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This edition of the Prompt is built on the very first Prompt, where many respondents expressed a concern that antitrust has become too political in recent years.
We presented our panel with a choice:
Given recent politicization of antitrust policy, which is the greater concern:
A. Antitrust enforcers will “look the other way” because of political pressures; or
B. Antitrust enforcers will bring more politically charged cases.
The Prompt
Answering antitrust challenges one question at a time
The Chamber has assembled a range of preeminent experts in the field of antitrust from across a wide political spectrum to offer timely views on key questions of antitrust law and policy. This group brings together senior enforcers spanning seven administrations, from both the Antitrust Division at the Department of Justice and the Federal Trade Commission.
As with Prompt 8, one contributor pushed back on the premise of the question:
“Both seem equally possible. What this prompt is missing, though, is the fact that “political” White House interference to block a bad antitrust case for the right reasons (say a pro-consumer welfare merger challenge or a challenge to efficient unilateral conduct by a dominant firm) could be a very good thing. I am aware of a number of occasions when good agency economists strongly opposed cases that had majority Commission support – cases in which White House involvement would have been consumer enhancing. Of course, self-interested political efforts to block a case (say an anticompetitive merger of major campaign contributors to the president), or to bring a case (say cases ginned up by a big presidential supporter to block an efficient merger or efficient unilateral conduct ginned up by a major presidential backer) should not be tolerated. But public choice teaches that there is nothing sacrosanct about an agency decision to take or to avoid taking a particular enforcement action. As such, I believe that an enforcement agency’s preliminary enforcement call (yea or nay) should be subject to White House review for the right reasons.”
Only one contributor thought the first outcome was a greater concern:
“The greater concern is that antitrust enforcers will “look the other way” because of political pressures. While the opposite is certainly a concern, courts remain a check against politically charged cases.”
Several more saw a bigger problem with politically-charged cases:
“It is more dangerous for an enforcer to bring politically-charged cases. Then, antitrust becomes a political weapon that can be wielded to compel changes to business practices that are unrelated to antitrust goals. In the prior administration, there was an effort to make antitrust anti-racist and promote diversity and ESG goals, while there are some looking to antitrust as a way to combat DEI currently. Once antitrust enforcement ceases to be moored to economic and market impacts, it no longer has a legitimate basis under the case law and the agency Guidelines become of little import.”
“Both are plenty bad, but bringing antitrust cases against the president's political opponents that are not supported by the facts and the law is worse because it more visibly destroys trust in antitrust enforcement, undermines the rule of law, and can greatly harm innocent targets.”
“The greater concern is bringing more “political” cases. While enforcers could look the other way on certain cases, doing so does not ensure an enforcement void. Anytime the Federal Trade Commission or Department of Justice do not act, there is the possibility that the same conduct could be subject to prosecution from other enforcement authorities, including especially the states. See, e.g., Sprint/T-Mobile.”
And the balance of our experts found good reasons not to settle on one option:
“Concern (A) may happen more often (because weak cases brought due to concern (B) will often be constrained by the courts). But the two concerns equally undermine the integrity and effectiveness of, and public confidence in, antitrust enforcement. For years, as competition laws proliferated abroad and U.S. enforcers traveled the world explaining how it should be done, we emphasized the importance of making enforcement as apolitical as possible, and our counterparts expressed concern about how difficult this could be in their country. Multinational companies have long lamented the lack of transparency and rationality in antitrust regimes that are highly politicized. Is another U.S. comparative advantage about to be voluntarily relinquished?”
“The concerns noted are equally serious. Politicization can lead to both under and over-enforcement. And importantly, politicization poses the significant risk of creating business uncertainty, chilling potentially beneficial, competitive strategies, or innovations. This is a significant risk because it is a drag on the fluid workings of competitive markets, innovation, and growth, plus inconsistent with the purpose of the antitrust laws, as the Supreme Court has repeatedly warned. Also, politicization undermines our antitrust enforcement institutions, which has serious implications not only for law enforcement generally, but also in maintaining and attracting antitrust talent to work at these institutions.”
“We've already seen both and the breakdown of the rule of law and due process that goes with it. the Department of Justice’s pivot in Hewlett Packard-Juniper from full stop injunction to small divestiture with no nexus to the competitive harm is an example of the first. The remedy in the Omnicom-IPG merger, which was not tethered to any valid competition claim, is an example of the second. We will see more White House pressure on the agencies to engage in case selection and resolution that advances the political goals of the Trump Administration and we will see more companies curry favor with the White House to get their deals through.”
“Both are real concerns. Both concerns are limited by countervailing factors – state actions and private suits as a protection against politically motivated underenforcement, and federal courts as a protection against politically motivated overenforcement. If one believes that markets tend to self-correct, undue overenforcement is probably the bigger risk due to the chilling effect, the cost of litigation, and the likelihood of compelled settlement.”
“Agencies will both bring politically charged cases and allow for certain mergers to go through if they play to the appropriate rent-seeking group.”
