Vanderbilt Law Review

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Shortly after taking office, President Barack Obama announced that his Administration would pursue a policy of vigorous antitrust enforcement in order to ensure healthy competition in the economy.' In two of the highest-profile antitrust cases that have followed, the United States Department of Justice ("DOJ") sought to block two proposed mergers in which the target companies were low-cost competitors in their industries. The DOJ won a judgment in November 2011 that blocked retail-tax giant H&R Block from acquiring 2nd Story Software, maker of the low-cost digital tax- preparation program TaxACT. A month later, the DOJ scored another "victory" when AT&T dropped its bid to acquire the low-cost telecommunications provider T-Mobile USA.

These enforcement actions provide a relatively rare glimpse into the government's interpretation of section 7 of the Clayton Act,5 which is designed to stop potentially problematic mergers before the reduction in competition causes consumers harm. Since the acquiring firm in each of these proposed mergers was the second largest in its industry, the mergers could have been seen as facilitating competition by making the second-place firms more efficient or innovative and thus more capable of competing against the first-place firms. But the DOJ did not see the mergers that way. Instead, the DOJ moved to protect the low-cost competitors from acquisition on the theory that their independence was an essential ingredient for competition in the industry.

These markedly similar enforcement actions might suggest that the government has a new focus in antitrust enforcement; at very least, they provide a ripe opportunity to identify and evaluate the specific theory of anticompetitive harm that the government argued in those cases and might argue in the future. This Note refers to that specific theory as "the maverick-firm theory of anticompetitive harm." Both federal agencies in charge of antitrust enforcement-the DOJ and the Federal Trade Commission ("FTC")-use the "maverick" label to refer to firms that play a special competitive role in their industries and thus require protection under antitrust law. In United States v. H&R Block, for instance, the court observed that the government had committed quite heavily to this maverick-firm theory of anticompetitive harm: "The parties have spilled substantial ink debating TaxACT's maverick status." It is axiomatic, then, that the persuasiveness of this theory depends on how the government defines a maverick firm and whether that definition can accurately identify specific firms whose independence is truly essential for healthy competition. Otherwise, as the court noted, this label "amounts to little more than a game of semantic gotcha."

The first goal of this Note is to show that neither the government nor any other legal authority has offered a persuasive definition of a maverick firm. A natural first place to look for a definition is in the 2010 Horizontal Merger Guidelines, the joirit publication of the DOJ and the FTC that "describe[s] the principal analytical techniques and the main types of evidence on which the Agencies usually rely to predict whether a horizontal merger may substantially lessen competition."0 Indeed, the 2010 Guidelines do define a maverick firm as "a firm that plays a disruptive role in the market to the benefit of customers.