President Obama yesterday announced his first antitrust appointment – Christine Varney will head the DOJ's Antitrust Division. Ms. Varney, who served as an FTC Commissioner under President Clinton, has a reputation as an aggressive, but reasonable, antitrust enforcer. Her appointment, together with D.C. rumors about other likely antitrust leaders, signals the prospect of a more aggressive antitrust regime.

During the campaign, President Obama openly criticized the Bush Administration for its lax antitrust enforcement, vowing that his administration would reinvigorate U.S. antitrust policy. Vice President Biden too has pro-enforcement antitrust views. During the last Congress, he cosponsored legislation to reverse the Supreme Court's decision in Leegin and return minimum resale price maintenance agreements to per se illegal status. Much of the Obama Administration's criticism has focused on the antitrust enforcement policies of the DOJ's Antitrust Division. During the campaign, the President denounced the agency's complacency, pointing both to the absence of a single Section 2 enforcement action by the DOJ during the Bush Administration and the DOJ's release of a report advocating a lenient approach to single firm conduct.

The President's appointment of Ms. Varney will likely lead to a more activist Antitrust Division, especially with respect to single firm conduct. While at the FTC, Ms. Varney voted to reject a proposed settlement in the Staples/Office Depot merger. She also wrote the Commission's decision that found that rules imposed by the International Association of Conference Interpreters amounted to a per se illegal pricing scheme. In private practice, Ms. Varney successfully represented Netscape in a monopoly suit against Microsoft Corp. When asked about a proper remedy for Microsoft's anticompetitive conduct, Ms. Varney responded that "serious antitrust violations call for serious remedies" and indicated that, in her opinion, even the breakup of Microsoft would be "on the table." She also has been quoted as condemning the recent proposed advertising deal between Google Inc. and Yahoo! Inc.

The President has not yet made his other major antitrust appointment – the Chairman of the FTC. Speculation inside the Beltway, however, is that current Democratic FTC Commissioner Jon Leibowitz will likely be chosen for the job. Like Ms. Varney, Commissioner Leibowitz has made his activist leanings clear. In a recent workshop, Leibowitz argued for the increased use of Section 5 of the FTC Act to defeat anticompetitive conduct that does not fall strictly within the confines of the Sherman Act. In his speech, he suggested that the FTC faces a "federal judiciary, and especially a Supreme Court, that is hostile to vigorous enforcement of the antitrust laws." Commissioner Leibowitz also takes a tough stance on competition in the pharmaceutical industry and has argued that the FTC should more frequently seek disgorgement, asserting that "malefactors should not keep the ill-gotten gains of their illegal acts."

President Obama's influence on FTC policy, however, will be broader than his appointment of the Chairman; he also has an opportunity to fill a vacant spot on the Commission. This appointment combined with the departure of Commissioner Pamela Jones Harbour in September could result in a Commission with a Democratic majority as soon as the Fall of 2009.

Companies with market power and those considering mergers are most likely to be affected by the Obama Administration's proposed re-invigoration of antitrust enforcement, as these companies would face increased scrutiny under an activist antitrust agenda. These companies can take some comfort, however, in the fact that the Obama Administration's tougher stance on antitrust enforcement will likely need to take a backseat to the more pressing issues underlying the current domestic and global financial crisis. Moreover, President Obama has indicated that he will not seek and does not believe the U.S. antitrust agencies should seek to prevent or delay mergers that are not likely to harm consumer welfare. Even Ms. Varney, during her tenure as an FTC Commissioner, voted in favor of the Boeing/McDonnell Douglas merger. Her reputation as a fair-minded (although proactive) enforcer may be precisely the balance required given the current economic conditions and the divergence between the DOJ and the FTC, which has made clear it disagrees with the DOJ's lenient take on Section 2.

Thus, another result of the Obama Administration's appointment of Ms. Varney will likely be a gradual reduction in the divergence between the U.S. antitrust agencies – and the application of more consistent and predictable antitrust policies. The President's campaign statements – and his appointment of Christine Varney – suggest that change will come. The change, however, will likely be gradual rather than sudden, and moderate rather than revolutionary.

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