A top Justice Department official put corporate giants on notice Monday that the Obama administration will aggressively enforce antitrust laws, reversing a 2008 decision by the Bush administration that made such cases harder to prosecute.
Assistant Attorney General Christine Varney said government lawyers would not be dissuaded by the recession from going after corporations that crowd competitors out of the market.
She announced the immediate withdrawal of a report issued in September which, her department said in a formal statement, “raised too many hurdles to government antitrust enforcement and favored extreme caution” in antitrust prosecutions.
In a speech at the Center for American Progress, a liberal think tank, Mrs. Varney said, “Vigorous antitrust enforcement must play a significant role in the government’s response to economic crises, to ensure that markets remain competitive.” Previous enforcement was tilted too much in favor of the defendant, she argued.
Though Mrs. Varney said she was not singling out any one company, there is speculation that Internet-search leader Google Inc. could be a potential target of an antitrust investigation. But she shrugged off that suggestion.
“Look, when you become successful, and you have market power, however you define it, you need to pay attention to the rules,” she said.
A spokesman for Google did not respond to a request for comment.
Before the Bush administration eased back on antitrust litigation, prosecutors under President Clinton launched a landmark antitrust case against software giant Microsoft Corp. in the 1990s.
Not everyone welcomed the policy reversal. Mark Calabria, an economist with the free-market Cato Institute, said a recession is “the absolutely wrong time” for such a move.
“You’re in a situation where sometimes you really want a larger firm to take over a very small failing firm,” said Mr. Calabria, director of financial-regulation studies at the think tank.
As for Google and other successful, dominant firms, Mr. Calabria questioned the notion that bringing antitrust action would aid the larger economy.
“Even if one thought there was a lack of merger enforcement against folks like Google, how has that resulted in the economic downturn?” he asked.
D. Daniel Sokol, a professor at the University of Florida Levin College of Law, said the Justice Department’s policy change “is not responding to the current economic downturn as much as to its belief that overall the Bush administration was overly lax in enforcement,” even though much of the Bush administration was a time of economic growth.
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