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Obama Appoints New Antitrust Leaders
Obama Appoints New Antitrust Leaders
First published in V&E Antitrust News and Notes, April 2009.
By Sarah Stark
The FTC Appointments | The Division Appointees | Footnotes
Within his first 100 days in office, President Obama chose new leaders for the Federal Trade Commission (the FTC) and the Antitrust Division of the Department of Justice (the Division or DOJ), including Jon Leibowitz as the new Chairman of the FTC and Christine Varney to be the Assistant Attorney General for the Division. In addition to Mr. Leibowitz and Ms. Varney, Richard Feinstein was appointed to run the Bureau of Competition, Joe Farrell was selected as the chief economist at the FTC, and Carl Shapiro was selected as the chief economist at the DOJ. Further, Ms. Varney has filled several other positions at the Division. These appointees are experienced antitrust lawyers and economists that bring particular expertise to their respective agencies. Chairman Leibowitz was a Commissioner and Ms. Varney was an internet/antitrust expert and former FTC Commissioner. Mr. Feinstein was a healthcare antitrust lawyer and former Assistant Director of the Bureau of Competition in the Clinton Administration. The economist designees have research and testifying experience in antitrust. Overall, these appointments suggest that there will be continued enforcement efforts at the FTC and increased enforcement at the DOJ. Moreover, we expect these antitrust teams to test the boundaries of certain antitrust "norms" to determine whether the antitrust laws are adequately protecting competition.
The FTC Appointments
Mr. Leibowitz has been an FTC Commissioner since September 3, 2004, where he is known as a consumer advocate. Two of Mr. Leibowitz's focuses are on "opposing collusive pay-fordelay settlements between brand and generic pharmaceutical companies" and "stopping predatory financial practices."1 He appears to be skeptical that businesses will effectively self-regulate and is open to instituting additional government regulations if businesses fail to do so.2
In the antitrust area, we can expect the Chairman to look closely at healthcare (particularly issues involving generic drug competition and biologics), energy, technology industries, and possibly expanding the application of Section 5 of the Federal Trade Commission Act. While we expect Mr. Leibowitz to enforce aggressively the antitrust laws, we do not expect radical departures from accepted antitrust principles. With respect to consumer protection, Chairman Leibowitz is likely to focus on online advertising and advertisers' protection of consumers' privacy.3 Finally, we expect the Chairman to continue recent FTC efforts to meld the Commission's consumer protection and competition missions. Because Mr. Leibowitz is a sitting Commissioner, his appointment does not require Senate approval.4
Richard Feinstein is joining Mr. Leibowitz at the FTC as the new Director of the Bureau of Competition. Prior to his appointment by Mr. Leibowitz, Mr. Feinstein was an antitrust partner at Boies, Schiller & Flexner LLP in Washington. Mr. Feinstein previously worked at the FTC as an Assistant Director in the Bureau of Competition's Health Care Services and Products Division, the Antitrust Division, and McKenna & Cuneo, LLP. Mr. Feinstein has had broad exposure to healthcare issues while at the FTC. He examined whether the Hatch-Waxman Act patent litigation settlements furthered competition or encouraged companies to delay the entry of generic pharmaceuticals into the market,5 the potential pro-competitive benefits of creating associations of independent pharmacies and pharmacists to offer pharmaceutical-related services to third party payors,6 and proposed legislation to provide competing physicians with an antitrust exemption so that they could collectively bargain with healthcare plans.7 Because of his background in antitrust enforcement in healthcare industry, coupled with the FTC's on-going interest in the healthcare,8 it is likely that Feinstein's appointment will result in the FTC continuing to challenge activities by pharmaceutical companies.9
Joe Farrell has been appointed to become the Director of the Bureau of Economics at the FTC. Prior to accepting the position, he was a Professor of Economics at The University of California at Berkeley where he chaired the Competition Policy Center. He previously served as the Deputy
Assistant Attorney General and chief economist at the DOJ and was also the chief economist for the Federal Communications Commission. Farrell's primary focus has been on competition policy, compatibility standards, and innovation. Specifically, Farrell is interested in whether legal protections for intellectual property further competition and innovation.10 Additionally, he has co-authored several articles with Carl Shapiro, the newly appointed chief economist at the Division. Recently, Farrell and Shapiro wrote a piece about horizontal mergers. They propose that the authorities modify their approach to evaluating the competitive effects of mergers in differentiated product markets by focusing their analysis on the likelihood that the merger would increase prices or margins.1
The Division Appointees
Ms. Varney supports vigorous antitrust enforcement to limit the ability of individual companies to dominate their industries.12 Ms. Varney's previous government work includes serving as a FTC Commissioner during the Clinton Administration. She also has a good deal of experience in internet law. Her experience, confirmation hearings, and speeches suggest that she will look closely at monopolization law and increase the enforcement of mergers. We believe that Ms. Varney will increase the DOJ's involvement in the healthcare industry and look closely at dominant firm conduct in the technology area. She is also likely to work to improve the relationship between the Division and the FTC and antitrust enforcement agencies around the world.13 Prior to accepting her new position, Ms. Varney served as counsel to President Obama's transition team.14
Joining Ms. Varney at the DOJ will be Carl Shapiro, who has been selected to become the Deputy Assistant Attorney General for Economics in the Division, a position he previously held in the mid-1990s during the Clinton Administration. Dr. Shapiro is currently the Transamerica Professor of Business Strategy at the Haas School of Business and a Professor of Economics at The University of California at Berkeley. In the past, Dr. Shapiro has provided expert advice to the DOJ during its case against Microsoft and has worked with Google as part of its effort to broker an ad-sharing deal with Yahoo!Inc.15 Dr. Shapiro has also represented Intel in various antitrust proceedings. Dr. Shapiro has published numerous articles related to various antitrust and patent matters, including horizontal mergers.16
Dr. Shapiro's position on horizontal mergers is that "merger enforcement has become too lax"17 and he believes that "horizontal merger enforcement is essential for protecting competition in a dynamic economy."18 Dr. Shapiro has also written on reverse payment settlements and patent traps, believing them to be capable of reducing competition. Dr. Shapiro is well versed in the antitrust issues involving technology industries and complements Ms. Varney's expertise. Ms. Varney has begun filling in her staff at the Division, appointing three additional Deputy Assistant Attorneys General and a Special Counsel for Competition Policy.
The DOJ's press release states that Molly Boast and William Cavanaugh, Jr., will be responsible for civil matters. Ms. Boast has led the antitrust practice group at Debevoise & Plimpton LLP since 2001 and, before joining the firm, she served as the Senior Deputy Director and Director of the FTC's Bureau of Competition where she was responsible for merger and nonmerger civil litigation. Boast led the FTC's challenge to the BP-Arco merger. Mr. Cavanaugh also has antitrust litigation experience. He has been practicing at Patterson, Belknap, Web & Tyler, LLP for more than 20 years in the firm's litigation section where he has focused on antitrust, patent, and commercial litigation.
Additionally, Philip J. Weiser has been named Deputy Assistant Attorney General for International, Policy and Appellate Matters. Mr. Weiser is currently a Professor and Associate Dean for Research at the University of Colorado School of Law. He previously worked at the Division as an Assistant Attorney General. Mr. Weiser established the Journal on Telecommunications & High Technology Law and focuses his writing and teaching on competition, Internet, and innovation policy. In addition to the Assistant Attorney General, Ms. Varney selected Gene Kimmelman to be the Chief Counsel for Competition Policy and Intergovernmental Relations. Prior to accepting this position, Kimmelman was the Vice President for Federal and International Affairs at Consumers Union where he oversaw its federal and international policy programs. Mr. Kimmelman's focus is deregulation and consumer protection issues, particularly in the telecommunications realm. He has represented consumers as part of various media and telecommunications mergers, such as the America Online-Time Warner merger, the dismantling of AT&T, and other media and telecommunications issues before Congress.19
For more information about this and similar topics, please contact V&E lawyers William Vigdor or Sarah Stark. Visit our website to learn more about V&E's Antitrust practice.
This article is not intended to be legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general information only. Results described herein may be subject to reconsideration or appeal. Application of the information reported herein to particular facts or circumstances should be analyzed by legal counsel.
Footnotes
1Jon Leibowitz, Remarks for the Center for Democracy & Technology Dinner (Mar. 10, 2009), www.ftc.gov/speeches/leibowitz/090310remarksforcdtdinner.pdf.
2Id.
3Id.; Eric Krangel, Watch Out, Ad Networks: Obama Nominates Privacy Advocate as FTC Chief (Mar. 2, 2009), www.businessinsider.com.
4Andy Lustigman, President Names Jon Leibowitz FTC Chairman (Mar. 2, 2009), www.promotionlawblog.com.
5Consumer Reports, The Stalling Game (July 2001), available at www.globalaging.org/health/us/stalling.htm.
6Letter from Richard A. Feinstein, Assistant Director, Health Care Service, Bureau of Competition, Federal Trade Commission, to Paul E. Levenson, The Rufus Choate House (July 27, 2000), www.ftc.gov/bc/adops/neletfi5.shtm.
7Letter from Richard A. Feinstein, Assistant Director, Federal Trade Commission, to Robert R. Rigsby, Interim Corporation Counsel, Office of the Corporation Counsel, Government of the District of Columbia (Oct. 29, 1999), www.ftc.gov/be/hilites/rigsby.shtm.
8Federal Trade Commission, Competition in the Pharmaceutical Marketplace: Antitrust Implications of Patent Settlements (May 24, 2001), www.ftc.gov/os/2001/05/pharmtstmy.htm; Federal Trade Commission, Leveraging FTC Resources to Protect Consumers of Financial Services and Promote Competition (Mar. 31, 2009), www.appropriations.house.gov/Witness_testimony/FS/Jon_Leibowitz_03_31_09.pdf.
9Reuters, FTC Names Top Staff for Antitrust, Consumer Affairs (April 14, 2009), available at www.reuters.com/article/companyNewsAndPR/idUSN1428450320090414.
10See Joseph Farrell, Competition & IP (Feb. 28, 2002), www.ftc.gov/opp/intellect/020228josephfarrell.pdf.
11Joseph Farrell & Carl Shapiro, Antitrust Evaluation of Horizontal Mergers: An Economic Alternative to Market Definition (Nov. 25, 2008), available at www.faculty.haas.berkeley.edu/shapiro/alternative.pdf.
12James Rowley, Antitrust Pick Varney Saw Google as Next Microsoft (Update 2), Feb. 17, 2009, www.bloomberg.com.
13 Confirmation Hearing of Christine A. Varney Before the Senate Judiciary Committee, Answers to Questions for the Record from Senator Patrick Leahy (Mar. 10, 2009), available at www.judiciary.senate.gov/nominations/ChristineVarney/upload/QFRsLeahy.pdf.
14 John R. Wilke, Internet-Law Expert is Nominated as Antitrust Chief, Wall Street Journal (Jan. 23, 2009), available at www.online.wsj.com/article/ SB123265154794706989.html?mod=article-outset-box.
15 Who’s Who Legal, Carl Shapiro is Appointed Top Role in the DOJ (Mar. 13, 2009), www.whoswholega.com/news/article/13099/carl-shapiro-appointedtop-role-doj/.
16 Carl Shapiro, Curriculum Vitae, Nov. 2008, available at www.faculty.haas.berkeley.edu/SHAPIRO/shapirocv.pdf.
17Jonathan B. Baker & Carl Shapiro, Detecting and Reversing the Decline in Horizontal Merger Enforcement, Antitrust, Vol. 22, No. 3, Summer 2008, available at www.faculty.haas.berkley.edu/shapiro/detecting.pdf.
18Jonathan B. Baker & Carl Shapiro, Reinvigorating Horizontal Merger Enforcement (Oct. 2007), available at www.faculty.haas.berkley.edu/shapiro/mergerpolicy.pdf.
19Press Release, Department of Justice, Antitrust Division Senior Leadership Named (Arp. 22, 2009), available at www.usdoj.gov/atr/press_releases/2009/245092.htm.
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