With the U.S. presidential election right around the corner, DAMITT has analyzed what a Biden victory might mean for antitrust merger reviews. Although many expected antitrust merger enforcement to become more lax under President Trump’s first term, DAMITT data show that any differences may be more marginal rather than a major change in enforcement policy. Although there have been slightly fewer total significant investigations so far in the Trump era, there have also been a higher number of significant investigations with vertical aspects, and the agencies have taken more time to review mergers.
President Trump-era merger enforcement levels are slightly behind those of the Obama/Biden administration’s second term. Under the Trump administration between Q1 2017 and Q3 2020, 16 significant investigations out of a total of 97 resulted in complaints seeking to block mergers. At the same point in the Obama/Biden administration’s second term (Q1 2013-Q3 2016), the totals were slightly higher at 18 complaints and 111 total significant investigations.
Under both administrations, the FTC concluded more significant investigations than the DOJ. Between Q1 2013-Q3 2016, the FTC concluded 65 significant investigations compared to 60 between Q1 2017-Q2 2020. DOJ’s total significant investigations dropped slightly more, with 46 significant investigations between Q1 2013-Q3 2016 versus 37 significant investigations in Q1 2017-Q2 2020.
Yet, the Trump administration has overseen an increase in significant investigations with vertical aspects. Between Q1 2017-Q3 2020, the Trump administration concluded 12 significant investigations with vertical aspects compared to only eight between Q1 2013-Q3 2016 under the Obama/Biden administration’s second term. This increase coincides with the release of the new Vertical Merger Guidelines this year, which replaced the vertical guidelines last issued in 1984.
In addition, the duration of significant investigations substantially increased during the Trump administration. Significant investigations concluded between Q1 2017-Q3 2020 lasted an average of 10.9 months, about two months longer than the Obama/Biden administration’s 8.7-month average from Q1 2013-Q3 2016.
Going forward, if Biden were to win the election, more continuity is expected at the FTC compared to DOJ. FTC commissioners have seven-year terms and cannot be removed for political or policy reasons by a new administration. Thus, absent a resignation by a Republican commissioner, Republicans would retain majority control of the FTC until 2023. By contrast, DOJ is led by political appointees who can be replaced more rapidly after a new administration takes control. For this reason, policy changes at DOJ can be implemented more quickly under a new administration if the president chooses to do so. But assuming Biden were to appoint DOJ leadership similar to the group that served under the Obama/Biden administration’s second term, these policy differences are not expected to be drastic.
If Trump were to win re-election, significant changes from current enforcement levels are not expected. Although changes in leadership sometimes occur at the FTC or DOJ at the start of a president’s second term, any replacements likely would maintain the status quo.
Another wildcard for future merger enforcement is whether Democrats are able to take control of Congress. Democratic control of Congress would increase the likelihood of new antitrust merger legislation or greater agency funding for merger investigations, both of which could result in more merger enforcement. Without such changes, however, antitrust policy would continue to be constrained by economic theory and modern era case law. These constraints make significant merger enforcement changes unlikely given that agency overreach in challenging mergers would still be subject to judicial review under existing precedents.