It looks like presiding over the death of the Yahoo-Google ad deal will be one of the final acts of Thomas Barnett, the Assistant Attorney General who headed the Justice Department’s Antitrust Division since June 2005.
Barnett announced his resignation today, effective Nov. 19.
He earned high praised from Attorney General Michael Mukasey, who commended Barnett for the vigorous enforcement of antirust law that netted $1.8 billion in criminal fines and racked up a record-high 31-month average prison sentence for offenders.
But Barnett didn’t always take such a full-throated approach in antitrust enforcement. After all, it was his division that greenlighted the merger satellite-radio companies XM and Sirius over strenuous opposition from numerous groups who argued that a union of the only two companies operating in a market sector was pretty close to the definition of a monopoly.
Another controversial merger between two close competitors that cleared under Barnett’s watch was that of Maytag and Whirlpool.
Yet with Google and Yahoo, which were not merging, he took a different approach. In that review, he held the view that it would be deleterious to the market if Yahoo were to eventually exit the search-advertising business. One source with knowledge of the talks took issue with that “speculative” market analysis, given that Yahoo went to great lengths to convince regulators that it fully intended to continue to compete in search.
Of course, Barnett will hardly be the only Republican appointee hanging up his spikes as the Obama administration begins to take shape. The countdown to an administration transition is “like rats off a ship,” a Washington tech-policy analyst once told me. Indeed.
Meantime, Standard & Poor’s analyst Scott Kessler, looking ahead to the regulatory climate of the next administration, anticipates “better enforcement of antitrust laws [that] probably means less M&A, which on a net basis is probably not so good for larger firms and neutral for small companies that would be more accounted for, but less likely to receive takeover offers.”
There was no immediate word on plans for Barnett’s replacement.
