Last fall, I commented on this blog about the potential effect of an Obama administration on the nature of antitrust enforcement in the United States. In particular, I noted that a new Obama administration might focus on repairing the lack of antitrust enforcement that had resulted over the past few years through a slavish adherence to Chicago School analysis. On Monday of this week, Christine Varney, Assistant Attorney General for the Antitrust Division, revealed an antitrust plan for the Department of Justice that removed any doubts that the Obama administration is shifting dramatically from the “theoretical economics” laden Chicago School antitrust philosophy and practices that dominated the enforcement goals of the Bush administration to a pragmatic antitrust policy based on the realities in the marketplace.

Rejecting the “laissez-faire” views that the Antitrust Division had practiced over the past eight years and attempted to enshrine in a policy statement in 2008, Ms. Varney declared that small- and medium-sized competitors, suppliers, and distributors are encouraged to whistle-blow on any anticompetitive practices. Indeed, she stated the government would welcome hearing from those who were suffering at the hands of dominant entities. Although Ms. Varney did not go so far as to adopt the European Union view of dominance as against the evolved modern American view that monopoly in itself is legal and that the burden is on the plaintiff to show that the defendant had attempted to further its monopoly position through anticompetitive practices, she hinted that challenges based on dominance will be given a much more welcome hearing. Moreover, Ms. Varney indicated that mergers will be scrutinized very carefully, especially in certain sectors of the economy. 

Although the new Antitrust Division policy will place the DOJ more in line with the views of the FTC (healing a rift between the two agencies that became an open conflict after the 2007 DOJ policy statement), Ms. Varney was also announcing a legal stand that will at least put parties and courts on notice that the 2008 policy statement does not reflect the views of the DOJ. Considering the predominant Chicago School bias that has been reflected in recent Supreme Court decisions, such as Leegin Creative Leather Products, Inc. v. PSKS, Inc., 127 S. Ct. 2705 (2007), and Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007), the new policy statement could play a significant role in shifting the nature of case selection and legal arguments by the government. But the effect of the new policy statement may go much further. In light of the appointment of a generation of federal judges raised on the dogma of the Chicago School theories, the Antitrust Division announcement could deny the opportunity to use government guidelines as a crutch for decisions that reflect theories over realities in private litigation. Of course, there are many benefits from the economic analyses that inform reasoned decision-making. But, much like the philosophies that dominated banking and securities regulation over the past decade, the Chicago School antitrust doctrines need to be reined in to meet the realities of the marketplace. Hopefully, the courts will treat the Antitrust Division’s policy analysis and guidelines with the same deference as they did those established in the past, and not just ignore them by continuing with their judicial activism in setting economic and legal policy for the country.