Antitrust Anathema

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A generation of antitrust lawyers seems to have disappeared and been replaced by a new cohort that is loath to interfere in business decisions.

That is my legal takeaway from this JDS Uniphase (JDSU:Nasdaq - news - boards) deal. Companies used to clear a hurdle when they thought about violating the antitrust act: It was called "counsel." Lawyers would say, "You know, I don't think this will pass muster." Or, "I don't think this one will get by the Justice Department." Or, "We are going to have a hard time with the Federal Trade Commission on this."

But, beginning with President Reagan, we pretty much shelved antitrust law. Why not? The Japanese were beating us to a pulp and the whole practice of antitrust law revolved around the notion of saving Zenith from the Japanese. (Ultimately, we failed and it was bought by the Koreans.)

The whole antitrust doctrine became irrelevant. There used to be powerful lawyers at major firms who would pontificate on these matters. Deal-blockers who would stand in the way of combinations that would obviously raise hackles. But with every combo being blessed by Washington in the name of worldwide competition, who needs those graybeard lawyers any more?

The practice of antitrust law ceased to be lucrative. The older generation of antitrust lawyers retired and they were replaced by ... nobody! Nobody would go into that nonrevenue-producing body of law.

Now, 18 years later, we have had so many combinations that almost every single industry has become a mini-oligopoly. Whatever limited competition that might exist between paper or chemical or auto or airline companies has now been threatened by a host of mergers. And the companies themselves almost seem oblivious to this.

These companies seemed equally oblivious to potential government intervention when they decided to get together and form business-to-business exchanges to buy materials on the Web. It was almost as if these exchanges weren't ever discussed with attorneys. They were just proposed; someone figured they would never come under scrutiny.

Now, the whole world has turned upside down. The antitrust division of Justice has become the most powerful enforcement division in the stew down there. The FTC seems to be looking for fights.

Meanwhile, the companies remain as oblivious as ever. If there had been a forceful antitrust counsel advising JDS Uniphase, I don't even think this deal would have ever left the whispers of the boardroom.

But there isn't. Instead we get this "throw it up and see if anybody shoots it down" mentality.

I bet this one gets shot down.

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James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long JDS Uniphase. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at [e-mail].