Biden antitrust chiefs seek funds for ambitious enforcement

The Biden administration’s top antitrust enforcers have asked Congress for more money to pursue their ambitious enforcement strategy, telling a Senate panel they are ‘overwhelmed’ by the legal power wielded by giant corporations.

During a Senate Antitrust Judiciary Subcommittee oversight hearing on Tuesday, Jonathan Kanter, the assistant attorney general for antitrust, said the Justice Department will litigate more mergers this year than any fiscal year on record. and remains “committed to carrying tough cases”.

Kanter’s testimony came the day after a federal judge rejected the department’s bid to block UnitedHealth Group Inc.’s acquisition of Change Healthcare Inc. for $7.8 billion, dealing a blow to the aggressive program of the division.

“While I’m proud of the work we’re doing, we lack the resources to fully address these challenges,” Kanter said, pointing out that the antitrust division now has 350 fewer people than it did in 1979.

Federal Trade Commission Chairwoman Lina Khan said in her monopolization case against Meta Platforms Inc., the commission was “one to 10.”

Read more: UnitedHealth gets court approval to change healthcare agreement

Khan said vigorous antitrust enforcement is essential to economic growth, adding that when industries consolidate, “prices go up, wages go down, and our markets become more fragile and less resilient.”

She said the agency has had “significant success with at least six mergers dropped due to an FTC lawsuit.”

The abandoned deals include the proposed acquisition by Lockheed Martin Corp. from Aerojet Rocketdyne Holdings Inc. and the agreement from Nvidia Corp. to buy ARM from Softbank Group Corp. Three hospital groups also walked away from the merger, as did Great Outdoors Group, the tightly held owner of Bass Pro Shops and Cabela’s, which was seeking to buy Sportsman’s Warehouse Holdings Inc.

Khan and Kanter, along with White House adviser Tim Wu, have been hailed as the Holy Trinity of a new antitrust movement advocating for stronger government in the face of market concentration. Their calls to return trust to its more aggressive roots by smashing the steel barons and oil tycoons of the last century have found enthusiastic support from progressives, as well as more populist Republicans who also speak out against the abuses of the corporate power.

This attitude has found a particularly rich target among the tech giants — both in legislation that seeks to restrict anticompetitive practices in the internet economy and in federal antitrust enforcement. Kanter’s DOJ division is suing Alphabet Inc.’s Google and investigating Apple Inc., while Khan’s FTC is suing Meta and investigating Amazon.com Inc.

Such cases, however, are tough after decades of what progressives see as lax enforcement and conservative rulings that have built case law favoring the idea that consolidation can benefit consumers with lower prices. Khan and Kanter have indicated that they are prepared to file aggressive lawsuits – even if they are difficult to win – to force companies to reconsider mergers and acquisitions which they will have to defend in court.

This year alone, the Justice Department was tried for blocking four deals, an unusually high number of cases that antitrust prosecutors must pursue at the same time. Rulings in three of the cases remain pending, and the antitrust division will appear in court next week in a fifth lawsuit against American Airlines Group Inc. and JetBlue Airways Corp. about a joint venture between the airlines.

The UnitedHealth merger challenge wasn’t the Justice Department’s only trial loss this year. In June, five chicken industry executives, including the former CEO of Pilgrim’s Pride Corp., were found not guilty of price fixing after two landmark trials. Following the June trial loss, prosecutors dismissed charges against most other executives, Koch Foods Inc. and Claxton Poultry Farms Inc.

The FTC and the Justice Department are rewriting federal merger guidelines in an effort to persuade courts to block more deals.

Republican senators criticized Khan for what they described as politicizing the FTC. Mike Lee of Utah, the top Republican on the subcommittee, singled her out for being willing to “sacrifice the actual app for flashy headlines.”

“Getting good press isn’t enough,” Lee said. “What little we’ve seen from the FTC is legally questionable and misrepresented.”

Republican FTC commissioners Noah Phillips and Christine Wilson submitted a statement disagreeing with parts of the testimony approved by the three Democratic commissioners. Phillips and Wilson said the majority had misrepresented the agency’s work under Khan and complained of an “unfortunate departure from the agency’s tradition of working toward bipartisan consensus”.

Amy Klobuchar, chair of the Senate antitrust subcommittee, praised Khan and Kanter. She also reinforced the need for new legislation, such as her U.S. Online Innovation and Choice Act, to give the FTC and DOJ new rules and the power to stop America’s biggest tech companies. to abuse their dominant market position.

“We have many opportunities to create common sense rules to ensure that entrepreneurs and small businesses can compete on a level playing field, and also to give those who appear before us today more tools to do their jobs in a modern economy,” Klobuchar, a Democrat from Minnesota, said during the hearing.

However, momentum is slowing for Klobuchar’s bill, which has surpassed all US legislative efforts to tackle the market power of some of the world’s wealthiest companies. The Senate has only a few weeks and several competing priorities before leaving Washington for the November election.

More stories like this are available at bloomberg.com

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