President Obama’s top antitrust official and some senior Democratic lawmakers are preparing to rein in a host of major industries, including Broadcasting and Communication giants.
Christine A. Varney, the antitrust chief at the Justice Department, has begun examining complaints by the phone companies Verizon and AT&T that their rivals — major cable operators like Cablevision and Cox Communications — improperly prevent them from buying sports shows and other programs that the cable companies produce, industry lawyers said. She is also examining a settlement between Google and book publishers and authors to make more books available online.
The more aggressive antitrust policy was described in interviews with officials at the White House, the Justice Department, other agencies and Congress. It is a major policy reversal from the Bush administration, which did not prosecute cases in which some dominant companies engaged in potentially anticompetitive behavior, often because those officials maintained such behavior was not harmful to consumers.
Democrats have spent years trying to gain the support of businesses, and the policy changes under way may have long-term political implications for their party. Some companies would like to see more aggressive antitrust enforcement against their rivals, while others could be hurt by it.
Ms. Varney returned to government after working as a partner at Hogan and Hartson, a Washington law firm. During the Clinton administration she served in the White House as Cabinet secretary and a commissioner at the Federal Trade Commission.
The antitrust division under Ms. Varney scrapped the Bush administration’s monopoly guidelines, which had sharply limited the government’s ability to prosecute large corporations that used their market dominance to elbow out competitors.
Now the division has opened inquiries in the financial services and wireless phone industries. The division’s wireless inquiry is looking at, among other things, whether it is legal for phone makers to offer a particular model, like the iPhone or the Palm Pre, exclusively to one phone carrier. It is examining the sharp increase in text-messaging rates at several phone companies. And it is scrutinizing obstacles imposed by the phone companies on low-price rivals like Skype.
The new enforcement policy reverses the Bush administration’s approach, which strongly favored defendants against antitrust claims. It returns to a policy that led to the landmark antitrust lawsuits against Microsoft and Intel in the 1990s.
Ms. Varney said that the Bush administration policy “lost sight of an ultimate goal of antitrust laws — the protection of consumer welfare.”
“The failing of this approach is that it effectively straitjackets antitrust enforcers and courts from redressing monopolistic abuses, thereby allowing all but the most bold and predatory conduct to go unpunished and undeterred,” she said. “We must change course and take a new tack.”
The administration is hoping to encourage smaller companies in an array of industries to bring their complaints to the Justice Department about potentially improper business practices by their larger rivals. Some of the biggest antitrust cases were initiated by complaints taken to the Justice Department.
Ms. Varney said that the administration rejected the impulse to go easy on antitrust enforcement during weak economic times.
Instead, she said, severe recessions can provide dangerous incentives for large and dominating companies to engage in predatory behavior that harms consumers and weakens competition.
“There is no adequate substitute for a competitive market, particularly during times of economic distress,” she said. “Vigorous antitrust enforcement must play a significant role in the government’s response to economic crises to ensure that markets remain competitive.”
During the Bush administration, the Justice Department did not file a single case against a dominant firm for violating the antimonopoly law.
Antitrust policy is set by Washington in two ways: by the interpretation of laws announced by the Justice Department and the Federal Trade Commission through guidelines for the courts and private litigants, and by the enforcement cases that those agencies decide to bring.
The government’s guidelines are often cited by lawyers and given considerable weight by judges in antitrust cases, including those lawsuits that the government does not participate in.
It is not unlawful for a company to gain control of a market. It becomes unlawful if the company engages in conduct to exclude or harm competitors with no business justification.
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