
Policy Deep Dive: The Trump Administration and antitrust.
In this special policy series, the Caveat team is taking a deep dive into key topic areas that are likely to generate notable conversations and political actions throughout the next administration. This limited monthly series focuses on different policy topic areas to provide you with our analysis of how this issue is currently being addressed, how existing policies may change, and to provide thought-provoking insights.
For this month's conversation, we’re focusing on antitrust policy. We’ve seen substantial changes over the past several years and we assess how the Trump Administration will likely approach this key topic in the coming years.
To listen to the full conversation, head over to the Caveat Podcast for additional compelling insights.
Key insights.
- Biden’s antitrust approach. Under Biden, his administration departed from traditional approaches and took a more theoretical and aggressive approach.
- Trump’s potential policies. While Trump is known for having a pro-business stance, experts believe that his second administration may have a stronger lean than initial thoughts would suggest.
- The ongoing cases. Despite the change of administrations, numerous antitrust cases are still ongoing and how the next administration plans to address them will likely change.
- The 2023 merger guidelines. One of the most controversial antitrust policies under the Biden administration was its new business merger guidelines, which have an uncertain future with the incoming administration.
Shifting practices.
Biden’s administration departed from the established antitrust enforcement norm by utilizing a new and highly aggressive approach.
Under the Biden administration, the federal government’s approach to designing and implementing antitrust policy could be described as a dramatic shift compared to the past forty years, especially when addressing big technology companies. During this administration, federal authorities shifted their focus and implemented new policies, taking a more aggressive approach when pursuing antitrust lawsuits. The two primary agencies President Biden used to execute this shift were the Federal Trade Commission (FTC), led by Lina Khan, and the Department of Justice (DOJ) antitrust division, led by Jonathan Kanter.
Some notable accomplishments these two agencies achieved included drafting major policies and pursuing numerous antitrust lawsuits against Google, Meta, Apple, and Amazon, among others.
However, before diving into what will change as well as what will stay the same under the incoming administration, it is important to understand how the Biden administration changed policy and how this shift will likely remain consistent, albeit slightly watered down when spearheaded by the incoming Trump administration.
Thinking ahead:
How do Biden’s policies compare to the previous administrations and how keeping these policies with the next administration could impact markets?
Biden’s lawsuits and policies.
Throughout his administration, Biden overhauled the nation’s approach to antitrust policy threatening monopolists with company break-ups and redefining what is considered to be a monopoly.
While the Biden administration tackled policies in numerous ways, the administration’s largest achievements came when pursuing cases and crafting the 2023 merger guidelines. Regarding the lawsuits, the Biden administration targeted many major technology companies to limit corporate dominance and make markets more competitive. Under the leadership of both Khan and Kanter, each lawsuit was rooted in improving each respective industry's competitiveness and safeguarding emerging markets. At the time, Kanter highlighted their motives emphasizing that “competition does not just protect the markets and technologies of today, but the innovations of tomorrow.” Furthermore, these lawsuits have already begun to yield results.
One of the most notable antitrust successes under the Biden administration came from one of its lawsuits against Google. In August, Google was found to have had an illegal monopoly after a judge ruled that the company violated antitrust law in the search engine market. In this case, United States (US) District Judge Amit Mehta wrote that “the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly.” After this ruling, the Biden administration continued to aggressively pressure Google with the DOJ recommending that Google be required to divest from Chrome to end its search engine monopoly.
While Google has been found guilty in this case, the company is still awaiting a second sentencing trial to determine the appropriate remediation solutions. However, initial reactions to this outcome were significant with experts lauding the ruling as a major antitrust victory. Rebecca Haw Allensworth, a legal professor at Vanderbilt Law School, commented that the verdict was “a sign that the tide is changing in antitrust law generally away from the laissez-faire system that we’ve had for the last forty years.” Aside from this notable Google lawsuit here are some of the other major antitrust lawsuits that the Biden administration is currently pursuing:
- Apple's Case. An antitrust lawsuit alleges that Apple has intentionally made it more difficult for consumers to switch software and hardware while also simultaneously stifling innovation.
- Google’s Second Case. A different antitrust case alleges that Google maintains a monopoly regarding advertising technology.
- Amazon’s Case. An antitrust case alleges the company uses anti-discounting measures and applies conditions to sellers’ abilities to stifle competition.
- Meta’s Case. A case aiming to break up the social media company after alleging it has purchased other social media applications to crush the emerging competition.
Aside from DOJ’s lawsuits the administration also crafted new antitrust policies. Led by the FTC and Lina Khan, the administration created the 2023 merger guidelines, which were considered to be “very hostile to mergers and acquisitions.” For context, the guidelines replaced the previous 2014 guidelines and implemented two major changes. The first change involved substantially lowering the threshold at which a merger is considered to be presumptively anticompetitive. The second change involved reshaping the basis of many of the merger guidelines to be based on newer and less proven legal theories. The theories included the following:
- Prohibiting transactions that may enable a firm to “dominate” in a single market or extend its position into other markets.
- Finding that a firm may violate the Sherman Act by engaging in multiple smaller acquisitions even if none of these individual acquisitions would violate antitrust law.
- Reasoning that while a merger may not raise issues relating to the sale of products, it may result in noticeably less competition in labor markets.
- Asserting that mergers can raise competitive concerns even if they do not fall into traditional horizontal and vertical merger definitions.
Through these mergers and acquisitions guideline changes, agencies have been empowered to pursue enforcement more aggressively. Aside from these new merger guidelines, Lina Khan’s FTC has also instituted other rule revisions, which have enabled the agency to continue its aggressive merger enforcement. One key rule that will go into effect at the beginning of 2025 revolves around a rule revision to the Hart-Scott-Rodino Antitrust Improvements Act of 1976. With this revision, the FTC made it significantly more burdensome for merging parties requiring them to have more comprehensive disclosure requirements than previously needed.
By designing more stringent antitrust policies and through more aggressive enforcement via lawsuits, the Biden administration set a new antitrust agenda that was a noticeable departure from the previous norm. However, with the incoming Trump administration, people have initially reacted believing his policies will be a return to the more business-friendly model seen previously. While it may be true that some of the more strict and aggressive policies may be modified, if not outright rescinded, under the incoming administration, there are key indicators that have shown that this second Trump administration may be more in line with Biden’s policies than originally thought.
Thinking ahead:
What Biden’s policies would have impacted the antitrust landscape long-term and what policies and initiatives are likely to survive in the next administration?
The Trump Administration’s agenda.
As Trump’s administration prepares to take power, early indicators demonstrate that this new administration may be more hostile to monopolistic behaviors than initially suggested.
While it is true that a Trump-led White House will be more reserved in its antitrust agenda than a Harris one would have been, there are early indications that this new administration may align more closely with existing antitrust policy than initially anticipated. From key figures in the administration making notable comments, the first Trump administration’s antitrust efforts, and leadership nominees, the incoming Trump administration has given strong signals that many policies and ongoing cases will survive even if new outcomes are sought or more traditional assessment processes are utilized.
Thinking ahead:
How will these early indicators set the tone for Trump’s administration and what next steps can he take to build off these initiatives?
Ongoing antitrust cases.
With how many outstanding antitrust cases still need to be resolved, questions have been raised about how Trump will pursue these cases and what outcomes his administration hopes to achieve.
Given the fact that many of these ongoing lawsuits were initially started by the first Trump administration, it should be no surprise that his second administration will likely aim to continue pursuing many of these cases. Earlier this year, Trump outlined his initial views on these antitrust cases indicating that while he aims to continue pursuing these cases, he does not intend to pursue Biden’s aggressive remediation solutions. For example, in October, Trump expressed concerns about the fallout of Biden’s proposed Google breakup asking “if you do that, are you going to destroy the company?” However, while Trump expressed concerns about a company break-up, Trump then emphasized that he would look to find alternative solutions when handling the sentencing rather than pursuing a breakup to “make sure it’s more fair.” Meaning that it is likely the Trump administration would aim to pursue more traditional punishments like significant financial and regulatory penalties rather than the divestments that the Biden administration had aimed to achieve.
Aside from Trump emphasizing his support for a continued but albeit less severe antitrust enforcement, his administration’s antitrust leadership nominee reflects this mindset. For context, the Trump administration has formally nominated Gail Slater to lead the DOJ’s Antitrust Division, who was previously a policy advisor for JD Vance. With Slater’s formal nomination, she will likely bring a more moderate antitrust agenda to the DOJ but still aim to continue many of these cases. Given Slater’s past work with the FTC, as well as her work as a technology policy advisor in Trump’s first term, she has been a strong big tech critic, whose nomination likely doused some hopes from big tech that this stronger antitrust environment ushered in by Biden is not fully going away. With her nomination, President-elect Trump stated that “Big Tech has run wild for years, stifling competition in our most innovative sector…and our [DOJ]’s antitrust team will continue [to fight these abuses] under Gail’s leadership.”
Industry experts have taken notice of these early indicators and have made similar assessments. Owen Tedford, a senior research analyst at Beacon Policy Advisors, commented on this dynamic emphasizing that he believes that “there still would be a belief from Trump regulators that they want to win something [from] these cases” even if the sought outcome is not nearly as aggressive as those that would have been under a Harris administration. Matthew Cantor, an antitrust lawyer with Shinder Cantor Lerner echoed these sentiments and emphasized that while he does expect greater leniency from this next administration, he does not think that “tech companies [will] be jumping up for joy” when assessing how the overall antitrust environment will impact them during the Trump administration.
However, pursuing antitrust cases is just one aspect of overall antitrust regulatory efforts. As the incoming administration prepares itself to begin taking over these cases, another key aspect that will be addressed will revolve around assessing which of Biden’s antitrust policies need to be removed, edited, and kept as is.
Thinking ahead:
How will Trump’s administration pursue some of these cases and what outcomes will his administration hope to achieve?
Mergers and acquisitions.
While Trump’s handling of various legal cases may be more aligned with Biden’s approach, how he approaches more conventional policies is likely to be rooted in more conventional assessments.
Another key antitrust area that Trump’s team will likely address revolves around mergers and acquisitions. As mentioned previously, under Biden, the FTC instituted new merger guidelines in 2023 to replace the previous 2014 version. Overall, these new guidelines were a significant step up concerning the requirements placed on businesses looking to merge and how regulators assessed market impacts. Due to these significant regulatory changes, it should come as no surprise that businesses reacted negatively to these policies. Given the incoming administration’s more pro-business mindset, experts are skeptical about the future of these guidelines.
While the 2023 merger guidelines were passed by the FTC, which does have two Republican members on its committee, these members have already expressed their reservations about the new restrictions. Melissa Holyoak, a Republican FTC Commissioner who originally voted for the guidelines, commented that she now considers them to be an overreach. More specifically, Holyoak stated that she “would strongly consider rescinding or revising” the guidelines given their impact on downplaying the role of economics when assessing potential mergers and acquisitions. Holyoak’s emphasis on economic analysis represents a return to more traditional mergers and acquisitions assessments that place greater emphasis on the role of economics and utilizing more standard legal presidents when examining proposed mergers. More specifically, the following provisions are most likely to face the greatest levels of scrutiny:
- The lowering of the concentration thresholds that trigger a structural presumption of illegality to pre-2010 levels.
- The evaluation process of whether a merger may entrench or extend a firm’s dominant position in new markets.
- The evaluation process of a given transaction in the context of industry, including trends towards vertical integration, to determine whether a merger presents a threat to competition.
- The evaluation process of a firm’s “pattern or strategy of multiple small acquisitions in the same or related business lines.”
- The process of assessing a transaction’s impact on labor markets and explicitly rejecting potential efficiency arguments related to labor cost reductions.
Given comments by key leadership regarding these guidelines, experts have drawn conclusions emphasizing that this incoming administration will see a return to more traditional regulatory merger assessments. Justin Stewart-Teitalbaum, an antitrust partner with Freshfields and former FTC attorney, commented on this policy shift emphasizing that he “anticipates continued scrutiny of mergers, although not [the] inherent skepticism of [merger and acquisitions] activity” that was seen under Biden. Matthew Cantor echoed this assessment commenting that “mergers and transactions [were] sort of held back during the Biden administration” and that he expects a “slew of deals” to take place over the next four years.
However, despite the incoming administration signaling its intentions to reduce some of the regulatory merger frameworks, this does not mean the new lawmakers intended to outright remove all of Biden’s antitrust policies. One key policy that has not been fully addressed revolves around a recent rule change that is scheduled to go into effect on February 10th, 2025. Despite this rule change increasing the regulatory requirements, it is not clear if the incoming administration intends to dismantle the rule. While Trump would be able to place a freeze on the revision that would last for at least sixty days, Commissioner Holyoak commented that she aims to “analyze the effects of the rule” before determining if it needs to be amended or removed.
Thinking ahead:
With Trump’s administration returning to more conventional merger and acquisition assessments, how will these policy changes impact existing markets, and what doors will open for big business to take advantage of?
The antitrust environment.
As the Trump administration prepares to take power, their approach to tackling antitrust policy appears to be more hostile than initial reactions would have many believe, and this approach will likely aim to strike a balance between the two sides of antitrust enforcement.
Over the past four years, the Biden administration’s aggressive antitrust approach marked a notable departure from the established norm. Whether that be pursuing monopoly breakups, as seen with Google’s first antitrust case, or crafting aggressive new policies, like the 2023 merger guidelines, Biden’s approach was focused on applying more theoretical antitrust concepts when assessing companies rather than utilizing more traditional impact assessments. This line of thinking was heralded by antitrust proponents as a substantial victory for antitrust efforts, whose long-lasting impacts now remain uncertain as the nation prepares for a new administration to take over.
While it is impossible to say how the incoming administration plans to address antitrust efforts over the next four years, it is clear that Trump intends to remain committed to antitrust efforts even if they are less aggressive. Rather than pursuing monopoly breakups or being inherently skeptical of mergers and acquisitions, the Trump agenda will aim to enforce more conventional punishments and conduct more traditional economic-based merger assessments. However, despite these more conventional and conservative approaches, that does not mean that this administration intends to return to the laissez-faire model that defined the last several decades. Instead, both citizens and businesses should expect this next administration to find a middle ground between these two extremes aiming to target and reduce monopolistic behaviours without completely uprooting existing market structures.
Thinking ahead:
How will initial policies impact the regulatory landscape and what will antitrust lawsuits look like over the next four years? While initial policies focused on finding a middle ground, how might this new approach change market structures?