THE PROMISES AND THE PERILS OF AN ANTITRUST CHIEF

By Richard Lacayo

In the corporate takeovers of the 1980s, the reagan Administration was a wallflower at the orgy. Free-market philosophy discouraged government from interfering in corporate combinations. Capital Cities lapped up ABC. R.J. Reynolds gulped Nabisco. Under George Bush the outlook shifted a bit, but when understaffed government lawyers went to court, they mostly lost. Anne Bingaman, Bill Clinton's chief of antitrust, roared into work promising a different world. As a warning shot she got Congress to fund 61 new antitrust attorneys. At a Washington conference a few weeks ago, she gave the word once again to companies that try to corner their markets: "We are the competition agency."

As she sweeps up the shattered pieces of the Microsoft settlement, Bingaman must be wondering whether she's been promising more than she can deliver. The wife of Senator Jeff Bingaman, a three-term Democrat from New Mexico, Bingaman was once a plaintiff's lawyer who could claim a record-making $1 billion judgment against a foreign uranium cartel. By the end of last year, she had initiated more than 33 civil antitrust cases, compared with an average of 10 a year for her Republican predecessors. But the legal theory of antitrust has been changing. In federal courts, where Republican-appointed judges predominate, pursuing large companies simply because they are successful is frowned upon. Rather than see an oversize market share as proof in itself of anticompetitive practices, judges want evidence of real impact on consumers.

In that tricky environment, Bingaman has allowed some mergers, especially in areas, such as telecommunications, where the White House happens to favor combinations that promise to create more jobs. When she does move against what she sees as monopolistic practices, a favored tactic has been to scare companies with the threat of lengthy suits. By huffing and puffing, she got AT&T to sign a consent decree promising to keep the McCaw Cellular phone company a separate subsidiary, which allowed McCaw customers to pick their own long-distance carriers. But when Bingaman has actually gone to court, the results have not been stellar. Two months ago, she suffered a humiliating defeat after suing General Electric on charges it conspired with DeBeers of South Africa to fix industrial diamond prices. Before the companies had even presented their defense, a federal judge dismissed the case, complaining that the government's evidence was too weak.

"She has moved aggressively and brought a lot of cases," says Stanford law professor William Baxter, a Reagan-era antitrust chief. "But she's going to have egg on her face if she loses a lot of them." Then again, her Microsoft case was undone by a judge who thought she moved too timidly. "We filed exactly the case that in my best professional judgment deserved to be filed," she told TIME last month. "Anyone else want to sue Microsoft? Go for it."

--By Richard Lacayo. Reported by Andrea Sachs/Washington

With reporting by ANDREA SACHS/WASHINGTON