Overview
Last week's mid-term election results are likely to have significant implications for the future of our country.
What's less than fully clear is the effect of the mid-terms on antitrust enforcement. Here are our thoughts on what's likely to happen:
- Appointments. President Trump recently nominated to serve as an Federal Trade Commission (FTC) Commissioner Chris Mufarrige, the current Director of the FTC Bureau of Consumer Protection who served in the first Trump Administration as Senior Adviser to the Director and Deputy Director of the Consumer Financial Protection Bureau. And President Trump's nomination of Adam Candeub, currently General Counsel at the Federal Communications Commission, to serve as Assistant Attorney General in charge of the Antitrust Division has been pending before the Senate, following a strict party-line vote by the Senate Judiciary Committee on September 24 to advance his nomination.
We expect a significant effort to move these nominations forward before January. The Democratic-controlled Senate is unlikely to rubber-stamp any of these nominations. The appointment of Mr. Mufarrige would leave the FTC with three GOP Commissioners and no Democrats; one can expect the Senate in the 120th Congress to have a problem with that allocation. And Mr. Candeub's nomination hearing was not without fireworks.
- Enforcement Priorities. A Democratic-led Congress may have only limited success in efforts to impose its enforcement priorities on an FTC and Department of Justice (DOJ) that remain in control of the Administration. There could be some added heat, in the form of Congressional hearings on pending mergers or active investigations – and FTC Commissioners and Mr. Candeub may be subjected to periodic grilling in Congressional hearings. There could be attempts to link appropriations to specific enforcement priorities. But in the short term, these efforts are not likely to have any material impact on the exercise of prosecutorial discretion.
With the selection of Mr. Mufarrige as FTC Commissioner (as well as rumors, albeit denied, of prospective departures of Chairman Ferguson and Commissioner Meador), we anticipate a heightened focus on consumer protection issues at the FTC. Bear in mind that these kinds of cases can have a more immediate impact on the kitchen table dollars-and-cents affordability issues that apparently were determinative in the mid-terms. In contrast, antitrust investigations into the exercise of monopoly power, prospective mergers, and even price-fixing are complex, can take years and, in some cases, have only a limited or indirect impact on consumer prices.
- Parallel Congressional Investigations. Even if a Democratic Congress cannot meaningfully change DOJ/FTC enforcement priorities, it could change the enforcement landscape indirectly. We anticipate greater congressional scrutiny, through broad committee subpoena powers, of proposed mergers and corporate conduct. Congressional power to issue subpoenas and hold hearings relating to its lawmaking function is broad. This power is already used to examine competition, proposed mergers, and other antitrust issues; We anticipate this will expand to the extent the actions of the Antitrust Division or FTC are inconsistent with Democratic priorities. It is possible that hearings regarding Trump administration decisions on mergers could be followed by a bill seeking to amend the Tunney Act, which provides for judicial oversight of antitrust consent decrees, although the prospects of surviving Senate filibuster or presidential veto limit the likelihood of such amendment becoming law.
Rep. Jamie Raskin is anticipated to become the next chair of the House Judiciary Committee; he has called for "serious and aggressive oversight” of what he has called "the putative antitrust enforcers.” In the Senate, Senators Booker, Whitehouse, and Warren have each been vocal in calling for tougher antitrust enforcement.
We anticipate the Democratic-led Congress to focus, not surprisingly, on affordability issues – which may mean attention not only on consumer protection issues, but also on proposed mergers, on algorithmic or individualized pricing, and on healthcare antitrust issues. Congressional investigations could also generate information that states and private plaintiffs might use in subsequent litigation.
- State Attorney General Activity. As a result of the mid-term elections, at least 29 states will have Democratic governors and attorney generals in 2027, reflecting flips from Republican control in five states (Georgia, Iowa, Nevada, Ohio, and Texas). Kansas remains unresolved as of this writing.
We expect Democratic state attorneys general to be further emboldened to challenge transactions that the federal agencies have cleared and potentially unlawful conduct that is not being pursued at the federal level. Cooperation and collaboration with the states will continue where the FTC or Antitrust Division launch investigations or bring cases, but where the federal agencies opt not to take action, state AGs may be even more willing to pursue independent actions, particularly where they perceive federal enforcement to be politically influenced. Some states may increase funding for antitrust and consumer protection initiatives to fill a perceived gap in federal enforcement.
On the other hand, already we have seen the suggestion that some GOP-led litigation at the state level could be slowed down or abandoned – or at a minimum have its leadership shifted. For example, the Texas-led antitrust case against BlackRock and State Street alleging a conspiracy to reduce coal output could be in danger following the election of a Democratic governor and attorney general in Texas; leadership of that and other cases could simply shift to Florida or other Republican-led states.
Finally, looking forward to the 2028 presidential election campaign, antitrust and consumer protection issues could become important aspects of emerging candidates' platforms. While many of the potential Democratic candidates may claim leadership here, recall that, as we previously noted, JD Vance was one of the "Khanservatives” who backed many of Lina Khan's efforts at the FTC; both Vice President Vance and other GOP candidates may also seek to burnish their antitrust credentials as champions of affordability.
