Our thinking

M&A and Antitrust Enforcement

Trump will assume the presidency following a period of aggressive regulatory enforcement by the Obama administration.

The Obama legacy

Trump will assume the presidency following a period of aggressive regulatory enforcement by the Obama administration. In remarks before the American Bar Association, U.S. Attorney Loretta Lynch cautioned against the “unprecedented swell of mergers coursing through the U.S. economy.” Crain’s Chicago Business recently reported that in response to this high volume of M&A activity, the Obama administration opposed a greater percentage of mergers than any president in the past 35 years. According to The Street, under President Obama, the annual challenge rate—how often the Department of Justice (DOJ) or the Federal Trade Commission (FTC) sues to stop a transaction or imposes conditions—has hovered around three percent, a two percent jump from the Reagan years.

Trump’s unclear intentions

An April 2016 Intralinks survey indicated that two-thirds of global banking professionals believed Donald Trump would have a negative impact on deal-making if elected president. But despite this strong perception, it is unclear how rigorously Trump will enforce the nation’s antitrust laws.

Trump was a litigant in several antitrust actions, including defending an enforcement action brought against him by the Federal Trade Commission and Department of Justice in 1988. While these experiences have almost certainly colored his view of antitrust law, Trump provided few clues on the campaign trail about his approach to antitrust enforcement, save for his opposition to the recently announced AT&T-Time Warner transaction. Trump said it is “a deal that we will not approve in my administration because it’s too much concentration of power in the hands of too few.”

Appointing regulators

But despite this stated opposition, whomever the president-elect installs as the head of the Department of Justice’s Antitrust Division and at the Federal Trade Commission will have the ultimate authority over such enforcement decisions. And with pro-business Republican Chris Christie a strong contender to be the next U.S. attorney general—and the ease with which Trump has pivoted from other established policy positions—companies should not necessarily count on another four years of aggressive enforcement of the nation’s antitrust laws. Kellyanne Conway, Trump’s campaign manager, signaled Trump’s aversion to regulation on CNBC, saying he would move to lift onerous regulations.