Justice Dept. Antitrust Division Treads Lightly Absent Leader

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By Liz Crampton

The Justice Department’s antitrust division has spent the first six months of the Trump administration largely wrapping up projects started under the Obama administration as staff waits for permanent leadership to get in place.

The antitrust division hasn’t taken up merger challenges or launched new public conduct investigations by the 2017 mid-year point. Instead, they’ve spent most of their time clearing investigations and wrapping up litigation.

Most of the division’s public work has occurred in the courtroom. Notably, DOJ lawyers succeeded in a challenge to the merger of competing nuclear waste disposal companies in Delaware. Pressure from regulators also forced Deere Co. and Monsanto Co. to abandon a deal that was scheduled for trial earlier this month.

The long-term agenda of the Justice Department remains unknown as Makan Delrahim, nominee to lead the division, is still awaiting Senate confirmation three months after President Donald Trump named him.

Here are the DOJ’s antitrust major accomplishments to date in the Trump administration:

Enforcement

Antitrust Win in Delaware. A district judge this month handed the Trump administration its first antitrust win in court by ruling in favor of the DOJ in its challenge to the proposed combination of EnergySolutions Inc. and Waste Control Specialists Inc., which is owned by Valhi Inc. The case is significant because it involved questions of what constitutes a “failing firm,” a legal argument companies can make as justification to merge.

The judge’s opinion remains sealed until lawyers agree to redactions of confidential business information. But once it’s available to the public, the ruling will provide valuable insight on what it takes to put forth a successful failing firm defense, which will aide the DOJ in future enforcement actions and companies looking to make that argument.

Deere-Monsanto Trial Avoided. Litigation against John Deere and Co. and Monsanto Co. was resolved in May when the parties abandoned their transaction in which John Deere wanted to buy Monsanto’s high-speed precision planting business. The deal was scrapped just a few weeks before trial was set to begin in Chicago.

DirecTV-AT&T Settlement. In March, the Justice Department reached a settlement with DirecTV and AT&T Inc. to rectify claims that the companies engaged in unlawfully sharing information with competitors during negotiations to carry a channel broadcasting Los Angeles Dodgers’ baseball games.

Packaged Seafood, Mortgage Investigations Continue. More charges have been filed in the government’s ongoing investigations into price fixing in the canned seafood industry and bid rigging in real estate foreclosure auctions. A former president of sales for Starkist Co. June 28 pleaded guilty for his role in a conspiracy to fix the price of packaged seafood.

Green Light for Dow-Dupont. The biggest news from the antitrust division on the merger front came with its clearance of Dow Chemical Co. and DuPont Co. earlier this month. U.S. antitrust regulators demanded concessions similar to what the European Union required — that DuPont divest certain herbicide and insecticides and Dow sell off plastics packaging units.

Next in Line

Bayer-Monsanto. With Dow-DuPont off the table, attention has turned to what antitrust officials will do with the proposed tie-up of Bayer AG and Monsanto Co., which would further consolidate the agriculture industry. The companies say the deal is on track to close by the end of the year.

Farmers groups have been outspoken against the partnership. At a congressional briefing earlier this month, farming advocate John Boyd called for more competition in the seed industry because he said the prices of seeds have become unaffordable for farmers. “The demise of the family farmer is at stake with this merger,” said Boyd, founder of the National Black Farmers Association, to a packed room of congressional aides.

AT&T-Time Warner. Over the last week, Democratic members of Congress have become more outspoken against AT&T Inc. and Time Warner Inc.’s mega-merger. Eleven senators sent a letter to Attorney General Jeff Sessions pressuring the Justice Department to “strongly scrutinize” the proposed merger. They expressed concern about how the deal may lead to higher TV and internet prices, fewer choices for consumers, and reduced quality of services.

Still, the deal shouldn’t raise traditional antitrust issues because it’s a vertical merger not involving direct competitors. It’s possible that conditions will be applied, such as when the Justice Department required Comcast Corp. and NBCUniversal Inc. to agree to conditions on how programming was licensed to online competitors, among other requirements.

Health System Trial Set. The government under Obama filed claims against a Charlotte, N.C. health care system alleging it uses illegal rules in its contracts that prohibit insurers from offering patients financial benefits to use less expensive services offered by competitors. These “steering” restrictions reduce competition and harm consumers, employers and insurers, the DOJ said. That trial is scheduled to begin in November 2018.

To contact the reporter on this story: Liz Crampton in Washington at lcrampton@bna.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bna.com

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