Jon Leibowitz and Ruth Marcus married in 1994. They were the perfect Washington power couple: He was chief counsel to Sen. Herb Kohl (D-Wisc.) and she was a White House correspondent for the Washington Post. Sure, they were just cogs in the establishment, but they were still part of America's ruling class. And over the next decade-and-a-half, they solidified that standing. Marcus – who has worked at the Post for twenty-six years – rose through the ranks to become a member of the paper's editorial board and a regular op-ed columnist. Leibowitz remained with Sen. Kohl until 2000, when he joined the "private sector" as a lobbyist for the copyright industry (aka the Motion Picture Association of America). But in 2004 he returned to his natural habitat, the government, when he received one of five seats on the Federal Trade Commission.

On June 2, S.M. Oliva filed a "friend of the court" brief with the Federal Trade Commission supporting William Isely's application for an award of attorney fees and related expenses. The FTC previously charged Isely with operating a website that contained statements the Commission disagreed with. The FTC's administrative law judge found that Isely did not own, operate, or control the website, thus he was not liable for its content. The same judge, however, denied Isely's application for attorney fees, citing the FTC was "substantially justified" in prosecuting Isely in the first place. Isely appealed this decision to the five FTC commissioners. Oliva's brief supports Isely's appeal.

The electronic version of the brief, as filed with the FTC, can be viewed at this link.

As I’ve long suspected, “health care reform” has emboldened the Justice Department to take a more active role in enforcing government price controls against physicians. Last week the Antitrust Division, joined by Idaho Attorney General Lawrence Wasden, forced a a group of Boise orthopedists to accept price controls for worker’s compensation and HMO contracts as part of a settlement accusing the doctors of “price fixing”:

According to the complaint, the conspiring orthopedists engaged in two antitrust conspiracies, which took place from 2006 to 2008. In the first conspiracy, through a series of meetings and other communications, the orthopedists agreed not to treat most patients covered by workers’ compensation insurance.

They entered into a group boycott in order to force the Idaho Industrial Commission to increase the rates at which orthopedists were paid for treating injured workers. The Idaho Industrial Commission sets the fee schedule that determines the amount that orthopedists and other healthcare providers usually receive for treating patients covered by workers’ compensation insurance. The boycott resulted in a shortage of orthopedists willing to treat workers’ compensation patients, causing higher rates for orthopedic services.

In the second conspiracy, all of the defendants, except [one], and other conspiring orthopedists agreed to threaten to terminate their contracts with Blue Cross of Idaho. They jointly threatened to terminate their contracts to force Blue Cross of Idaho to offer better contract terms to orthopedists.

The proposed settlement prevents the Idaho Orthopaedic Society and the named orthopedists from agreeing with their competitors on fees and contract terms. The settlement also prohibits them from collectively denying medical care to patients, refusing to deal with any payer or threatening to terminate contracts with any payer.

This case is a watershed for two reasons:

The Justice Department is seeking a new chief for the New York office of the Antitrust Division. Since this is a “Senior Executive Service” position, applicants must demonstrate not just technical qualifications, but also “Executive Core Qualifications” defined by the Office of Personnel Management:

1) Leading Change: This core qualification involves the ability to bring about strategic change, both within and outside the organization, to meet organizational goals. Inherent to this ECQ is the ability to establish an organizational vision and to implement it in a continuously changing environment.

2) Leading People: This core qualification involves the ability to lead people toward meeting an organization’s vision, mission, and goals. Inherent to this ECQ is the ability to provide an inclusive workplace that fosters the development of others, supports employee diversity, facilitates cooperation and teamwork, and supports constructive resolution of conflicts.

3) Results Driven: This core qualification involves the ability to meet organizational goals and customer expectations. Inherent to this ECQ is the ability to make decisions that produce high-quality results by applying technical knowledge, analyzing problems, and calculating risks.

4) Business Acumen: This core qualification involves the ability to manage human, financial, and information resources strategically.

5) Building Coalitions: This core qualification involves the ability to build coalitions internally and with other Federal agencies, State and local governments, nonprofit and private sector organizations, foreign governments, or international organizations to achieve common goals.

The goal of the ECQs, according to OPM, is a “results driven, customer focused, team oriented Federal Government.” I’m skeptical. The Antitrust Division is a particularly poor showcase for all these wonderful-sounding ECQs.

The antitrust staff at the Federal Trade Commission has latched onto Google’s November 2009 $750 million purchase of AdMob, a mobile advertising company, and according to some well-placed media leaks, the Commission could vote soon on whether to challenge the deal as a violation of the Federal Trade Commission Act. The staff claims a Google-AdMob combination illegally reduces competition for “mobile web advertising,” an industry that barely existed just two years ago (indeed, AdMob was founded in 2006). As a percentage of the overall demand for advertising, the type of advertising represented by AdMob — mobile devices, iPhones, etc. — isn’t even a drop in the bucket. It’s a still-developing market that nobody can predict or project with any accuracy, not even Google. 

Portland, Maine, is getting a new Trader Joe’s — courtesy of the Federal Trade Commission. For some reason, Trader Joe’s didn’t see a reason to enter the Portland market until the FTC offered to seize some property from rival grocer Whole Foods and sell it to Trader Joe’s at below-market price. The locals appear ecstatic; the FTC has already received over 340 comments from Portlanders praising federal intervention in their local grocery market.

The basis for all this is the FTC’s 2007 lawsuit claiming Whole Foods’s acquisition of Wild Oats Markets violated federal antitrust statutes. After a split court of appeals’ panel voted to retroactively enjoin the completed merger — and after the FTC announced there would be another rigged “trial” presided over by one of its own members —Whole Foods signed a “settlement” requiring the sale of 32 stores to government-approved buyers. Among the stores to be “divested” was the now-closed Wild Oats store in Portland.

The FTC staff ordered Whole Foods to retain The Food Partners, LLC, a Washington-based “investment banking firm” to conduct the sales. Last month Matthew S. Morris, the divestiture trustee for The Food Partners, filed a petition with the FTC seeking approval for the sale of the closed Portland store and related assets to Trader Joe’s East, Inc., which operates 338 stores throughout the U.S. but none in Maine. The FTC refused to disclose the terms of the deal to the public.

The 2010 Masters should be noted as the start of the Post-Tiger Era in professional golf. In the wake of Mr. Woods's scandal, the world's number-one golfer managed fourth place in his first tournament of the year. But the outcome really doesn't matter. Winning a fifth green jacket wouldn't have changed Woods's reality or that of the media establishment that continues to depend on him for their own livelihoods. Woods may be receiving treatment for sex addiction, but good luck getting the CBS television crew into rehab for Tiger addiction.

Still, I think we've seen the start of the Post-Tiger Era. What does that mean exactly? As I hypothesized in an earlier column for LewRockwell.com, the media has spent the past decade or so inflating a "Tiger bubble," something akin to a Fed-induced credit bubble. There's a surplus of media hacks who've managed to carve out a decent living merely hyping Tiger Woods and his importance. Yet even the Tiger bubble requires some underlying consumer demand to sustain it. The scandal risked damaging Woods's career entirely; no Tiger bursts the bubble.

Tiger came back, of course, but we don't know for how long. There's no word on when his next tournament appearance will come. Presumably, he'll still compete in the four majors – his primary goal of eclipsing Jack Nicklaus's record of 18 professional major titles hasn't changed. But nobody, not even Woods, can say with any certainty how the rest of his career will unfold. Tiger may "relapse" and find himself in a whole new series of scandals. He may lack the mental concentration to consistently compete for major championships, especially as older golfers have lost their fear of Woods and newer players rise from the ranks. Competition has eventually brought down every dominant firm in history; Tiger won't be an exception.

The one Tiger stakeholder most impacted by this new reality is the PGA Tour. The only events Woods cares about are the four the Tour doesn't run, the majors; the Tour-based events are now a diminished priority for Woods, to the extent they were ever a priority. The Tour needs to accept this and plan accordingly.