With Makan Delrahim’s recent confirmation by the Senate to head the Department of Justice’s (“DOJ”) Antitrust division, the focus has now shifted to the Trump administration’s approach to corporate transaction deals and the potential appurtenant policy changes.1 Under the Obama administration, the Antitrust division continued recent trends exemplified by an increasing inclination to challenge proposed transactions.2 This trend seems unlikely to continue under the new conservative administration; the new chief of the Antitrust division is a staunch adherent to laissez-faire economics restrained government involvement in the economy.3
The views of Delrahim seem to be in line with typical GOP viewpoints, and as such it is reasonable to forecast a pattern of the DOJ favoring mergers and acquisitions as well as efficiency-maximizing transactions. He expressed his view explicitly in remarks made during his tenure at the antitrust division under the Bush administration, where he stressed the legality of monopolies where there is no evidence of abuse of monopoly power.4 As such, the administration is likely going to firmly oppose over-zealous prosecutors, courts, and government agencies that seek to disrupt these free market activities that, in theory, maximize efficiency.
Such a hands-off approach to antitrust laws may come as a shock to some, as the relaxation of regulation will be in stark contrast to the activist approach imposed by the Obama administration. Under the previous administration, the DOJ and the Federal Trade Commission (“FTC”) challenged 47 mergers in 2015, all of which resulted in a lawsuit, restructuring, or cancellation of the deal.5 Earlier in the Obama tenure, the Department of Justice blocked AT&T’s proposed acquisition of T-Mobile, citing the lessening of competition due to the combination of the nation’s second and fourth largest telecommunication providers as the primary roadblock.6
However, all hope is not lost for those favoring heightened government involvement in the realms of corporate competition and antitrust laws. Delrahim has been known for his adherence to pragmatism, and he was a counsel of the Judiciary Committee that played a key role in the Government’s investigation and prosecution of Microsoft.7 This suggests that the new Antitrust chief is not fundamentally opposed to the enforcement of antitrust laws, given the right circumstances.
The way the new administration handles the merger between Time Warner and AT&T could serve as a guidepost to how the Trump administration will handle antitrust matters. The proposed acquisition of Time Warner by AT&T. for $85 billion is set to bring two of the largest media and telecommunications conglomerates together, forming what could be the dominant powerhouse in the industry.8 Time Warner’s assets include, among others, CNN, HBO, and the Harry Potter Franchise, all of which could be utilized by AT&T to attract a greater subscription base – already at a massive 133 million customers – by way of commercial or personal bundles to its telecommunications network.9 The combination of content production and distribution on a global scale will inevitably trigger an investigation by both the DOJ and the FTC as to its effect on competition in the industry. The transaction could raise a Section 2 of the Sherman Act issue, which disallows attempts to monopolize an industry.10
The new administration’s approach to antitrust laws takes on greater importance in circumstances like those we are now facing, where we are seeing a boom in both the number and size of mergers in the United States and worldwide. As we approach at least three more years of the Trump administration, the approach and philosophy taken by the administration could shape the country in a multitude of different areas across all sectors of society. It remains unclear what changes we may see in the fields of competition and antitrust, but it is safe to assume the administration will take a more hands-off, but pragmatic, approach, which will be a drastic change from that employed by the Obama administration that yearned for greater government control and involvement.
Ted Johnson, Senante Confirms Makan Delrahim as Antitrust Chief, Variety (Sept. 27, 2017), http://variety.com/2017/politics/news/makan-delrahim-antitrust-chief-1202574881/. ↩
William McConnell, Obama Administration Most Aggressive Ever in Regulating Merger and Acquisitions, TheStreet (Apr. 28, 2016), https://www.thestreet.com/story/13538758/1/big-government-steps-up-challenges-to-big-business-in-merger-wars.html. ↩
Cecilia Kang, How Trump’s Pick for Top Antitrust Cop May Shape Competition, The New York Times (Apr. 25, 2017), https://www.nytimes.com/2017/04/25/technology/how-trumps-pick-for-top-antitrust-cop-may-shape-competition.html. ↩
McConnell, supra note 2. ↩
Jessica Roy, 4 Corporate Mergers Shot Down by the Government, Splinter (Feb. 26, 2014), https://splinternews.com/4-corporate-mergers-shot-down-by-the-government-1793840916. ↩
President Trump Appoints Makan Delrahim to Lead the Antitrust Division, Davis Polk (Mar. 27, 2017), https://www.davispolk.com/files/2017-03-27-president-trump-appoints-makan-delrahim-to-lead-the-antitrust-division.pdf. ↩
Walt Mossberg, Why AT-T-Time Warner Merger is Dangerous, The Verge (Dec. 14, 2016), https://www.theverge.com/2016/12/14/13941266/walt-mossberg-att-time-warner-merger-deal-danger. ↩
The Sherman Antitrust Act of 1898, 15 U.S.C. § 2. ↩