By many indicators, 2012 is ripe for the kind of boom in antitrust enforcement not seen since the late 1990s. Criminal enforcement penalties topped $1 billion in 2011 for just the second time ever, and the number of criminal cases doubled. Ongoing cartel investigations in municipal bonds, air cargo and other freight industries, and electronic and lighting components continued to drive massive settlement agreements.

The year came to a close with the scuttling of AT&T’s proposed merger with T-Mobile. The Department of Justice (DOJ) filed suit in August to block the acquisition on anti-competitive grounds. AT&T withdrew its bid in November 2011, after an FCC report concluded the deal would lead to job loss and higher prices for consumers. The company announced in December it was permanently walking away from the merger.

“I may have been the only lawyer in D.C. not working on the AT&T case, but it was lining up to be a titanic battle,” says Martin Cunniff, a partner in the antitrust and litigation groups at Arent Fox. “Most of the antitrust bar was quite impressed with the DOJ and, frankly, I think it will embolden them. There’s nothing like success to get you going some more.”

That normally would be the case, but it may not come to pass this time, at least not immediately. The enforcement outlook in the short term is complicated by election year politics, as well as by succession issues at the DOJ.

Mixed Results

When Christine Varney was appointed to lead the DOJ’s antitrust division in 2009, many expected a hard-hitting approach to big mergers right out of the gate. Instead, the department gave softer-than-anticipated treatment to controversial deals such as Ticketmaster-Live Nation and NBC-Comcast. When she stepped down last July for a job at Cravath, some were dismayed.

“We are at a little bit of a crossroads,” says Craig Wildfang, an antitrust partner at Robins, Kaplan, Miller & Ciresi. “Although the consensus is that the DOJ got it right on AT&T, the pro-antitrust enforcement private bar has been pretty disappointed, first with Christine Varney and what she did and didn’t do, and now with the lack of a replacement.”

Varney’s interim replacement, Sharis Pozen, announced in January that she, too, would step down in April. On Feb. 4, President Obama announced he would nominate Bill Baer, a partner at Arnold & Porter, to take over the antitrust division. The prospects for his confirmation any time soon, however, are cloudy at best.

Sen. Charles Grassley has vowed to block DOJ nominations because he says the department is not cooperating with investigation of the “Fast and Furious” gun-trafficking scandal. Then there’s the simple fact that the confirmation of all presidential nominees slows to a trickle in election years, and antitrust enforcement could prove a particularly hot potato this time around.

Party Politics

There’s no denying politics play a role in antitrust enforcement.

“In Republican administrations you tend to have a little less antitrust enforcement and in Democratic administrations, a little more,” says John Harkrider, co-chair of the antitrust practice at Axinn, Veltrop & Harkrider. “That swing is a bit more pronounced at the DOJ and a little bit less pronounced at the [Federal Trade Commission (FTC)], simply because the FTC is relatively bipartisan to begin with.”

That swing may not be as dramatic as some think—perhaps 10 percent on either side of the median, Harkrider says. But the perception of partisan impact on antitrust enforcement can be as significant as the reality, particularly around election time.

In practice, antitrust investigations are mammoth undertakings that take years to resolve and span presidential administrations. The notion that Democrats are anti-deal, however, makes political hay when a Democrat is up for re-election.

“This is pure rank heresy,” Cunniff says, “but there’s talk of a push from the politicals to not rile up the business community. I don’t imagine that concern will be present in a second term. If the Obama administration continues, I think there would think there would be pretty vigorous enforcement.”

That may well be the case, but the perception that there’s an entrenched constituency against antitrust enforcement can be a bit of an illusion.

Two-way Street

“The funny thing about antitrust is most companies are both producers and consumers—they buy stuff and they sell stuff,” Harkrider says. “Antitrust enforcement usually helps consumers because it’s designed to reduce prices. So a company, when selling a product, wants less competition because they get higher prices, higher margins. But when they’re buying products they want more competition.”

So while companies in general want less antitrust enforcement for their own deals, more enforcement is favorable to them when their suppliers are merging. In other words, they want it both ways. So while politics can play a role in election season, the real driver in antitrust trends is something more straightforward, if just as fickle: the economy.

“If you go back over the hundred or so years of the Sherman Act, you tend to find more anti-competitive conduct in difficult economic times than in boom times,” Wildfang says.

That would certainly explain the significant uptick in antitrust enforcement over the past few years, and point to continued vigorous enforcement for the foreseeable future, regardless of how the cards fall in November.