Mergers & Antitrust Law News

Amazon, Facebook Poach Justice Dept. Staff Amid Antitrust Scrutiny

Nov. 27, 2018, 10:46 AM

AT&T Inc., Facebook Inc., and Amazon Inc. are padding their antitrust expertise by poaching from the government.

All three tech giants have recently hired top Justice Department antitrust division lawyers, resulting in something of a brain drain at the agency.

The hirings could hinder the department’s antitrust enforcement powers at a time when large tech companies’ market dominance is coming under greater scrutiny. But adding the government’s experts to their payrolls could help the companies self-check their exposure to antitrust risk, Makan Delrahim, the DOJ’s assistant attorney general for the antitrust division, told Bloomberg Law.

The antitrust division, in the last three months, lost three high-ranking officials to big tech firms. Bryson Bachman, senior counsel to Delrahim, left for Amazon. AT&T scooped up Brinkley Tappan, another counsel to Delrahim. Kate Patchen, chief of the antitrust division’s San Francisco office, is now at Facebook.

The three officials “would help minimize anticompetitive conduct” at their new employers, Delrahim told Bloomberg Law. The companies can lean on the new employees to help boost their knowledge on compliance and antitrust risks, he said.

The departures aren’t “concerning,” Delrahim said. The division continues to employ “high caliber applicants and additions.”

Facebook, AT&T, and Amazon did not return Bloomberg Law’s requests for comment.

DOJ staff, including heads of the antitrust division, typically leave government posts for in-house counsel roles or go on to powerhouse antitrust firms. For example, Christine Varney, the antitrust division chief from 2009 to 2011, moved onto Carvath, Swaine, and Moore, and represented Time Warner Inc. during its fight to merge with AT&T.

Still, the turnover at the DOJ in recent months is atypical, Michael Carrier, professor at Rutgers Law School who specializes in antitrust issues, told Bloomberg Law. “We don’t typically see three front office members leave in such quick succession to go to companies subject to antitrust scrutiny,” he said.

Navigating Shifting Water

The sudden antitrust hiring binge could be attributed to the growing spotlight on the tech industry’s dominance and influence, Carrier said.

President Donald Trump said Nov. 4 that Facebook, Amazon and Alphabet Inc.'s Google were under review by the government for potential anti-competitive conduct. AT&T continues to litigate over its closed merger with Time Warner, after the DOJ appealed a district court’s decision to allow the deal to proceed.

“Big tech firms realize they’re under a microscope these days and probably believe that former DOJ front office staff could help them navigate the quickly-shifting water of antitrust scrutiny and potential liability,” Carrier added.

Companies, when under antitrust pressures, need representation from immediately credible sources, notably former DOJ and FTC staff, Tad Lipsky, a former Federal Trade Commission and DOJ antitrust official, told Bloomberg Law. “There is no question that when companies begin to encounter antitrust questions that are important to their business models, eventually a realization sets in,” said Lipsky, who is a professor at George Mason University’s law school.

The FTC and DOJ, who share antitrust jurisdiction, are more likely to be confident of a company’s legal approach when it’s spearheaded by a former government lawyer, Lipsky said.

Companies, in turn, may gain greater insight to the DOJ and FTC’s antitrust perspectives, Lipsky said. “When an agency official becomes a trusted counselor, there is often a willingness and ability to understand and accept how the government arrives at its point of view and why it acts as it does,” he said.

To contact the reporter on this story: Victoria Graham in Washington at vgraham@bloomberglaw.com

To contact the editor on this story: Roger Yu at ryu@bloomberglaw.com

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