Six Agenda Items for Potential Antitrust Head

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By Liz Crampton

Makan Delrahim, President Donald Trump’s nominee to lead the Justice Department’s antitrust division, has a lengthy to-do list to tackle once he receives Senate approval and is sworn in.

If confirmed, his decisions about how to handle pending mega-mergers or next steps on litigation could signal how aggressive this administration will be on monitoring and enforcing competition.

Delrahim is set to appear before the Senate Judiciary Committee May 10 and is expected to be confirmed. The hearing, initially set for April 26, had to be rescheduled due to missing paperwork from the Office of Government Ethics.

Delrahim is a former staffer for Sen. Orrin Hatch (R-Utah), senior Republican on the committee, and is known and respected among other committee members. Hatch is a former chairman of the Judiciary Committee who now chairs the Senate Finance Committee. Delrahim worked for Hatch when he chaired the committee.

Here are six issues Delrahim will likely confront when he assumes his new position:

1. Appoint Deputy Assistant Attorney Generals

Delrahim’s first order of business will be to fill the antitrust division with his own team. The division is currently run by a Trump appointee, Andrew Finch, who will move into the number two spot once Delrahim is confirmed. Finch will be the deputy assistant attorney general for the division.

There are four open deputy spots in the division, according to a spokesman. Delrahim will need to appoint deputy assistant attorney generals to supervise civil and criminal operations, civil enforcement, economic analysis and litigation.

2. Appeal American Express Court Loss

Another task awaiting Delrahim is to decide whether the department should appeal its loss in its suit against American Express for anticompetitive conduct. The division staff has delayed filing the appeal so that top leadership can get in place.

Delrahim will need to move quickly. The U.S. Supreme Court has already granted the DOJ a second extension of time to seek review and set June 2 as the deadline. Even if the Senate votes promptly to approve Delrahim, he’ll just have a few weeks to sign off on or reject an appeal.

The government claims that AmEx illegally stopped merchants from asking customers to use cheaper credit cards like Mastercard or Visa. The DOJ lost the case in the U.S. Court of Appeals for the Second Circuit, which ruled that the government only considered the interests of merchants, which are just one side of a two-sided market that also includes cardholders.

3. Agriculture Consolidation

Delrahim will also have a chance to shape the antitrust division’s legacy by deciding how to act on pending mega-mergers. Those initial enforcement choices could signal the division’s approach to regulating deals and give Wall Street clues on what transactions may be viewed as problematic by the administration.

Several mergers in the agriculture industry are facing extended reviews in the Justice Department. Dow Chemical Co.’s $68 billion bid for DuPont Co. received a “second request” for more information in February 2016, suggesting the DOJ had fairly specific questions about the deal. With more than a year of review, a decision on the pending deal should be coming soon.

Bayer AG and Monsanto Co.'s deal is also under review, along with China National Chemical Corp.’s bid for Syngenta.

4. AT&T-Time Warner

Trump spoke out against the proposed tie-up of AT&T and Time Warner on the campaign trail, saying it puts “too much concentration of power in the hands of too few.” Trump’s comments put pressure on Delrahim, who will lead a division that traditionally operates independently from the White House.

Delrahim has said he doesn’t see major antitrust problems with the deal. He told Canadian business news channel BNN last year that the Time Warner deal doesn’t raise the same questions as a merger of two direct competitors because it would unite a distributor and a content provider, according to Bloomberg News.

5. Generic Drugs Price-Fixing Investigation

Delrahim will oversee a sweeping investigation into price fixing of generic drugs that resulted in guilty pleas from two executives earlier this year. U.S. prosecutors have been investigating allegations of widespread collusion among drug manufacturers. More charges could result from the generics investigation.

The Justice Department also has long-running probes in the auto parts, packaged seafood and real estate foreclosure auction industries.

Speaking at a conference in March, Brent Synder, former acting head of the antitrust division, said the DOJ’s “criminal prosecutions remain very, very busy, and I expect you will hear more in the near future.”

The DOJ announced charges against Bumble Bee Foods LLC for a price-fixing conspiracy on May 8. The seafood production company pleaded guilty.

6. Division Funding

Delrahim’s advocacy for the antitrust division’s resources will take place later this year, when the Senate Judiciary Committee’s antitrust subcommittee will likely call the heads of the Federal Trade Commission and DOJ’s antitrust division to give an update on the agencies’ work.

Antitrust officials traditionally appear every year to discuss enforcement actions and usually request more funding from Congress. Last year, the hearing took place in March. This year, it will likely come as part of discussions about the fiscal 2018 budget, which should begin soon now that Congress has approved a spending bill through September.

Under the current spending package signed by the president last week, the DOJ received a $143 million cut in funding, but the antitrust division’s funding stayed flat.

Trump is seeking deeper cuts to the Justice Department that Delrahim could publicly oppose. The White House’s 2018 budget blueprint calls for a $1.1 billion cut to the DOJ.

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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