be approved by the full Senate. Here’s what we learned about what Delrahim plans to prioritize at the Justice Department upon confirmation.
Delrahim warned of foreign agencies misusing antitrust laws to defend their own businesses and exclude U.S. companies from participating in their markets. “The underlying basis for all antitrust actions, in the United States and elsewhere, should be appropriate legal and economic analysis,” Delrahim wrote.
He will draw from his previous work on international issues in a prior stint at the division during the George W. Bush administration. “In that capacity, I advocated strongly for foreign enforcers to apply sound, competition-based principles in their own enforcement efforts. If I am confirmed as Assistant Attorney General, I will support the continuation and strengthening of those contacts as well as exploring additional avenues to ensure American businesses and consumers are not harmed by discriminatory antitrust enforcement by foreign antitrust authorities,” he wrote.
This is a topic of particular interest to Sen. Amy Klobuchar (D-Minn.), the ranking member on the Judiciary Committee’s antitrust subcommittee. In a statement provided for Bloomberg BNA after the hearing, Klobuchar said antitrust agencies have “a responsibility” to promote competition internationally “so that U.S. companies can compete in the 21st century economy.”
There is a debate in the antitrust community about whether “vertical” mergers such as AT&T’s bid to take over Time Warner Inc. are a threat to competition, since the tie-ups don’t involve direct competitors.
Delrahim said vertical mergers generally raise less serious competition concerns than horizontal mergers of close competitors. But he acknowledged there are situations where a vertical merger can be anticompetitive. “The vertical mergers most likely to require a close look by government enforcers are those where there is risk that upstream or downstream competition may be foreclosed by the transaction,” he said.
Those comments are important because Delrahim will have to sign off on the AT&T and Time Warner merger. AT&T is a telecom company that uses Time Warner’s “downstream” media content on its cable and wireless platforms.
Delrahim said he’s had no discussions with the White House about companies seeking antitrust approval for their mergers, such as AT&T’s bid for Time Warner or Bayer AG’s deal for Monsanto Co. On the campaign trail, Trump vowed to keep AT&T and Time Warner from merging. He also held a meeting with executives from Bayer and Monsanto.
The nominee’s statement could be critical to his confirmation because antitrust authorities are supposed to be independent from White House decision making. Klobuchar pointed that out at his confirmation hearing. “What would you do if the White House calls to ask about pending investigations,” she asked him.
Delrahim responded that the DOJ should be free from political influence. “Politics will have no role in the enforcement of antitrust laws,” he said at the time.
He reiterated that view in his written remarks to the committee. “I was not asked, nor have I provided, any commitments or assurances regarding any potential enforcement actions or pending matters before the antitrust division,” Delrahim wrote.
“I have had no conversations with the President regarding [AT&T-Time Warner],” he added.
Delrahim also emphasized his commitment to “applicable department policies and guidance” when it comes to communications between the DOJ and the White House, a recurring issue in discussions about Trump’s informal contact with intelligence officials. “It is important to ensure that all antitrust investigations comply with these policies, and that partisan considerations do not influence the handling of particular cases,” he wrote.
U.S. antitrust officials traditionally have preferred that companies sell off hard assets like contracts or manufacturing centers to lessen the competitive impact of proposed mergers. They believe that works better than behavioral remedies that can be difficult to monitor.
Delrahim’s comments show he is firmly in that camp. “With respect to remedies, as a general matter, I tend to believe structural relief has many advantages over behavioral relief when antitrust law enforcers are considering whether and how to remedy a competitively problematic transaction,” he said. “Evaluating the enforceability of any behavioral conditions should be an important consideration in determining the appropriateness of such a remedy.”
Delrahim, a patent attorney, has worked on international property issues throughout his career. His experience in both the patent and antitrust worlds puts him in a strong position to help clarify the legal gray area between intellectual property protection and anticompetitive behavior.
That question is at the heart of several antitrust probes against various tech firms, including Qualcomm Inc., which is facing a lawsuit by the Federal Trade Commission and queries from the European Union.
Delrahim was measured in his comments on the issue. “It is my view that the intellectual property laws combined with the proper enforcement of antitrust laws together form the basis of our successful innovation policy,” he wrote.
“Antitrust enforcers should also strive to eliminate as much as possible the unnecessary uncertainties for innovators and creators in their ability to exploit their intellectual property rights, as those uncertainties can also reduce incentives for innovation,” he added.
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