“Enhanced enforcement is going to continue throughout this administration, and there are several factors that play into that,” said Latham & Watkins partner Lawrence Buterman. “The DOJ’s Antitrust Division has been quite successful over the past four years in trying both civil and criminal matters. As a result, attorneys at the Division have more trial experience than ever, and are more focused on putting cases together for litigation.”
Buterman represents and advises multinational companies in all aspects of antitrust litigation and compliance matters, including strategic B2B litigation, price-fixing accusations by both private plaintiffs and governments, merger challenges and other forms of private damage antitrust litigation. He joined Latham in 2014 from the US Department of Justice (DOJ) Antitrust Division’s Networks and Technology Enforcement Section, where he successfully tried multiple merger and conduct matters on behalf of the government.
In this lw.com interview, Buterman looks at the Obama Administration’s approach to antitrust enforcement, its influence on private action and what types of cases the Division may be looking to litigate in 2015.
How would you describe the Obama Administration’s approach to antitrust enforcement?
Buterman: The Obama Administration has been more aggressive in terms of antitrust enforcement compared to prior administrations. On the civil side, the Division has brought challenges to high-profile mergers in industries such as telecommunications, beer and airlines, and it has sued to address conduct in various technology industries. While many of those cases settled before trial, the Division has fully tried four civil cases in the past four years. Three of those cases they won, and the fourth, which is the U.S. v. American Express case, is awaiting a decision. In contrast, between 2005 and 2010 the Division didn’t have any trials on the civil side.
On the criminal side, the Division’s Leniency Program remains the most powerful tool for antitrust prosecutors in terms of developing cartel cases. In part based on information gathered through the Leniency Program, the Division has successfully tried numerous criminal cases in recent years, obtained unprecedented fines and convictions, and in 2014 even obtained its first extraditions for antitrust violations. The Antitrust Division has been bolstered by all of these successes, and is thus likely to continue to be aggressive in bringing matters and seeing them all of the way through.
Has government antitrust action in recent years served as an impetus for private action?
Buterman: In recent years we’ve seen the government open up civil and criminal investigations in a variety of sectors, including financial, manufacturing and technology. Regardless of whether those investigations led to actual governmental action, we have seen private plaintiffs use information gleaned from the government investigations, as well as the mere fact of the government investigations, in bringing their own cases. Those private cases can go on for years after the government has concluded its inquiries.
If faced with an antitrust enforcement action, why is it critical for a company to involve trial counsel early on in the process?
Buterman: Civil enforcement cases can be and have been lost during the DOJ investigation phase. While oftentimes accommodating the Division from the outset by providing information, making presentations and making individuals available for interviews makes sense, a monolithic strategy of cooperation is imprudent. The reality is that over-cooperating can sometimes hurt a client by providing the Division with more ammunition in order to build a potential enforcement action. In every investigation, companies need to analyze what strategy makes most sense.
This is an area where I think there is a real difference between civil and criminal. The Division’s criminal Leniency Program sets forth what information can be provided in terms of cooperating that will lead to the client receiving leniency in a criminal matter. On the civil side there is no corollary and as a result, providing the Division with everything that it asks for in a civil matter may not be to the client’s best interest.
I believe that companies should bring in trial-savvy litigators from the very outset — to show the Antitrust Division that you are serious about litigation and to protect your interests. It’s important because from the first moments, the Division is analyzing a matter in part based on the likelihood that it will be successful in litigation. Private parties that are not approaching an investigation in a similar mindset are doing themselves a disservice. I have seen on multiple occasions clients struggling to move away in litigation from arguments they made in investigations — arguments that they never would have put forth if they had been vetted by antitrust trial counsel.
How have investigative depositions changed in nature during the past few years?
Buterman: When I joined the Antitrust Division in 2010, investigative depositions were really viewed as information-gathering exercises. Those depositions were often conversational, and provided parties with opportunities to make their arguments as to why a transaction or conduct was not problematic. But as time has gone on that has changed. Today, I would say that most people in most cases would find that there is not much difference between the depositions that the Division takes during an investigation and the depositions that they take during the litigation. They are both case-building exercises.
Are there any particular types of cases that you anticipate the Division will be litigating in the coming year?
Buterman: It’s interesting to see what has been transpiring in recent years on the merger side. The reality is that technological advancements are creating competition and synergies between companies where they did not traditionally exist. That is, in many instances, both driving merger activity and greatly complicating merger reviews for the DOJ. I think you see this most clearly with some of the telecommunications and media transactions that have been announced in the past year, where the Division has been forced to grapple with non-traditional market definitions and conduct extensive vertical analyses. Yet, when it comes to bringing enforcement actions and litigation, the Division has focused on more traditional horizontal cases, and has contested market definition arguments that sought to reflect those technological realities. I think that will continue in 2015, though it is certainly possible that a negative outcome for DOJ at trial could cause a bit of a sea change.
On the criminal side, we should see a fair amount of increased action in the financial sector, and specifically with respect to the Division’s probes into alleged manipulation of various financial benchmarks and exchange rates. Several financial institutions have already sought to resolve their potential exposure, and the Division reportedly has begun targeting individuals for their involvement in the suspected activities. There appears to be an unprecedented level of cooperation among different US and European regulators in these probes, and that will only operate to strengthen the Division’s cases. And, of course, the Leniency Program will continue to operate as a strong incentive for parties to self-report anticompetitive conduct, and form a solid basis for cartel investigations.