Obama's New Antitrust Rules Have Big, Powerful Companies Sweating
The monopoly policy is a reversal of a Bush administration rule
The Obama administration has swept away policy after policy from the Bush administration, and the top antitrust regulator, Assistant Attorney General Christine Varney, made it clear in her first speech this week that she's coming in with a very big broom.
Varney repudiated the Bush administration's more laissez-faire approach to monopoly cases in a forceful speech to a liberal think tank and then in another one to the U.S. Chamber of Commerce. A report issued last year by the Bush administration on monopoly regulation is no longer government policy, she warned judges, lawyers, and companies. "As antitrust enforcers, we cannot sit on the sidelines any longer, both in terms of enforcing the antitrust laws and contribution to sound competition policy as part of our nation's economic strategy," she said in her speech.
Antitrust regulation is designed to protect consumers from a concentration of power in a market that leads to higher prices, lower quality, and less innovation. But how to do that opens a philosophical divide over whether aggressive regulation does more harm than good in the marketplace.
Varney's announcement will have big companies with large market shares sweating. So will an eye-popping $1.45 billion fine imposed Wednesday on computer chip maker Intel Corp. by the European Commission. The European Union's regulatory body found that Intel had given customers incentives to keep them from buying from its competitor, Advanced Micro Devices.
Antitrust experts predict Varney will set her sights on high-tech companies as she steps up antitrust enforcement, as well as health, pharmaceutical, telecommunications, food, and agriculture firms. High-tech firms in particular are ripe for monopoly violations because they can quickly gobble up large chunks of a market if they are first to the table. And as a former Netscape attorney, Varney won't be scared off by the geekspeak that comes with the tech world, says University of Chicago law professor Randy Picker, who teaches antitrust. But Varney says no area is off limits. "I'm not afraid to roll up my sleeves and learn any industry," she says.
Varney's comments sent a clear message that she wants to return some of the balance of power in monopoly regulation to the United States. During the past eight years, companies bypassed the Bush Justice Department, instead taking their cases to the European Commission and the other 100 international regulatory bodies. Varney says she hopes her speeches will prompt corporate attorneys to press companies to "behave well," and she invited victims to come to the Justice Department with their complaints. And the Federal Trade Commission, which has an investigation of Intel open, now will probably move ahead with the case.
Antitrust cases are notoriously complicated and can take a year or more to bring to trial, so Varney's big talk may mean little action in the short term. And her predecessor in the Bush administration, Thomas Barnett, says it "remains to be seen how far they can go," since the Supreme Court is more in sync with his approach. "It's easy to give a speech. It's harder to bring cases and win them," says Steven Salop, a Georgetown professor of economics and law who specializes in antitrust.
Even if Salop is right, powerful businesses can't help but worry.
Reader Comments
Attention George Norcross
Maybe George Norcross will adhere to this and realize that Big Brother is watching him.
‘Antitrust’ is the latest shakedown; here’s the previous one:
These legal documents show Barack Obama suing Citibank under the Community Reinvestment Act (CRA), filed 7/6/1994, terminated 12/4/97, and settled 2/14/98. In this one example, Obama and the other lawyers got $950,000 from Citibank in legal fees without finding any evidence of discrimination.
(University of Saint Louis digital achieves):
http://clearinghouse.wustl.edu/chDocs/public/FH-IL-0011-9000.pdf
http://clearinghouse.wustl.edu/chDocs/public/FH-IL-0011-0007.pdf
This was part of a legalized protection racket preying on our nations banks, and part of a widespread systematic shakedown, described in great detail in this article from the year 2000: "The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities":
http://www.city-journal.org/html/10_1_the_trillion_dollar.html
Obama, other members of ACORN, Bill Clinton, members of the Clinton Administration, and members of congress from both parties explain what happened in their own words in these videos:
http://www.youtube.com/watch?v=ivmL-lXNy64&feature=channel_page
http://www.youtube.com/watch?v=8vJcVgJhNaU&NR=1
http://www.youtube.com/watch?v=_MGT_cSi7Rs&feature=related
This video connects all the dots, citing sources you may Google for yourself:
http://www.youtube.com/watch?v=1RZVw3no2A4&feature=iv&annotation_id=event_597487
The New York times explained the problem this created for banks as early as 2003, and explained what additional regulatory action the Bush administration tried to initiate to protect the banks, to cope with this, "New Agency Proposed to Oversee Freddie Mac and Fannie Mae":
http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html?sec=&spon=&pagewanted=1
Thomas Sowell summarized this in his column, "Do Facts Matter?":
http://article.nationalreview.com/?q=NGRjODM1MTJlOGZiZDk2ODI4NTUzMWMxYjgwMjliMGQ
Washington Post ("Where Was Sen. Dodd? Playing the Blame Game On Fannie and Freddie"):
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/11/AR2008091102841.html
The Wall Street Journal ("Blame Fannie Mae and Congress For the Credit Mess "):
http://online.wsj.com/article/SB122212948811465427.html
Most members of the media are still drinking the Obama Kool-Aid, and giving the president standing ovations at White House press conferences. Most have no background in finance to understand of the gravity of this situation. Less enthusiastic members of the press don't get invited to these celebrations, but they don't want to be seen spoiling the party either. This pattern of behavior must be stopped to protect the economic future of our country. Don’t take my word for it; take a look at the evidence I've assembled here to see for yourself.
Obama's new Anti-Trust Rules
The new rules are much needed for one reason only--big business has, by ignoring the common good, made them necessary. What is good for business is good for America ONLY as long as the bottom line for business does not overwhelm all other considerations and as long as greed is not a driving factor.
I found interesting the comments added by those in the anti-unions camp. Unions, it should be remembered, have no potency whatsoever when total remuneration packages for workers are adequate. They become a nuisance for business when they aren't.
It's really up to business to keep workers happy, for when they're unhappy, unions come in through an open door not a closed one.
I also found interesting the comments on biased media. This has been a problem ever since newspapers (especially) began running opinion in supposedly news articles. That's a situation easily remedied with regulation and oversight. Delivery of news should be uncontaminated by opinion, whether print version or on-air. Period. Separate news from opinion and cure the problem. (Folks like Sean Hannity won't like this because they rely on seducing readers and listeners through an almost inseparable mix of news, information, opinion, propaganda and humor. In Hannity's case, he says his program is "the best source of news and information on your radio dial" when it's also a prime source of outright right-wing propaganda and opinion. Regulated, like all "news" and information media, Hannity will have to clean up his act. So will ALL "news" media.)
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