On February 11, 2020, the Department of Justice (DOJ) submitted its budget request to Congress for fiscal year 2021, which includes a 13% increase in funding for the Antitrust Division. Overall, the Division is requesting a budget of $188.5 million for fiscal year 2021, a jump of over $20 million from its current funding of $166.8 million. Of particular note is the dramatic increase the Division is requesting for staff, seeking an additional $8.2 million to hire 55 additional attorneys and 32 other staff.

This unprecedented increase in budget and staffing suggests that antitrust enforcement is, and will continue to be, a priority for the DOJ in the near future. While the Division is seeking increased funding for 2021, the DOJ’s overall budget request is down across the agency.

The Division intends to split its resources between civil and criminal enforcement approximately 60/40, with civil enforcement receiving $113 million and criminal enforcement $75 million. The Division explained its rationale in an overview to its budget request, indicating that it expects its merger, monopolization, and cartel enforcement work to continue increasing into fiscal year 2021. As evidence of this need, it pointed to across-the-board increases in merger activity. Total U.S. merger volume hit $1.8 trillion in 2019, up from roughly $1.5 trillion the year before. Additionally, the total number of mergers reviewed by the Division jumped roughly 37 percent between fiscal years 2013 and 2019, increasing from 1,326 to 2,091.[1] Additionally, the Division pointed to its recently announced Procurement Collusion Strike Force (PCSF), designed to investigate antitrust crime in government procurement, as an enforcement priority that will receive additional resources.

The Division has already taken steps to broaden and increase its enforcement activity. It recently posted job listings for trial attorneys to work on its digital markets related investigations.[2]

FTC Budget Request

In contrast to the Division’s plans to increase staffing and enforcement, the budget request of the Federal Trade Commission (FTC) reveals a different set of priorities. The FTC is requesting a competition-enforcement budget of $144.8 million, essentially unchanged from the current year’s appropriations. Likewise, the budget does not suggest that the FTC plans to increase staffing. The budget request was approved by the FTC with a 4-1 vote, with Commissioner Rebecca Kelly Slaughter dissenting. Commissioner Slaughter issued a statement criticizing the budget request, stating that the request “does not adequately reflect the funding the FTC needs to protect consumers and promote competition.”

Takeaways

The Division’s budget request stands in stark contrast to those of recent years. If enacted, it would represent a dramatic increase in both funding and personnel. Specifically, the approximately $167 million in congressional appropriations in 2019 represented a high watermark for the Division. Likewise, the attorney headcount at the Division has remained steady at 335 for the past three fiscal years. The Division’s intention to hire an additional 55 attorneys represents a 16 percent increase in headcount year-on-year.

With its plans to bring on these additional resources, the Division is signaling that it intends to ramp up its enforcement efforts. Recently, the Division has publicly stated that it is prioritizing investigations through the PCSF and of digital platforms, but it is likely that the Division is currently pursuing, or will soon pursue, enforcement actions in other spaces. Assistant Attorney General Makan Delrahim recently commented that the Division will be bringing a criminal no-poach case in the next six months, signifying the Division’s increasingly expansive enforcement efforts.[3] Additionally, after having been quieter than usual in cartel enforcement for the past two years, the Division has significantly stepped up charging actions in the last two weeks, bringing charges involving pharma, electronics components, and government procurement, a signal that the additional litigators may be a part of stronger criminal antitrust enforcement.

As the Division takes steps to increase and broaden its enforcement, it is a good time for companies to revisit their antitrust compliance programs, including their policies and training. In July 2019, the Division announced a major policy change that it will now consider a company’s antitrust compliance program at the charging stage of a criminal investigation and potentially offer a deferred prosecution agreement, a resolution that was not previously available to companies subject to a criminal antitrust investigation.

As discussed further in our client alert, relevant factors the Division will consider are (1) whether the program is tailored to a specific company’s business, (2) whether the program is being applied seriously, and (3) whether the program works. With the Division now promising to offer benefits to companies with robust and well-implemented compliance programs, there is now a strong incentive to re-invest in antitrust compliance, especially with the specter of dozens of additional enforcers at the DOJ focused on bringing new actions.

[1] Joshua Sisco and Dave Perera, To fight antitrust violations, DOJ wants more money, while FTC seeks status quo, MLex (Feb. 10, 2020), https://www.mlex.com/GlobalAntitrust/DetailView.aspx?cid=1161577&siteid=191.

[2] Id.

[3] Brent Kendall, U.S. Targets Drug Pricing, No-Poach Deals for Antitrust Action in 2020, Wall Street Journal
(Jan. 15, 2020), https://www.wsj.com/articles/u-s-targets-drug-pricing-no-poach-deals-for-antitrust-action-in-2020-11579124098.

[View source.]