Biden’s Bid to Reshape Competition Law Thwarted by Trump Win

Donald Trump’s return to the White House likely portends a rollback of some of the Biden administration’s competition initiatives and an end to an M&A enforcement regime centered on deterrence.

While it’s uncommon for antitrust agencies to drop cases brought by the previous administration, there was little gulf between the parties on competition policy in prior decades. As Biden’s antitrust leaders sought to revive aggressive enforcement, a sharper divide emerged. An overhaul of federal merger guidelines and the Federal Trade Commission’s push to ban worker noncompete contracts are now in doubt.

“The big questions will be the ongoing litigation,” Stephen Calkins, a Wayne State University law professor and former FTC general counsel said, citing cases such as the FTC’s monopoly suit against Amazon Inc. “Will there be a course change or will they carry on?”

Signs will emerge quickly in the Justice Department’s case against Alphabet Inc.’s Google. The DOJ is considering seeking a breakup of the company following a Washington, D.C., federal court decision branding it a monopolist in search. A hearing on proper remedies is set for April 2025, when a new set of leaders will be running things.

The FTC, meanwhile, is fighting legal challenges to its noncompete ban in the Fifth and Eleventh circuits. The agency was also sued in October over its rule requiring firms to make it as easy to cancel a subscription as it is to sign up for one.

The two Republicans on the commission—Andrew Ferguson and Melissa Holyoak—each opposed the rules, which signals they could discontinue them once in the majority.

Ferguson and Holyoak have also pushed back hard on certain legal initiatives from Chair Lina Khan and Jonathan Kanter, her counterpart at the DOJ’s antitrust division.

Holyoak said she’d consider rescinding the new merger guidelines, which memorialized the Biden administration’s approach to cracking down on economic consolidation that it claims grew out of hand by decades of lax enforcement.

The commissioners recently voted with the Democrats to update a federal merger notification program. But a change in leadership adds to the questions about what GOP leaders would seek to undo, said Gerald A. Stein, an antitrust partner at Davis Wright Tremaine LLP.

“There’s going to be different priorities advanced in antitrust enforcement,” Stein said. “I don’t think we’ll see this blanket deterrence approach. It will go back to a more predictable environment.”

Big Tech

Trump will gain the power to overhaul the Justice Department and pick a new FTC leader once he assumes office.

It is unclear whether Trump would appoint Holyoak or Ferguson as chair or look outside the agency for a new appointee. It is common for someone in Khan’s position to resign following a change in party control.

The first Trump administration brought some big antitrust lawsuits, including the search case against Google that Biden’s DOJ appointees brought to trial and the original monopoly action against Meta Platforms Inc.

Vice president-elect JD Vance voiced support during the campaign for Khan’s approach to taking on tech titans.

That would suggest a hostile posture towards Big Tech, but it also depends on the role Vance is given. Trump was noncommittal in October when asked about breaking up Google and has more generally promised a deregulatory agenda.

Elon Musk, the X owner and billionaire ally of Trump, said in an Oct. 31 post that Khan “will be fired soon.”

M&A Enforcement

The signals from Trump still point to a far more favorable environment for companies considering mergers and acquisitions, lawyers said.

“One of the hallmarks of the Biden administration’s approach to M&A is to stand firm in opposition to mergers and not concede divestitures as a remedy,” Robin Adelstein, the head of Norton Rose Fulbright’s global antitrust practice, said.

A shift in approach may lead to more “large mergers attempted under a new Trump administration,” she said.

Enforcers in the Biden administration pushed to bring more cases, which led to a mixed record in court. The FTC last month successfully blocked $8.5 billion fashion sector deal between Tapestry Inc. and Capri Holdings Ltd., in a case where the judge voiced support for the new merger guidelines.

The agency is awaiting a decision in its bid to block Kroger Co.'s $25 billion proposed purchase of grocery rival Albertsons Cos. It is also set to begin a trial Nov. 12 in its challenge of Tempur Sealy International Inc.'s $4 billion acquisition of Mattress Firm.

The cases will help answer how consequential the Biden administration’s antitrust policies were. The “long-term question” will be about the precedent they established in court, said Maureen Ohlhausen, a Wilson Sonsini partner and former FTC acting chair in the first Trump administration.

The private antitrust bar may take on new importance in the deal space as the dial swings back to relaxed enforcement, said Daniel Walker, an antitrust plaintiffs’ lawyer at Berger Montague.

At the same time, the appetite for price-fixing and monopolization cases will likely continue unimpeded under Trump, he said, as both parties have agreed on those areas of enforcement.

“There are lots of worthy cases out there,” Walker said.

States are also already playing a bigger role than they once did with respect to merger enforcement. New York’s attorney general is investigating Capital One Financial Corp.'s proposed $35 billion acquisition of Discover Financial Services, and credit cardholders in July sued to block the deal.