Will the Trump Antitrust Leadership Split the Uprights?

Life comes at you fast! Andrew Ferguson is the next FTC Chair. Gail Slater is the next AAG for Antitrust. I predict pain for Big Tech. But these appointments are promising for other reasons, too.

I rarely write on back to back days. Check out yesterday’s Competition on the Merits to explore a fun hypothetical scenario in which Lina Khan refuses to leave the FTC by January 20th. (Actually, with today’s announcements the “What If” scenario is even more interesting as Khan could delay a Republican majority until the 5th Commissioner, Mark Meador, is confirmed). But Tuesday was no ordinary day in the antitrust world. With the most recent appointments, President Trump has nominated Gail Slater to run the DOJ Antitrust Division and Andrew Ferguson as Chairman of the Federal Trade Commission. Both are folks I mentioned in my preview of who might be tapped for these positions. And there is a LOT of commentary on what it all means for the future of antitrust.

The consensus view appears to be a singular prediction for Big Tech: Pain.

And that’s fair enough. And probably correct!

But I want to get to what I think makes both picks a bit more interesting (and promising) than just pain for Big Tech. I’ve talked a lot here about the need for nominees that will “split the uprights” between aggressive enforcement against Big Tech and others who violate the antitrust laws AND deregulatory initiatives meant to bring back regular order at the FTC and DOJ after four years of flouting the rule of law and bureaucratic excess that has deterred innovation, thwarted Little Tech, and hampered mergers and acquisitions across many sectors in the economy.

Let’s start with the Clubber Lane-style prediction of pain for Big Tech. The prediction comes from pretty high quality sources. In Ferguson’s case he has said so himself.

In Slater’s case, she is closely associated with JD Vance who has expressed sympathy for this view. In both cases, the parties most enthusiastic about weaponizing antitrust to go after Big Tech firms – or at least, the loudest – are thrilled with the nominations.

Aggressive enforcement against Big Tech is an obvious enforcement goal – and it is one that the Trump Administration has indexed heavily on. But as readers of Competition on the Merits know, the problems facing modern antitrust institutions are much larger than Big Tech.

The highlights that Chairman Ferguson and AAG Slater will face on Day 1 include:

• For whatever agreements the Trump and Biden agencies might have on Big Tech – their impact on the economy as a whole has been to increase regulatory and bureaucratic burdens.

• The Biden FTC and DOJ have turned merger process into an absolute chaotic mess over the past 4 years from flouting the rule of law and threatening parties with remedies unrelated to competition law to criminalization to dysfunctional investigations and unnecessary bureaucratic delays.

• The Khan Merger Tax is now the law of the land – both Commissioners Ferguson and Holyoak voted for the Tax as a political compromise; but it is a compromise they do not need to live with in the new Administration – particularly if they are interested in greasing the tracks for commerce and innovation.

• The FTC and DOJ have cooperated with Europe to punish successful American innovators precisely at a time when the competitive race for AI is key to American prosperity. It is a race that President has acknowledged we simply cannot lose.

• The Biden FTC has flouted the rule of law with attempts at rulemaking and expanding authority through its Unfair Methods authority under Section 5 of the FTC Act.

• The Biden FTC is poised to use federal resources to bring Robinson-Patman Act suits, which are the closest substitute to price controls available.

I’m not sure there has been a more important time for the long run health of our antitrust institutions. They are ailing. That Big Tech will have the heat turned up for the next 4 years is, well, obvious. Fine. But that is 10 percent of the job weighted by economic significance, even if it is 90 percent of the job if weighted by political significance. At least, for now. What about the rest of it?

If you have made it this far you are saying to yourself, “here he goes with the splitting the uprights metaphor again.” You’re damned right I am.

(It’s Chris Boswell of the Steelers, and the kick went in)

Splitting the Uprights, Once Again.

The political demand for something different than Lina Khan’s FTC and Jonathan Kanter’s DOJ comes from lived experience with the agencies over the past 4 years. The Biden-Harris administration competition regime has happened:

• New HSR rules that introduce bureaucratic sludge and impose a tax on all mergers and acquisitions and disproportionately impact smaller firms;

• Flouting the rule of law to authority the FTC simply does not have to override state contract law and ban all noncompete contracts;

• Sacrificing the rule of law in merger consents to punish individuals from disfavored industries like oil and gas or private equity;

• Threatening to bring back the Robinson-Patman Act to punish discounts and low prices for groceries.

• Targeting Elon Musk and X.com for political reasons

• A variety of failures of due process as documented in the House Oversight Committee Report

• The withdrawal of the Trump administration Vertical Merger Guidelines and the introduction of the new, more structural, and less economically sound Merger Guidelines

• Throwing away the bipartisan Section 5 Policy Statement that harmonized the FTC’s unfair methods of competition authority with the rest of the federal antitrust laws under the consumer welfare standard;

• Controversial use of FTC consumer protection authority to convert the FTC into a civil rights regulator.

The examples go on and on. The bottom line is that huge swaths of the American economy are under investigation by the FTC and DOJ. And they are not just Big Tech. And many of them for little reason to do with potential violations of the antitrust laws or the FTC Act.

The overhang of antitrust liability for normal, competitive conduct, the bureaucratic sludge that has been introduced into the merger review process, the flouting of the rule of law to ban noncompetes. But the costs of that regulatory overreach are real and salient and have had political consequences. Republican politicians hear a lot more about what the FTC is doing to make their life harder than what Google is doing to make their life harder. The economy has been overregulated and smothered. Just like Khan and Kanter said they would do. The Trump Administration’s mandate is more than to just recreate Khan and Kanter from the right.

The second obvious change has been that Big Tech has been nine ways to Sunday. Virtually every Big Tech target has been the subject of multiple antitrust suits by federal and state enforcers, even holding aside private litigation. Google has live suits targeting both its search and Ad Tech businesses, Amazon has been sued multiple times on competition and consumer protection grounds. DOJ brought a monopolization suit against Apple. Meta certainly has not escaped antitrust scrutiny. Big Tech is, frankly, up to its eyeballs in lawsuits, many which will not be resolved until well after the 2024 election. Heck, some may not be resolved by 2028. That does not mean Ferguson and Slater cannot find more! Maybe they will. In fact, I would bet a nickel that they do find some new suits. But it appears diminishing marginal returns for further large scale Big Tech antitrust suits have kicked in.

The main point here is only that a successful Trump competition regime will have a more complex personality than simply beating the hell out of Big Tech. There is demand – and billions of dollars of value for the American economy – in fixing the bureaucratic problems created by the Biden Administration. That’s the challenge. And one hears a lot about the qualifications of Ferguson and Slater to continue to beat the hell out of Big Tech – but a lot less about making sure the ball bends inside the second upright. That’s what I want to talk about today. Because I actually think both nominees are a lot more promising on that front than they are being given credit for in the public discussions I’ve seen.

I should say before I dive in that I consider both Andrew and Gail to be friends. Gail was an Attorney Advisor for Commissioner Julie Brill back when I was a Commissioner. Andrew and I have also known each other for a decade. You should not hold that against either of them. Surely they disagree with me on any number of antitrust issues! Andrew seems more enamored with the Philadelphia National Bank presumption than I am (IYKYK). And I can’t tell you how many times Julie Brill and I disagreed at the Commission on matters Gail advised on. But my job here is to give it to you straight. And I am certainly willing to publicly disagree with either – indeed, I noted my disagreement with the compromise calculus behind Commissioner Ferguson’s vote for the HSR Merger Tax awhile back. So here goes. But the general thesis here is a positive one – that the market is probably underestimating the likelihood that Ferguson and Slater value splitting the uprights rather than hitting one of them (and not in a Kansas City Chiefs-style hit the upright and make the field goal kind of way). Let’s start with the DOJ.

Gail Slater and the DOJ Antitrust Division

Satisfying the demand for antitrust aggression is not just being a good plaintiff's lawyer. One has to be aggressive without pursuing enforcement strategies that chill rather than promote innovation. There is ample and justified concern that uncalibrated aggression will chill incentives to innovate, create, and compete aggressively. That requires some real knowledge of both antitrust law and technology. Slater has both of those. And there is ample evidence that she cares about both.

Slater has excellent substantive antitrust knowledge, is an experienced lawyer, and knows how the agencies work. She also knows from in-house experience how agency process -- including bad agency process -- impacts the real world. For example, I would be surprised if you saw the continuation of threats of criminal prosecution for previously civil violations of Section of the Sherman Act under Slater. More importantly, Slater is someone who understands the costs imposed by bureaucratic delays in merger process or regulatory uncertainty generally from her time at the FTC and working on behalf of companies.

Slater’s record includes work not just for the FTC, or for companies like Roku and Fox, but also in the National Economic Council working on matters involving technology and innovation. Perhaps the strongest endorsement of her work there that I have seen comes from the person I think has no peer when it comes to generating a record of strong enforcement where needed combined with an equally aggressive propensity to deregulate:

This is all good news. And one hell of an endorsement. Would I be more worried on the margin by the Slater appointment if I were a Big Tech company? Yeah, I would. I used to represent one or two of those companies in a previous life. And I can assure you that they are. But I suspect you will see smart, calibrated aggression. I've also seen a few criticisms from organizations worried that her approach might be more of the Biden administration, just from the right. That is, I’ve seen some express concern that Slater’s nomination (presumably based upon affiliation with Vice President Vance) means we will see aggression but no investment in undoing the institutional harm. If I believed that would happen I would be concerned too. But I do not.

Gail's combination of skills and experiences make it very unlikely we get Kanter-redux. Instead I predict a thoughtful return to "regular order," cleaner merger process, consumer welfare as the lodestar of AT, and yes - some carefully thought out heat applied to Big Tech.

Andrew Ferguson and the Federal Trade Commission

Here is what I wrote about soon to be Chairman Ferguson in my preview and how is style and approach complements Commissioner Holyoak:

Each has earned their stripes as a minority (oft-dissenting) Commissioner combatting the Khan FTC in individual cases, rulemaking, and policy matters. Each obviously cares deeply about the rule of law and FTC attempts to erode and evade it. You can get a sense of their views in interviews they have published (Ferguson here; Holyoak here).

Now is not the time to review their entire record – but they have each supported antitrust enforcement where they viewed a case as sufficiently strong. But they have also dissented where appropriate. The strongest dissents in antitrust enforcement matters, in my view, were in the extortionist abuse of merger process by the Khan FTC in Exxon/ Pioneer and Chevron/ Haas. Each has been prolific and has exhibited a strong proclivity for fighting against abuses of power that the FTC does not have from the non-compete rule to “click to cancel” and beyond.

Each is also probably a bit more aggressive on antitrust enforcement (particularly mergers) than say, I would be (e.g. there are a few merger complaints that Holyoak and Ferguson supported that I would have not). But President Trump might view that aggression as more of a feature than a bug.

There are some differences between the two. My own reading of their written statements and interviews suggests Holyoak is a bit more invested in the interplay of economics and antitrust law while Ferguson’s mastery of administrative law and history is a relative strength (not too many dissents out there that cover Blackstone, the APA, and the Federalist Papers!)....Both are strong lawyers and thoughtful about the FTC Act and the rule of law. Neither has a long history of institutional FTC knowledge, but a fresh perspective is sometimes very useful for evaluating which FTC institutions and norms are useful and which are not…Bottom line: Each is well above the bar and qualified as FTC Chairman and I am sure will receive serious consideration. And again, a pick from this lane seems most likely for those handicapping the field.

I stand by that assessment. But you do not have to take my word for it.

Ferguson has done us all a favor and told us what his agenda will be. You can see the document that floated around on his behalf to support his successful campaign for Chairman here. Most of the attention has been paid to the document calling attention to Ferguson’s promise to use FTC authority to “fight wokeness,” go after Big Tech, “fighting the trans agenda,” or to “terminate uncooperative bureaucrats.” There is certainly some political red meat in the flyer. Which is not to say many of those objectives do fall squarely within the FTC’s traditional competition or consumer protection missions.

But what has not gotten as much attention is what Chairman-to-be Ferguson leads his case with. Here, I will let him speak for himself:

That sounds just about right. There is plenty here to suggest not only that Chairman Ferguson understands the significant economic costs of the Khan FTC overreach, but that he has prioritized doing something about it from rationalizing merger process to ending lawless rulemaking proceedings. This should not be a surprise. Ferguson and Holyoak both dissented over the implementation of much of the Khan FTC agenda.

The biggest questions – to be frank – were about merger process. What would happen to political compromise HSR Merger Tax? What steps to clean up merger process? What about new Merger Guidelines? Those questions remain open – but I am optimistic based upon Ferguson’s own record, his stated agenda, and my own judgment that we are going to get a committed attempt to split the uprights.

On the deregulatory front, the targets are endless:

• Assessing the constitutionality of administrative adjudication and rulemaking at the FTC;

• Bringing back sensible Merger Guidelines (both Horizontal and Vertical);

• Reharmonizing enforcement under Section 5 of the FTC Act with the traditional antitrust laws – or at a minimum, bringing back the bipartisan 2015 UMC Policy Statement;

• Considering whether OIRA should govern independent agencies (a pet project of former Trump OIRA Administrator and now D.C. Circuit Judge Neomi Rao);

• Reforming the HSR process to be less burdensome;

• Reforming or repealing the Robinson-Patman Act;

• Getting back to International Competition Advocacy – in defense of the consumer welfare standard which has taken quite a beating over the past 4 years in the global antitrust community.

And there are more.

If you are excited about going after Big Tech you did not need to read this to maintain your excitement. Clubber Lane still predicts Pain for Big Tech. But if you only read X or press reactions to Ferguson and Slater’s appointments, you might mistakenly come away with the impression that each was simply a right-handed version of Khan and Kanter, laser focused on bringing as many enforcement actions as possible against firms associated with political opposition. I don’t think so. Those accounts are incomplete and misleading and do not fully reflect their experiences, records, and abilities as I understand them. I predict an organized, ambitious, and well thought out attempt to bring antitrust back to regular order. And that is a great thing.