As covered previously on Law Street, federal antitrust enforcement is handled by two different departments: the Department of Justice (DOJ) and the Federal Trade Commission. While their purviews overlap, the two are rarely in conflict according to a 2023 Government Accountability Office report.
This article examines an important subset of the DOJ’s antitrust enforcement since 2001 – cases in which federal, state, or local governments are directly impacted by the alleged monopolistic or oligopolistic behavior. Data from the agency indicates that the percentage of total antitrust cases filed by DOJ that concern the government itself varies significantly, with up to 40% of cases concerning contractors in 2009.
Notably excluded are cases where “gun-jumping,” or failure to file Hart-Scott-Rodino pre-merger notifications were charged, since the governmental interest in these cases is as a regulator, not a purchaser or seller of goods or services.
Looking at the raw case numbers over time, the Bush administration saw considerable variability with an average of 10.25 cases per year during his first term and 16.25 cases per year during his second. The peak came in 2008.
The Obama administration began with their highest cases in a given year (23 cases in 2009), and fewer and fewer cases were opened in the following years. The Obama DOJ averaged 15 cases per year in his first term and only 3.75 cases per year in his second. The Trump administration, mirroring their steep dropoff in total cases opened, only averaged 2 cases per year, and in 2019 did not open a single case.
The Biden administration thus far has seen an uptick in cases opened, particularly in 2021. When looking at the percentage of cases that this subsection represents since 2001, they largely track with the raw numbers. This suggests these cases are independent of the total antitrust cases the DOJ opens. Furthermore, there is no significant correlation between the number of total cases opened in a year and the number of cases in which a governmental body was involved.
It is unclear, based on this data, if variance in these cases is due to the presence or absence in monopolistic or oligopolistic activity regarding governmental bodies, or simply how much the DOJ is enforcing antitrust law.
Of all the cases examined in this analysis, 195, or 97% concerned alleged criminal antitrust conduct, such as a number of parties agreeing to rig bids for government contracts. Only 6 cases, or 3%, involved the DOJ stepping in to stop a merger. Of these 6, half concerned defense contractors. The remainder consisted of mergers between companies producing raw materials for infrastructure consumption, namely sand, gravel, and stone.
Breaking down all the cases by sector, Departments of Defense and Homeland Security contractors made up the plurality of all cases, particularly during Bush’s second term and Obama’s first. The Bush administration prosecuted six and the Obama administration two cases against defense contractors manufacturing fenders, buoys, and pilings for the Coast Guard and Navy. The Bush administration also opened five cases against manufacturers of metal sling hoists used by the Navy and eleven cases against logistics providers in Iraq. The Bush and Trump administrations each prosecuted three cases against fuel suppliers in the Middle East and Korea respectively. The Obama administration prosecuted four cases of corruption at the Bagram Air Field and two at Camp Arifjan. And the Biden administration has thus far opened three cases against security guard companies for Department of Defense contracts in Belgium.
Infrastructure construction and development followed, especially during Bush’s two terms. However, these cases are fairly piecemeal and do not consolidate into significant clusters. Most are batches of one to four cases for various state- and municipality-run road or utility projects. The other six consist of two cases surrounding US wastewater infrastructure development in Egypt as part of the Camp David Accords under Bush and four cases concerning security guards concerning the New York Power Authority under Obama.
In breaking down the educational resources segment, both Bush and Obama prosecuted twenty-one cases in total against individuals and companies defrauding the Federal Communication Commission’s E-Rate program, which helps public schools and libraries obtain telecommunications equipment. The Bush administration prosecuted eight cases surrounding a late 90’s conspiracy in which grocers rigged bids for food served at New York City public schools.
For state-held auctions, the majority were the one case during the Bush administration and the sixteen cases during the Obama administration concerning bid rigging at tax lien auctions around the country.
And for remediation, the Bush and Obama administrations opened four cases each concerning environmental recovery efforts at the former Federal Creosote Superfund Site
If anything, this analysis undercounts the number of cases in which governmental bodies had a stake in the purported trust. Not included are cases in which the government might be affected downstream of the trust. For example, a hypothetical conspiracy restricting trade of semiconductors would not be included even though it could affect governmental bodies since they might have to pay more for work computers. Also not included are cases in which a governmental body was affected, but that impact is not mentioned in court documents.