Janice R. Andrews
As the world of corporate mergers and acquisitions changes, President Joe Biden’s strong attitude on antitrust problems has become a key part of his administration’s business policy. Dealmakers aren’t sure what the future holds as his term goes on, especially since the 2024 presidential race is coming up. Biden’s antitrust watchdogs, like Lina Khan, Chair of the Federal Trade Commission (FTC), and Jonathan Kanter, Assistant Attorney General, are expanding the scope of antitrust enforcement. This means that the business world is under more scrutiny, which might lessen if former President Donald Trump were to return to office.
The antitrust stance of Biden marks a new era of close examination.
President Biden has been very wary of corporate deals because he wants to limit what he sees as the too much power of big businesses. In a change from previous administrations, his has put a lot of focus on how deals might affect workers and new companies entering the market. In July 2021, Biden signed an executive order that set the tone for this new era. It encouraged competition and warned of a ban on corporate mergers.
Khan and Kanter were chosen by Biden to lead competition efforts. This sent a clear message to business, especially tech giants. Khan became famous after writing an academic piece about Amazon in 2017 that slammed traditional antitrust enforcement for not looking at important issues like how it affects workers and how it stops new rivals from coming up. Both Khan and Kanter have brought these problems to the top under Biden, which led to the release of new merger rules in December 2023.
Antitrust lawsuits have had a range of outcomes.
The Biden government has had some big wins in its antitrust battles. For example, Illumina’s purchase of Grail was thrown out, which involved tests for cancer. In a case started by the Trump administration, a recent decision said that Google’s search engine was a monopoly. These wins show that the government is serious about fighting corporate power.
But the government has also had some major failures. It lost important cases like the one that challenged Microsoft’s purchase of Activision Blizzard and the one that challenged UnitedHealth Group’s purchase of Change Healthcare. These losses have made people wonder how well the administration’s tough antitrust attitude is working.
What the Future Holds: Trump vs. Harris
As the 2024 election approaches, people who work in trade and dealmaking are closely watching to see what might happen. People generally think that if former President Trump wins, trade laws will not be enforced as strictly, which could lead to more mergers. When Trump comes back, there might be less of the close scrutiny that existed during the Biden years. This could make it easier to make deals.
However, things are not as simple as they seem. Senator JD Vance, Trump’s running mate, is part of the current Republican alliance. He has praised Lina Khan’s method. This tendency toward populism in the Republican Party makes things less predictable. Harry First, a professor at New York University, says that the future of antitrust regulation under a Trump government is still unclear.
If Vice President Kamala Harris wins, on the other hand, the strict trade policies put in place by the Biden government are likely to stay in place. In the business world, people are getting ready for more scrutiny, which could have an effect on mergers and acquisitions.
The Stuck Debate: Benefits and Risks
People are arguing about the Biden administration’s antitrust strategies in more than just the court system. Ryan Quillian, a former FTC enforcement official, has said that the current administration’s words are louder than its deeds when it comes to regulation. Quillian, who is now a partner at Covington & Burling, wrote a paper in October 2023 in which he said that the agencies have put more effort into deterrent language and procedures than real lawsuits.
Because of this extra attention, CEOs think about the risks of antitrust action from the very start of deal talks. A banker on Wall Street said that clients are now thinking “two or three times more” about things that could be looked over, which shows that people are being more careful right now.
The American Investment Council, which speaks for the private equity industry, has been very critical of the Biden administration’s plans to change the Hart-Scott-Rodino Act, which controls notices before mergers. With the suggested changes, more information would have to be shared, which could make merging more expensive and difficult. If these changes go through, the council says they will hurt customers because the economy will slow down.
Looking Ahead: What Will Happen Next with Antitrust?
The antitrust group has to think about what will happen next as Biden’s presidency comes to an end. The next government will have to make important choices, like whether to keep Biden’s antitrust rules and the 2023 merger guidelines, which need to be approved by US courts in order to be fully effective.
On top of that, cases against tech giants like Apple, Amazon, Google, and Meta are still going on. The next government will have to decide if these court fights will go on or if they will try to find other answers, like settlements or dismissals.
For now, people who make deals are still unsure what will happen. They are keeping a close eye on politics as they think about the pros and cons of future mergers in an antitrust environment that is changing.
