Ferguson and Slater have expressed more populist views on antitrust enforcement, particularly when it comes to regulating Big Tech. Ferguson has vowed to “hold big tech accountable” and in Donald Trump’s announcement appointing Slater, he warned that “Big Tech has run wild for years, stifling competition in our most innovative sector and, as we all know, using its market power to crack down on the rights of so many Americans, as well as those of Little Tech! I was proud to fight these abuses in my First Term, and our [DOD’s] antitrust team will continue that work under Gail’s leadership.”
One would ordinarily expect that a Republican Administration would cause the pendulum to swing back toward more “traditional” merger enforcement based on well-established theories of harm. Early indications suggest changes may not be as stark as one might think. Recall that just last year, JD Vance (advised by Slater at the time) complimented Lina Khan as “one of the few people in the Biden administration that I think is doing a pretty good job.” Both Ferguson and Slater have stated that the 2023 Merger Guidelines and the revised HSR Rules promulgated under the Biden administration will remain in effect, substantially increasing the burden on parties engaging in HSR-reportable transactions and leaving the door open to pursuing less conventional enforcement actions.
On the other hand, Ferguson’s agenda for the FTC includes “revers[ing] Lina Khan’s anti-business agenda” and stopping the “war on mergers.” His stated intention to “focus FTC resources on the mergers that harm competition and hinder innovation” is consistent with pursuing typical theories of harm against mergers that are likely to increase price or reduce output, quality, or innovation. Early statements also point to a return to utilizing settlements to resolve competitive concerns, whereas the Biden administration accepted substantially fewer settlements than prior Republican or Democratic ad-ministrations. During her confirmation hearing Slater was asked for assurance that the DOJ will “examine ways that we could ensure remedies or other alternatives before we charge in and go to court.” She affirmed, noting that “often remedies, if done right, if they are robust— divestitures, for example—can remove anticompetitive harm from a merger in order to allow it to proceed in a pro-consumer, procompetitive manner.”
There is also hope for a return to typical agency merger review procedures. Lina Khan was criticized for “throw[ing] sand into all the possible gears over proposed mergers, thereby halting many mergers by abuse of process and chilling other potential mergers from even being suggested.” Both Ferguson and Republican Commissioner Melissa Holyoak have expressed concern about the FTC’s abuse of the merger review process as a means to deter M&A activity and achieve political objectives. Ferguson has stated that he and Holyoak engaged in “intense negotiations” with the Democratic Commissioners to lift the Biden administration’s ban on early termination—an important procedural feature whereby the FTC (and DOJ) inform merging parties that they are free to consummate transactions before the expiration of the statutory waiting period where the deals are quickly identified as presenting no competitive issues. Despite maintaining the burdensome HSR filing requirements voted out during the Biden administration, Ferguson has stated that the rules “will allow us to find anticompetitive mergers efficiently, while more quickly getting out of the way of deals that will benefit the American people.” These statements alongside Ferguson’s commitment to “stop Lina Khan’s war on mergers” suggest that, at a minimum, deals will no longer face the headwinds prompted by a view that deals should die in the boardroom.
Antitrust Reverse Termination Fee Trends
Observed trends of the prevalence of reverse termination fees tied to a buyer’s obligation to obtain antitrust clearance for the deal (“Antitrust RTFs”)—considered alongside the other atmospheric changes referenced above—will inform how businesses think about, and how antitrust practitioners advise on, critical antitrust provisions in transaction negotiations over the next four years.
Antitrust RTFs historically were reserved for the small percentage of transactions that present the highest antitrust risk. During the Biden administration, however, the prevalence of Antitrust RTFs rose and ultimately surpassed levels observed during the Obama and first Trump administrations. As illustrated below, according to data obtained from Deal Point Data there was an increase in the percentage of transactions with an Antitrust RTF during the Obama administration, a slight decline during the first Trump administration, followed by a steady increase during the Biden administration culminating in over 13% of all transactions (and 22% of transactions with a public target) including an Antitrust RTF in 2024:
