U S Merger Enforcement In An Economic Crisis

U. S. Merger Enforcement In An Economic Crisis Global Competition Conference Wm. Randolph Smith Crowell & Moring LLP May 15, 2009 Privileged and Confidential

“That Was Then, This Is Now” » Candidate Obama: As president, I will - “reinvigorate antitrust enforcement, ” and - “step up review of merger activity. ” » President Obama: - “the state of our economy is a concern that rises above all others, ” so - “our single most important priority is bringing about economic recovery. ” Privileged and Confidential 2

When The Past Is Not Prologue » Merger analysis is about predicting the future » Relies on past performance (e. g. , market shares) » Most important question today: - Do past shares accurately reflect future competitive significance? Privileged and Confidential 3

Too Big To Fail? Or Efficient Enough Not To? » Many markets have experienced dramatic decreases in demand » New economic reality will not support existing supply base » Can 2 competitors right-size production more efficiently together than individually? Privileged and Confidential 4

Implications for New Administration » AAG Christine Varney and FTC Chair Jon Liebowitz have close ties to White House and Capitol Hill » First step is to support economic recovery » Enforcement legacy comes later Privileged and Confidential 5