New Antitrust Chief Has Full Plate [WSJ]
By JOHN R. WILKE
February 14, 2006; Page A6
WASHINGTON -- Thomas Barnett has a lot on his mind right now, from the price of washing machines to an alleged criminal conspiracy in Alaskan otter pelts.
As the Justice Department's new antitrust chief, Mr. Barnett will face a flood of possible mergers, including Whirlpool Corp.'s pending $1.7 billion buyout of Maytag Corp. He is also directing an assault on price-fixing, from the otter-pelt brokers busted last month to international investigations of corporate collusion in plastics, chemicals and commodities.
[Thomas Barnett]
"If a merger is likely to harm consumer welfare, based on the law and economics, we will challenge those deals," Mr. Barnett said in an interview yesterday. He said his top priority will be fighting criminal cartels, "which Justice [Antonin] Scalia once called the 'supreme evil' of antitrust."
Mr. Barnett, 43 years old, has been acting antitrust chief since June and isn't expected to stray from the administration's hands-off approach to merger enforcement. "He'll be tough when he has to be, but he is not going to be looking to discover new theories of antitrust," said John Shenefield, President Carter's antitrust chief, now with the firm of Morgan Lewis here. "He's in the mainstream of modern antitrust enforcement."
Mr. Barnett holds degrees from Harvard Law School and the London School of Economics and was a Fulbright scholar. Before his appointment by President Bush, he handled antitrust, sports law and intellectual-property cases at Covington & Burling, including legal work for the Republican Party and the Bush-Cheney campaign.
Still, despite conservative credentials and White House support, Mr. Barnett was nearly derailed from within his own party. Two Republican lawmakers blocked Mr. Barnett's confirmation for months, after corporate lobbyists complained he would be too tough on mergers, Senate aides said.
The main issue was Mr. Barnett's stewardship of the U.S. attempt to challenge Oracle Corp.'s hostile bid for PeopleSoft Corp. a year ago. Oracle defeated the Justice Department and won the case. It was a stinging rebuke for the department, and some observers have suggested that it could embolden rivals to attempt mergers that would otherwise be turned down on antitrust grounds.
Since then, Oracle has made no secret of its view that Mr. Barnett went too far in opposing the PeopleSoft deal, and Senate aides say the company met with lawmakers after the nomination to air its concerns.
The standoff over the appointment ended after Mr. Barnett recently reassured Sen. Sam Brownback (R., Kan.) in a private meeting, a conversation that cleared the way for Mr. Barnett`'s confirmation Friday.
Mr. Barnett faces tough decisions. A deadline looms on whether to challenge the merger of Whirlpool and Maytag, which would dominate the market for washing machines and dryers -- or accept Whirlpool's claim that the two companies face rising foreign competition and price cutting in a fast-changing market. The deadline was extended by a month last night, suggesting that the company and the government are still talking.
Another deal in the pipeline is Inco Ltd.'s $10.8 billion takeover of its largest rival, Falconbridge Ltd. Opponents -- including some major industrial companies -- fear it will let Inco raise prices in certain segments of the nickel market.
Mr. Barnett has also drawn complaints from consumer advocates who say he hasn't been tough enough. He approved two giant telecom mergers -- the purchase of AT&T by SBC Communications (now AT&T Inc.) and Verizon Communications Inc.'s acquisition of MCI -- with few major conditions, despite concerns that the deals would lead to higher prices for business customers.
Beyond merger enforcement, Mr. Barnett has led a campaign to nurture competition in the residential real-estate market. While he is recused from the government's pending antitrust suit against the National Association of Realtors, he has filed other lawsuits and cajoled state lawmakers to prevent real-estate agents from excluding competitors.
"The Internet and other new technologies are providing consumers with new choices and lower prices, and we're committed to examining practices in real estate and elsewhere that may impede that process," he said. |
