Antitrust Alert #1
Tuesday’s election results - a clear, if not dominant victory for former President Donald Trump - will have implications for antitrust enforcement and M&A activity. With the scale of his victory, improving on margins in nearly every county in the country, Mr. Trump has a mandate for change and one that will likely include the personnel at the Department of Justice and the Federal Trade Commission.
The antitrust agencies are led by a pair of political appointees; The current chair of FTC Lina Khan, whose term expired at the end of September, and Assistant Attorney General Jonathan Kanter. Look for both enforcers to be dismissed, even with recent compliments for their work by Vice President-elect J.D. Vance.
The future of antitrust enforcement, much like the rest of government, is that personnel is policy. This is especially true in competition policy because of internal fissures within the Republican Party over the issue. Beyond the imminent Trump restoration, what’s in store for antitrust policy will be decided by this upcoming clash of intra-GOP ideologies.
“It’s Ohio vs. New York”
A recent conversation with a former Trump Administration official boiled down the future of antitrust enforcement into this framework. On the one hand is Vice President-elect J.D. Vance, who deeply believes that the Reagan to Obama period of passive enforcement was not only a clear violation of the blackletter law, but also resulted in hurting the working classes and gutting communities. On the other is the long-time Republican consensus popularized by Robert Bork that looks primarily at price effects and efficiencies to determine competition.
Vance, as recently as two weeks ago, said that Google should be broken up and that “Lina Khan is the only one in the Biden Administration doing a good job.” He is an advocate for increased antitrust scrutiny, more resources for antitrust enforcement, and expanded authorities for enforcers to rein in Big Tech.
The other side of the GOP factional debate is the Reaganite establishment and the business executives who would like to restore the “Borkian” doctrine of “consumer welfare” to the center of antitrust. They are likely to be joined by some tech executives who have recently reached out to Trump seemingly in efforts to settle ongoing cases or to drop enforcement entirely. There is also a fair bit of jockeying by these firms to be viewed as “national champions” by an Administration concerned with China as well as engaging in mercantilist competition against countries in order to accumulate as much wealth to hoard as possible.
If given the opportunity, Vance would like to have a strong hand in staffing the Administration with likeminded populist conservatives. He has an idea of who he would like for many jobs already. Will he be allowed to staff them is the question. If not, this is where “New York” and even Elon Musk will have a say. With Musk’s companies under multiple investigations by the Biden FTC, he certainly has an axe to grind. But he also feels tightly bound to the “little tech” movement of disruptors and non-platform tech companies.
The names being circulated already are a decided mix of the two- some hailing from the J.D. Vance world, others from previous Republican FTC antitrust enforcers. Clearer signals will emerge as other areas of the government, like Council of Economic Advisers and National Economic Council, are filled.
“We’re not going back”
While there might be a restoration of some laissez-faire enforcers, to think that the Trump-Biden consensus on increased antitrust scrutiny will be reversed is pollyannish. The simple fact of the matter is that Trump views antitrust from the gut and with an eye towards making deals. He hates “Big Tech” (something he joined on by Elon Musk) and would love the opportunity to centrally plan large transactions from the Oval Office, something he famously did in TMobile-Sprint.
Furthermore, there is too much intellectual energy on the right on antitrust to turn the tide back to Reagan-Bush. VP-elect Vance is not alone. He is joined in this by people like Sens. Hawley, Rubio, and Lee. Additionally, likely FCC-chair Brendan Carr is already on record favoring the breakup of most of the tech platforms. While whatever role Robert Kennedy Jr. will have in the administration is under discussion, what seems settled is his insistence that the government must attack Big Pharma, Big Healthcare, and Big Food.
While it is likely whoever is at the agencies will not be as aggressive as Lina Khan or Jonathan Kanter, it won’t be a replay of 1980-2016 either. More targeted enforcement will be in the offing, but it will be enforcement nonetheless.
Ultimately, whoever wins the game of staffing musical chairs we’re sure to see as Trump’s administration takes shape will directly determine the direction of antitrust policy. For now, as the antitrust debate rages on in Republican circles, we can only watch and wait.Organizations need to stay vigilant and prepared to ensure they can swiftly and effectively respond to the evolving policy landscape.
Josh Tzuker spent most of the last twenty years in government, most recently as Chief of Staff of the Antitrust Division of the Department of Justice. While there he brought historic cases and issued new Merger Guidelines. He also worked at the FTC and for a decade in Congress. At FGS Global, Josh helps companies and organizations to compete in the marketplace by ensuring they can tell their story to regulators, enforcers, and policy makers in Washington, state capitals, and throughout the globe.
Learn more about how Josh and the FGS Global Antitrust & Competition team can help your organization navigate this uncertain environment.
