Randomly Noted

Someone very wise and Detroit-savvy once told me that when things seem to be going well at General Motors, just wait a few moments and things will turn sour. Well, yet again GM’s best-laid plans have gone awry: The European Commission’s antitrust boss is challenging Germany’s scheme to subsidize a consortium’s purchase of Opel. Frankly, GM’s not to blame for this snafu, which places Opel’s future in limbo. It’s the fault of Germany’s political and labor pooh-bahs (not to mention Russia’s political bosses) who pressured GM to sell Opel to auto supplier Magna International and its Russian partners.

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DJN has just reported that the Obama administration is looking into supposed anti-competitive issues in the agribusiness industry. Government officials will hold “listening” sessions across the countryside as they examine whether purported concentrations of farm-related businesses violate antitrust laws. ” The WSJ’s Scott Kilman reports on our wires: “Philip J. Weiser, a telecommunications law expert who was recently named deputy assistant attorney general, told a farmer gathering here that federal antitrust regulators are ‘committed to examining’ the level of competition in several agribusiness sectors, such as marketing of genetically modified seeds, dairy processing and meatpacking.” This is the latest in a litany of business practices and alliances Obama’s Department of Justice is reviewing. Some are less spurious-sounding than others; or to put it another way, some issues cry out for antitrust probes; some don’t. Take agribusiness. Exactly who’s getting hurt by the structure and composition of U.S. agribusiness? Not consumers. Americans have enjoyed gloriously low food prices for years. But of course it’s not supermarket patrons the DOJ’s worried about. It’s family farmers – moms, pops and kids living on farms in the midwest, Great Plains and South who have trouble making a living while seed, grain, dairy and livestock distributors and processors rake in all the dough. The Jeffersonian strain in our country’s collective consciousness means every few years we wring our hands over the plight of the family farmer. We need to get over it. The U.S. (and European) contemporary economy just can’t support and sustain small farms without massive taxpayer subsidies. This has been the case for at least 25 years. Continue reading…

The U.S. Department of Justice has come out against pacts pharmaceutical companies reach with generic-drug makers in which the latter are incentivized to delay launching lower-priced generic versions of patented medications. The legal beagles have been arguing the pros and cons of this practice, known as “pay-for-delay,” for a while, and will surely continue to do so, possibly all the way up to the Supreme Court. All I know is these agreements don’t pass the smell test. Paying generics makers enough money so they don’t feel a need to introduce look-alike drugs may in fact be legal, although the DOJ’s antitrust division obviously doesn’t think so. Justice argues in a court filing that it’s anti-competitive to effectively limit consumers’ choices in the marketplace of medicines. Specifically, DOJ says “drug patent settlements should be presumed unlawful,” and the onus is on drug makers to explain why such a pact doesn’t unreasonably restrain competition, reports DJN colleague Brent Kendall. My view: It’s not morally right for companies to take steps that keep new varieties of drugs (eg lower-price generics) from patients who have every reason to expect that a patent expiration will unleash a greater variety of off-patent meds. Yes, of course I recognize Big Pharma needs profits to fund research and development and develop new meds. This isn’t the way to do that. And frankly, in the arena of public relations, where the pharmaceutical industry has failed numerous times, this is certainly a good way to alienate customers.

The  Obama administration is in the early stages of reviewing antitrust issues surrounding big telecoms companies – specifically, their alleged advantage over smaller players in locking up distribution deals with makers of sexy gadgets like Apple Inc.’s iPhone, Palm Pre and, to a lesser extent, BlackBerry Storm. The review, informal at this point, is being conducted by the U.S. Department of Justice, The Wall Street Journal reports. This comes on the heels of last month’s Department of Justice statement of concern about United Airlines and Continental Airlines’ plans to work more closely together as part of the Star Alliance.  Moreover, the DOJ is investigating Google Inc.’s settlement with authors and publishers over its Book Search product. Clearly, the new president is crafting a new approach toward competition issues. Continue reading…