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From Antitrust Law Daily, January 15, 2019

Trump’s AG pick could investigate rise of Silicon Valley ‘behemoths’

By Jeffrey May, J.D.

On the first day of his confirmation hearing, William Barr, the nominee to serve as the next U.S. Attorney General, assured members of the Senate Judiciary Committee, particularly Senator Mike Lee (R.-Utah), Chairman of the Judiciary Committee's antitrust subcommittee, that he takes the traditional view that the purpose of antitrust law is to protect competition. However, Barr suggested that as Attorney General he would be interested in looking into the Antitrust Division's functioning and priorities, as well as the agency’s response to the growth of Silicon Valley "behemoths."

About two hours into the hearing, Lee asked Barr to comment on the growing number of people "who embrace the viewpoint that we should use antitrust law to address a whole host of social and economic harms." Some now argue that antitrust law should be used to prevent large companies from becoming too big, to shape labor markets, or to achieve some other broadly-defined social interest.

Barr said that "the purpose of the antitrust laws obviously is to protect competition, and it is competition that ultimately redounds to consumer benefits." He added, however, that he was "interested in stepping back and reassessing or learning more about how the Antitrust Division has been functioning and what their priorities are."

During the hearing, Barr did note the quality of the people at the Department of Justice. In addition, he said that he was looking forward to working with them if confirmed.

In response to a question from Lee about whether he was a believer in "big is bad," Barr said: "I don't think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of antitrust enforcers. You can win that place in the marketplace without violating the antitrust laws, but I want to find out more about that dynamic."

The current leadership at the Antitrust Division appears to reject the notion of big is bad, as well. Makan Delrahim, Assistant Attorney General in charge of the Antitrust Division is known for saying: "Big is not bad. Big behaving badly is bad."

AT&T-Time Warner merger challenge. Senator Amy Klobuchar (D-Minn.), ranking member of the Judiciary Committee’s antitrust subcommittee, raised issues related to the Antitrust Division’s case challenging the combination of AT&T Inc. and Time Warner Inc. In June 2018, the U.S. District Court in Washington, D.C., rejected the Justice Department’s attempt to block the transaction on the ground that the acquisition would likely result in a substantial lessening of competition by enabling Time Warner’s Turner Broadcasting cable network to charge AT&T’s rival distributors—and ultimately consumers—higher prices for its content. The case is currently on appeal to the U.S. Court of Appeals in Washington, D.C.

Barr has said that he would recuse himself from the appeal in that case if confirmed, as he served on the board of Time Warner for nearly a decade until last year. At the hearing, Klobuchar asked Barr to reiterate his earlier commitment to recuse himself, which he did.

Klobuchar also inquired about Barr’s views on possible Trump opposition to the deal that some have speculated might have led to the government challenge. She noted that Barr, while on the Time Warner board, "signed a sworn affidavit questioning whether the Justice Department’s decision to block the merger was politically motivated given the president’s prior public animus towards the merger."

"The affidavit speaks for itself," Barr said. He noted that he was concerned that "the Antitrust Division was not engaging with some of our arguments." In addition, he said that he was concerned "that the Antitrust Division wasn’t taking the merits as seriously as I had hoped they would." However, Barr added that he wasn’t sure why the Antitrust Division acted the way they did.

Klobuchar left her other antitrust questions for the record.

Companies: AT&T Inc.; Time Warner Inc.

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