During one of those sessions when incoming agency honchos were talking with an ABA audience—remember when we did that?—I listened as the appointee explained that their job was to engage early and often with merging parties to help design any remedies needed to permit quick closure and enjoyment of the consumer benefits that would flow from the merger. It struck me as odd that this official—coming from a Big Law firm—viewed themselves almost as a matter of the team trying to craft a remedy. And even very recently, AAG Delrahim reportedly helped arrange a remedy for T-Mobile/Sprint.
I think those days are gone. The once-prevalent faith that mergers are presumptively pro-competitive, that markets will self-correct, and that the key is to avoid type 2 errors has been badly shaken. There are major cracks in that important foundation for much of modern antitrust.
But unless there are major legislative changes—an important caveat in this strange time when Democrats and Republicans are both down on Big Tech—it would be a mistake to look for wholesale change.
We have a conservative judiciary and a Supreme Court that is both reliably conservative and deeply imbued with antitrust as we have known it. Only last June Justice Gorsuch wrote, for a unanimous Court, that “antitrust courts must give wide berth to business judgments before finding liability. . . . Judges must remain aware that markets are often more effective than the heavy hand of judicial power when it comes to enhancing consumer welfare.” Government and private plaintiffs alike find it difficult to win antitrust cases. Indeed, as I write this both Facebook and Apple have recently won antitrust victories.
The conservative judiciary is not just poised to resist FTC activism but is threatening the very existence of the agency as we know it. The FTC has suffered major procedural setbacks; courts show less and less deference to agencies; and litigants now regularly assert that the FTC’s structure is unconstitutional. When the new progressive leadership overreaches—as it almost inevitably will—the consequences may not be pretty.
Also ready to resist wholesale change is the immensely talented defense bar and the consulting economists who work with it. The revolving door that has long been a reality for American antitrust enforcement also tends to restrain. The Biden administration took a different path when it appointed FTC Chair Khan, but its AAG nominee Jonathan Kanter, although famous for being a critic of Big Tech, spent more than 20 years in corporate law firms as a protégé of Reagan AAG Charles “Rick” Rule. The U.S. pattern of near-constant change of leadership—very unlike other countries (although this may be starting to change)—naturally tends toward a revolving door because so many talented antitrust experts work for or want to work for major law firms.
For wholesale change, then, my view is that it will come from Congress or not at all. The Biden FTC will try rulemaking, and although that can’t be completely dismissed it will not be easy to accomplish. But even if there will not be wholesale change the cracks in the foundation of modern antitrust are important. If that old confidence that everything will work out for the best is gone—as I think it is—then enforcers will act differently, academics will write differently, and, eventually, courts will rule differently.
