Antitrust during Trump 2.0: It is Complicated
Antitrust enforcement during a second Trump Administration is complex, just like antitrust law. The notion that Republicans will be pro-business, and therefore take a laissez faire approach to antitrust enforcement is outdated and simplistic. During Trump’s initial term, antitrust enforcement did not stagnate, blending traditional Republican deregulation preferences with a populist skepticism towards Big Tech and market consolidation in general. This unusual meeting of conservative Republicans and progressive Democrats in the antitrust arena even earned a mashup moniker, the “Khanservaties”. The group included conservative Republicans such as Missouri Senator Josh Hawley, former Florida Representative Matt Gaetz and former Attorney General nominee Matt Gaetz who praised Biden’s appointment of Federal Trade Commission (FTC), Chair Lina Khan. Vice President-elect J.D. The antitrust “techlash” against disfavored tech companies and a focus on workers will likely continue during Trump’s second term. The antitrust “techlash” against disfavored tech firms and the focus on workers are likely to continue during Trump’s 2nd term. We expect criminal antitrust enforcement to remain the same. However, we believe the FTC will be less aggressive in its enforcement of Section 5 of FTC Act, including the non-compete rules, and will mothball Robinson-Patman Act enforcement. Merger review is harder to predict and will be a mixed bag, as described below.
Antitrust Agency Leadership & Staff – Some Stay and Some Will Go
On December 4, 2024, President-Elect Trump announced that Gail Slater would be nominated to be the Assistant Attorney General (AAG) for Antitrust at the Department of Justice (DOJ), stating “Big Tech has run wild for years, stifling competition in our most innovative sector and, as we all know, using its market power to crack down on the rights of so many Americans, as well as those of Little Tech! I was proud to fight these abuses in my First Term, and our Department of Justice’s antitrust team will continue that work under Gail’s leadership.”
Slater has been an economic advisor to then-Senator J.D. Vance is an attorney advisor at the Federal Trade Commission and a staff attorney. She has also worked at an internet trade group and FOX. Her focus has been tech policy. Plans for the FTC are not yet announced. It is expected that if FTC Chair Khan resigns as is common when there is a change in the presidential party, one of two Republican Commissioners will be named acting FTC chair. This will leave two Republican Commissioners and two Democratic Commissioners until a replacement is confirmed, likely creating an impasse for any non-bipartisan decisions and slowing Commission decision-making.
Although top political positions at both the FTC and DOJ change when the political party that holds the White House changes, each agency is comprised primarily of career staff. While there is much buzz about career staff worry and departures, it is also notable that during the Biden administration, the DOJ Antitrust Division did a lot of hiring, and those attorneys will continue to do work through political transition.
Antitrust Agency Resources – Can they Dodge the DOGE?
The newly-announced Department of Government Efficiency (DOGE) executive advisory committee to be co-chaired by Elon Musk and Vivek Ramaswamy and focused on government efficiency will likely have its sights set on antitrust enforcement agencies.
The One Agency Act makes the FTC low-lying fruit for the DOGE. The One Agency Act, which was passed by the House Judiciary Committee on April 20, 2024, consolidates antitrust enforcement authority. All FTC antitrust functions and assets will be transferred to the DOJ. The FTC will retain its consumer protection authority. Earlier attempts to pass legislation that would end the overlap between the merger review and civil investigations authority of the FTC and DOJ failed. However, the Act’s chances for passage are now higher due to the Republican majority in both houses. The FTC’s and DOJ’s informal clearance processes for civil antitrust cases have been criticized for their inefficiency. This would seem to be a good focus for the DOGE prioritizing government efficiency. This consolidation would be significant, even if personnel and open cases were to move from FTC. For instance, the FTC has expanded its investigations of unfair methods of competition under Section 5 of the FTC Act, which it claims provides for broader enforcement of than the Sherman Act, and that vehicle would likely cease to exist if the antitrust enforcement is consolidated within DOJ.
Possible antitrust enforcement consolidation within DOJ makes President-elect Trump’s pick of Gail Slater to lead the DOJ Antitrust Division even more significant.
Criminal Enforcement – Likely to Stay the Same
Cartels have been called the “the Supreme evil of antitrust” by the U.S. Supreme Court and criminally prosecuting agreements among competitors to fix prices, rig bids, or allocate markets or employees are likely to remain a high priority for the DOJ’s Antitrust Division during Trump’s second term. The Deputy Assistant Attorney-General (DAAG) of the DOJ’s Antitrust Division, who is responsible for criminal enforcement, is not a politician and the current criminal leadership usually stays the same through administration changes. This ensures continuity for the Antitrust Division criminal program. In addition, the DOJ’s Antitrust Division has the sole authority to criminally prosecute antitrust offenses under the Sherman Act, the One Agency act would not impact continuity in criminal prosecution.
While Biden administration antitrust enforcement was touted as aggressive, DOJ’s own criminal enforcement statistics show that during the first Trump administration, the number of criminal antitrust cases filed and the amount of total criminal fines and penalties were slightly higher than during the Biden Administration. We do not expect a drop in criminal antitrust prosecution during the second Trump Administration, even though administration priorities may change. The Antitrust Division’s Procurement Collusion Strike Force has been very active in prosecuting price fixing and other frauds relating to government funds and procurement during the Biden Administration. However, it was launched in 2019 under the first Trump Administration. We expect the DOJ to continue to support the PCSF’s focus on prosecuting fraud, waste, and collusion in government procurement during the second Trump Administration. Accordingly, we expect the DOJ to continue to continue to support the PCSF’s focus on prosecuting fraud, waste, and collusion in government procurement during the second Trump Administration.
We also expect criminal enforcement of labor-focused cases including criminal investigation and prosecution of no poach and wage fixing cases to continue in the second Trump administration, as it remained an antitrust focus from 2016-2020 and the original criminal cases in this area were brought during Trump’s first term.
One area of uncertainty in the criminal antitrust space is whether the Antitrust Division will continue its focus on criminal monopolization cases. In 2022, Antitrust Division announced its intention to criminally investigate and bring criminal monopolization charges against individuals or companies that violate Section 2 of Sherman Act. This marked a significant change from the criminal antitrust enforcement that focused solely on hardcore anticompetitive agreements such as price fixing, bid-rigging, or market allocation between two or more horizontal rivals under Section 1 Sherman Act. Section 2 of Sherman Act focuses on alleged anticompetitive unilateral practices by a company to maintain or gain its monopoly. These alleged violations are usually brought as civil monopolization suits (e.g. tech cases). These cases are likely to be resource intensive given the need to prove an intent to monopolize to a beyond a reasonable doubt standard and may be deprioritized by the new administration.
Overall, we expect criminal antitrust enforcement to remain much the same as it has been for the last eight years.
Merger Review – All I Need is a Remedy
The Biden administration’s DOJ and FTC effectuated three significant merger review policy changes, and it is possible that all three may be reversed in the Trump Administration. The first thing the Agencies did was to revise the Merger Guidelines. This is the framework they use when evaluating whether a proposed transaction will substantially lessen competition in accordance with Section 7 of Clayton Act. It is possible and even likely that the new Guidelines, which have only been in place for a year, will be withdrawn. This is because they were the subject of much controversy, including the idea that a firm with a 30% market share would be considered “dominant”, under current antitrust law. Second, the agencies have finalized new Hart Scott-Rodino Act regulations that will take effect on February 10, 2025. The new rules require merging parties to provide more information and have been criticized by the market. The rules were adopted on a bipartisan basis (a unanimous FTC vote), but we don’t expect the new administration will withdraw or revise the rules. Prior to the Biden Administration, structural remedies were very common. The merging parties would divest their product or business line to a third-party to resolve the agency’s concerns. Both agencies issued specific merger remedy guidance. We expect the agencies to return to this practice in a Trump Administration.
Aside from policy, the merger enforcement records of the previous few administrations is fairly consistent, but also difficult to gauge as we discussed in a previous post. The healthcare industry has also been scrutinized by administrations. That said, we do think that one industry – private equity – will not be the target it has been under the Biden administration.
Robust Civil Antitrust Enforcement, Techlash, and Focus on AI – Likely to Continue
Big Tech has faced heightened antitrust scrutiny, and we expect tech and AI are likely to remain under the antitrust microscope during Trump’s second term. Trump and Congressional Republicans have railed at Big Tech consolidation as a threat against free speech, excluding conservative voices. The same tech targets are being targeted, but with a different focus. We can expect the antitrust “techlash,” at least against companies that have fallen out of Trump’s favor, to continue under the next Trump Administration. Trump’s announcement of Gail Slater’s nomination as AAG Antitrust at DOJ and his comments about big tech running amok and stifling the competition when announcing the nomination further underscores this resolve. One thing is certain: President-elect Trump will end the Biden AI executive. In the 2024 GOP Platform it is stated that “We will repeal Joe Biden’s dangerous Executive Order, which hinders AI Innovation and imposes radical Leftwing ideas on this technology.” Trump said this repeatedly on the campaign trail. What, if anything, the Trump administration will do in the AI space remains to be seen.
So, we are likely to see an overall tension between a desire for deregulation and a desire to protect from perceived AI risks, and we will be watching closely how the next administration tackles those issues and the use of antitrust laws for this purpose.
Conclusion
While we expect some easing of antitrust pressures for merging parties, we also expect robust but likely unpredictable and possibly selective antitrust enforcement over the next four years that attempts to balance a desire for deregulation with a dash of Khan-era populist beliefs and continued disdain for Big Tech. State enforcers, private litigants and the President are not bound by the same rules. They will likely step up enforcement and litigation in the next four-year period and continue to disdain Big Tech. As we travel the antitrust road, it is important to have your antitrust lawyer on speed dial.
