As State AGs Step Up Enforcement, Plan Early on Merger Processes

As the number of mergers and acquisitions have increased over the years, so too has the level of antitrust enforcement by state attorneys general. In the past, this activity has most often been in conjunction with federal enforcement efforts.

State attorneys general have recently signaled they are fully prepared to move forward with investigating, blocking, or even dissolving mergers through subpoena power or litigation, even when federal counterparts have seemingly given their blessing to a deal.

Antitrust Enforcement

State attorneys general have a variety of mechanisms available to enforce antitrust laws. Like the Department of Justice and the Federal Trade Commission, state attorneys general may pursue claims under federal antitrust law.

Unlike their federal counterparts, however, state attorneys general may also pursue antitrust enforcement under their own respective state laws. Many states have passed or are considering passing such statutes—sometimes those laws closely mirror federal authority, while others include additional provisions or focus on state-specific issues. State attorneys general have also pursued antitrust enforcement through consumer protection laws. Pennsylvania doesn’t have state-specific antitrust laws; nevertheless, the Pennsylvania Attorney General’s Public Protection Division, which has an antitrust section, frequently engages in enforcement activity through Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.

State attorneys general have shown increasing willingness to pursue standalone investigations and litigation using some or all of these mechanisms, even after federal agencies step back. Indeed, several states have explicitly stated that they could use more resources to fill perceived gaps left by federal enforcers in the antitrust space due to “a mass exodus of career lawyers” and sharp shifts in enforcement priorities.

One of the most striking examples of such state activity is the recent Live Nation jury verdict. That litigation was originally brought by the DOJ, 39 states, and Washington, DC. Although the DOJ settled with Live Nation in March, a bipartisan coalition of 33 states and Washington, DC continued to trial and, in April, a federal jury found Live Nation liable for monopolization.

Notably, the divide between federal and state enforcers isn’t always whether to take action, but rather what remedy is acceptable when antitrust laws have seemingly been violated. In the Live Nation matter, state attorneys general forged ahead to trial because the DOJ settlement would allow Live Nation to keep Ticketmaster—a key sticking point for the state attorneys general, who are pushing for a breakup of the two entities.

To be sure, state attorneys general have pursued enforcement despite federal activity (or inactivity) before. The Live Nation litigation however, shows how far state attorneys general are now willing to go alone, and their success in that matter will only embolden them to take further action.

The question becomes, then, what should companies contemplating mergers do?

Practical Implications

The increasing bullishness of state attorneys general will lead to a more fragmented enforcement environment, both in terms of whether enforcers take action and, if they do, what remedy they will find acceptable.

California and New York have notoriously robust and aggressive antitrust departments. Other states have only more recently stood up their own antitrust departments, signaling that more resources will be devoted to these efforts. In 2024, the New Jersey Attorney General announced a new antitrust division. Since then, New Jersey has actively pursued several high-profile antitrust lawsuits, including in the housing and healthcare industries.

With this evolving landscape, companies should start thinking early in their merger processes about which state attorneys general are most active in their respective industry and whether those offices may take an interest in any prospective deal.

Companies should consider the impact a potential merger may have on any given state, not only in terms of consumer buying power but also in terms of the state’s labor market. For example, how will a contemplated merger help or hurt employment in a given state? Will it add jobs or eliminate them in any particular county or major city in that jurisdiction? These are the types of questions individual attorneys general will be asking themselves—and the answers will drive enforcement decision-making.

Once companies identify which states may take an interest in their potential merger, companies may consider proactive outreach to those states. State attorneys general can and will subpoena documents, information, and testimony in a way that was historically carried out by the FTC or DOJ. That subpoena power is incredibly broad, and attorneys general won’t hesitate to seek court intervention to enforce their subpoenas, if necessary.

If companies contemplating mergers wait too long to engage with states or are slow to provide materials those jurisdictions need to close an investigation, this will impact deal timelines or potentially cause state attorneys general to block the merger. Proactive outreach may also have the benefit of enabling coordinated state efforts, which, for companies, may help conserve resources by responding to and reaching a resolution with multiple states all at once rather than in piecemeal and on different timelines.

It’s critical for companies to understand that state attorneys general are ramping up antitrust enforcement activity, even when their federal counterparts have seemingly signed off on a deal.

Companies contemplating mergers should take steps early on to identify how their proposed deal may impact consumers—both purchasers and laborers—of any given state and further contemplate whether proactive outreach to those enforcers would be beneficial.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Jason Downs is a partner in Hogan Lovells’ Washington, DC litigation practice and co‑lead of the firm’s state attorneys general practice.

Victoria Glover is a senior associate in Hogan Lovells’ Washington, DC litigation practice.

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