US antitrust policy has remained largely consistent across administrations, but uncertainty looms with election

US antitrust policy hasn’t seen major shifts in enforcement between presidential administrations in decades.

A bipartisan consensus has generally been the rule, but a Biden victory amid progressive calls for tougher standards — particularly in the tech sector — would test that history. A Trump victory, on the other hand, could further encourage the president to extend his influence on antitrust matters.

Though conventional wisdom is that Republicans promise less intervention and Democratic governance leads to more vigorous enforcement, the difference between the parties over the last few decades has been marginal and, at the end of the day, antitrust action has been largely consistent.

Many expected lax merger enforcement under President Donald Trump, but the numbers show that the differences between the current and previous administrations were insignificant.

The Dechert Antitrust Merger Investigation Timing Tracker, or Damitt, report shows that under Trump, the antitrust agencies brought 16 complaints in significant investigations to block mergers from the first quarter of 2017 through the third quarter of 2020. The Obama administration, for the same length of time, brought 18 complaints of similar scope against mergers.

The direction of antitrust under Biden would depend largely on his appointments to lead the Department of Justice and the Federal Trade Commission. Within the Democratic party, views on competition issues are diverse.

If Biden were to win the election and select enforcers from the long-standing antitrust establishment, enforcement would be more predictable and more likely to resemble the past.

On the other hand, Biden choices could pursue a more aggressive agenda. The FTC’s two Democratic commissioners — Rebecca Slaughter and Rohit Chopra — have repeatedly dissented on merger settlements during the Trump administration and have criticized the FTC’s approach, particularly on pharmaceutical deals.

FTC chairs have traditionally stepped down to allow a new president to nominate a leader and appoint a majority, though commissioners have fixed terms and cannot be removed by an incoming administration if they choose instead to stay. If that’s the case, even though Biden would be able to appoint a new leader, the majority would still be Republican.

Trump was slow in nominating commissioners to the agency after his inauguration and so the FTC was split 1-1, with Maureen Ohlhausen serving as the acting chairman. Congressional confirmations also take time, so it’s unclear what the makeup of the FTC will be in early 2021.

The DOJ is led by a single enforcer and so change there could be more swift, though a permanent antitrust division chief wasn’t confirmed until September 2017 after Trump’s January inauguration.

Even if Biden’s enforcers ultimately do take on riskier cases under current law, the federal bench, with many Trump-appointed judges, may stymie them. Unlike authorities in many jurisdictions where competition agencies are prosecutors and adjudicators, in the US the courts ultimately have the final say.

Trump’s legacy

Much antitrust enforcement in Trump’s first term was uncontroversial, but some actions raised questions about whether the administration was more motivated by politics and personal vendettas than the rule of law.

One example that raised questions of so-called transactional enforcement — where laws are reinterpreted to suit personal goals — was the DOJ’s lawsuit to block AT&T's merger with Time Warner, then-parent of cable network CNN, which Trump publicly excoriated as an enemy.

Trump told supporters at a campaign rally that he thought the merger would give the company too much power, and he would block the deal if he were elected president.

DOJ staff had planned to negotiate a behavioral remedy to address harms to competition, but newly appointed Assistant Attorney General Makan Delrahim sued to block the deal and ultimately lost. Delrahim has repeatedly denied political interference or motives prompted the challenge.

Another case that raised questions was the DOJ’s decision to craft a remedy to usher through the T-Mobile-Sprint merger, a deal seen as potentially addressing the president’s goal of helping US companies in the race to 5G wireless.

A whistleblower offered perhaps the most blatant narrative of alleged ulterior motives, saying US Attorney General Bill Barr overruled the Justice Department staff and ordered an in-depth probe of a cannabis industry merger because he did not like the nature of the business.

More claims were made of political chicanery after Volkswagen, Honda, BMW and Ford struck an agreement with the California Air Resource Board to reduce greenhouse gas emissions after the Trump administration had just rolled back emission standards for some vehicles. The DOJ opened an antitrust investigation into the matter that was widely regarded as unlikely to lead to enforcement action and was ultimately dropped.

Biden’s antitrust agencies will be expected to hew more closely to the rule of law, choosing cases based on antitrust analysis, rather than political goals or a desire to retaliate against perceived enemies. A Trump victory, on the other hand, could embolden the president and ramp up the politicization of antitrust.

The intersection of intellectual property and antitrust law is one area where the Trump administration made polarizing changes, and it is unclear how a prospective Biden administration might regard those initiatives. Delrahim took the self-described “extraordinary step” of supplementing a business review letter sent to the Institute of Electrical and Electronics Engineers issued during the Obama administration.

The supplemental letter, issued in September, asked the standards body to consider updating its patent policy — a move that hasn’t gone down well with licensees of patents.

The DOJ's antitrust division has also filed briefs in standard-essential patent litigation in support of patent holders. A Biden administration may reduce the divergence that emerged over the past four years between the US and the EU, with the former having taken a stance more favorable to licensors.

During the Trump administration, the states and federal government initiated antitrust investigations into large technology companies’ competitive conduct, setting a course that appears irreversible. The DOJ, joined by some states, filed a search monopolization complaint against Google last month.

Distrust of the market power of digital platforms is a concern for Republicans and Democrats, and the likes of Google, Amazon, Facebook and Apple should not expect to see any relief if Biden emerges a winner.

Congress

A more aggressive approach to antitrust enforcement is perhaps more likely if Democrats gain control of both chambers of Congress, though passing legislation may still be challenging. The Democratic-controlled House antitrust subcommittee issued a 449-page report last month that included sweeping legislative recommendations to change antitrust law.

The proposals range from bold measures to overturn key US Supreme Court precedent and force companies to separate lines of business, to more modest proposals such as shifting burdens of proof so companies must show their behavior is procompetitive, rather than leaving it to the government or private plaintiffs to prove defendants’ behavior is anticompetitive.

Though there is some Republican support for shifting the burden of proof to companies, the more progressive changes have a much smaller chance of making it through if the US Senate remains in Republican control.

The House report also recommended that Big Tech merger reviews involving dominant companies be presumed anticompetitive, which could have a disproportionate burden on the companies and have a chilling effect on dealmaking. Some Democrats have even called for a ban on mergers during the pandemic — a view backed by FTC Commissioner Rohit Chopra.

FTC Commissioner Rebecca Slaughter didn’t support the moratorium specifically, but said that she “strongly support[s] efforts to think more broadly about economic policy and resiliency and to prohibit abusive and opportunistic acquisitions during this pandemic”.

The calls for more enforcement echo reforms already taking place in the European Union and the United Kingdom, among other countries, where legal and regulatory changes for increased enforcement are being adopted.

While US lawmakers have focused their efforts on the tech sector, stricter standards are expected to spill over to other areas, such as the pharmaceutical industry, health care, fintech, and agriculture.