US antitrust watchdogs that attacked Big Tech and blocked corporate deals during President Joe Biden’s administration could be kept on a short leash by Donald Trump when he returns to the White House next year. .
Although regulators began cracking down on tech powerhouses like Google and Facebook during Trump’s first term as president, most experts expect his second administration to ease antitrust enforcement and Biden. will be more receptive to mergers and deals after years of hypervigilance under the watchdog.
One of the main reasons for the expected pivot stems largely from the belief that the chief architects of the Biden administration’s hardline stance — Lena Khan of the U.S. Federal Trade Commission and Jonathan Kanter of the Justice Department — will not side with Trump. Government
Both the Justice Department and the FTC did not respond to requests for comment.
Trump’s announcement of billionaire Elon Musk, who once anointed himself a “technoking” to oversee a consulting effort focused on cutting government spending, has reduced staff and regulators. May be trying to rein in companies with deep pockets.
And the nomination of hawkish Trump supporter Matt Gaetz for U.S. attorney general has added more uncertainty to the game. Gaetz has previously criticized the policies of social media platforms that he claims stifle conservative views, and has at times joined calls to break up Big Tech. He also has a track record of supporting causes on behalf of Trump.
“There are going to be some profound changes in antitrust policies,” predicted John Koka, a Northeastern University economics professor who has worked periodically with the FTC and Justice Department on antitrust issues. “Elon Musk may have a larger-than-life influence on policy, and it’s not something we’ve seen before, where one individual whispers in the president’s ear.”
Other experts interviewed by The Associated Press mostly agreed with Kovka’s sentiments. But he also believes it is highly unlikely that the expected change would result in regulators abandoning existing antitrust cases against big tech firms, in part because of the legal showdown the industry faces. combined with public concerns about the growing power and influence over people’s lives.
“We’re in uncharted territory, but the idea of going against Big Tech still has legs,” said Rebecca Allensworth, a Vanderbilt University law professor who tracks antitrust issues.
But the changing of the guard could open the door for Google, Apple, Amazon and Facebook to avoid protracted court battles and negotiate a settlement under a president who is interested in striking a deal.
“Maybe Big Tech should buy a copy of ‘The Art of the Deal’ to figure out how to best negotiate with this administration,” suggested Paul Swanson, of Holland & Hart. Law firm antitrust attorneys. “I wouldn’t be surprised if they find ways to reach some accommodation and we see more negotiated resolutions and consent decrees.”
While the fate of current antitrust cases remains a matter of pure speculation, almost everyone is betting that the Trump administration will be more receptive to mergers, usually with the promise of lower costs and other benefits for consumers. Let’s come.
“The stage is set for a golden age for deal flow between public and private tech players over the next 12 to 18 months,” Wedbush Securities analyst Dan Ives wrote in a research note following Trump’s re-election.
It’s a belief widely shared by most investors, which has helped spur the overall stock market rally since Election Day and the bid to close deals announced during the Biden administration. Increase the shares of the companies. One such example includes Capital One Financial and Discover, which aim to consummate the merger in a stock swap next year. Capital One’s market value has increased by 11 percent while Discover’s market value has increased by 16 percent.
The change in management could also affect a proposed merger between the nation’s two largest supermarket chains, Kroger and Albertsons, which agreed to a $24.6 billion merger in 2022. But the FTC sued in federal court earlier this year to block the merger, claiming the deal would eliminate competition, leading to higher prices and lower wages for workers. But both companies say the merger will help them lower prices and compete with bigger rivals like Walmart.
Given that grocery prices remain a hot-button issue among consumers still reeling from post-pandemic inflation, Allensworth believes the Trump administration’s Kroger-Albertsons The FTC is less likely to “abandon or soft-pedal” a challenge to the merger.
In another case that has been cheered by the consumer crowd, the Justice Department is trying to break up Ticketmaster and its corporate parent, Live Nation, in a lawsuit that claims their conduct has harmed concerts and other entertainment. Costs are increasing.
Despite grassroots support for the issue, Live Nation executives are signaling they believe they can preserve the current system under a Trump presidency.
“We expect to see a return to a more traditional antitrust approach, where agencies have typically tried to find ways to solve the problems they market,” said Joe Berchtold, president of LiveNation. I minimize government interference.” During a conference call with investors shortly after the election.
Deals torpedoed by the Biden administration could find new life with Trump’s command. American and JetBlue are already considering reviving a partnership after an earlier proposal was torpedoed by a legal challenge from Biden’s antitrust team — a decision that was recently upheld by a Boston appeals court. was maintained.
“We’re still taking a look at it,” American Airlines CEO Robert Isom said shortly after the election. “We will take everything that the court has given back, and we will consider it.”
Similar conversations are likely leading to re-examination of deals between other executives that were overreach during the Biden administration, said Colin Kass, an antitrust lawyer at the law firm Proskauer Rose.
“It’s almost certain that there were deals that people put the brakes on because of antitrust concerns and those will be reviewed to decide whether they still make economic sense,” Kass said. ” “If so, they’ll present it to the DOJ. And if it needs to be fixed, it’s more likely to be fixed than outright blocked. So it’s worth taking the chance to get these deals done. .
As for efforts to end Big Tech’s monopolies, the first case brought by the Trump administration against Google is now in the hands of a federal judge who ruled in August that the company’s dominant search engine is a It is an illegal monopoly. U.S. District Judge Amit Mehta in Washington, DC, is now considering what kind of punishment to hand down to Google. A decision is expected by August next year.
In a preliminary proposal filed last month, the Justice Department indicated it may try to persuade Mehta to order that key parts of Google be broken up to restore competition.
A final draft of the sentences recommended by the Justice Department is due this Wednesday. David Olsen, a law associate, said the filing is unlikely to affect the Trump administration’s impression of taking office next January as Cantor and the rest of his assembled team at Justice state their case against Google. There will be one last chance. Professor at Boston College.
A reshuffled team of antitrust regulators appointed by Trump could still back away from whatever position was laid out in the Nov. 20 filing and when Mehta presides over hearings on the proposed penalties next spring. If you want, you can take a different position.
“It’s disappointing to see,” Kovka said. “A stricter policy was in order because tech companies in particular had been allowed to operate without significant restraint for 20 years. And then we all recognized that it was important to establish a stricter policy and demonstrate its merits. It will take more than four years.”
