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This Fried Frank memo discusses managing antitrust risk in the Biden Administration. After noting that regulators have evolved toward more enforcement & have demonstrated a greater willingness to tolerate litigation risk in recent years, the memo suggests that because antitrust enforcement is one of the few truly bipartisan issues, the new Administration may well have incentives to “push the limits of the law.” The memo discusses various potential legislative initiatives, and then turns to the enforcement side of the equation. Here’s an excerpt on that topic:

Apart from proposed legislative changes, any change in enforcement will depend on President-Elect Biden’s appointments to lead the FTC and the DOJ. What is clear, however, is that the sitting Democratic-appointed FTC  Commissioners support major changes in the next Administration’s approach to antitrust.

For example, Commissioner Chopra has been critical of the FTC’s long-standing practice of approving pharmaceutical mergers with divestitures limited to overlap products and has argued that the Commission should also consider the overall impact of the size of the companies on competition. He has also been particularly critical of private equity, arguing that roll-up acquisitions by PE-backed firms allow them to quietly accumulate market share and harm competition.

Commissioners Chopra and Slaughter recently dissented from the DOJ/FTC Vertical Merger Guidelines and Vertical Merger Commentary because they believe that vertical merger enforcement has been too lax, and strongly cautioned the market against relying on these guidelines as an indication of how the FTC will act going forward.

While the rhetoric from some commissioners may be strong, the memo also points out that the FTC’s enforcement efforts may be constrained by both the lack of judicial receptivity to novel antitrust theories and the agency’s own budgetary constraints.

– John Jenkins