Clinton’s Antitrust Chief Takes Tough New Look at Rules : Law: Reagan guidelines have been withdrawn. Despite staff cuts, the division aims to target foreign ‘cartels.’
Just when it looked like federal trustbusters had gone the way of the old Standard Oil monopoly, the Clinton Administration’s chief antitrust enforcer is surprising some corporate executives and attorneys with her aggressive approach to the job.
Sworn in as head of the Justice Department’s antitrust division only two months ago, Anne K. Bingaman has already withdrawn permissive guidelines on relations between manufacturers, wholesalers and retailers adopted during the laissez-faire years of the Reagan Administration. The division is turning heads in high-technology circles with its decision to investigate alleged anti-competitive practices by computer software giant Microsoft Corp., after the Federal Trade Commission deadlocked on the issue. Some analysts have wondered whether Microsoft might not become the American Telephone & Telegraph Co. divestiture case of the 1990s.
Meanwhile, the new antitrust chief is taking aim at powerful foreign consortiums with business interests in this country. In an interview, Bingaman said her division is conducting simultaneous probes of several overseas “cartels” that have the ability to set prices and restrict markets.
And if America’s ailing defense contractors and embattled health care providers hope the government will let them collaborate with competitors, they may want to think again. Bingaman rejected suggestions that she should relax antitrust rules so rival companies in threatened industries can develop joint strategies for restructuring their operations.
“Proponents of exemptions bear a heavy burden,” she said, adding that such waivers would turn antitrust policy into the legal equivalent of Swiss cheese.
Her icy view toward blanket exemptions typifies the harder line that Bingaman, a longtime antitrust attorney, is taking toward enforcement in general. In this area, the federal government became noticeably kinder and gentler during 12 years of Republican rule, tending to tolerate mergers, acquisitions, joint ventures and other deals that would have been frowned upon in years past.
While she downplays suggestions that she is charting a bold new course for her department and the Clinton Administration, Bingaman acknowledged that she considers herself “an unabashed and enthusiastic supporter of vigorous antitrust enforcement.”
But her ability to translate a harder-line attitude into action may be limited by sharp cutbacks in the division’s work force. The number of antitrust attorneys in the division has been cut from more than 450 when Democratic President Jimmy Carter left office to about 300 when George Bush checked out.
Faced with a burgeoning budget deficit, President Clinton has proposed even more cuts. Bingaman, without going into details, said she is trying to head off an additional 8% reduction called for in the new federal budget.
Bingaman, 50, grew up in the small mining town of Jerome, Ariz. After receiving a law degree from Stanford University in 1968, she took a teaching job at the University of New Mexico. She moved to Washington in 1983 when her husband, Jeff, was elected to the U.S. Senate, and she has practiced law here ever since. She was chosen to head the antitrust division after serving on Clinton’s Justice Department transition team.
In an interview conducted in her office at Justice headquarters, Bingaman acknowledged that budget constraints will prevent her from expanding the size of her enforcement team. Most of the muscle for stepped-up antitrust enforcement, she said, will come from reorganization--and from focusing on “major issues that affect a lot of individuals” rather than “very small, local price-fixing cases with no larger implications.”
Bingaman said she hopes to enlist state attorneys general and U.S. attorneys to pursue these more narrow investigations.
The 50 economists in the Justice Department’s antitrust division, she noted, constitute “the largest group of microeconomists in government,” and she wants them working on analyses of significant antitrust issues.
She indicated that a prime target for scrutiny will be “price-fixing cartels that operate around the world and in connection with U.S. companies.” Bingaman said the division is conducting about half a dozen separate investigations of suspected overseas price fixing in “highly concentrated, basic industries.” While declining to discuss details, she said the affected industries include minerals and basic manufacturing components.
Bingaman suspects substantial abuses are occurring “where you have a worldwide market and a small number of producers.” But the distance between suspicion of collusion and the evidence needed to make a case in court can be significant. “The problem is we can’t get access to any of the (foreign) evidence” that would prove the violations, she said.
The notion of pursuing cartel activities received significant emphasis during the Bush Administration, which began the process of reversing the hands-off antitrust enforcement that characterized the Reagan years.
In 1992, Bingaman’s predecessor as antitrust chief, James Rill, and then-Atty. Gen. William P. Barr made a key change in the department’s guidelines by dropping a provision that limited U.S. suits against foreign firms to cases where harm to American consumers could be shown.
If a foreign cartel bars American exporters from competing, and if the nation involved fails to enforce its laws against the cartel, the United States now has the unfettered authority to sue subsidiaries of the foreign cartel with operations in this country.
So far, the government has initiated no such suits. But Bingaman said there is a “range of things under consideration” as a result of the policy change and that any application of the expanded authority to sue would not necessarily be limited to a single country.
Bingaman’s approach to antitrust enforcement seems to embody a traditional attitude about the potential dangers of business concentration.
Some experts have argued that the old standards for assessing business combinations, such as calculating the combined U.S. market share of the new enterprise, are no longer as relevant as they were when the robber barons ruled. What difference does it make if the surviving firm would control a big share of the domestic widget market, they ask, if the real competition is global in nature?
Existing U.S. regulations, Bingaman contends, have the flexibility to take account of such factors.
“Under the merger guidelines, you look to see what the market is,” she said. “In a particular case, it may be a world market.” Then global considerations may override national or regional market share calculations.
“Every one of these things is different, and they are fact-specific: What market? How much competition?” she said.
And while Bingaman is mindful of private-sector concern about the potential chilling effect of federal oversight and regulation, she said she does not accept the premise that the subject is so complex that it restrains U.S. business activity.
Antitrust law is “not some black box” whose contents are inscrutable to those it affects, Bingaman said. “My feeling is the business community has a pretty good horseback feel for when a merger may be a problem.”
