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Silicon Valley companies are bracing for a tough new phase of antitrust scrutiny, responding to signs of heavier enforcement by the Obama administration and continued pressure from abroad.
A stricter stance against companies that dominate their sectors is likely to test government-relations strategies that technology giants adopted during the Bush administration.
Google Inc., one of the most prominent companies under the watch of antitrust regulators, says its lobbyists and executives since March have met with about 40 groups, including lawmakers, regulators and advertising agencies, to argue that its business practices don't reduce competition. A Google spokesman said the effort is a response to Google's "size and success" not to the new administration.
Intel Corp., which was hit last week by a $1.45 billion fine by European Union antitrust authorities, has been running ads in Washington and Brussels since last year that stress its positive impact on innovation and job creation. In October, the giant chip maker for the first time recruited a government official: Peter Cleveland, who served as chief of staff to Sen. Dianne Feinstein (D., Calif.) and will head Intel's Washington office.
Antitrust lawyers in private practice expect to get more business. "During the Bush administration nobody was interested in hearing about that," said Gary Reback, a Silicon Valley attorney who has been involved in high-profile, high-technology antitrust cases and recently wrote a book on the subject. "As we go forward, we'll hear a lot more about it."
Many tech companies were already following lessons from the treatment of Microsoft Corp., which was accused of monopolistic tactics by the Clinton administration. The software giant fought government oversight but suffered harsh publicity and some major defeats in court.
Some companies followed with a more accommodating approach. Cisco Systems Inc. chose to meet frequently with officials to explain its business. Apple Inc. managed to head off likely criticism in Europe over its music-download restrictions by moving to drop them.
The Justice Department during the Bush administration, which forged a relatively lenient settlement with Microsoft, shied away from antitrust actions aimed at individual companies.
EU regulators became the most aggressive enforcers in recent years. Last week, authorities in Brussels cited Intel for offering rebates to computer makers and a major retail chain on the condition that they buy most of their chips from Intel rather than Advanced Micro Devices Inc. Intel has said it would appeal the ruling.
The EU action came two days after Christine Varney, named by the Obama administration to head antitrust enforcement at the Justice Department, withdrew Bush-era guidance that had helped defendants in antimonopoly suits.
High-tech companies that had adjusted to the Bush administration's antitrust doctrine are now feeling "a little bit of frustration," said D. Bruce Sewell, Intel's senior vice president and general counsel. The chip maker, which faces a Federal Trade Commission investigation in addition to the EU battle, says it has become less clear what business tactics will be viewed as permissible.
While working for the law firm Hogan & Hartson last year, Ms. Varney during a panel discussion said she was "deeply troubled" by Google's acquisition of DoubleClick, a company that serves Web ads, as well as by a proposed advertising deal between Google and rival Yahoo Inc. The deal was abandoned in November after the Justice Department said it would attempt to block it.
Google has said the Justice Department inquired about a proposed class-action settlement Google struck with authors and publishers to digitize books and make them available online. Some authors and publishers contend the settlement makes it more difficult for other companies to launch similar services, an argument Google disputes. And Google General Counsel Kent Walker recently told reporters a discussion is pending with the FTC about whether Google Chief Executive Eric Schmidt's position as an Apple board member violates seldom-enforced regulations against interlocking directorships.
Google's annual spending on lobbying rose to $2.8 million last year from $80,000 in 2003, according to the Center for Responsive Politics.
Some of Google's positions are laid out in a presentation that it has shared with officials and is posted on a company blog. It argues that advertisers still have "many choices in a dynamic market."
The Google spokesman, Adam Kovacevich, said the presentation was a reaction to recent experiences, such as the scuttled Yahoo deal, rather than to the new administration. He said Google has become more proactive about giving regulators a heads up about products that might raise questions. For example, Google told the FTC of plans to offer ads targeted at users' likely interests before it began to do so earlier this year, he said.
Mr. Sewell, of Intel, said the chip maker has been beefing up its presence in capitals with the most potential regulatory impact: Washington, Brussels, Beijing, Moscow and New Delhi.
Intel, which in February pledged to invest $7 billion to upgrade its U.S. plants over the next two years, headlines one of its newspaper ads "Investing in Innovation, Investing in America." A company spokesman said the ads are aimed at creating a positive image for general reasons but aren't particularly in response to antitrust issues.
-----------------------------BY DON CLARK and JESSICA E. VASCELLARO
Source：THE WALL STREET JOURNAL
Write to Don Clark at don.clark@wsj.com and Jessica E. Vascellaro at jessica.vascellaro@wsj.com
Elizabeth Williamson contributed to this article.
Copyright ©2009 Dow Jones & Company, Inc. All Rights Reserved.
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