Trust Busting Isn't On Bill Clinton's Short Listby
Business has lots to worry about as Bill Clinton prepares to storm Washington. But here's a cheery bulletin: The Clintonites show little inclination for a trust-busting crusade. Odds are, the new Democratic antitrusters at the Justice Dept. will be friendlier than business expects.
The reason, in a word: competitiveness. "Clinton is more likely to welcome cooperative activity among businesses," says Thomas M. Jorde, a University of California at Berkeley law professor who has advised the Clinton team on antitrust. "He won't see every consortium as a scheme to fix prices."
Clinton knows the world has changed in the 12 years since Jimmy Carter's ardent antitrusters left government. In the globalized economy, bigness often means not badness but survival. And many of Clinton's economic advisers openly admire Japanese and European industrial combines. "Integrating antitrust and international competitiveness will be the trick over the next 10 years," says Robert Pitofsky, a Georgetown University law professor and key Clinton antitrust adviser. "Market forces are pressing regulators to think globally." GREEN LIGHT? Clinton's appointments will signal his policies. Contenders to head the Justice Dept.'s Antitrust Div. include Pitofsky; New York University law professor Eleanor M. Fox; Robert M. Langer, a Connecticut assistant attorney general; and Stephen M. Axinn, a New York attorney with Skadden, Arps, Slate, Meagher & Flom. None are antitrust zealots.
But the New Democrats won't merely accept Republican laissez-faire. "There's no overall assumption that business can do no wrong," says NYU's Fox. One likely target for stepped-up enforcement: cozy arrangements among suppliers, manufacturers, and distributors. Republican antitrusters usually left attacks on such "vertical restraints" to private lawsuits and the states. Connecticut antitrust cop Langer, for example, helped lead a 50-state suit against Mitsubishi Corp. for setting television retail prices with its distributors and launched a similar multistate suit against Nintendo Co. in 1991. Both companies settled without admitting wrongdoing.
Democratic trustbusters also are likely to take a harder look at mergers and price agreements that could drive up costs to consumers. Reagan and Bush officials rarely challenged mergers and instead attacked local bid-rigging by highway contractors, trash haulers, and school milk suppliers. The Dems will probably pursue national conspiracies, leaving local ones to the states. Clintonites may give the green light to mergers that aid global competitiveness, but they will first make companies prove that a proposed merger doesn't violate laws. Under Reagan, mergers were routinely approved unless challengers could show that they hurt competition.
DISAPPOINTMENTS. Some skeptics doubt that this new thinking runs deep. Former Reagan antitruster Charles F. Rule suspects that the Democrats' populist instincts may overwhelm their competitiveness concerns. He fears only a handful of high-profile mergers might get approval for global reasons. "That will do significant harm to the ability of American companies to compete," he says. Indeed, Clinton is being urged by party liberals to be tough. Edward O. Correia, former chief counsel for Ohio Democrat Howard M. Metzenbaum's Senate antitrust subcommittee, worries that overzealous support for business will chill competition and raise prices.
But the liberals are likely to be disappointed. A global perspective seems deeply ingrained in the Clintonites' thinking. And for business, always ready to expect the worst from Democrats, that's hopeful news.