(Dow Jones) -- A top Justice Department official on Thursday pledged continued vigilance against mergers in concentrated industries, a warning sign for health-insurance companies and others seeking approval of major deals in the last months of the Obama administration.
"Mergers between substantial competitors, especially in already concentrated industries, can give companies far too much power over the markets in which they operate, threatening the principles of freedom and fairness that undergird our economy," Bill Baer, the acting associate attorney general, said in a speech to the American Antitrust Institute.
Baer, who headed the department's antitrust division before a recent promotion to the department's top leadership, added, "Competition is not free when companies are allowed to purchase their main rivals to avoid competing with them, and it is not fair when merged companies use their new-found power to harm the interests of American consumers."
The U.S. remains in the midst of a merger wave and "some of the country's most important industries are faced with the possibility of substantial consolidation," Baer said.
"Especially in this environment, we cannot afford to let up our efforts," he said.
He referenced the government's continued review of two health insurance mergers -- Anthem Inc.'s proposed takeover of Cigna Corp. and Aetna Inc.'s deal for Humana Inc. -- as well as their investigation into "major consolidation among large agricultural, chemical and seed manufacturers," a reference to deals including the planned merger of DuPont Co. and Dow Chemical Co.
His comments Thursday suggested the insurance companies as well and Dow and DuPont are likely to face skepticism from the department as they seek antitrust approval for their deals.
The health insurance mergers in particular are in the late stages of the government review process. Aetna, which expects to close its deal this year, said earlier this month that it had finished its response to the Justice Department's second information request and was in active discussions with officials. Anthem has said it would soon begin meeting with Justice officials end expected its deal to close this year.
The Wall Street Journal last year reported the Justice Department had concerns about the health-insurance deals even before they were officially announced.
Baer on Thursday touted the Justice Department's efforts to block past mergers it found problematic, including a successful effort to stop Halliburton Co. from acquiring rival Baker Hughes Inc. But he also noted that merger enforcement includes more than just blocking transactions.
Baer pointed to the department decision in 2013 to allow the merger of US Airways and American Airlines after the companies offered concessions to settle a government lawsuit. He said the settlement has paved the way for more competition at congested airports.
The Justice official did say that some mergers may benefit the public, "when they bring together complementary assets, people and ideas that help lower production costs or spur greater innovation."
Baer said merging companies will receive the opportunity to demonstrate the "possible beneficial effects of consolidation." But when those benefits are uncertain or don't outweigh potential harms, "we should views these mergers with great skepticism," he said.