To state the obvious, the early days of the Trump 2.0 administration have been marked by a whirlwind of activity and significant changes. We've seen a storm of executive orders, a more confrontational stance on foreign policy, the advancement of new tariffs, the pardon of all persons imprisoned for their January 6 activities, the nomination and confirmation of some very controversial cabinet members, and so on and so on. A tsunami of change.
In contrast, the antitrust world seems relatively calm – for now, although not without some surprises. A quick recap of what we've seen thus far:
- Department of Justice (DOJ) nominees seem poised to
sail through their Senate confirmations. Gail
Slater, nominee for Assistant Attorney General in charge
of the Antitrust Division, had a relatively calm hearing before the
Senate Judiciary Committee – reflecting an apparent consensus
that Big Tech and health care remain key targets for antitrust
enforcement. It didn't hurt either that she shared her
interview panel with Todd Blanche, President Trump's private
counsel and current nominee for Deputy Assistant Attorney General,
who drew much more attention.
In her opening statement, Ms. Slater touted the need to "ensure that the law is enforced both vigorously and fairly with clear rules" in order to make "progress towards the President's goal to make America competitive again." In response to direct questions, she committed to tough antitrust enforcement and a focus on concentration in big tech, big pharma, meatpacking, entertainment ticketing, airlines, AI, and eggs. She cited bipartisan support for the notion that the exercise of power by companies in highly concentrated industries is a threat to personal liberties and to economic well-being.
One theme in her hearing is a bit confusing, in that the Antitrust Division is an enforcement agency rather than a regulatory body. In response to questioning from Senator Mike Lee, Slater said one of her highest priorities will be to shift the Antitrust Division's focus to antitrust enforcement, rather than regulation, analogizing enforcement to a scalpel and antitrust regulations to a sledgehammer. She "100%" agreed with Sen. Mike Lee's statement that "by embracing the enforcement angle, we can achieve better outcomes...better compliance and overall end up with lower enforcement costs."
At the same time, however, Ms. Slater appeared to show a greater openness to the use of consent decrees in merger reviews and said that merger remedies, "if done right," can "remove any competitive harm from a merger." This was in response to questioning from Florida Senator Ashley Moody, who was critical of DOJ's successful challenge to the JetBlue/Spirit merger, parroting the parties' argument (rejected by the district court) that the merger would have led to increased competition with the "big four" carriers. Ms. Slater avoided any reference to the DOJ's position in that case – that it would have reduced competition among Low Cost Carriers, but did suggest that DOJ will again agree to consent decrees in appropriate circumstances.
Several times, Ms. Slater said she wanted to strengthen the Antitrust Division's relationship with State Attorneys General and would pursue additional funding for the DOJ. She also committed to taking a fresh view of the last-minute antitrust actions rushed out by the Biden Administration.
With regard to antitrust enforcement, Attorney General Pam Bondi stated in her confirmation hearing that antitrust enforcement was a priority when she was the Florida Attorney General and that it will be a priority for her as US Attorney General. In that regard, she stated that she was "proud to have Gail Slater handling that," noting that Ms. Slater is "loved by both sides of the aisle."
- The big tech cases and investigations will continue. As was evidenced by the questioning of Ms. Slater, there remains bipartisan support for the cases against Google, Amazon, Apple, and Meta, as well as for other continued investigations in the big tech and AI arena.
- The new Hart-Scott-Rodino (HSR) regulations went into
effect on February 10. The new HSR regulations – the most sweeping
changes in premerger review since the 1976 enactment of the HSR Act
took effect on February 10. The new regulations were passed by the
Federal Trade Commission (FTC) with a 5-0 vote during the Biden
Administration – as former Chair Lina Khan softened some of
the requirements of the new rules in order to win the votes of the
two GOP Commissioners. The new rules are currently subject to both
judicial and legislative challenges. Last month, the US Chamber of
Commerce and others filed a lawsuit seeking declaratory and injunctive
relief to block the new rules. And last week, Rep. Scott Fitzgerald
introduced a Congressional Review Act (CRA) resolution of
disapproval to repeal the new rule.
The FTC's new Republican Chair, Andrew Ferguson, enthusiastically welcomed the new HSR regulations and stated on social media that "updates were long overdue" and the new rules were "the product of bipartisan consensus and will allow [the FTC] to find anticompetitive mergers efficiently, while more quickly getting out of the way of deals that will benefit the American people." Ferguson's statement reflects the Trump administration's support of the new HSR form. The bottom line is that while HSR practitioners counted down to 5 pm on Friday, February 7 – the end of the old regime – not unlike revelers in Times Square on New Year's Eve, the new rules are now in effect. At least for now.
- DEI and ESG are potential hotbeds for antitrust
enforcement. The new Trump administration believes that
diversity, equity, and inclusion (DEI) programs are being used as a
guise to commit "dangerous, demeaning, and immoral" civil
rights violations. The President, by executive order, instructed
the DOJ and other agencies to institute investigations and
promulgate regulations aimed at ending those DEI initiatives that
the administration perceives to be illegal race- and sex-based
preferences in violation of civil rights laws. The antitrust
component here is that DEI initiatives arising from pledges to
trade groups, agreements among competitors, or information or best
practices shared among competitors can all give rise to antitrust
investigations and/or litigation. Already, FTC Chairman Ferguson
has characterized DEI as a "scourge on our institutions"
that "denies to all Americans the Constitution's promise
of equality before the law."
Similarly, industry commitments to environmental, social, and governance (ESG) objectives may also give rise to antitrust exposure. Last June, the House Judiciary Committee released an interim staff report on the "climate cartel" of "left-wing activists and major financial institutions" that sought to collectively impose "radical environmental, social and governance goals on American companies." This is consistent with the Trump 1.0 investigation into whether four automobile Original Equipment Manufacturers (OEMs) conspired with the State of California to limit auto emissions.
- The FTC's blanket non-compete rule is likely dead, but selective enforcement will likely continue. Last May, the Khan-led FTC finalized a rule that would have banned most non-compete provisions in employment contracts. That rule was successfully challenged in district courts in the Fifth and Eleventh Circuits, which blocked implementation of the rule pending appeals. New FTC Chairman Ferguson, who dissented from promulgation of the rule on the basis that the FTC lacked rule making authority to regulate that broadly, is expected to move to rescind the non-compete rule once the third GOP Commissioner is confirmed. That is not to say, however, that non-compete provisions that, for example, restrict entry in highly concentrated markets, will not continue to be prosecuted.
- Similarly, the no-poach and wage fixing guidelines may be gone, but some enforcement will continue. Four days before Inauguration Day, the DOJ and FTC issued new Antitrust Guidelines for Business Activities Affecting Workers, addressing not only no-poach, wage-fixing, and information-sharing agreements, but also expanding the scope of prior guidance into a number of related agreements and restrictions. New FTC Chairman Ferguson and Commissioner Holyoak dissented, in particular with regard to the timing of the release of the new guidelines. But Mr. Ferguson acknowledged that "antitrust laws protect employees from unlawful restraints of the labor markets," and the protection of workers was a focus not only of enforcement actions during the first Trump administration, but also of the presidential campaign. Expect enforcement – if not the January 16 guidelines – to continue.
There's a lot more going on as well – we haven't touched on the impact of the "fork-in-the-road" policy on the Antitrust Division or FTC Chairman Ferguson's embracing of the President's ability (contrary to Humphrey's Executor) to fire FTC Commissioners. Buckle up; it's going to be an interesting ride.
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