Uncovering and prosecuting cartel behavior will be a top priority for the U.S. Justice Department's Antitrust Division, while the Federal Trade Commission will continue focusing on health care and generic prescription drug markets, the heads of those agencies testified Tuesday on Capitol Hill.
Newly confirmed Assistant Attorney General William Baer, in his first time testifying before Congress as DOJ's antitrust chief, said the division's lawyers have put a new spotlight on dismantling international cartels.
"My sense is we are simply uncovering things that have been under a rock for a while," Baer said at the oversight hearing before the Senate Antitrust, Competition Policy and Consumer Rights Subcommittee. The division also works with foreign enforcers to develop programs for cracking down on these cartels, he said.
DOJ antitrust lawyers have filed 67 criminal cases since September, including matters brought against 16 corporations and 63 individuals, Baer said. The result: criminal fines more than $1.1 billion and criminal sentences for 45 people averaging more than two years per defendant. This includes an ongoing investigation into the auto parts industry that marks the widest-ranging criminal investigation in division history.
Aggressively pursuing criminal price fixers benefits consumers in multiple ways, not just because a specific price fixing is eliminated and other wrongdoers are dissuaded from continuing yet undetected illegal conduct, Baer said.
"And those contemplating price fixing realize the risk they are running and are deterred from committing the crime in the first place," Baer said.
Baer also touted civil actions such as the e-book antitrust settlement, which he said has garnered $80 million for consumers and contributed to a more than $3 drop in the average online price of best sellers.
Baer, a former partner at Arnold & Porter until his confirmation in January, was pressed by Senators Mike Lee (R-Utah) on giving more guidance on Section 2 of the Sherman Antitrust Act. That section addresses single-firm anticompetitive conduct, rather than two or more companies working in concert.
In 2009, then-Antitrust Division chief Christine Varney withdrew a Section 2 guidance statement that had been issued a year earlier under previous leadership at the Justice Department. Varney at the time said the report "raised to many hurdles to government antitrust enforcement."
Baer today said he also didn't approve the 2008 guidance policy, saying it "may have been going too far, too fast." The FTC did not join with the Justice Department in the publication of the guidance.
Baer said he was prepared to move forward cautiously on Section 2 guidance, not making a formal statement but explaining actions through closing statements and other actions.
"A better way to move forward with Section 2 enforcement is to carefully articulate what we're doing and why we’re doing it," Baer said. On issuing broader guidance, Baer said, "I’m afraid it would be too qualified that the business community wouldn't get the benefit out of it."
FTC Chairwoman Edith Ramirez said the agency will continue pushing on issues ruled on this year by the U.S. Supreme Court: stopping anticompetitive health care mergers like those addressed in FTC v Phoebe Putney Health Sys. Inc. from and combating efforts to stifle generic competition like "pay-for-delay" agreements like those argued in March in FTC v Actavis, Inc.