The Antitrust Club: A weapon in Bill Clinton's hands

National Review, Sept 25, 2000 by Michael Catanzaro

Such influence peddling goes hand in hand with the hostility to successful businesses that animates the Clinton antitrust apparatus. Robert Pitofsky, now chairman of the Federal Trade Commission, headed up the 1992 transition team on antitrust, and in 1993 succinctly summed up the Clinton antitrust approach. The Reagan administration had mounted "about as minimal an antitrust program as can be imagined," and antitrust had been stepped up a little under Bush-but under Clinton, Pitofsky suggested, "antitrust enforcement would be more vigorous. Close questions in all areas would more often lead to government challenges. Unjustified nonenforcement at the federal level would end."

The administration has lived up to Pitofsky's prediction. The Justice Department has unleashed the power of antitrust in ways strikingly reminiscent of the anti-corporate fervor of the 1960s and 1970s. From 1994 to 1999, the antitrust division filed a total of 481 cases, vastly increased its investigations of supposed monopolies, and intensified reviews of mergers and acquisitions. Under Reagan and Bush, the department had filed just three cases concerning the conduct of monopolies. Under Clinton, twelve such lawsuits have been filed.

In the Clinton administration's first three years, antitrust-division head Anne Bingaman increased the enforcement section's personnel and budget, and increased the review of mergers and acquisitions. In fact, according to D. J. Armentano, a professor of economics at the University of Hartford, between 1993 and 1996, the number of merger investigations initiated by the department increased from 102 to 237. That upward trend has continued under Klein. According to Robert Levy of the Cato Institute, the division will be handling an estimated 514 antitrust cases this year, an increase of 35 percent over the last two years.

The division has been relentless in stopping major mergers. In July, it effectively blocked a major telecommunications deal between MCI-Worldcom and Sprint. Attorney general Janet Reno said the deal threatened "to undermine the competitive gains achieved since the [Justice] Department challenged AT&T's monopoly of the telecommunications industry 25 years ago."

Not surprisingly, Pitofsky's FTC has been just as aggressive as Klein on the merger front. Over the last few years, the FTC has gone after mergers in many industries. It has especially targeted high-tech, investigating antitrust issues in a long list of companies, including Intel and Cisco Systems. Most recently, America Online's $113 billion buyout of Time Warner has occasioned an FTC investigation of AOL's popular instant-messaging service. Not that traditional bricks-and-mortar companies have escaped scrutiny: In 1997, the FTC nixed the proposed merger between Staples and Office Depot.

Justice and the FTC are not the only agencies assuming antitrust oversight. The Federal Communications Commission, under the stewardship of William Kennard, has acted like a de facto antitrust body, according to Harold Furchtgott-Roth, an FCC board member. Kennard recently played an important role in blocking the MCI-Worldcom/Sprint merger, which he said would be a "surrender" of the robust competition that has driven down long-distance prices.