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Obama antitrust enforcement looking like more of the same

Campaign promises

Still, the department's performance so far has fallen short of the high expectations among antitrust watchers when Obama took office. On the campaign trail, he gave an unusually detailed statement on antitrust policy, promising: "As president, I will direct my administration to reinvigorate antitrust enforcement. It will step up review of merger activity and take effective action to stop or restructure those mergers that are likely to harm consumer welfare, while quickly clearing those that do not."

Then Obama picked Varney as his antitrust chief at the Justice Department. (The Federal Trade Commission also handles antitrust matters, but is an independent agency from the administration.) Varney had raised her profile by representing Netscape Communications - the once-dominant provider of Web browsers - during the government's antitrust case against Microsoft. She further stoked excitement among antitrust advocates - and jangled nerves in the business community - after a tough speech in May 2009.

"It is time for the antitrust division to step forward again," Varney said then. "We must change course and take a new tack."

In an early signal that enforcement would probably be tougher under Obama, the Justice Department rejected guidelines issued by George W. Bush's administration on how to enforce antitrust offenses, saying the guidelines went too far in limiting the government's power to prosecute big companies that abuse their market dominance. Fines on companies for violating antitrust laws also sharply increased during the division's first year.

But in the eyes of some consumer advocates, the line in the sand between the antitrust division's current lawyers and their predecessors is less clear. They say nowhere was this more apparent than in the first big test of the administration's antitrust muscle: Ticketmaster's merger with the world's biggest concert promoter, Live Nation.

To consumer groups, the deal was clearly egregious, because it would give one firm enormous power to dictate what prices consumers pay when they buy tickets and because it combined different businesses related to live entertainment under one roof: ticket sales, concert promotion and even the management of artists such as Miley Cyrus, Maroon 5 and Christina Aguilera.

The advocates asked the Justice Department to go to court and block it. So did 50 members of the House.

Several strings attached

In January, Justice said the merger could go ahead, but with several strings attached, including an unusual provision to set up a committee to monitor the new company for certain kinds of bullying. The agreement also required the firm to license Ticketmaster's technology to rival concert promoter Anschutz Entertainment Group. Ticketmaster also had to sell one of its ticketing businesses to competitor Comcast-Spectacor.

But the solution disappointed some opponents of the deal. "They chose to take the safe consent decree rather than to be aggressive and block the merger," said David Balto, an antitrust lawyer. "I don't think there's any reason this consent decree fully restores competition."

Seth Hurwitz, co-owner of the District's 9:30 Club, a Live Nation competitor, said: "Given the tough talk that came from them, yes, I expected and hoped that finally things would be different. But they're not."

But justice officials said it wasn't clear that the antitrust division's lawyers could have achieved an equally tough result by taking Ticketmaster to court.

Now, all eyes are on the proposed merger of NBC and Comcast, a case with echoes of the Ticketmaster deal because the two companies will combine businesses - in this instance, cable and media properties - that typically sit on opposite sites of the negotiating table but that if combined could help each other.

"I think, ultimately, the administration will be judged by its signature events," said Gary Reback, an antitrust lawyer who formed the Open Book Alliance, a group that has challenged Google's settlement with authors and publishers over electronic books. "The signature events have to be a willingness to go to court and fight about it and win, or at least go down swinging."


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