Source: http://www.techlawjournal.com/topstories/2013/20130925.asp
Timestamp: 2019-04-20 14:25:56+00:00

Document:
Bill Baer Addresses Antitrust Remedies, 9/25/2013.
September 25, 2013. Bill Baer, Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division, gave a speech [13 pages in PDF] in Washington DC titled "Remedies Matter: The Importance of Achieving Effective Antitrust Outcomes".
It was his first public speech since taking office on January 3, 2013. However, he testified at a Senate Judiciary Committee (SJC) hearing on April 16, 2013. See, prepared testimony [10 pages in PDF] and SJC web page for that hearing. Before that, he testified at his confirmation hearing before the SJC on July 26, 2012. See, SJC web page for that hearing.
Baer (at right) began with this statement. "Antitrust's touchstone should be the preservation or restoration of competition in the affected market. Nothing less."
Notably, he did not state "Nothing more".
He said that the DOJ will seek appointment of independent corporate monitors in both civil and criminal cases.
He discussed several cases related to information and communications technology, including the DOJ's Clayton Act merger block against case AT&T and T-Mobile USA, its Sherman Act e-book price fixing case against Apple and book publishers, and its Sherman Act criminal price fixing cases against LCD makers and executives.
DOJ v. AT&T and T-Mobile USA. He praised the DOJ's blocking of the proposed AT&T T-Mobile USA merger in 2011 pursuant to Section 7 of the Clayton Act (15 U.S.C. § 18) as "the right call".
See, complaint [25 pages in PDF] filed in the U.S. District Court (DC), and story titled "DOJ Files Complaint to Block AT&T Acquisition of T-Mobile USA" in TLJ Daily E-Mail Alert No. 2,298, August 31, 2011.
AT&T and T-Mobile abandoned their merger plans in December of 2011. See, story titled "AT&T and T-Mobile Abandon Merger Effort" in TLJ Daily E-Mail Alert No. 2,320, December 20, 2011.
He said that "Once the division concludes that a transaction is anticompetitive, we should only consider remedies that effectively resolve the competitive concerns and protect the competitive process. In some mergers, that means a full stop injunction is the only right law enforcement outcome. AT&T's proposed acquisition of T-Mobile was such a case."
He did not mention the Federal Communications Commission's (FCC) activities with respect to that merger, or any other matter, in the text or footnotes of the written version of his speech.
He did write in a footnote to his speech that the DOJ and FTC "are closely aligned".
DOJ v. Apple. Baer also discussed the Apple e-books case. The case was filed before his confirmation, but tried several months after he took office.
He offered this description of the facts and Sherman Act Section 1 (15 U.S.C. § 1) violation in this case. The DOJ "challenged a conspiracy among Apple and five of the nation’s largest publishers to stifle retail price competition for e-books. Over three days in January 2010, each of the publishers signed contracts with Apple, under which Apple agreed to let publishers set retail e-books prices – often referred to as the agency model. The contracts set pricing tiers that were virtually identical for all five publishers. They also included most-favored-nation (MFN) provisions, which effectively compelled the publishers to pull other retailers onto the same agency model."
He also discussed remedies, and remedies in the context of this case. "Permanent injunctive relief in a Sherman Act case should end the violation, prevent recurrence, and restore competition in the market."
He elaborated that in the Apple case the DOJ's objective "was to obtain an injunction that would stamp out any lingering effects of the conspiracy, prevent Apple and others from engaging in similar conduct in the future, and ensure that Apple put in place the training and internal compliance controls needed to avoid a recurrence."
He said that the September 6, 2013 final judgment and permanent injunction [17 pages in PDF] "accomplishes this. Most prominently, it requires significant improvements to Apple's antitrust compliance program, including the designation -- over Apple's strenuous objection -- of an external compliance monitor."
See also, story titled "District Court Issues Final Judgment in Apple E-Books Antitrust Case" in TLJ Daily E-Mail Alert No. 2,597, September 9, 2013.
Baer also explained why the DOJ sought appointment of a monitor. "Apple's senior executives and in-house counsel helped orchestrate the price-fixing scheme. These are the very people who should have been ensuring Apple’s compliance with the law. There was no evidence of antitrust awareness or of self-reflection by Apple during the conspiracy or afterwards."
This monitor has authority to make recommendations to Apple, which if rejected by Apple, must be referred to the Court. The monitor also has authority to report violations to the Court. Hence, this is both an intrusive remedy, and one that indirectly involves the Court and DOJ in corporate management.
This remedy may be inconsistent with the understanding that the Antitrust Division is primarily a law enforcement agency, not a regulator, that punishes wrongdoers for past violations and enjoins future violations of law, but does not regulate companies or engage in management.
Baer concluded that "When conduct harms consumers and raises serious questions about a company's commitment and ability to police its own conduct, independent, external oversight may well be needed to protect consumers from future misconduct."
He also warned that "We will seek other equitable remedies in appropriate circumstances. Disgorgement of ill-gotten gains is one example."
He noted that while the DOJ did not seek disgorgement in the Apple case, "the states and private plaintiffs at the same time reached settlements with the publisher defendants to refund more than $160 million to e-books consumers". Also, the District Court has yet to decide on damages in the DOJ's action against Apple.
DOJ v. LCD Makers. Baer also discussed the DOJ's long series of price fixing cases brought against manufacturers of liquid crystal display (LCD) panels, and some key executives.
He focused on recent trials and remedies involving AU Optronics Corporation. In that case, the DOJ requested, and the District Court imposed, as a probation condition, that the company hire an independent corporate monitor to develop and implement an effective antitrust compliance program. The Court also imposed a $500 Million fine, which was less than requested by the DOJ.
See, items titled "DOJ Seeks Billion Dollar Fine and 10 Year Prison Sentences in LCD Price Fixing Case" in TLJ Daily E-Mail Alert No. 2,447, September 13, 2012, "More Antitrust News" in TLJ Daily E-Mail Alert No. 2,494, December 19, 2012, and "More News" in TLJ Daily E-Mail Alert No. 2,547, April 8, 2013.
Baer v. Supreme Court. Key provisions of federal antitrust statutes are brief, and provide little guidance to businesses, regulators, and courts. However, there is a huge body of law created by judicial -- especially Supreme Court -- interpretation of these statutes.
Antitrust law experienced a transformational shift in the 1980s and after. Lawyers in the Carter DOJ advocated reform. The 1978 publication of the book [Amazon] titled "The Antitrust Paradox" by Robert Bork was influential. Reagan's appointment of Chicago school judges, justices, and DOJ regulators implemented changes in interpreting antitrust law, for example, towards reliance upon economic analysis, towards protecting consumer welfare rather than competitors, and towards a nti-cartel enforcement.
Baer said nothing about all this in his speech. However, the cases that he cited may be revealing. In the text and footnotes to this speech, Baer cited five Supreme Court antitrust opinions. They were issued in 1922, 1947, 1961, 1972, and 1978 -- all pre-transformation cases.
He did cite the Supreme Court's 2005 opinion in US v. Booker. But, that was a criminal case regarding sentencing guidelines.
Also, he referenced American Express v. Italian Colors Restaurant, a Sherman Act tying class action case involving the issue of enforceability of arbitration clauses. The Supreme Court released its opinion [28 pages in PDF] on June 20, 2013. However, Baer did not state that the Supreme Court had decided that case, or what the outcome was.
Instead, Baer cited only the DOJ's amicus curiae brief [42 pages in PDF]. In fact, the Supreme Court rejected the position taken by the DOJ.
In that case, the Supreme Court split along party lines. Justices Scalia, Roberts, Kennedy, Thomas and Alito formed the majority. Justices Kagan, Ginsburg and Breyer dissented. Justice Sotomayor did not participate.

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