By Brent Kendall
WASHINGTON -- The Justice Department's antitrust chief, Makan
Delrahim, has presided over a tumultuous time for the enforcement
of U.S. competition law.
Appointed by President Trump in 2017, Mr. Delrahim's tenure
began with a sweeping loss: a court rejection of his division's
challenge to AT&T Inc.'s acquisition of Time Warner, a case
clouded by the president's repeated criticisms of the deal. He
finishes with a win, as Visa Inc. this week walked away from a $5.3
billion deal to buy an up-and-coming fintech firm after the Justice
Department challenged it using a progressive legal theory about
protecting future competition in the online-payments space.
Those bookends highlight a tenure in which Mr. Delrahim at times
sometimes bucked expectations. The AT&T and Visa cases were
aggressive enforcement actions that light-touch Republicans of
earlier administrations likely wouldn't have embraced. He also
built internal momentum for the Justice Department's examination of
dominant tech companies. But he took a decidedly conservative
approach on some matters, including by allowing T-Mobile US Inc.
and Sprint Corp. to merge after the Obama administration wouldn't.
Mr. Delrahim also faced allegations that some of the department's
antitrust work was politicized in the Trump era, claims he
denies.
"We were appropriately tough," Mr. Delrahim said Wednesday in an
interview with The Wall Street Journal ahead of his departure next
week.
Amid a debate about whether current U.S. antitrust law
sufficiently protects competition -- as well as consumers -- Mr.
Delrahim said there is merit to some legislative proposals for
strengthening enforcement. It would be reasonable, he said, for
Congress to place more of a legal burden on companies with 50% or
greater market share to prove that their future acquisitions in
that market wouldn't harm consumers.
"That's a small change that could have a real positive impact
with respect to concentration in the marketplace," Mr. Delrahim
said.
He also said Congress should revisit a 2018 Supreme Court ruling
that rejected a government antitrust challenge to American Express
Co.'s rules for merchants, on the theory that the rules had
benefits for consumers. That logic could hamper enforcers in cases
where companies serve both consumers and other businesses, he
said.
Mr. Delrahim's tenure came during a national discussion about
whether the government should rein in a handful of dominant tech
companies. After years of anticipation, Alphabet Inc.'s Google and
Facebook Inc. were each hit with sweeping government lawsuits in
2020. Both companies deny they have engaged in anticompetitive
conduct.
Mr. Delrahim in 2019 opened the department's monopolization
investigation of Google and gave speeches arguing that antitrust
enforcers could target companies that offer free services by
focusing on nonpricing issues like innovation and consumer choice.
Generally enforcers have measured consumer harm by whether the
prices are likely to rise. As the probe progressed and
then-Attorney General William Barr played a more active role, Mr.
Delrahim recused himself in light of some long-ago work he did for
Google while in private practice.
He declined to comment on the specifics of the case, but
suggested the slow pace of litigation -- the department's Google
case isn't scheduled to go to trial until 2023 -- means other
avenues may be needed to address tech-sector competition.
He suggested one possible approach: a hybrid public-private body
that could set rules for tech-sector conduct. "If there is
anticompetitive conduct shown, business models and technology
change so rapidly that you have too much harm before there's a
[legal] remedy at the end," Mr. Delrahim said.
Separately, Mr. Delrahim presided over the antitrust division at
a time when it brought criminal price-fixing charges against
generic-drug makers and chicken producers. "I'd be surprised if
we're done," he said about the department's ongoing chicken
probe.
The department this month also brought its first-ever criminal
case against a company for allegedly conspiring with rivals not to
hire each other's workers. The defendant, Surgical Care Affiliates,
a subsidiary of UnitedHealth Group Inc., said the charges were an
unjustified and novel application of the antitrust laws as they
relate to employee recruitment.
Mr. Delrahim's division focused enforcement attention on a wide
range of competition issues that caught his eye, from rules for the
Academy Awards -- he was concerned a now-withdrawn rule change
would have excluded Netflix Inc. titles from the Oscars -- to NCAA
limits on benefits for college athletes, an issue that remains
unsettled.
That approach, however, sometimes brought him difficulties.
After four auto makers reached a tailpipe-emissions deal in 2019
with the state of California, Mr. Delrahim's division questioned
whether the companies improperly colluded to reach the pact. State
officials and Democratic lawmakers criticized the Justice
Department for investigating, saying it was politically motivated
to harm companies that defied the Trump administration's more
lenient approach to fuel-efficiency standards.
Mr. Delrahim in Senate testimony said the department was engaged
in a fact-finding effort and wasn't doing Mr. Trump's bidding. The
department closed the investigation last year, finding no evidence
of collusion.
Mr. Delrahim said he had few regrets and accomplished most of
what he set out to do. He highlighted one item of unfinished
business: modernizing music-licensing rules, which have been
governed by decades-old antitrust settlements dictating how music
is licensed for play on radio, television, streaming services or in
venues like restaurants.
It is important for the government to ensure that artists are
fairly compensated, he noted, but any needed changes were "very
difficult to do in the time we had."
The AT&T case may remain Mr. Delrahim's best-known endeavor,
and one that it is clear he has pondered in the years since U.S.
District Judge Richard Leon ruled in 2018 that the government had
not come close to proving the deal would harm the pay-TV
industry.
AT&T questioned the Justice Department's motivations for
suing in light of Mr. Trump's opposition to the Time Warner deal,
and because the two companies weren't head-to-head competitors.
Mr. Delrahim said he still believes the case was sound, "and I
think the marketplace is bearing that out." The consumer benefits
of the deal that AT&T touted in court, like skinny, low-cost
pay-TV bundles, haven't been sustainable, he said.
An AT&T spokesman declined to comment.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
January 14, 2021 18:21 ET (23:21 GMT)
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