VIEW FROM WASHINGTON / JUBE SHIVER JR. : Critics Say Clinton Must Act to Make Imprint on GOP Antitrust Policy

Following a 12-year explosion in corporate merger activity that went virtually unchallenged by laissez-faire-minded Republican administrations, antitrust activists hoped that having a Democrat in the White House would swiftly bring about a shift in policy.

But for months now, President Clinton’s promised laser-like focus on the nation’s economy has missed antitrust policy, which many experts say forms the foundation of the nation’s economy because it sets the fundamental rules of business competition.

By intervening quickly and systematically in court cases--and by installing “free market” believers throughout the enforcement bureaucracy--Clinton’s Republican predecessors have so thoroughly transformed antitrust policy that the President will need to move quickly if he hopes to have even a small impact during his stay in office.

“This is America’s basic industrial policy,” says Charles E. Mueller, editor in chief of Antitrust Law and Economics Review, a law journal published in Vero Beach, Fla. “You can’t have competition unless you have an aggressive antitrust policy because monopoly is more profitable than competition. Antitrust helps to level the playing field.”

To be sure, the new head of the Justice Department’s Antitrust Division, Anne K. Bingaman, has promised to be more aggressive than her Republican predecessors. And there has been some increase in government oversight, as evidenced by the recent decision by the Justice Department to investigate possible antitrust violations by computer software giant Microsoft.

But Clinton has also compounded his woes, critics say, by seeking to appoint antitrust officials whose views differ little from those who served under Ronald Reagan and George Bush.

Robert Litan, a fellow at the liberal Brookings Institution think tank, recently confirmed that he is under consideration for a deputy assistant slot in the antitrust division at the Justice Department.

When asked to describe his philosophy, Litan responded: “There was an old view of antitrust--before Reagan--that attacked bigness for its own sake and didn’t take sufficient view of economic principles. The Reagan view took the other extreme--there were no problems except for price fixing. I’m somewhere in the middle.” Litan added that overly aggressive “antitrust enforcement can bog down the courts.”

Some activists worry that such centrist views may not serve Clinton well at a time when the President may need a tougher antitrust policy to help slow the rising cost of health care and stave off concentration in the burgeoning high-tech and telecommunications industries.

Already, the economic ramifications of business concentration are apparent: Among cereal makers, the four largest producers control over 80% of the industry’s $7 billion in annual sales; prices are estimated to be as much as 30% above the levels that would exist if there were effective price competition. By contrast, the two largest computer firms, Apple and IBM, have non-dominant shares of the field; as a result, prices are low and competition fierce.

But Clinton must deal with the fact that Republicans have already had 12 years of influencing those branches of government that have the most direct involvement in shaping antitrust policy--the courts and the Federal Trade Commission.

The five FTC commissioners, who deadlocked for months over whether to launch an investigation of Microsoft before the Justice Department decided to step in, were all appointed during the Reagan and Bush administrations. There won’t be another opening for a new commissioner, each of whom serves a seven-year term, for another 13 months.

The tenure of the current FTC has been marked by a strong focus on consumer fraud issues such as investigating diet programs, dishonest telemarketing outfits and franchising firms.

The commissioners have devoted comparatively little enforcement attention to merger activity. The conservatives on the FTC argue that business concentration can lead to greater market efficiencies and is not always, per se, anti-competitive.

Meanwhile, the courts, under aggressive intervention by the Reagan Justice Department, have drastically limited so-called private antitrust actions brought by aggrieved individuals and business owners who believe they might be harmed by a proposed merger or other business move.

From a peak of 1,611 such cases filed in 1977, the number of private antitrust cases has declined dramatically over the past 12 years to under 500 cases annually in recent years.

The decline came in the wake of a systematic campaign by Reagan’s Antitrust Division chief, William Baxter, to identify court cases which could affect antitrust law.

So steeped have the courts, the Justice Department and the FTC become in a free-market view of ant itrust policy that government veterans now predict there will be little change.

“I have too much confidence in both the institutional strength of the Antitrust Division and the excellent program we have put in place there to believe that the incoming administration can or will stray materially from the basic course we set,” Charles A. James, the Bush Administration’s acting assistant attorney general for antitrust, said in a speech 10 months ago in Cambridge, Mass.

Indeed, the Republican legacy may be so intractable that the President might need to pursue a course suggested some time ago by his antitrust chief.

In a 1984 speech, Bingaman said antitrust enforcement “cannot keep up” with the rapid pace of economic and technological change. Instead, she recommended that Congress and state legislatures be called on to deal with the problem in a comprehensive way.