What Trump’s new antitrust enforcers mean for business
Source: Live Mint
It was as if the sun came out on Wall Street. Donald Trump’s election victory was met not just with a blistering stockmarket rally, but also a flurry of dealmaking. Mondelez, a snack-seller, is reportedly trying to buy Hershey, a chocolatier. Consolidation beckons for the advertising industry. Bankers are expecting that many more tie-ups will follow. The surge in activity partly reflects a level of certainty that would have materialised whoever won the election. But it also has much to do with the changing of the guard at America’s antitrust authorities.
On December 10th Mr Trump announced that the new chair of the Federal Trade Commission (FTC) will be Andrew Ferguson (pictured), who has been a commissioner since April. Last week Mr Trump picked Gail Slater, an adviser to J.D. Vance, the incoming vice-president, to lead the antitrust division of the Department of Justice (DOJ). The newcomers will replace Lina Khan and Jonathan Kanter, respectively. Both aggressively scrutinised corporate power in America. Often their bark was worse than their bite. Many cases failed in the courtroom. But not all: on December 10th judges blocked the merger of Kroger and Albertsons, two big grocers, after the FTC sued to prevent their union.
Mr Trump’s picks will mostly make corporate deals easier. Merger guidelines, the framework regulators use to evaluate deals, may be replaced by an approach that places more weight on consumers and acknowledges the potential efficiencies from deals, says Mike Cowie of Dechert, a law firm. Objections to a merger because of its effect on union workers, for example, are less likely to be raised under the new regime. Private-equity firms, which faced more scrutiny under Mr Biden, will find that burden lighter under Mr Trump, reckons Richard Falek of Winston & Strawn, another law firm.
Continuity, though, is likely in the crusade against big tech. Mr Trump’s nominees inherit a full docket of cases against Apple, Amazon, Meta and Alphabet. They could even bring new venom to the task. “Big tech has run wild for years,” Mr Trump wrote in a post on Truth Social, his social-media site, when he announced Ms Slater’s nomination. He praised Mr Ferguson’s record of “standing up to big tech censorship” in another. On December 2nd, in a case ostensibly about retail shipping practices, Mr Ferguson wrote an opinion calling for the FTC to conduct an investigation into online censorship.
Thus more legal drama between Washington and Silicon Valley is inevitable. But one of the biggest topics in antitrust next year, says Eric Grannon of White & Case, a third law firm, will be a potential tie-up between the FTC and DOJ. A bill was introduced in Congress earlier this year to consolidate antitrust enforcement into the DOJ. The departments have overlapping briefs, and each has an army of economists and lawyers. That makes them obvious targets for Elon Musk’s new government efficiency drive. The deal police may soon go through a merger of their own.
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