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By Liz Crampton
The Justice Department’s antitrust division is taking a “fresh look” at about 1,400 agreements between the government and companies intended to curb anticompetitive behavior, the assistant attorney general for antitrust said Oct. 27.
Speaking at New York University’s law school, Makan Delrahim said he ordered a survey of the settlements, officially known as consent decrees, upon his recent arrival at DOJ
“Big swaths of the economy have been regulated by consent decrees,” Delrahim said. The antitrust division will examine “whether or not they have any relevance in today’s economy.”
The Justice Department has resolved antitrust complaints about mergers or anticompetitive behavior through consent decrees. Under these agreements, companies agree to certain actions like selling assets or to continue selling to competitors. Some consent decrees last for decades, and it’s a common practice among antitrust lawyers to question whether they work or are even appropriate.
Delrahim is among this group. “I view my role as a law enforcer, not a regulator through consents,” he said. “You either violate the law or you don’t.”
It may be hard to avoid consent decrees altogether. Just days after Delrahim was confirmed by the Senate Sept. 27, the DOJ wrapped up a settlement with CenturyLink Inc. and Level 3 Communications Inc. in order to clear the parties’ proposal to merge. The consent decree announced Oct. 3 requires Level 3 to divest its telecommunication networks in several markets and offer long-term leases for dark fiber along 30 intercity routes. The merger proposal is still pending at the Federal Communications Commission.
Delrahim’s speech was his first in his new role that he’s held for one month. After receiving bipartisan support in the Senate Judiciary Committee this summer, he was confirmed along party lines in September.
Delrahim also used his first official public appearance to promise to reshuffle resources to concentrate on international cooperation. The antitrust division will increase the ranks of attorneys working under Deputy Assistant Attorney General Roger Alford, he said.
Delrahim has tapped Alford to confront trade and international antitrust issues. Although the department generally can expect “belt-tightening” in funding, Delrahim said he will make sure the international section “has all the resources it needs.”
The proliferation of competition regimes around the world has brought new challenges because regulators have different views about what constitutes sound antitrust enforcement, he said. The EU has targeted big companies like Google Inc. and Apple Inc., while Taiwan recently fined Qualcomm Inc. NT$23.4 billion ($773 million) for how it prices mobile phone chips and patents.
“The stakes here are high and real,” Delrahim said.
International coordination among competition regulators is a special interest for Delrahim, who views antitrust enforcement as critical to ensuring a fair global market. He stated at his Senate confirmation hearing in May that, if confirmed, he would advocate for uniform, economics-based antitrust standards across the world.
He wants to target regimes seen as using antitrust enforcement to discriminate against foreign companies in the interest of protecting their own domestic ones. On Capitol Hill, lawmakers are expressing concern about what they see as China’s unfair behavior toward U.S. companies.
Last month’s finalization of a competition chapter in the renegotiation of the North American Free Trade Agreement is a promising model for future trade agreements, Delrahim said.
The Justice Department has been working with U.S. trade officials renegotiating the trade agreement with Mexico and Canada in an effort to ensure that U.S. businesses are treated fairly when it comes to competition enforcement around the world. The U.S. Chamber of Commerce claims that American businesses are being unfairly targeted by antitrust enforcers in jurisdictions like Europe and Asia.
Prospects for a new NAFTA’s passage are dim. The most recent round of talks broke with several items unresolved and expressions of frustration from the negotiators. Talks will now extend into next year. Still, Delrahim assured that the competition chapter marks progress in creating an international framework for antitrust policy.
“We will see what happens to NAFTA itself, but the work that went into it was not a waste of time,” he said.
To contact the reporter on this story: Liz Crampton in Washington at firstname.lastname@example.org
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