Justice Department's Antitrust Chief Plans Shake Up for Stronger Enforcement
August 20 2020 - 2:38PM
Dow Jones News
By Brent Kendall
WASHINGTON -- The Justice Department's top antitrust official is
shaking up internal operations, aiming to better coordinate
enforcement in the financial sector and ensure that companies
across the economy stick to commitments they make in legal
settlements designed to protect competition.
Assistant Attorney General Makan Delrahim, who is ordering the
restructuring, also is creating a new group to promote scrutiny of
potentially anticompetitive business practices that are unrelated
to mergers and acquisitions, which tend to absorb much of the
antitrust division's attention.
After nearly three years in the job, "my goal is to capitalize
on what I have witnessed as the institution's strengths and to fix
some of the organizational weaknesses," Mr. Delrahim said in an
email interview with The Wall Street Journal. He is expected to
discuss the changes in a virtual event hosted later Thursday by
Stanford University.
On the financial front, the Justice Department's oversight and
enforcement has been fragmented for years, with areas like banks,
credit cards, insurance and securities exchanges each being handled
by different sections within the antitrust division. Mr. Delrahim
said he is bringing all of these areas into one cohesive group,
with the goal of combining internal expertise and improving
antitrust enforcement on financial issues.
The department needs to "take a fresh look at how new
technologies are changing the competitive dynamics in these
industries, particularly the financial services industry that is
key to every American consumer and small business," he said.
The changes come as financial markets are becoming another front
for high tech, with consumers conducting an array of transactions
with a click of their smartphones. The department is grappling with
more issues related to this transformation. For example, it is
currently scrutinizing Visa Inc.'s proposed $5.3 billion deal to
buy Plaid Inc., a growing San Francisco-based firm that provides
the technology connecting bank accounts to payment apps like Venmo.
It is also looking at Mastercard Inc.'s nearly $1 billion deal for
fintech firm Finicity, which helps consumers connect their banking
data to third parties like mortgage lenders.
The reorganization also comes after the Justice Department and
Securities and Exchange Commission recently agreed to a formal
working partnership that could lead to greater antitrust scrutiny
of the securities industry, including the fees charged by stock
exchanges for crucial market data.
While the Justice Department does resort to litigation to
challenge some threats to competition, the reality is that many of
its antitrust cases, especially related to mergers, are resolved
through consent decrees -- legal settlements in which companies
agree to make concessions designed to prevent harm to
consumers.
Mr. Delrahim said he is creating a new office that will monitor
compliance with those agreements.
Settlement compliance became a prominent issue last year when
the department alleged concert promoter Live Nation Entertainment
Inc. repeatedly violated the terms of an agreement in which the
department allowed it to buy Ticketmaster in 2010, on the condition
that it refrain from using its growing power to suppress
competition.
Instead, Live Nation, the world's largest concert promoter,
strong-armed concert venues into using its Ticketmaster subsidiary
in violation of the decree, the department alleged. The company
denied the allegations but agreed to resolve them by extending the
terms of the settlement another five years.
Last week, telecommunications provider CenturyLink Inc. agreed
to an extended consent decree and the appointment of an independent
monitor after the department alleged it violated a settlement that
allowed it to buy Level 3 Communications Inc.
The third prong of the division's update involves creating a new
task force designed to bolster investigations of civil antitrust
concerns unrelated to mergers.
Government antitrust lawsuits challenging attempted
monopolization or other anticompetitive conduct have been rare for
years, across Republican and Democratic administrations, drawing
widespread criticism.
There have been occasional exceptions, including a 2012 case the
Justice Department and about 30 states brought against Apple Inc.
alleging the iPad maker orchestrated a conspiracy among five of the
top six U.S. publishers to fix e-book prices. The case ultimately
led to Apple returning about $400 million to consumers.
The number of conduct-related investigations has grown recently,
with the Justice Department working on several high-profile probes
now, including tech-platform investigations of Alphabet Inc.'s
Google and Apple, as well as investigations of the beef and pork
industries.
Mr. Delrahim didn't comment on any specific investigations --
and he has recused himself in the Google matter -- but said the
task force would allow a dedicated group of attorneys to become
experts at some of the unique skills required for investigating and
litigating conduct cases.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
August 20, 2020 14:23 ET (18:23 GMT)
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