U.S. Antitrust Enforcement Post-Election | Brunswick Group

U.S. Antitrust Enforcement Post-Election

What will the U.S. elections in November bring in terms of change in antitrust enforcement? Historically, the answer has been “little.”

There is no reason to think that a second term of the Trump administration would be significantly different from the first. But what about a Biden administration? Terry Calvani, Brunswick Senior Advisor and a former Commissioner of the Federal Trade Commission, explains what companies facing antitrust and competition issues can expect from the two potential administrations.

A history of bi-partisan agreement

For the past thirty years, the U.S. has enjoyed a bi-partisan antitrust agenda. Of course, there were rhetorical differences: Democrats promised more vigorous enforcement; Republicans promised a more restrained agenda. While there has been marginally more assertive merger review under Democrat administrations, at the end of the day, output was largely the same. Both parties subscribed to the same underlying predicate: consumer welfare.

The other principal reason for the absence of a stark difference in approach by administrations is that U.S. antitrust and competition agencies are constrained by the courts – unlike authorities in many other countries where relevant agencies act as investigators, prosecutors, and adjudicators. With the exception of some FTC cases, the U.S. enforcement agencies act as plaintiffs in the federal courts and must prove their cases before a federal judge. President Trump learned this lesson in the AT&T-Time Warner case. Even in the relatively small number of competition cases brought by the FTC before its own administrative tribunals, there is robust – and relatively quick – judicial review. Any administration that ignores this fact risks significant embarrassment. 

Predicting change is rendered more difficult because few presidential candidates – and indeed few sitting presidents – have devoted much time to thinking about antitrust policy. On the rare occasion when asked, all promise stronger enforcement. But in practice, most would not know whether antitrust is hyphenated or not. This is not surprising. Foreign policy, the economy, national defense, health and welfare – these are the daily fare of presidents. Antitrust is not. 

Trump v. Biden outlook

The power of presidents to affect competition enforcement has historically been vested almost exclusively in their ability to appoint leadership of the Department of Justice and Federal Trade Commission. Following their confirmations, traditionally these men and women have been left alone to enforce federal laws.

Are we on the cusp of change in 2020? Maybe. President Trump continues to actively voice his opinion via Twitter regarding antitrust subjects: Amazon, Facebook, Instagram, Twitter, and the AT&T-Time Warner matter have all drawn his attention. Most recently, the President again directed his interest in this topic toward social media companies with an executive order tasking the FTC with investigating whether their respective content moderation policies are appropriately neutral and empowered the agency to review complaints about political bias with respect to content on the platforms themselves.

Some also believe that, unlike most of his predecessors, the President has actually directed specific cases to be brought forward. Whether true or not, there is no reason to expect his interest in antitrust will subside during a second term.

On the other side of the aisle, several of the unsuccessful Democratic presidential candidates have taken unusually active positions on competition law topics. Senators Amy Klobuchar and Elizabeth Warren, for example, are urging a much more activist enforcement agenda and legislation to facilitate change. Yet the Democratic nominee, Vice President Joe Biden, has not voiced a strong stance regarding antitrust other than to support the standard commitment to vigorous enforcement during his tenure on the Senate Judiciary Committee. As with previous Democratic administrations, we should expect policy under a Biden administration to be largely driven by his appointments to the DOJ and FTC. When thinking about the policies that appointees could bring to the table, it is important to remember that the array of competition expertise within the Democratic Party is vast and views are quite diverse. It does not take much imagination to envision quite different policies depending on the individuals named.

The road ahead

No president or administration can enjoin a merger or “break up” a company simply because they see a benefit. There must be a case to answer and it must be proven. But what about legislation?

On the left, the COVID-19 pandemic has occasioned a proposal from David Cicilline (D-RI), the Chairman of the House’s Antitrust Subcommittee, to bar mergers during the course of the crisis. That Subcommittee is in the midst of a multiyear investigation into the country’s largest tech firms, which could serve as a predicate for future legislation.

On the right, Senator Josh Hawley (R-MO) has brought his longstanding interest in antitrust to the Senate, opening the possibility of a left-right coalition for legislative changes. But while there is certainly interest on the left and right in changes to the key statutes, history teaches that even if one party holds the White House and both houses of Congress, enactment of significant legislation is difficult. Tellingly, aside from anti-cartel policy, where there has always been broad bi-partisan support, the last piece of major competition legislation was enacted in 1976. 

So, what changes can we expect to see? Cartel enforcement, a major focus of the DOJ, enjoys very significant bi-partisan support. It always has and little is likely to change. Many Democrats would like to see greater vertical enforcement. If AT&T-Time Warner is any indication, so would President Trump. Perhaps more importantly, the President seemingly is focused on “Big Tech/Big Data.” His rhetoric on these topics is both populist and anchored in his view that many tech firms are controlled by the “Radical Left,” as evidenced by his recent executive order with respect to social media companies and content moderation. In fact, the effects of this order could outlast his presidency. In the coming months, regulators will determine new rules and consequences for companies found to exhibit political bias, which could ultimately result in liability for a much wider lens of Internet companies, apps, services, and platforms beyond the traditional social media giants. Democrats in both the House and Senate have urged the FTC to maintain the agency’s independence from any outside agenda, but thus far the FTC has largely remained quiet on the issue. Nevertheless, the President may find a surprising consensus in the “Populist Left” on the Democratic side of the aisle, who seem to share at least some of his concerns.

What will become of some of the more aggressive proposals put forth in recent months, including the proposal to re-review previously approved transactions, more scrutiny of passive ownership, presumptions of illegality, and merger bans? It is safe to say they will not go away after the election no matter who wins. However, proposals that do not require legislation must still pass judicial muster in the courts. And those requiring legislation will face difficult hurdles even if the Democrats take control of the White House and Congress. Absent a clean sweep by the Democrats, their proposals will be dead-on-arrival until 2024.

Bottom line: The U.S. regulatory environment is increasingly unpredictable and politicized, making the right communications strategy critical to helping companies achieve their business goals and support their legal and operational decisions in the face of antitrust and competition scrutiny.

Companies should expect continued incremental increases in vertical scrutiny and no change in cartel enforcement. Large tech firms, especially those that engage in large-scale data collection, will continue to experience significant scrutiny regardless of who is elected in November. This will all play out against a backdrop of enforcement by the courts, which will interpret and apply existing case law to the relevant statutes.