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Washington – For more than two years, the U.S. Department of Justice’s Antitrust Division has been trying to shake the perception that it’s been snakebitten. In this case, the fangs, as it were, were those of U.S. District Judge Vaughn Walker and his 2004 opinion clearing the way for software maker Oracle Corp.’s merger with PeopleSoft Inc. over the objections of the Justice Department’s trust-busters. Since that decision, in which Walker found that the Justice Department didn’t prove the deal was anti-competitive, the department hasn’t gone to trial to block a proposed merger. In 2006 alone-the fourth-largest in history for mergers and acquisitions, according to Thomson Financial-AT&T Inc. received the Justice Department’s unconditional go-ahead to acquire BellSouth Corp. in a deal that creates a telecom behemoth with $117 billion in revenue; Whirlpool Corp. nabbed Maytag Inc., merging the first- and third-largest makers of home appliances; and agriculture-technology giant Monsanto Co. announced a bid to buy Delta & Pine Land Co., the country’s largest cottonseed producer. “Ever since the Oracle-PeopleSoft decision, the common observation has been that the division has been fearful of taking strong positions against mergers,” said Albert Foer, who heads the American Antitrust Institute, echoing many antitrust lawyers. Some bragging rights It’s a perception that Thomas Barnett, the head of the Antitrust Division, isn’t happy about. “I don’t agree with it,” Barnett said, before ticking off what he views as the division’s major merger challenges over the past year: a pretrial settlement with a dairy company protecting competition in milk sales to a number of schools in Kentucky and Tennessee; a consent decree with Mittal Steel Co. requiring it to sell a Canadian tin plant as part of its purchase of Arcelor S.A.; and another consent decree requiring the sale of six generating plants as part of a merger between two power companies-a deal later blocked by New Jersey state officials. Those actions, of course, are hardly of the magnitude of Oracle-PeopleSoft, the challenge to which Barnett helped oversee as a deputy to then-antitrust chief R. Hewitt Pate. And Barnett, who was confirmed as the division’s assistant attorney general in February, is sensitive to criticism that his division hasn’t been vigorously protecting consumers or playing an active role in public policy. Late last month, the Justice Department issued a release touting the Antitrust Division’s achievements during his first year on the job. (Before his confirmation, Barnett served as the division’s acting chief for several months.) The release highlights the division’s continued crackdown on international price-fixing cartels, which netted nearly $500 million in criminal fines in 2006; its streamlining of the merger review process; and the division’s recent burst of activity before the U.S. Supreme Court (the high court has granted certiorati in seven antitrust cases over the past two terms, an unusually high number) as evidence that its lawyers have been anything but inactive. Barnett also said the division is close to finishing a long-overdue report on antitrust and intellectual property law with the Federal Trade Commission, an agency whose views in that area the Justice Department publicly critiqued in a Supreme Court brief last summer. Despite those activities, it’s the division’s merger-enforcement activity-or relative lack thereof-that is most notable to many antitrust lawyers in private practice. Behind the cautious approach, say these practitioners, is more than just conservative economic thinking about the role of government in the marketplace, but a fear of bringing another big case to trial and losing. “People don’t like to lose big cases,” said Renata Hesse, who worked on the Oracle-PeopleSoft case before leaving the Justice Department for Wilson Sonsini Goodrich & Rosati of Palo Alto, Calif., last year. “When you lose a big case, it makes you step back and look at how you’re doing things.” “The buzz around town was that, after losing the case against Oracle-PeopleSoft that had strong customer support, the division got very worried about its ability to put on an effective merger case at trial,” said William Randolph Smith, who heads the antitrust group at Washington-based Crowell & Moring.

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