The recently concluded US Presidential election will likely significantly affect the scope and focus of antitrust enforcement over and beyond the next four years. In addition to appointing new leadership at the Antitrust Division of the Department of Justice (DOJ), President-elect Donald Trump will have the unique opportunity to appoint at least two and likely three Commissioners to the five-member Federal Trade Commission (FTC), including the next chair, moves that will have a huge impact on the FTC’s enforcement priorities and policy decisions for years to come.
The question now is: What will antitrust enforcement look like in a Trump administration? The Trump campaign did not issue any official policy proposals regarding antitrust, and the Republican Party platform does not specifically mention antitrust policy.
Antitrust enforcement in a Trump Administration
For the last 40 years, there has been general bipartisan agreement that (1) enforcement decisions should be economics-based, focusing on the consumer welfare standard, and (2) overzealous enforcement can deter potentially efficient business relationships, while too little enforcement could lead to business combinations or arrangements that reduce competition in ways not outweighed by efficiencies.
Trump’s economic policies, to the extent he fleshed them out during the campaign, have been neither uniformly pro-business nor anti-regulation. He consistently struck populist notes on the campaign trail by railing against the “special interests” representing “big business.” Candidate Trump made several references to antitrust enforcement that indicate he may take a much more aggressive stance in some cases than one would expect from a Republican administration.
Among those who may be in the crosshairs:
- High-tech companies, including Amazon, which Trump deems to have “a huge antitrust problem,” and company CEO, Jeff Bezos, who Trump alleges will use Bezos-owned The Washington Post, “for political purposes to save Amazon in terms of taxes and in terms of antitrust.”
- AT&T’s proposed acquisition of Time Warner, which Trump stated that he will block, because he believes “it's too much concentration of power in the hands of too few”—a much different standard than the “substantial lessening of competition” test that the courts enforce under Clayton Act Section 7.
- The 2011 Comcast/NBCU transaction, which Trump claimed he would undo, without explanation.
There also may be clues in Trump’s previous personal interactions with the antitrust laws.
- Trump zealously used the antitrust laws as a plaintiff when he owned a franchise in the now-defunct US Football League (USFL). The USFL filed a federal complaint alleging that the National Football League (NFL) had unlawfully monopolized professional football. The jury found a violation, but awarded only $1 in damages (which was trebled to $3) because it found that the USFL’s demise was caused largely by its own mismanagement rather than by the NFL’s alleged conduct.
- In 1988, Trump paid $750,000 to settle alleged violations of the Hart-Scott-Rodino Antitrust Improvements Act (HSR) for failure to make HSR filings on reportable transactions.
While a Trump Administration’s positions on antitrust enforcement are unpredictable, based on his history and his campaign rhetoric, we expect to see a mix of traditional Republican caution in non-cartel cases with some potentially unpredictable aggressive enforcement decisions—perhaps involving industries that Trump mistrusts, such as the media, or entities with which he has had a negative experience as a businessman.
A check on any potential Trump inclination toward aggressive enforcement is the fact that the Antitrust Division and FTC, unlike antitrust enforcers in some other countries, cannot make a dispositive finding of an antitrust violation without convincing a court that the relevant judicial antitrust precedents compel a finding of an antitrust violation. That said, the mere threat of government litigation may compel parties to abandon a transaction or discontinue a business practice.
Another area of potential concern in a Trump Administration is international cooperation with other antitrust enforcement agencies. Antitrust has been one of our most successful exports, and well over 100 countries now have their own antitrust laws. Businesses operating in multiple jurisdictions may be subject to conflicting or differing outcomes in multi-jurisdictional investigations of mergers or unilateral conduct. Increased cooperation among antitrust enforcers, through international organizations as well as multilateral and bilateral agreements, must play an important role in future antitrust enforcement.
In response to observations that American businesses may be subject to disproportionate antitrust enforcement abroad, The Antitrust Division and FTC have been highly active in international organizations such as the International Competition Network and the OECD, as well as in bilateral agreements like those recently signed with China and India. Recently proposed updates to the Antitrust Enforcement Guidelines for International Operations explain how the agencies cooperate with other enforcers and describe when and how they will launch investigations that have an international dimension. A new chapter on international cooperation addresses the agencies’ investigative tools, confidentiality safeguards, the legal basis for cooperation, types of information exchanged and waivers of confidentiality, remedies, and special considerations in criminal investigations.
It is not clear how the Trump Administration will choose to reconcile its “America First” stance with these guidelines, or how much emphasis it will place in general on international antitrust coordination and competition advocacy abroad. Trump’s campaign rhetoric often eschewed traditional foreign policy positions and implied a retreat from traditional international cooperation such as NATO and international trade agreements such as NAFTA.
What’s to come
The enforcement of the antitrust laws has a significant impact on our economy--and the world economy. It is difficult to tease out a coherent antitrust policy from Trump’s rhetoric as a candidate and his personal antitrust experience, but there is a strong likelihood that a Trump Administration’s enforcement efforts will be unpredictable in some cases and may not reflect traditional Republican antitrust norms. The people he appoints to the antitrust agencies will provide important indications of what we can expect. Stay tuned.