US Antitrust Chief Battles Crosscurrents
ANN BINGAMAN came to the Justice Department with guns blazing.Skip to next paragraph
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The Clinton administration's No. 1 corporate watchdog set out 16 months ago to revitalize the antitrust division -- Uncle Sam's check on illegal mergers, monopolies, and consumer ripoffs. It is the bureau that took on Standard Oil and AT&T and stood for a fair shake for small business -- but was cut in half during the Reagan years of ''merger-mania.''
Since then, Ms. Bingaman has opened a record number of investigations. The chief trustbuster has wrestled the Microsoft leviathan, battled Mitsubishi's monopoly on fax paper, and examined price-fixing charges on behalf of rock group Pearl Jam. (Microsoft, Page 9).
Yet Attorney General Janet Reno's assistant is also finding some hard going. Conservatives call her antibusiness. On the other side, Ms. Bingaman is criticized for being all sound and no fury -- particularly in the much-publicized Microsoft settlement she negotiated last summer.
On Tuesday, in fact, a federal judge rejected the settlement that would prohibit Microsoft from anticompetitive licensing practices, saying the scope of the Justice Department's inquiry into the software giant's behavior was too limited:
''Simply telling a defendant to go forth and sin no more does little or nothing to address the unfair advantage it has already gained,'' said Judge Stanley Sporkin, of the Washington federal district.
Still, it is clear that under Bingaman antitrust has become more active. Data obtained by the Monitor show that last year her division began 1,135 civil investigations; the average prior to Bingaman was 450.
The division took on 22 monopoly cases last year -- more than in all four years of the Bush administration. As a former Justice official put it, ''Bingaman came in and told the lawyers to stop dotting the i's and crossing the t's, and to get out and investigate.''
Under two Republican administrations, the antitrust staff had been cut from 1,000 staffers to 500; it is now at 700. Moreover, say current and former employees, the division's confidence had waned because of a lower litigation success record. During the ''merger-mania'' 1980s, prosecuting illegal mergers sank from 185 to 72; monopoly cases dropped from 20 to five.
Bingaman, who came into the post as a civil litigator rather than as the more typical button-down legal scholar, said in a Monitor interview that the conventional wisdom about lax antitrust enforcement in the 1980s is too simplistic. She credits President Reagan's antitrust chief William Baxter with pushing through the break-up of AT&T, ''which revolutionized telecommunications,'' though others say the division was gutted.
So far, the new activity has led to only a modest increase in actual prosecutions. Advocates say she is trying, during a more complex time, to put corporations on notice that they are being watched. ''She has been aggressively clever,'' says former US deputy assistant attorney general Joe Sims, now a Washington lawyer. ''She has settled for a greater number of smaller victories.''
These include innovative deals, and some pioneering international antitrust efforts. A recent MCI/British Telcom case, for example, kept the British market open for AT&T and Sprint; a deal between two Florida health-care companies partly blocked a merger, but helped the firms cut a two-way deal that lowered consumer prices.
Yet the Microsoft case highlights the tougher side of antitrust. Attorney General Reno announced the Microsoft deal with great fanfare last July. Critics said the settlement was too little, too late -- that Microsoft has already established the necessary dominant position. Not to be outdone by critics, even Microsoft owner William Gates said this.
Then, last month, Bingaman defended the deal before Judge Sporkin who, presented with evidence of alleged Microsoft predatory behavior, questioned if Bingaman's inquiry had been broad enough. She argued vehemently that it had -- putting her in the odd position of siding with the corporation she had prosecuted. ''People think she let Bill Gates off the hook,'' says one Justice source. ''They aren't sure why.''