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Last month we reported on the antitrust views of Sen. Barack Obama and former Sen. John Edwards, focusing largely on their written statements to the American Antitrust Institute. Since that time, Sen. John McCain has emerged as the frontrunner for the Republican Party presidential nomination, while Sen. Hillary Clinton and Obama continue to fight for the nomination on the Democratic Party side. Getting a firm handle on these candidates’ antitrust views is challenging, despite the continuing dialogue regarding the nation’s economy during this historic election year. For instance, neither candidate has submitted an antitrust position statement to the AAI, despite a second invitation by the organization, published only a few weeks ago. Nor has antitrust been a theme during the numerous television debates. As described in a recent BusinessWeekarticle, antitrust is the “sort of topic that makes voters’ eyes glaze over, so it rarely gets attention on the campaign trail.” Therefore, in this second article, we will look at public statements and legislative actions taken during the U.S. Senate careers of both McCain and Clinton to gather some insight into what role antitrust may play in either a possible McCain or Clinton administration. MCCAIN Although a member, and former chairman, of the Senate Commerce Committee, McCain has been described as the “hardest to predict” when it comes to a specific antitrust stance. While he “talks tough” on business issues, according to a recent Reutersarticle, his public statements focus on wrongdoing within big business, such as fraud and waste, rather than a general opposition to big business itself. In fact, our search for McCain’s antitrust views took us back to the 2000 presidential campaign, when the AAI published an article questioning why, in the wake of U.S. v. Microsoft, antitrust had not arrived as a salient political issue during that election year. Nevertheless, the article does provide some clues into how a McCain administration may approach antitrust legislation and enforcement. For instance, the AAI article commented that during the 2000 Republican primaries, McCain “emerged as far more pro-enforcement than [current President] Bush.” However, the AAI article also noted that neither McCain nor Bush “appeared particularly well-briefed on antitrust, probably because it was not an issue they were forced to address.” “Not needing to be well-briefed,” the AAI noted, “[Bush and McCain] did not rely upon any particular advisers.” Perhaps signaling a change from 2000, McCain has signed on a notable antitrust adviser for his current campaign. James F. Rill, a former assistant attorney general for the antitrust division of the U.S. Department of Justice, who served from 1989 to 1992 under former President Bush and has been a vocal critic of Obama’s AAI statement (as reported in Part I of this article), was announced as a McCain economic adviser in July 2007. The above-mentioned AAI article also reported, quoting BusinessWeekand Wall Street Journalinterviews, that McCain would “update the [antitrust] laws” if elected and that he expressed a “fervent” belief in competition. According to McCain, the “only thing worse than regulation is an unregulated monopoly.” Such statements led the AAI to compare McCain’s antitrust views with those of trust-buster Teddy Roosevelt during the 1912 presidential campaign. McCain was also reported as saying that, if elected, he would pursue a vigorous policy of reviewing mergers. For instance, during the 2000 race, he told BusinessWeek: “I say to Corporate America: I am worried about these [telecommunications] consolidations. These mergers are the biggest in history. I want them watched carefully, and I want them carefully reviewed. I am a free trader, and I am antiregulation. But I do read history and I know there have been times these consolidations have hurt consumers.” This statement is consistent with McCain’s decision to sponsor the Telecommunications Merger Review Act of 1999. Along with his co-sponsors, Sens. Orrin Hatch and John Ashcroft, McCain introduced the TMRA to “make the government’s review of telecommunications industry mergers more coherent and effective.” Specifically, the TMRA sought to limit the Federal Communication Commission’s role in telecommunications mergers while preserving the broad authority of the Justice Department and Federal Trade Commission to independently review merger activity. The problem, according to McCain, was the FCC’s efforts to “[bootstrap] itself into the unintended role of official federal dealbreaker” in telecommunications mergers by “using its authority to impose conditions on the FCC licenses that are being transferred as part and parcel of [an] overall merger deal.” McCain was concerned that the FCC was using its power to pre-approve license transfers to place “burdens and restrictions on the merging companies that translate into higher costs for consumers.” Under the bill, the FCC, among other things, would be precluded from imposing terms and conditions on license transfers in telecommunications mergers already being reviewed by the Justice Department or FTC. Nevertheless, no congressional action was ever taken on the TMRA, following its May 26, 1999, introduction. McCain was also a staunch opponent of the proposed $11.6 billion merger between United Airlines and US Airways in 2000. McCain not only introduced a resolution in the Senate opposing the merger but was quoted as saying, “I cannot think of any marketplace that works better for consumers with few competitors … Apart from the ability of three bigger carriers to wield significant market power, especially at hub airports, new entry would probably become more difficult in a concentrated industry.” The merger was eventually called off in July 2001, after the Justice Department announced that it would move to block the deal. Looking outside the telecommunications and airlines industries, a McCain administration may also use the antitrust laws in non-traditional ways. In 2005, McCain said, “I have no problem with Congress examining steroid use in baseball given the league’s antitrust exemption. … If the owners of these teams have knowingly turned a blind eye toward illegal steroid use, then Congress has the right to question their exemption.” McCain similarly called for a review of baseball’s antitrust exemption after the baseball strike of the mid-1990s. McCain has also considered using the antitrust laws as a way to regulate content in the movie, music and videogame industries. On June 16, 1999, and again on May 2, 2000, McCain and Sen. Joseph Lieberman introduced legislation, known as the Media Violence Labeling Act, to amend the antitrust laws to allow these industries to join together and introduce a voluntary rating system for violent programming. While neither bill became law, both bills were part of McCain’s efforts to speak out against, what he saw, as the negative effects of violent programming on children. In sum, while McCain has not outlined a specific antitrust policy for the 2008 campaign, antitrust enforcement has surely played a part in McCain’s senatorial career in both traditional and non-traditional ways. CLINTON While Clinton, as noted above, has not stated her antitrust views to the AAI, she is the only remaining 2008 presidential candidate to weigh in on the recent U.S. Supreme Court decision in Leegin Creative Leather Prods. Inc. v. PSKS Inc. In that controversial 2007 decision, the court disposed of a 96-year-old absolute ban on minimum resale price floors on products and changed the legal rule by which certain vertical price restraints are to be judged. Under the former rule, minimum pricing floors were per se illegal, but because of Leegin, such practices are now evaluated under the more difficult to prove rule of reason analysis. However, on Oct. 30, 2007, Clinton, along with Sens. Herb Kohl and Joe Biden, introduced legislation to, according to the senators, “correct the Supreme Court’s mistaken interpretation of the Sherman Act in the Leegindecision.” The proposed law is based, in part, on the concern that abandoning “the rule against resale price maintenance will likely lead to higher prices paid by consumers and substantially harms the ability of discount retail stores to compete.” If passed, the Discount Pricing Consumer Protection Act would restore the ban on minimum resale price floors and negate the Leegindecision by adding the following language to Sherman Act: “Any contract, combination, conspiracy or agreement setting a minimum price below which a product or service cannot be sold by a retailer, wholesaler, or distributor shall violate this act.” Reaction to the bill has been mixed. In an article published by the Global Competition Review, one commentator called the bill “a political move,” while another source viewed it as a “real attempt to change the law.” Nevertheless, the same source explained that, if passed, the resulting law would likely harm consumers because even though resale price agreements raise prices, they will also likely result in higher quality goods and benefit to consumers, as the majority of the Supreme Court found in Leegin. The Discount Pricing Consumer Protection Act is not the first time Clinton has taken action to amend the Sherman Act. She voted to pass the No Oil Producing and Exporting Cartels Act of 2007, which amends the Sherman Act to “prohibit any foreign state or entity from restraining of trade if such action has a direct, substantial, and reasonably foreseeable effect on the market, supply, price, or distribution of oil, natural gas, or petroleum product in the United States.” The act became law in December 2007. Notably, McCain did not take part in the vote. Finally, Clinton recently commented on the wave of airline mergers that could potentially be announced in the months approaching the election. On Feb. 25, 2008, BusinessWeekreported that Delta Airlines, Northwest Airlines, Continental Airlines and United Airlines are among the carriers discussing mergers. Speaking on Feb. 14, 2008, according to BusinessWeek, Clinton said that mergers in the airline industry should prompt “a hard look at the potential effects on workers” before they’re approved. Because airline mergers have received close scrutiny in the past, including the United Airlines and US Airways merger that was described above and opposed by McCain, history could repeat itself. Therefore, it remains unclear whether a democratic or republican White House will result in stronger antitrust enforcement. However, the records of McCain and Clinton demonstrate that both have been active in this area, sometimes speaking out against business combinations within the same industry and sponsoring related legislation. Hopefully, in the next few months, the candidates will weigh in more about the important antitrust issues that impact all companies and consumers. Stay tuned. Carl W. Hittinger is a partner in the litigation group at DLA Piper in its Philadelphia office, where he concentrates his practice in complex commercial litigation with particular emphasis on antitrust and unfair competition matters. Hittinger is also a frequent lecturer and writer on antitrust issues and has extensive experience counseling clients on all aspects of civil and criminal antitrust law. He can be reached at 215-656-2449, or [email protected]. Matthew A. Goldberg is an associate at the firm �s Philadelphia office and his practice involves a variety of complex commercial, product liability and antitrust litigation matters.

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