Making antitrust great again could start with appointment for Joshua Wright

Few decisions define the economic zeitgeist of an administration more than its approach to antitrust enforcement. But President Trump has been in office for over a month and has yet to nominate — or even announce the intention to nominate — his assistant attorney general for the antitrust division of the Department of Justice.

Compared to recent administrations both Republican and Democrat, Trump is significantly behind in announcing a candidate for this critical position. President Obama, for example selected Christine Varney as his AAG just two days after his inauguration; President George W. Bush and President Ronald Reagan announced their AAG selections within their first 30 days in office.

{mosads}While the position of AAG lies vacant, fundamental, policy-defining antitrust issues are languishing in the dock and rapidly emerging on the horizon. Without a clearly defined antitrust policy to signal whether the federal government intends to micromanage the economy or allow innovation and competition to drive growth, uncertainties imposed on industry by this inaction will (quickly) chill innovation and deter economic investment.

Despite a few well-publicized sound bites suggesting President Trump might have interventionist inclinations, there is reason to hope for a shift away from the previous administration’s antitrust agenda. Thus far, antitrust-related appointments point toward a more economically rigorous approach. Most prominently, the appointments of Ajit Pai as chairman of the Federal Communications Commission, Maureen Ohlhausen as acting chairwoman of the Federal Trade Commission, Wilbur Ross as Secretary of Commerce, and even the nomination of Neil Gorsuch as Supreme Court Associate Justice signal this (still nascent) shift.

Whatever the actual merits of the president’s “America First” agenda, the notion is far more consistent with principles defined by economic rigor and antitrust humility. If the new administration’s goal is to depart from the interventionist zeal of the previous administration, it should appoint a seasoned antitrust expert with a demonstrated commitment to supporting innovation and free enterprise to lead the charge.

As it stands, however, Obama administration holdovers continue to administer U,S, antitrust policy. Then-acting-AAG Renata Hesse, for example, recently opined that “the unfounded Chicago-School presumption that mergers often benefit competition” was the basis for “the Antitrust Division and the FTC [becoming] justifiably more skeptical about the promise of procompetitive benefits of mergers.” And such troubling claims are nothing new.

Christine Varney quickly and definitively set the Obama Administration’s approach to antitrust by withdrawing the Section 2 Report — the previous Division’s blueprint for restrained analysis of monopoly claims — during the first months of her appointment. As she noted at the time, this marked “a shift in philosophy and the clearest way to let everyone know that the Antitrust Division will be aggressively pursuing cases….” Intrusive enforcement actions, including those in  American Express (recently tossed by the Second Circuit) and Apple (lamentably upheld by the Second Circuit), as well as a spate of ill-advised merger enforcement actions including (but by no means limited to) the FTC’s action against Staples/Office Depot and the DOJ’s recent health-insurance merger actions made good on that threat.

The need for speed on this appointment isn’t only about defining a new course: There are critical antitrust decisions to be made in the coming weeks and months that one can only imagine the Trump Administration would prefer be made by its own appointee rather than career staff of the agency.

Federal agencies and several federal district courts are currently considering a number of mergers that could have a significant impact on the shape of future antitrust policy. The two health insurance deals — Aetna/Humana and Anthem/Cigna — were each blocked by the federal district courts within the last month. The enforcement actions themselves constituted an effort to prop up support for Obamacare by demonstrating that the concentration in insurance engendered by the ACA could be countered with aggressive antitrust enforcement. Although the Aetna/Humana deal has been abandoned, the D.C. Circuit has granted Anthem’s bid for a faster appeal and has set oral arguments to begin on March 24.

In addition, the AT&T/Time Warner merger and three agrochemical/seed industry mergers are looming. All of these are innovation- and efficiency-promoting vertical mergers that the DOJ should be quick to approve — but the Department has been widely encouraged to open investigations into each. Under holdover Obama Administration guidance, the DOJ may well bow to the pressure.

The lack of an appointed AAG under the new administration also has significant consequences for the development of policy issues related to numerous other areas of antitrust law, including the rapidly changing world of intellectual property. Pending investigations of US companies by foreign antitrust agencies, including ones contemplating extra-jurisdictional remedies imposed on US companies owning US patents, call out for the presence of a strong US antitrust voice.

More generally, it is critical to realize that the global antitrust community looks to the US for guidance on antitrust and competition policies. Indeed, the last administration’s retrograde economics and problematic approach to IP place an implicit US imprimatur on interventionist antitrust enforcement by foreign jurisdictions against US companies.

Few things make this more clear than a recent op-ed by Zephyr Teachout lambasting Supreme Court nominee Neil Gorsuch for being an adherent of “law and economics” (scare quotes and all). But Teachout’s misguided and partisan characterization of Chicago School antitrust has far more in common with the aggressive antitrust enforcement practices of some foreign jurisdictions than the restrained approach she derides. As Maureen Ohlhausen, Trump’s Acting FTC Chair, recently pointed out, “China reportedly is relying on non-competition factors in analyzing mergers and acquisitions…. [A] growing chorus is claiming that the Chinese are using [antitrust laws] to promote industrial policy.”

Several names have been mentioned as potential picks for AAG of the antitrust division — perhaps most prominently that of my friend, co-author, former FTC commissioner, and current executive director of the Global Antitrust Institute, Joshua Wright. Josh is the globally recognized standard bearer of the economically rigorous approach to antitrust that the division needs. The administration should nominate him forthwith.

Geoffrey Manne is executive director of the International Center for Law & Economics in Portland, Oregon.

The views expressed by contributors are their own and are not the views of The Hill.