SAN FRANCISCO — The U.S. antitrust agencies that have taken a hard stance against major technology firms under President Joe Biden may find themselves more constrained by Donald Trump if he regains the presidency in the upcoming year.
While enforcement measures against tech giants such as Google and Facebook began during Trump’s initial tenure, many analysts believe that a second term could result in a more lenient approach towards antitrust regulations and greater encouragement for mergers and acquisitions, which had faced scrutiny over the past few years under Biden’s administration.
A significant factor driving this expected shift is the belief that key figures behind Biden’s stringent policies, like Lina Khan of the Federal Trade Commission and Jonathan Kanter from the Justice Department, are unlikely to continue in their positions under a Trump administration.
Neither the FTC nor the Justice Department has commented on these developments.
Trump’s recent suggestion to appoint billionaire Elon Musk, who has dubbed himself the “Technoking,” to lead an initiative aimed at cutting government expenditures could lead to a reduction in the number of regulators monitoring large corporations.
Further uncertainty was introduced by Trump’s nomination of Matt Gaetz as U.S. Attorney General. Gaetz, a staunch ally of Trump, has been vocal in critiquing social media platforms for their policies viewed as suppressive to conservative perspectives, and he has shown support for the breakup of major tech companies.
“Significant changes in antitrust policy are on the horizon,” anticipates John Kwoka, an economics professor at Northeastern University who has collaborated with the FTC and Justice Department on antitrust cases. “Elon Musk might wield an unprecedented level of influence over policy, which is not something we’ve seen before, where one individual holds such sway with the President.”
Other experts involved in discussions support Kwoka’s insights. However, they caution that it is improbable for regulators to abandon the current antitrust lawsuits against major tech companies, especially since these legal battles resonate with rising public concern regarding the immense power and influence these firms maintain over everyday life.
“We find ourselves in uncharted waters, but there is still significant momentum behind confronting Big Tech,” states Rebecca Allensworth, a law professor at Vanderbilt University specializing in antitrust matters.
The administration change could offer opportunities for corporations such as Google, Apple, Amazon, and Facebook to sidestep prolonged legal disputes, potentially leading to settlements under a president with a preference for negotiation and deal-making.
“Perhaps Big Tech should acquire a copy of ‘The Art of The Deal’ to better navigate negotiations with this administration,” suggested Paul Swanson, an antitrust attorney with Holland & Hart. “It would not surprise me if companies find ways to reach accommodations, leading to more negotiated settlements and consent decrees.”
While the status of ongoing antitrust litigations remains speculative, there is a prevailing sentiment that the Trump administration will more likely endorse mergers that promise reductions in costs and other benefits for consumers.
In a recent research report, Dan Ives of Wedbush Securities predicted “a golden era for deal flow among public and private tech entities over the next 12 to 18 months.”
This sentiment is broadly shared among investors, contributing to a surge in the overall stock market since Election Day, beneficially impacting companies pursuing mergers that were initially outlined during Biden’s administration. Notably, Capital One Financial and Discover are moving ahead with plans for a merger via stock exchange next year, with Capital One’s market capitalization rising by 11% and Discover’s by 16%.
Changes following the election might also affect the proposed merger between Kroger and Albertsons, the two leading supermarket chains, which announced a $24.6 billion merger last year. The FTC had filed a lawsuit to block this merger earlier this year, citing potential harm to competition, which could lead to increased prices and decreased wages for employees. The companies argue that the merger would enable them to lower prices and effectively compete with larger rivals like Walmart.
Given the heightened grocery prices, a pressing concern among consumers still reeling from post-pandemic inflation, Allensworth believes that the Trump administration is less likely to completely abandon the FTC’s litigation against the Kroger-Albertsons merger.
Similarly, in a case applauded by many consumers, the Justice Department is pursuing legal action to separate Ticketmaster from its parent company, Live Nation, alleging that their practices inflate concert and entertainment costs.
Despite widespread consumer support for this legal action, Live Nation executives have expressed optimism about maintaining the current situation under a Trump presidency. Live Nation President Joe Berchtold commented, “We remain hopeful to see a return to a more conventional antitrust approach, where agencies aim to find targeted solutions that minimize government interference in the market.”
Deals previously blocked during Biden’s administration could gain new momentum under Trump. For instance, American and JetBlue are evaluating a potential partnership after their original proposal faced a legal challenge from Biden’s antitrust team, a ruling later upheld by a Boston appeals court.
“We are still reviewing it,” stated American Airlines CEO Robert Isom shortly post-election. “We will consider all feedback from the court as we move forward.”
Similar discussions are expected among other corporate leaders reevaluating deals that seemed implausible during Biden’s term, remarked Colin Kass, an antitrust attorney at Proskauer Rose.
“It’s quite likely that there were deals placed on hold due to antitrust issues, and they will now be revisited for their economic viability,” Kass explained. “If they are still reasonable, they will be presented to the DOJ. If any fixes are needed, they might be more feasible to implement than being outright rejected.”
As for ongoing initiatives to dismantle monopolistic practices within Big Tech, the first antitrust case launched by the Trump administration against Google is currently pending before a federal judge who ruled that Google’s dominant search engine constitutes an illegal monopoly. The judge, Amit Mehta, is considering punitive measures against Google, with a decision expected by next August.
A preliminary filing from the Justice Department last month suggested potential measures to persuade Mehta to enforce a breakup of key Google business segments to enhance competition. This upcoming filing is not expected to be swayed by the prospect of Trump’s administration resuming duty next January, as Kanter and his team have a final opportunity to present their case against Google, according to David Olson, a law professor at Boston College.
Nonetheless, a reshuffled group of antitrust regulators appointed by Trump could depart from the stance presented in the upcoming filing and adopt a divergent approach during subsequent hearings regarding proposed penalties in spring.
“It’s quite troubling to observe,” Kwoka lamented. “A tougher policy was warranted due to the unregulated behaviors of tech companies for the past two decades. We’ve come to realize that developing a stronger policy would require more than four years to prove its effectiveness. Unfortunately, that may not be the case now.”
