Maximizing DOJ Antitrust Division’s Impact on Innovation: Revitalizing Business Review Letters

By: Barry Grossman & Marla Grossman

In the intricate landscape of commerce, where businesses navigate a myriad of regulations and legal frameworks, lack of ambiguity and clear guidance are invaluable assets. The Department of Justice’s Antitrust Division recognizes this need and offers a vital tool in the form of Business Review Letters. These letters serve not only as beacons of clarity but also as guardians of competition and innovation in the marketplace.

However, recent trends suggest a concerning decline in the issuance of these crucial letters. Reports indicate that the Antitrust Division has not been issuing many business review letters lately. What’s more alarming is that requests for business review letters, some dating back several years, have been left unanswered. Timely issuance of these letters is essential for providing clarity, promoting competition, fostering innovation, and enhancing confidence in the antitrust enforcement process.

Clarity and Guidance: In a climate of uncertainty, businesses rely on clear and concise guidance to navigate the complexities of antitrust laws. Business review letters illuminate the path forward by providing insights into the antitrust implications of proposed actions or transactions.  Companies rely on business review letters to inform their strategic planning and decision-making processes, enabling them to structure their operations in a manner that is legally compliant and aligned with their business objectives. However, the absence of timely responses to requests for these letters leaves companies in limbo, unsure of whether their proposed conduct complies with antitrust laws.

Compliance and Risk Mitigation: Without the guidance offered by business review letters, companies are left to navigate the regulatory landscape with limited clarity. This not only increases the risk of inadvertently engaging in anticompetitive behavior but also undermines efforts to foster a culture of compliance and ethical conduct within the business community.

Promotion of Competition: At the core of antitrust law lies the principle of promoting competition. Business review letters play a pivotal role in this endeavor by encouraging businesses to structure their operations in a manner that enhances competition. However, the lack of clarity surrounding antitrust implications hampers companies’ ability to make informed decisions that promote competition in the marketplace.

Fostering Investment and Innovation: Clear guidance from the Antitrust Division is essential for fostering investment and innovation. Business review letters provide companies with the confidence to pursue innovative strategies and make investments that drive economic growth. However, the delay in issuing these letters stifles innovation and deters companies from making strategic investments due to uncertainty about antitrust compliance.

Transparency and Predictability: Transparency in antitrust enforcement is essential for fostering trust and confidence among stakeholders. Business review letters enhance transparency by publicly disclosing the Antitrust Division’s analysis and conclusions. However, the lack of timely responses to requests for these letters erodes predictability and undermines confidence in the antitrust enforcement process.

Enhancing Public Confidence: A robust antitrust enforcement regime depends on public confidence in the fairness and integrity of the process. Business review letters contribute to enhancing public confidence by demonstrating a commitment to transparency and the rule of law. However, the failure to issue timely responses to requests for these letters undermines confidence in the antitrust enforcement process and erodes trust among stakeholders.

We temper our criticism of the Department’s failure to fully utilize its Business Review program with certain acknowledgements. The Antitrust Division, like many other government agencies, has limited resources, and understandably will prioritize enforcement actions, its primary responsibility, over providing guidance to the business community, a task that it shares with the private bar. The current practice of the Antitrust Division is to assign Business Review requests to the litigation section that deals with the industry in question; within the assigned section, the matter is assigned to attorneys who have numerous other matters on their plate. The reality, however, is that most of the attorneys employed by the Division joined the government to gain experience in investigating and litigating potential antitrust violations rather than providing guidance to private parties. Historically, promotions have come from doing good work on investigations and in trials, not in promptly handling business review requests. In light of the enforcement priorities of the Department and the personal interests and incentives of the attorneys involved, it is not surprising that granting timely business review responses is not given a high priority and that the program has not lived up to its guidance potential.

While recognizing the financial and personal factors that limit rapid Business Review responses, we think that the program could be significantly improved with a few modest changes. The first involves accountability. Currently, no individual within the Antitrust Division bears responsibility for developing or implementing reasonably prompt Business Review responses. The appointment of such an individual in the “front office” of the Division or with the front office’s support would provide the accountability necessary for substantial improvement of the program. Business Review requests could be parceled out, as at present to the section with knowledge about the industry involved, but subject to a reasonable time frame for response, let’s say 180 days. An additional thirty days could be provided for front-office review. Establishing and enforcing such a reasonable time frame would recognize the importance of timely responses by the Antitrust Division while recognizing that the Division has other responsibilities as well. Most importantly, it would encourage businesses to seek advance guidance and thereby attain the public and private benefits that the Business Review prom was designed to achieve.

In closing, the recent decline in the issuance of business review letters by the Department of Justice’s Antitrust Division is a cause for concern. Issuing these letters promptly is crucial for ensuring clarity, stimulating competition, nurturing innovation, and bolstering trust in the antitrust enforcement process. It is imperative that the Antitrust Division addresses this issue promptly to unlock the full potential of antitrust and help maximize the nation’s innovative edge.  We believe that the suggestions set forth above could lead to the revitalization of the Antitrust Division’s Business Review program and help achieve the important public and private benefits for which it was created.

About the authors: Barry Grossman was at the Department of Justice’s Antitrust Division from  1967-2002 and served as the Chief of the Evaluation Section, Chief of the Appellate Section, and Chief of the Communications and Finance Section.

Marla Grossman, Barry Grossman’s daughter, served as Minority Counsel to the Senate Judiciary Committee from 1996-1999 and is currently a Partner at ACG Advocacy.