Antitrust Settlements at Agencies Are Back in Play Under Trump

The antitrust enforcers of the Trump administration reversed the prior administration’s anti-settlement rhetoric, expressing a more pragmatic willingness to “get out of the way” of procompetitive mergers and conduct and to enter settlements that can allow parties “to proceed in a pro-consumer, pro-competitive manner.”

Action has followed this rhetoric in recent months. The Federal Trade Commission and the Department of Justice’s Antitrust Division both have shown in practice that robust settlements are back in play for mergers and conduct cases. The return of settlements is important. It can provide greater certainty and optionality for dealmakers and companies under investigation. It also provides the agencies’ flexibility to achieve sensible protections for consumers at lower cost.

This approach represents a significant change compared with the Biden administration. Biden antitrust enforcers all but abandoned settlements for merger cases, representing a sharp break from prior agency practice, and injecting uncertainty and additional costs into dealmaking.

The leadership of the FTC and the Department of Justice’s Antitrust Division expressed a preference for litigating, win or lose, rather than settling merger cases. This stated preference was born out in practice. The Biden DOJ resolved only one merger investigation via consent, and that was only after seven months of litigation. The Biden FTC took a similar approach. In the last two years of the Biden administration, the FTC didn’t, with one exception, resolve any merger investigations via the divestiture of tangible assets. The Biden FTC did resolve two other mergers via remedies during that period, but those settlements—Exxon’s acquisition of Pioneer and Chevron’s acquisition of Hess—were withdrawn by the FTC last July in the face of criticism.

A similar anti-settlement approach was taken in conduct cases at the Biden FTC. Under Chair Lina Khan, the Biden FTC brought numerous conduct cases and settled very few: only two non-compete cases. The DOJ arguably took a more nuanced approach to settlement in conduct matters, settling a variety of cases.

In contrast, the Trump administration has been more active in resolving merger investigations via settlement. First, with respect to mergers, the FTC has resolved six mergers via remedies, and the DOJ has resolved four. Ten collective merger remedies in the year since inauguration stands in stark contrast to the prior administration. In the commission’s statement on the first merger settlement of the administration—Synopsys’ acquisition of Ansys—Chairman Andrew Ferguson explained that “[a]ntitrust litigation is expensive. It is also uncertain. . . . Settlement, by contrast, is much cheaper. If the Commission can successfully settle. . . cases that are likely to result in anticompetitive harm, it can block more anticompetitive effects in the aggregate than it would if its only choice were litigating every one of those cases to judgment.”

This doesn’t mean that all mergers can be remedied via settlements or that the agencies are being “soft” on merging parties. Agencies have continued to bring lawsuits and are requiring robust merger remedies when they think such remedies can preserve competition. For example, the recent settlement by DOJ of the proposed acquisition of Arctic Glacier by Reddy Ice includes a broad prior notice provision that requires a 30-day waiting period on future acquisitions by Reddy Ice in the divestiture markets where the target “entity [is] valued at 15% of the HSR Act’s ‘size of transaction’ threshold (as adjusted annually) or greater.” The proposed final judgment also requires prior notice for transactions within 50 miles of certain airports where the parties agreed to divest certain assets.

That said, some approaches to merger settlement at DOJ have generated controversy (similar scrutiny hasn’t appeared at FTC). Most notably, the remedy in Hewlett Packard’s acquisition of Juniper Network was accepted by DOJ after months of litigation, engagement at high levels within the DOJ outside of the Antitrust Division, and the firing of division officials.

The proposed remedy has faced unprecedented scrutiny through the Tunney Act process, from state attorneys general, and from Capitol Hill; this settlement approach has required depositions, including depositions of certain individuals hired by the company who weren’t counsel of record before the Antitrust Division. Questions about DOJ’s approach in this matter could continue for years.

As for conduct cases, the FTC has reached three settlements in the current Trump administration. The first two were settlements with Gateway Services Inc. and Adamas Amenity Services LLC, preventing the defendants from enforcing noncompete and no-hire agreements. The third was the FTC’s “landmark settlement” with Express Scripts as part of the FTC’s insulin litigation, which is still subject to public comment and finalization by the commission.

The settlement, which Ferguson described as “pretty comprehensive,” resolves allegations across both the FTC’s Bureau of Competition and the Bureau of Consumer Protection, and goes beyond the insulin case such that, when finalized, it would “represent[] a global settlement that resolves the current concerns of the commission.” This settlement is the only competition lawsuit initiated by the Biden FTC that has been settled by the Trump FTC.

Other significant FTC antitrust conduct lawsuits originally initiated by the FTC during the Biden administration continue, including FTC v. Deere & Co., FTC v. Syngenta, et. al, FTC v. U.S. Anesthesia Partners, Inc., FTC v. Amazon, Inc., and FTC v. Southern Glazer’s Wine and Spirits, LLC.

On March 9, the DOJ settled its high-profile monopolization case against Live Nation. New York Attorney General Letitia James announced that the state wouldn’t agree to the DOJ’s settlement with Live Nation and would continue its litigation. Many states are continuing their litigation against Live Nation, though this could change.

The Trump administration’s antitrust agencies have demonstrated a willingness to settle merger and conduct investigations and ongoing litigation. Dealmakers and parties to investigations should continue to expect thorough investigations and a willingness to litigate, though the agencies have demonstrated they will settle “if done right.”

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

Daniel J. Howley is managing partner at Rule Garza Howley and a leading antitrust attorney.

William Dolan is partner at Rule Garza Howley with more than a decade of experience guiding companies through complex antitrust issues.

Nathaniel J. Harris is counsel at Rule Garza Howley and a former senior advisor at the Federal Trade Commission and Department of Justice Antitrust Division.

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