Department of Justice explains role in agriculture competition
Fort Collins, Colo. – “Unlike the USDA, the Justice Department is not an agricultural regulator, that is not what we do as our primary function. We have a more narrow, but important, role, and that is to enforce antitrust law. We are a voice for competition advocacy,” explains U.S. Department of Justice (DOJ) Attorney General Eric Holder.
“The antitrust laws prohibit conduct that stifles competition, and that’s what we focus on. We want to take aggressive action against conducts that violate those antitrust laws. We think that this will result in better prices for producers selling their livestock and also consumers at the retail level.
“Our enforcement efforts include a variety of things. We challenge mergers, including the 2008 JBS proposed acquisition of the National Beef Packing Company. We fought that acquisition as we felt it lessoned competition among packers for the purchase of fed cattle, and in the production of USDA graded and boxed beef. Again, something we thought would have stifled competition, so we intervened,” explains Holder.
Assistant Attorney General for Antitrust in the DOJ, Christine Varney explains the steps taken when there is a potential antitrust issue.
“On a merger the first thing we do is call the state Attorney General’s offices because they have the state expertise on the ground, and we loop them in depending on where the merger is taking place.
“We have targeted tools in the antitrust division. We have the Sherman Act and the Clayton Act, which describe what we can do when there is a merger that substantially lessons competition. We look at consolidation and we try to determine what are the consequences of the proposed consolidation on the competitive marketplace.
“We have absolutely committed a robust enforcement of the antitrust laws, so when we see a proposed merger that we believe will meet the criteria established by the courts and the law that it will substantially lesson competition, we will challenge the merger.
“It takes a while and is a very fact specific undertaking. We have to get a lot of testimony and do a lot of economic analysis. The DOJ employs the second or third largest number of economists in the U.S. government, and they’re in the antitrust division. We have a very strong ag economics section, where we go through a lot of activity in the sector. We consult very closely with USDA whenever we see a merger, whether it is livestock, poultry or grain – across the board.
“Then we have to go to court. We can’t block a merger on our own; a judge has to agree with us. In the past when we’ve seen a merger that we believe is anticompetitive, many times the parties will simply abandon the merger and not go forward. Other times we have to go to court and litigate, and we put on a heck of a case,” explains Varney of the process her office undertakes when fighting a merger that will lesson competition.
She notes there are those mergers that provide increased efficiency and competition in the marketplace. “We try to distinguish those mergers that are positive and help them through,” she notes.
Holder adds that criminal suits can also be used, and that while they aren’t as common as civil suits, they are another tool the DOJ can utilize to enforce antitrust law.
“Antitrust laws are not a cure-all for the problems that face ranchers and farmers, and we don’t hold ourselves out in that way. But, we think that, in conjunction with other laws and regulations that are more specifically designed to protect those rights of individual farmers, we can work in combination with those laws and our partners at the USDA to be most effective.
“The DOJ, at the base, acts as an advocate for fair competition. We don’t view big as necessarily bad. In our perspective, fairness is the key to ensure there is a level playing field for competitors, whatever their size. We try to encourage more competition and transparency in the agricultural sector. That is the general way in which the DOJ sees its role in this very important sector.”
Information presented at the DOJ/USDA public workshop on competition issues in agriculture, held Aug. 27 in Fort Collins, Colo. on the Colorado State University campus. Heather Hamilton is editor of the Wyoming Livestock Roundup and can be reached at email@example.com.