Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
Of the 191 executive orders signed by President Donald Trump so far, an order announced earlier this month could change antitrust enforcement directed toward mergers and acquisitions.
M&A attorneys haven’t seen a radical shift yet from the Federal Trade Commission and U.S. Department of Justice in regards to antitrust enforcement during Trump’s second term, compared to the Biden Administration.
But some attorneys think there could be a pivot towards more traditional antitrust enforcement practices on M&A deals and a little more breathing room for negotiations with regulatory agencies.
The Aug. 13 order signed by Trump is relatively short and straightforward.
It revokes the Biden-Harris Administration’s 2021 Executive Order on competition policy.
FTC Chairman Andrew Ferguson issued a statement on the revocation, calling it another break between the last administration’s “failed policies” and the Trump-Vance Administration’s focus on “protecting everyday Americans from anticompetitive practices through tailored action, promoting economic growth, and ensuring that American workers benefit from competition for their labor.”
“The now-withdrawn Executive Order encouraged top-down competition regulations,and established a flawed philosophical underpinning for the Biden-Harris Administration’s undue hostility toward mergers and acquisitions.,” Ferguson said.
Anna Behrmann, an attorney with Faegre Drinker Biddle & Reath, said there was a critical distinction to be made between the public statements of Ferguson and the DOJ and actual antitrust enforcement policy differences between the Trump and Biden Administrations.
“I think it’s still too early to draw real conclusions,” Behrmann said.
Behrmann said the Trump Administration has kept in place the 2023 Merger Guidelines.
In a Feb. 18 memo to FTC staff, Ferguson clarified that the 2023 guidelines would be in effect and serve as the framework for the agency’s merger-review analysis.
“By and large, the 2023 Merger Guidelines are a restatement of prior iterations of the guidelines, and a reflection of what can be found in case law. That is good reason to retain them,” Ferguson wrote. “That is not to say that the 2023 Merger Guidelines are perfect. No guidelines are perfect. If experience teaches that revisions are appropriate, then the agencies can consider revisions as they have done in the past.”
The Hart Scott Rodino Act merger notification requirements also went into effect earlier this year, Behrmann said.
According to the FTC, under the HSR Act, parties to certain large mergers and acquisitions must file premerger notification and wait for government review. The parties may not close their deal until the waiting period outlined in the act has passed, or the government has granted early termination of the waiting period.
Shift in antitrust enforcement priorities
Kendall Millard, co-chair of Barnes & Thornburg’s antitrust and competition law practice and a partner in the firm’s Indianapolis office, said the Trump Administration has already signaled it would be more permissive, in terms of M&A antitrust enforcement efforts.
Earlier this year, Millard told The Lawyer there might be less antitrust enforcement actions during Trump’s second term, but he expected BigTech federal investigations will continue, as well as scrutiny of cases involving questions about bid rigging, price fixing and market allocation.
Millard said that the FTC under Biden tried to expand worker protections through its rule making process.
He said the agency under Trump would likely be looking at M&A antitrust enforcement through a more traditional lens.
The Barnes & Thornburg attorney said he’s seen an uptick with his clients in M&A activity this year so far, which he speculated may be due to a perception that the current administration will apply less scrutiny to antitrust enforcement.
“Whether there will be more scrutiny or not is another question,” Millard said.
Millard noted that Biden’s 2021 executive order contained much more detail than the one Trump signed that revoked it.
Maria Vladimirova Geltz, a senior associate in Krieg DeVault’s Carmel office, echoed Millard’s thoughts on a more traditional antitrust approach, and she said she thought the federal agencies would be looking more at things like pricing effects and impacts on consumers in the market.
Geltz said M&A volume so far this year was not as high as expected, but she stressed that it’s still been busy.
Concerns about interest rates, economic growth and tariffs have had more impact on M&A activity than anything antitrust-related, Geltz said.
She expects that, with a more traditional antitrust approach, the lead time for M&A deals will be shorter.
Geltz said technology is always going to be an industry that faces significant antitrust scrutiny.
Even if there is an enforcement shift with federal agencies, Geltz emphasized that certain industries will still face deal scrutiny on the state level.
Geltz noted that, in Indiana, health care mergers are an area that can be reviewed by the state Attorney General’s office.
The Krieg DeVault attorney said it was speculative, but she thought there may be fewer flat-out denials of mergers by federal agencies in the future.
“I think you’ll see agencies try to work out possible solutions for transactions to proceed,” Geltz said.
Behrmann said she thought there would still be a lot of M&A antitrust enforcement directed toward certain industries, like telecommunications, health care and technology.
She noted that, during the Biden Administration, there was a lot more reluctance in the use of consent decrees to resolve competitive issues in proposed mergers and acquisitions.
Behrmann said, looking ahead, there may be more use of consent decrees.
“There’s more of a willingness to negotiate to make a deal,” Behrmann said.
Overall, Behrmann said she’s seen a general expectation that the regulatory agencies under the Trump Administration will be more relaxed about M&A antitrust enforcement issues than the previous administration.•
Please enable JavaScript to view this content.