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The White House formally nominated Thomas O. Barnett to be the top gun at the Justice Department’s antitrust division, an announcement greeted with enthusiasm by antitrust lawyers in Washington. Barnett is a former partner at Covington & Burling’s antitrust group, and is expected to be confirmed without conflict. Barnett, now the acting assistant attorney general, faces confirmation hearings before the Senate Committee on the Judiciary, the same committee reviewing Judge John Roberts’ nomination to become a justice for the Supreme Court. The hearings for Roberts are likely to be contentious, making the timing of Barnett’s confirmation uncertain. Before becoming acting antitrust chief, Barnett was a deputy assistant attorney general for civil enforcement. Antitrust lawyers said that, if confirmed, Barnett is likely to continue the course laid out by his predecessor, R. Hewitt Pate, who left in June to return to his old firm, Richmond, Va.-based Hunton & Williams. Barnett has spoken extensively about his perspective on the mission of the antitrust division, which shares federal antitrust enforcement duties with the Federal Trade Commission. In line with most Republican administrations, Barnett has said the top priority of the DOJ’s antitrust enforcement policy is breaking up and preventing cartels, a criminal activity where it, not the FTC, holds full authority. “Companies that participate in such cartels are committing a fraud against their customers and deserve severe penalties,” Barnett said in a speech to the American Bar Association in November. The effort to eradicate cartels generated $350 million in criminal fines from 17 different corporations and 15 individuals in fiscal 2004, the second-highest in division history. In addition, U.S. courts ordered defendants to pay more than $18 million in restitution, and sentenced 20 individuals to serve a total of 7,334 days in prison. Although reviewing mergers remains a key focus at the DOJ, Barnett said he expects an increasingly smaller share of deals to warrant extended antitrust reviews. There has been a “slight uptick” in the number of mergers, he said, but investigations, second requests for information and efforts to block deals have not risen accordingly. “In real numbers, we initiated 89 investigations, issued second requests in 15 of those cases and challenged eight transactions,” Barnett said. “One can infer from the increase in filings, but the lack of an increase in challenges, that we are not seeing a significant increase in horizontal mergers between sizable competitors.” Antitrust lawyers predict Barnett will join an effort to improve and streamline the merger review process begun by Pate and former FTC Chairman Timothy J. Muris and continued by current FTC Chairman Deborah Platt Majoras. Majoras, a former deputy assistant attorney general at the antitrust division, has urged greater cooperation between the agencies. Among Barnett’s concerns about the merger review process is the sometimes shoddy compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which spells out merging companies’ obligations for notifying regulators. “Without adherence to merger filing laws, parties may seek to complete mergers harming consumers before the government has had a chance to stop the merger to prevent increased prices to consumers,” Barnett said. As a result of stepped-up enforcement efforts, the dollar level of merger filing penalties assessed by the division has increased 26 percent over the past four years. As deputy assistant attorney general, Barnett also led the agency’s efforts to block Oracle Corp.’s acquisition of PeopleSoft Inc., which the DOJ lost in a California courtroom. While the decision in that case was controversial, Barnett has continued to insist the agency was correct in trying to block the merger, although the judge said the agency didn’t provide the necessary proof of likely anti-competitive harm. That decision, Barnett said, will not dissuade the DOJ from blocking potentially harmful mergers in the future. Additionally, he continues to support the use of customer testimony and internal company documents as evidence even though the judge in that case didn’t find the evidence persuasive. “In some cases it is not possible to perform some of these more sophisticated economic analyses and the lack of these tools certainly does not immunize such transactions from antitrust scrutiny,” Barnett said. “While it is true that this particular judge found our customer evidence unpersuasive, another judge may have felt differently. We will continue to talk to customers, to solicit their views and to integrate their testimony into our analyses and court challenges.” Barnett also said that intellectual property and its interplay with antitrust law will remain an important issue for antitrust lawyers. This is true in both domestic and international forums. Copyright �2005 TDD, LLC. All rights reserved.

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