U.S. signals tougher line on dominant firms

The Justice Department's top antitrust official announced on Monday a return to a more aggressive approach to dealing with dominant companies that use their position to squelch competition.

Christine Varney, head of the agency's antitrust division, announced the withdrawal of a Bush administration policy report and said the department will be aggressively pursuing companies that abuse their monopoly positions.

In a speech to the Center for American Progress, Varney said antitrust officials at the Justice Department will return to tried and true case law and Supreme Court precedent in enforcing antitrust law.

The Justice Department under former President George W. Bush in September last year issued the report saying the guidelines were aimed at stopping abuses while avoiding interfering in the rough and tumble of beneficial competition.

At issue is monopoly behavior by dominant companies such as software giant Microsoft and chip maker Intel , which won huge market shares in their industries and were then accused of abusing that dominance to stay on top.

Section 2 of the Sherman Act prohibits illegal attempts to monopolize or to maintain a monopoly.

I am hereby withdrawing the (Bush) report, Varney said, adding that it raised too many hurdles to effective antitrust enforcement.

(Reporting by Diane Bartz; Editing by Gerald E. McCormick, Dave Zimmerman)