The Justice Department’s Antitrust Division chief Christine Varney on Friday reiterated her agency’s tough line on enforcement and said it will take a close look at mergers even if only a small portion of a deal presents a problem.
At a brown bag lunch in Washington, D.C., Varney listed some recent examples of what she was talking about. She said settlements with Bemis Company Inc. — which makes plastic packaging for meats and cheeses — and the concert promoter and ticketing giant that is now Live Nation Entertainment Inc. – illustrate that even if the overlap between two merging companies is small, the Justice Department will still consider a range of remedies to address its concerns.
Bemis agreed last month to sell some assets in order to complete its $1.2 billion purchase of a unit owned by Rio Tinto – Alcan Packaging Food Americas. Ticketmaster agreed in January to license its software, divest some ticketing assets, and submit to a strict behavioral regime to win regulatory approval of its blockbuster $2.5 billion deal with Live Nation.
“We see a lot of this, where a very small percentage of the deal — 12 to 15 percent — presents the problem,” Varney said.
Merger activity is down from a 1990s peak of around 5,000 deals seeking regulatory clearance each year. Last year, Varney said, federal regulatory agencies looked into about 700 mergers and were on track to review around the same number this year.
Varney hinted that the downturn in merger work has allowed the Antitrust Division to shift some resources to examining possible anti-competitive conduct by individual firms. In response to a question about non-merger cases the government is looking at, Varney declined to comment other than to say: “the division is quite busy, and mergers are down.”
Friday’s informal session, hosted by the American Bar Association, is the first in a series of meetings suggested by Varney to promote transparency in the DOJ’s antitrust enforcement efforts. Another lunch session will be scheduled with policy and appellate deputy Philip Weiser and economist Carl Shapiro, and a third with criminal deputy Scott Hammond.
In Friday’s session, Varney, along with civil deputy Molly Boast and litigator William Cavanaugh, touched on the transactions and policy matters the Justice Department has examined in the past year.
The trio also addressed questions on:
– The agency’s relationship with the Transportation Department in approving airline alliances (DOJ believes it is listened to, but DOT has a broader public interest mandate).
– When bundling is anti-competitive (DOJ reviewed the literature but didn’t cite any in its Ticketmaster settlement).
– Whether the DOJ might revisit the last administration’s report on monopolies (no plans to do so.)
Boast also answered a question on Attorney General Eric Holder’s relationship with the Antitrust Division (he met with staff last month, and was “warm and charming.”)
Varney promised to save some news for the ABA’s spring meeting next month, including an update on any revisions to the guidelines that the Justice Department and the Federal Trade Commission use to evaluate whether a merger might violate antitrust laws.
