Gearing Up For Change in Antitrust Merger Enforcement
“Litigation readiness” was the unofficial theme of antitrust enforcement at the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission over the past eight years. Although determining whether this “litigation readiness” actually resulted in the two antitrust enforcement agencies’ bringing more merger cases than we might have otherwise seen is a complicated question, the practical effect was that deal review took longer, faced increased scrutiny, involved more non-parties, was more expensive and faced more uncertainty than in prior administrations. These effects were evident in the recent number of large-scale, high-profile litigated deals involving retail and consumer products companies, including the FTC’s challenges to the proposed mergers of Staples/Office Depot, Sysco/U.S. Foods and Dollar Tree/Family Dollar, and the Antitrust Division’s challenge to the proposed acquisition of GE’s appliances business by Electrolux.
Looking forward, President Trump has provided some insight through his public statements regarding the future of antitrust policy. For example, he has indicated a willingness to use the federal antitrust laws to prevent the proposed tie-up between AT&T and Time Warner and to revisit (and potentially break up) Comcast’s 2011 acquisition of NBC Universal.
Despite Trump’s ambiguous rhetoric, his antitrust advisers for the transition suggest a merger antitrust climate that likely will be generally less interventionist than the Obama administration. Hunton & Williams partner David Higbee is advising the President with respect to the Antitrust Division transition. Joshua Wright, a former FTC commissioner and current professor at Antonin Scalia Law School at George Mason University, has also been reported as working on the antitrust transition. Together, these advisers suggest a more market-oriented approach to antitrust enforcement.
Already, newly appointed Attorney General Jeff Sessions has indicated in Senate confirmation hearings that he thinks merger remedies should be based solely on applicable competitive concerns rather than remedies that are not directly related to antitrust problems. General Sessions stated that he has “no hesitation to enforce antitrust laws,” but emphasized that he thinks “certain mergers should not occur” and that “there will not be political influence in that process.”
The one certainty is that the Trump administration will bring new leadership to both the Antitrust Division and the FTC. Certainly the FTC has two open commissioner spots for Republican nominees who may bring new approaches and who will flip the political balance of power from the Democrats to the Republicans. A current Democratic Commissioner, Edith Ramirez, has confirmed that she is stepping down as a commissioner effective February 10, leaving a third open position at the FTC. Similarly, the DOJ will see a new front office, including a new Assistant Attorney General, and likely several new deputies and the chief of staff.
2016 Retail Antitrust Highlights
2016 brought a multitude of mergers and acquisitions reviewed by the FTC and Antitrust Division in the retail and consumer products space. Many of these deals were cleared without significant review, including Hunter Douglas/Levolor, Unilever/Dollar Shave Club, FedEx/TNT Express, Ball Corp./Rexam and Walmart/Jet.com. Other deals, however, received significant scrutiny and faced lengthy investigations that ended in negotiated consent decrees or litigation.