Christine Varney (DOJ): A new Assistant Attorney General for the US DoJ

April 2009
Assistant Attorney General, Head of the Antitrust Division at the US Department of Justice

Sept. 1997 to April 2009
Partner, Hogan and Hartson Partner in the antitrust, competition, and consumer protection practice

Oct. 1994 to Aug. 1997
Federal Trade Commissioner

1989 to 1992
General counsel to the Democratic National Committee

1977
B.A. at the State University of New York at Albany

INTERVIEW

You were appointed in April 2009 Assistant Attorney General, head of the Antitrust Division at the US Department of Justice. You have also held the position of Commissioner at the US Federal Trade Commission during the Clinton Administration. And you are a highly respected lawyer in the Washington Private Practitioners Community. What has led you to exercise twice such high ranking positions in the Public Service and leave a successful career in the Private Practice?

In my experience, the opportunity to engage in public service is one of the most personally and professionally rewarding experiences available. My previous experience in public service includes my time as Secretary to the Cabinet in the Clinton Administration, which was an exhilarating challenge. I was appointed by President Clinton to serve as a Commissioner on the Federal Trade Commission (FTC), a position I held from 1994 to 1997. I thoroughly enjoyed my time at the FTC, working closely with my fellow Commissioners and the excellent FTC career staff on a wide variety of technology-related issues including innovation markets, antitrust policy, and privacy issues in the information age. I enjoyed my time in private practice, from which one gains a unique and important perspective on the practice of law. I had no hesitation, however, in agreeing to return to public service when I was fortunate enough to be nominated by President Obama to serve again in the federal government as the Assistant Attorney General in charge of the Antitrust Division at the Department of Justice. In today’s difficult economic climate, it is a very important time for those asked to respond to the call to serve the public.

Can you tell us more on your academic background and your exposure to Antitrust? What led you to devote your career to such a branch of Economic Law?

After completing a B.A. from the State University of New York and a Master of Public Administration from Syracuse University, I obtained my law degree at Georgetown University in Washington, DC. While at the FTC, I saw firsthand how antitrust law plays a crucial role in enabling our free market economy to operate effectively. In particular, I appreciated the considerable extent to which ensuring full and fair competition has an impact on Americans and their families. I was fortunate enough to have the opportunity to serve with Chairman Bob Pitofsky at the FTC, who is a preeminent scholar. He greatly influences my thinking on antitrust issues, and continues to be an important mentor and a good friend.

To turn to in-depth antitrust but to keep a political course, in your first speech before the Center for American Progress, you have made remarks on the contribution of Antitrust for the Americans in a time of Economic Crisis and you evoked the Great Depression period. President Obama has also made strong statements with regard to the reinvigoration of Antitrust under a Democratic Presidency. Can you give us a broad outline of your Antitrust Agenda for America in the present day crisis?

In these critical times, the Antitrust Division must step forward and play a contributing role in developing the Government’s multi-faceted response to current economic conditions. As I said in the speech that you reference, I believe that there are three important lessons to be learned from the U.S. Government’s experience in responding to the market conditions that followed the Great Depression. First, there is no adequate substitute for a competitive market, particularly during times of economic distress. Second, efforts to achieve “stability” through government-supported or tolerated industry cartels are doomed to fail and hurt consumers. Third, antitrust enforcement must play a significant role in the Government’s response to economic crises to ensure that markets remain competitive. Therefore, my priorities as Assistant Attorney General will be focused on ensuring enforcement of the U.S. antitrust laws, and on supporting the development of sound competition policy during these challenging times.

« There are three important lessons to be learned from the US Government’s experience in responding to the market conditions that followed the Great Depression...»

Antitrust enforcement must include continued investigation and prosecution of criminal cartel activity, as well as a close analysis of potentially anticompetitive merger and non-merger activity. While the Antitrust Division’s criminal enforcement program in recent years has achieved unprecedented success in cracking and successfully prosecuting large domestic and international cartels, we must remain vigilant as markets with higher levels of concentration and economic instability are increasingly vulnerable to collusion and anticompetitive practices. On the civil enforcement front, the Antitrust Division will continue to conduct merger and non-merger investigations, and we will not hesitate to take enforcement action against anticompetitive mergers or other activities where they are found. In this regard, enforcement action against anticompetitive unilateral conduct under Section 2 of the Sherman Act will be undertaken as appropriate.

In addition to its responsibilities for enforcing the antitrust laws, the Antitrust Division also supports the development of competition policy more broadly. Sound antitrust policy must be informed by a comprehensive knowledge of the economic and regulatory environments in which industries operate. The development of sound antitrust policy requires attention to the overall state of competition, as well as the frameworks that govern the industries that we investigate. Through a number of different avenues (reports, testimony, speeches, etc.), the Antitrust Division will contribute our experience and expertise to these reform efforts.

You have been a Commissioner at the US FTC as mentioned earlier. Can you explain to European readers what main differences you see between the Antitrust Division and the FTC? Do you need to differentiate your action as Head of the Antitrust Division or do you favor a converging approach with FTC?

Traditionally, the Antitrust Division and the FTC have shared jurisdiction over civil antitrust matters, and have done so very effectively and efficiently. While there are some differences in our organization and operations, we share the same basic enforcement goal of protecting consumers. Over the past few years, the two agencies have occasionally diverged in their enforcement approaches. As head of the Antitrust Division, I am committed to working closely with FTC Chairman Jon Leibowitz to explore opportunities for greater convergence in doctrine and better harmony in our modes of operation. To the extent that we can resolve our differences and collaborate to pursue our shared concerns regarding threats to competition, both agencies will be able to achieve their enforcement goals more effectively.

We have noticed the very diverging and dissenting views expressed by a majority of the FTC Commissioners, including its Chairman, in the last months of the Bush Administration vis à vis a DOJ Report on unilateral conducts. Can you tell us more on that divergence and what course of action you have decided to follow to ease the tension between the Agencies, and maybe the differing philosophies of Antitrust between Republicans and Democrats? Do you foresee in particular amicus briefs in any major case pending before the US Supreme Court? When President Obama was a candidate, there were mentions of possible Democratic bills in the area of Antitrust. Can you tell us more on such legislative work already?

The United States loves competition so much that it has two competition agencies, which produces the possibility of differing perspectives. In practice, such differences are rare. The Department of Justice’s Section 2 Report, issued by my predecessor in September 2008, was an example of such divergence. We withdrew the Section 2 Report in May 2009, and returned to the fundamental principles underlying the Sherman Act’s prohibition on exclusionary conduct.

« Historically, U.S. antitrust enforcement has been a bipartisan endeavor... »

Historically, U.S. antitrust enforcement has been a bipartisan endeavor, with a strong commitment to competition widely shared by leaders in both parties. This tradition reflects, in part, that antitrust law involves an ongoing dialogue with the courts and thus the Department has a long tradition of filing amicus briefs that I intend to continue. In general, it is the courts that have developed the body of antitrust law, with Congress stepping in only on rare occasions and with limited interventions.

During the Presidential campaign we also noted the sharp title of a major contribution to political debates by a team assembled by former FTC Chairman Robert Pitofsky. That team has produced a very dense and well documented book with a strongly worded title: “Why Chicago overshot the mark, the effects of Conservative Economic Analysis on Antitrust.” You mentioned this book in your first speeches as AAG in charge of the Antitrust Division. What are the main points made by this team that you would consider as most inspiring to determine your priorities for future action?

As I mentioned earlier, Bob Pitofsky was my valued colleague when I was an FTC Commissioner, and he remains a good friend. His criticism, which my talk referenced, is that the Chicago School, which provided a very constructive and important corrective to earlier antitrust law excesses, has gone too far in certain cases. Notably, his critique is that the Chicago School, as manifested in the Section 2 Report I referred to above, has understated the ability of antitrust law to sort the wheat from the chaff when it comes to anticompetitive conduct.

“The Chicago School... has understated the ability of antitrust law to sort the wheat from the chaff when it comes to anticompetitive conduct”

I agree with this criticism and firmly believe that antitrust enforcers - and antitrust courts - are capable of distinguishing between anticompetitive acts and lawful conduct. As Judge Posner has explained, and as I quoted him in my speech, “antitrust law is supple enough [...] to take in stride the competitive issues presented by the new economy.” [1]

Given the fact that President Obama has set up a new Commission to protect consumers from operators of the finance industry and given the responsibilities of this industry in the origins of the present Economic Crisis, do you foresee specific antitrust actions in the area of banking and insurance in the United States?

It is not our agenda to pursue antitrust enforcement action in any specific areas or industry sectors. Instead, it is our goal to understand, evaluate, and protect competition in sectors that are important to our economy and American consumers, including financial services.

During the Presidential Campaign, it has been said that a Democratic Administration would launch some emblematic cases on market power abuses in the area of intellectual property, pharmaceuticals and the multimedia sector. What are the views of a Democratic Administration now in power with respect to these objectives?

Again, we do not have a set of cases that we are prejudging and ready to bring without due consideration. We do believe that the high-tech sector is of critical importance to the economy and that competition in that sector is a driver of innovation. To that end, we recently filed a brief with the federal court of appeals in the so-called “Cipro” case, [2] explaining our standard for evaluating the so-called “reverse payment” cases, wherein a brand name pharmaceutical company pays a generic company for not taking advantage of its right to enter under the market opening provisions of the Hatch-Waxman Act. In short, we argue that such payments are presumptively illegal, but that defendants in such companies should be given an opportunity to justify them as, on balance, not harmful to consumers.

To turn to international Antitrust, can you tell us about your priorities for Antitrust in a world that is deeply affected by the Economic Crisis?

I am committed to an international dialogue around, and a shared commitment toward, promoting competition. During the Great Depression, many countries, including my own, erected trade barriers, gave in to the temptation to promote national champions, or allowed (or even encouraged) cartelization of industries on the theory that so doing would protect them at the expense of other countries or just facilitate some level of stability.

That experience underscored the harmful consequences of such policies and I am mindful of the need not to repeat that lesson. I am also mindful of the need to underscore the beneficial impact of international competition for consumers and businesses everywhere and believe that promoting such competition, and not protecting individual competitors, is a policy that will benefit all nations and their citizens.

Do you have views about the evolutions of the EU Commission competition policy enforcement? With a Progressive Democratic Administration now in power in Washington and a Conservative European People’s Party-backed EU Commission at Brussels, how far do you think that we are likely to achieve a transatlantic convergence on Antitrust and Competition Law and Policy? If there are limits to such convergence, in which areas do you foresee the persistence of differences? [3]

I would say that the EC and US approaches to antitrust enforcement have evolved to a point where we are able to engage in extremely productive cooperation across a broad range of enforcement activities. I am encouraged about the opportunities for convergence and do not believe that it depends on ideological perspectives as much as a history of shared experience in working together, an increasing comfort discussing competition concerns with agencies across the world, and the maturation of institutions like the International Competition Network and the Organization for Economic Cooperation and Development that are designed to promote such convergence.