Biden's Antitrust Policies Won't Depart Entirely From Trump's
Kirkland partners Andrea Agathoklis Murino and Peter McCormack spoke with Law360 regarding a push to step up competition enforcement that they say has been years in the making.
After seven months in office, President Joe Biden has a Justice Department antitrust nominee on deck and a fully stocked Federal Trade Commission already working to fundamentally overhaul U.S. competition enforcement. But for all the political upheaval that accompanied the White House transition, some antitrust professionals say the new administration's approach isn't a complete departure from its predecessor.
What's changed? And what hasn't? Antitrust professionals offered a mixed assessment of where the antitrust approach under former President Donald Trump ends and the new Biden approach begins.
Many say that at minimum the two administrations were and are driven by some of the same basic reactions to corporate concentration, Big Tech dominance, vertical integration of the supply chain and the effects of employer deals on worker wages, even if those reactions are colored by different philosophies.
"There is definitely a growing sentiment against concentration of market power and against monopoly that has been brewing for at least the last five years," said Kellie Lerner, a Robins Kaplan LLP partner and co-chair of the firm's antitrust and trade regulation group.
Kirkland & Ellis LLP partners Andrea Agathoklis Murino and Peter McCormack see in the current atmosphere a push to step up competition enforcement that's been years in the making, and they have a new article in the most recent addition of the American Bar Association's Antitrust Magazine arguing just that.
"What we're seeing now is sort of a blossoming of the seeds that were planted … because of the Trump administration," said Murino, an alum of both the Justice Department and the FTC who argued that the Trump administration was moving in many of the same directions as its successor, even if Biden enforcers are likely to go further some instances.
Different Philosophies, Similar Results
Trump's antitrust enforcers often didn't appear especially concerned about growing corporate concentration, which the Biden administration now seeks to dampen.
In fact, Trump's U.S. Department of Justice Antitrust Division not only cleared T-Mobile's purchase of Sprint with a divestiture deal — thus permitting the number of national wireless providers to go from four to three — but also openly backed the companies against a failed challenge from state attorneys general, filing a statement of interest arguing that the small number of states contesting the deal demonstrated that the state enforcers lacked a national mandate and saying the case wrongly elevated pricing concerns over the build-out of new wireless networks.
"They brought very few merger cases — very few civil cases," said Stephen Calkins, a former general counsel at the FTC who is now a professor at Wayne State University Law School in Detroit.
Biden's enforcers, on the other hand, appear intensely focused on corporate consolidation. In particular, Biden tapped Columbia Law School professor Tim Wu, an outspoken critic of big technology companies and past antitrust enforcement trends, to serve on the National Economic Council. Wu's most recent book, "The Curse of Bigness: Antitrust in the New Gilded Age," chronicles a history of the economy and the conditions that led to passage of antitrust laws, warning about the ill effects of industrial concentration on society as a whole.
Perhaps the biggest break between the two administrations' antitrust policies is over intellectual property rights. While it remains unclear how Biden's enforcers will handle patent-related antitrust claims — like accusations of leveraging huge patent portfolios to demand too-high licensing fees and violations of commitments to license standard essential patents on fair terms — the Trump DOJ pushed a policy far more favorable to the rights of patent holders than its predecessors. The Biden administration is unlikely to follow that same philosophy.
Even if the philosophies are different, however, some of the outcomes are likely to be the same. That includes the wide bipartisan support for more agency funding, although Trump's Capitol Hill backers have been just as motivated by concerns not rooted in antitrust law but in punishing major social media platforms for what they believe has been an intentional effort to suppress conservative speech. Biden's FTC chair, antitrust academic and Big Tech critic Lina Khan, likely gained some bipartisan support because Senate Republicans were eager for a commission that would continue Trump's effort to go after Silicon Valley.
"People like Josh Hawley and people that are supporting renewed antitrust enforcement are focused much more on the way market power can censor information," Lerner said, referring to the Missouri Republican senator and frequent critic of alleged Big Tech censorship of conservatives who wants to all but ban merger activity by online platforms designated as "dominant digital firms" and any company with a market capitalization of more than $100 billion.
Congress continues to mull a range of sweeping antitrust law overhaul proposals, including legislation aimed at making it easier for enforcers to contest megamergers.
While many of the proposals come from liberals like Sen. Amy Klobuchar, D-Minn. some conservatives have also been eager to put their imprint on the debate, including House Judiciary Committee Republicans who want to speed up antitrust challenges to major technology companies, combine all enforcement at the DOJ and remove the so-called "liability shield" of Section 230 of the Communications Decency Act, which protects internet and tech companies from being held liable for content posted on their platforms.
The legislative rallying cries, at a time with the strongest momentum in years for major change in U.S. antitrust law, have been building for a long time, fed and paralleled by antitrust enforcement by the Trump administration.
"I think we're in a real moment. And I think Biden recognizes that," Lerner said.
It was Trump's GOP-controlled Justice Department that brought the first court challenge in four decades to a "vertical" merger between companies on different points on the supply chain, unsuccessfully contesting AT&T's purchase of Time Warner in a lawsuit that many believe was brought at least in part because of Trump's hatred of Time Warner property CNN, an assertion Trump's antitrust enforcers denied.
"His administration, especially on the DOJ front, was [pursuing] a much more aggressive approach towards mergers. I think the AT&T-Time Warner case under his jurisdiction was something a lot of people didn't predict," said R. Mark McCareins, a Northwestern University professor at the Kellogg School of Management and former co-head of Winston & Strawn LLP's global competition practice. "It certainly showed an effort to start to corral some aspects of vertical mergers."
For years, antitrust enforcers looked at vertical deals as less competitively detrimental than horizontal tie-ups between direct competitors. But that appears to be changing, including through joint guidance issued by the Trump-era DOJ and FTC, although those guidelines were criticized at the time by the FTC's two Democrats in dissenting statements that lined up with their long-standing arguments that merger enforcement generally has been too permissive of anti-competitive deals and has allowed rampant industry consolidation.
Those Democrats are now part of Khan's moves to fundamentally overhaul how the FTC conducts investigations, handles allegedly anti-competitive mergers and more. Similar changes and a similarly aggressive enforcement posture are a strong possibility at the DOJ's Antitrust Division once Biden's pick, Google critic Jonathan Kanter, is confirmed by the Senate.
"We're seeing very aggressive antitrust enforcers that did not have the same level of voice or power in the Trump administration," Lerner said.
Biden's enforcers appear eager to pursue what's expected to be the most aggressive enforcement campaign in recent memory, buoyed by a belief that extends all the way to the White House that enforcement over the last few decades has been too permissive of mergers and too easy on anti-competitive conduct, and guided by FTC Democrats' dissents when the agency was under Republican control and a landmark House staffers report that last year specifically targeted the dominance of Google, Apple, Facebook and Amazon.
"I think there's an attitude in the Biden administration that they're not only willing to go after big companies and big tech companies in particular, but they're anxious [to do so]," said Steve Cernak, a partner at Bona Law PC.
Cernak notes that it was Trump's DOJ that sued Google, which is also battling enforcement actions from state attorneys general and private plaintiffs.
It was also Trump's FTC, alongside state enforcers, that filed parallel suits against Facebook that were tossed at least initially earlier this year.
"That was not an obvious case. And not an obvious case for a Republican-led FTC," Cernak said.
It was also Trump enforcers who started going after larger firms trying to scoop up "nascent" competitors in alleged killer acquisitions to snuff out would-be rivals before they could grow to real threats, including through the DOJ merger challenge that ultimately forced Visa to abandon its purchase of Plaid.
McCormack notes that the Trump-era FTC, while divided along party lines, forced consent decrees on several vertical deals, including on Staples Inc.'s purchase of workplace supply company Essendant Inc.
Concern about vertical mergers has carried over into the current FTC, which voted 4-0 before Khan joined the agency to challenge biotechnology firm Illumina Inc.'s planned $8 billion acquisition of Grail Inc., a cancer-detection company it founded and then spun off. That challenge remains ongoing.
The Road Ahead
However, the similarities between the two administrations' policies shouldn't be overstated, says Lerner of Robins Kaplan.
"I don't see a clean line connecting those two administrations," she said, arguing that the antitrust approach by the two presidents is separated in part by the lens through which they and their antitrust enforcers have looked at corporate concentration.
"When you give it close examination [you see] fissures," Lerner said.
Cernak agreed.
Whereas Trump's antitrust enforcers may have looked harder for violations than other Republican administrations, Cernak said, they were guided by the long-standing underlying principles of antitrust law that tied enforcers' hands, which Biden's appointees appear to want to move beyond.
Much of the tone and tenor of the current commission reflects the dissents penned when Democrats Rohit Chopra and Rebecca Kelly Slaughter were in the minority, McCormack notes
"We're seeing a shift in that sense," he said.
Also apparently under the current FTC's microscope is Amazon.com Inc.'s planned $8.45 billion purchase of Metro-Goldwyn-Mayer Studios Inc. Reports have indicated that the FTC requested more information about the move, which would add more than 4,000 films and 17,000 TV shows to Amazon's streaming collection.
If those reports are true, according to Murino, scrutiny of the deal would be a "sea change" because the companies have little obvious overlap.
"It clearly shows that there's a theory they're willing to tap into," with "more analytical lanes for them to choose" for scrutiny, Murino said.
That deal may still have gotten scrutiny under Trump because of his ire toward Amazon owner Jeff Bezos, who also owns the Washington Post.
"It goes to the politicized rhetoric of antitrust enforcement these days," McCormack said.
Ending the perception that the White House will use antitrust law to wage political vendettas is likely to be a goal of Biden's enforcers. But conversely, he said, Biden enforcers are nevertheless sensitive to the political backlash that will result if they botch a merger analysis, for instance, by allowing a harmful merger to go through.
"I think it weighs heavily on the FTC and DOJ these days," he said.
