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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (38571)	7/4/2001 5:18:37 PM
From: Dealer	Respond to of 65232

Bush Administration Toes Antitrust Line By Peter Kaplan Wednesday July 4 11:13 AM ET WASHINGTON (Reuters) - If corporate executives were hoping for a break from antitrust scrutiny under President Bush (news - web sites), so far they have been sorely disappointed. Despite its laissez faire political philosophy, the Bush administration has forged ahead on a number of important antitrust cases in industries ranging from airlines and pharmaceuticals to the landmark antitrust case against Microsoft Corp(NasdaqNM:MSFT - news). Since taking over last month, the newly installed heads of the Justice Department (news - web sites)'s antitrust division and the Federal Trade Commission (FTC) have showed no signs of relaxing antitrust enforcement or taking a softer line on corporate mergers. ``What both agencies have done in the way of antitrust enforcement in the last couple of weeks is suggestive of a fair measure of continuity,'' said Bill Baer, who served as antitrust chief at the FTC during the Clinton Administration. Baer and other former antitrust officials cautioned that it's too early to draw any final conclusions. But they said they were surprised by the strong line taken by U.S. Attorney General John Ashcroft (news - web sites) when a U.S. appeals court ruled last week that Microsoft had abused its monopoly in personal computer operating systems. Ashcroft stood unflinchingly before reporters and declared victory over the software giant. ``I am pleased to say that the court unanimously found that Microsoft engaged in unlawful conduct to maintain its dominant position in computer operating systems,'' Ashcroft told a news conference. ``This is a significant victory.'' That statement contrasted with the department's conciliatory stance in its case against U.S. tobacco companies. ``They could have done what they did with tobacco and say, 'Hey, we've got a losing hand here, and we've got to fold it as quickly as possible,' `` said Bert Foer, president of the American Antitrust Institute. STANDING FIRM Only days earlier, the Justice Department served notice that it would appeal a judge's dismissal of a landmark suit charging AMR Corp.'s (NYSE:AMR - news) American Airlines with using predatory tactics to snuff out competitors. AMR is headquartered in Bush's home state of Texas and was a supporter of the president's campaign. Antitrust attorneys in Washington had thought there was a strong chance that the Justice Department would drop the case. ``Ashcroft must have said to someone, 'Let's do this on the merits. Tell me what the right thing to do is, and let's do it,' '' another antitrust attorney said. In its planned budget, the Bush Administration proposed large increases for both the Justice Department's antitrust division and the FTC, Foer said. And in April, the administration gave the green light to an antitrust investigation of pharmaceutical companies, another industry that contributed heavily to Bush's campaign. That probe, also begun under Clinton, centers on allegations that big drug manufacturers have used U.S. patent laws to stifle the launch of cheaper generic drugs. On Monday, the parent of United Airlines, UAL Corp.(NYSE:UAL - news), said it was in talks to drop its bid to buy US Airways Group Inc. (NYSE:U - news), citing continued opposition from antitrust attorneys at the Justice Department. ``I've been pleasantly surprised,'' said Foer, the president of the American Antitrust Institute, a Washington-based organization that promotes antitrust enforcement. ``I'm keeping my fingers crossed that what were seeing so far is an example of where they intend to go.'' NO OVERHAUL SO FAR Those decisions are a far cry from the first few months of Ronald Reagan (news - web sites)'s presidency, when incoming antitrust officials undertook an immediate overhaul of the agencies. ``It was a complete change of attitude,'' said former FTC official George Cary. ``It was almost hostility on the part of the new administration coming in with respect to the career (antitrust) staff.'' Under Bush, Cary said: ``I think there was a studied effort to communicate a message of continuity rather than change.'' Both James and Muris said during Senate confirmation hearings that they planned to take a moderate stance on antitrust enforcement. But among Washington antitrust attorneys, questions remained about how aggressive the new administration would be. Marc Schildkraut, who represented Intel Corp. (NasdaqNM:INTC - news) and Exxon Corp.(NYSE:XOM - news) before the Clinton-era FTC, said he believes James and Muris will be more reluctant to trample on companies' patents and copyrights. He said they also may be more receptive to companies when they argue their mergers will enhance efficiency. ``I think there will be important changes,'' Schildkraut said. ''There will be more demands placed on the (antitrust) staff by the administration.'' But other attorneys said it could be politically damaging for the administration if it's seen as going easy on corporate America. ``Antitrust has moved center-stage, and you're not going to sit on your hands when you're center-stage,'' said one antitrust attorney familiar with the government's thinking.