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Varney Defends Department’s Approval of Controversial Tech Mergers Varney Defends Department’s Approval of Controversial Tech Mergers

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Technology / TECHNOLOGY

Varney Defends Department’s Approval of Controversial Tech Mergers

(Alex Wong/Getty Images)

photo of Juliana Gruenwald
July 12, 2011

The outgoing head of the Justice Department’s Antitrust Division on Tuesday defended her division’s approval of some major tech and telecom mergers, saying imposing conditions on those deals to address antitrust concerns has helped consumers and promoted innovation.

“It is possible to achieve outcomes that benefit consumers and allow transactions to go forward when parties agree to well-designed conditions that preserve competition,” Assistant Attorney General Christine Varney told the Center for American Progress. Varney announced last week that she plans to leave her post next month to join a law firm.

Varney’s division has approved some of the biggest tech and telecom mergers in recent years, including Comcast’s acquisition of NBC Universal and Google’s purchase of ITA Software. She said Justice was prepared to sue to block those deals, along with Ticketmaster’s merger with concert promoter LiveNation, until the parties involved agreed to conditions that addressed the agency’s concerns.

 

She described the department’s approval in January of the Comcast-NBCU deal as a good example of the agency’s "pragmatic and forward-looking" approach.

“As originally proposed, the joint venture between NBCU and Comcast would have allowed Comcast, the largest cable company in America, to limit competition by either withholding or raising the price of NBCU content and effectively stifling new competition in the online video market,” Varney said. She said that after hearing the department’s case against the merger and its willingness to sue to block it, the companies agreed to conditions that she said preserve competition in the online video market without regulating how it would work.

In response to a question about how to enforce antitrust laws against tech companies, Varney responded that regulators need to proceed cautiously when it comes to fast-moving markets like the tech industry. “You need to have a scalpel, not a bludgeon,” she said. “These industries move very quickly, and what you don’t want to see is regulation that has unintended technology consequences. What you want to see is enforcement that keeps markets open and competitive.”

The Antitrust Division is currently reviewing AT&T’s proposed acquisition of T-Mobile USA, and Varney said she did not believe her departure would affect it. “We have a terrific team in place that is very diligent and doing a great job,” she said. “I don’t see any change in their ability to conduct their review and proceed appropriately.”

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