Harris, Trump Election Impact on Antitrust

The Forthcoming Conversation is part of the Bloomberg Intelligence Election series, covering the industry and company impacts of the upcoming election. On October twenty fourth, my colleague Jennifer Ree and I discussed what the election might mean for antitrust law and policy in the coming years. Any questions please feel free to reach out to any of us on the Bloomberg terminal.

Hi everyone, and welcome. My name is Justin Teresi. I'm a litigation and policy analyst here at Bloomberg Intelligence focused on anti trust issues, and joining me today is the one and only Jennifer Ree, our senior anti trust litigation guru, and for both of us, our coverage really runs across all sectors. This webinar is a part of a series of conversations across the month of October focused on the

upcoming election. Our first bourbinar considered financials, the second tackle TMT issues, and other discussions have included considerations on tax, healthcare, industrials, and consumer goods. All to help you get ready to understand potential impacts of the upcoming election. Where the only certainty around that issue seems to be uncertainty, we try to unpack a bit of a roadmap for what lies ahead. Playbacks for each of these sessions are available on the terminal.

And first, just a little about Bloomberg Intelligence, where the investment research platform on the Bloomberg Terminal, singing over five hundred professionals covering over two thousand companies. We cover companies from the perspective of equities, credit, ESG, litigation, and policy. Bloomberg Terminal clients can always reach out to us with questions about our research. So with that, let's get started. How we've structured this today is a conversation between myself

and Jen. First focus at some macro thoughts by Jen about what the FTC and DOJ might look like in the future, along with some considerations route M and A and the growing antitrust struggles that are facing big tech. Although I'll then weigh in on some policy considerations for some standalone legislation that might be considered in the next Congress and provide a quick rundown of what kind of activity we might see in the States. So with that, Jen,

glad to have you here with me today. This is our second webinar for you.

based on listening, researching, thinking about personality types. But because you know, both candidates have said very little on their views of anti trust policy, this is really just my view and not particularly informed by their own comments about what their goals are. Now, the first thing I actually think is that I believe things will change from the way they are no matter what, though definitely not right away.

These things absolutely take time, and it could be a little quicker if Trump is elected instead of Harris, But no matter what, it takes time. And I think the main question everybody is asking, at least in the business community, is whether this really aggressive interventionist approach we've been seeing for the last mostly three years, but going back about five years, that the current Federal Trade Commission and a

Department of Justice have taken will continue. My opinion is that I don't really think so, even if Harris is elected. And I generally think that every new president will want to do things their own way, even if they're in the same party as the previous president. But I'll start

with Harris. As you mentioned, justin personnel is policy, so you know, the main course of the antitrust approach of an administration is set by the decision makers of the FTC and DOJ, and I think there are quite a few people out there that actually expect President Harris to keep Lena Khan on as the Chair of the FTC. She's kind of the standard bearer for this very aggressive and activist anti trust enforcement that we've had. I actually don't think so. You know, Con is replaceable right now

because her term has expired. It expired at the end of September, and if she is replaced, to me, that's kind of the catalyst for a little bit of change in tone at the agency. And I have a couple of reasons for thinking that Conn will eventually, not right away, but eventually be replaced if Vice President Harris is elected. And part of it is just that it's just sort of the right of a president to name their own

senior officials. That's part of what they do. They guide their own policy, and this has happened even when they're in the same party. It's their right to do so.

new chair, Con could leave on her own. Now, another reason I tend to think that there could be a replacement here is because I tend to think that the litigation approaches as prosecutors that either one have taken over the years are a bit different, and there's a little bit of a disconnect between the two. You know, Con really kind of has this scorched earth approach where she brings cases that are long shots for a win. That's not typical, I think for most prosecutors are a little

more cautious, and it also carries some risk. And I tend to think Harris's approach as an attorney has been more nuanced and a bit less rigid, and she may want something like that in her own prosecutors. But in any case, I think if she wanted to keep her, she'd probably have to renominate her, and that actually could be difficult because we believe, we sort of expect Senate is going to flip to a majority Republican, and there's some doubt that if Con went back before the Senate,

she'd be able to get the votes she needs. I should say that even if Harris does replace her, I don't see things going back to the way they were before the last three to five years. You know, an environment where very few deals were challenged and enforcement against monopolistic conduct was very limited. I think we're going to stay in a heightened environment. It's still going to be more aggressive than it was, just maybe tempered. Right now, Trump I think I can be a little quicker. I

think absolutely replaced Con. I mean, I think there's no doubt. We know JD. Vance's vice presidential candidate, has praised Con, thinks she's done a good job. Would like to keep her. But this is going to be up to Trump, and I really think he's going to want his own people, particularly given that in his first administration he took a lot of recommendations and didn't end up being very happy with some of those people. I think he's going to

be a little bit more careful this time. And I also think right off the bat, what he would do is name one of the current Republicans Melissa Holyoak or Andrew Ferguson as the chair. He can do that right away and then sort of demote le Nikan to commissioner from chair at least right away until he's able to placer.

And I do think that we're probably going to see somewhat erratic, maybe idiosyncratic enforcement under a Trump administration, where he's looking more at the companies that he likes or the deals that he likes versus companies he doesn't like and DEALC doesn't like in terms of the hurdles that might be erected or the easing that might take place. So generally, I think some easing there, but maybe only for some companies and industries and not for others. What do you think justin right?

right that Harris I think would encounter too. And you know, I think to your point that you know, it's all taken at each price, and it kind of wants their own folks in their administration, even though the FTC is this independent kind of commission. So I think that alone suggests to me that harr is really looking at Con

that in this way. Even though they might agree and some things, or even maybe one might say all things, at some point, there is a bit of a rogue factor there in terms of the cases that could be brought by Con if she were to stay on, and it might not be on the same page all the time with what the White House is thinking. So I think that you're right, you know, there is that that kind of pushed probably replaced her at least at some point down the road. And you know, we're hearing all

of that conversation right now. I think from folks like Senator Warren and you know, AOC last week i think made a comment too that there'd be a brawl if there was this move to replace Lena Khan. But you know, it seems to me that at some point down the road, and maybe not right away, you know, there's probably something that President Harris could offer Senator Warren or AOC or folks that are pushing for Khan to kind of minimize their opposition to a replacement if one comes in down

the road. But you know, that's a game of chess and a lot of strategy, strategy, and you know, several moves ahead if that were to happen obviously too. So yeah, moving on from this topic, another one that's really been coming up a lot here, Jenna, is that you know these government monopolization suits that we're seeing it against big tech platforms. Can you kind of give us a rundown of the ongoing suits and whether you think those are going to be impacted at all by a new administration?

DOJ that's gone after Google over its conduct with respect to its ad tech products, and it's also now sued recently Live Nation related to its conduct with respect to its ticketmaster arm. The Federal Trade Commission, for its part, has sued Meta that's related to its act positions of WhatsApp in Instagram. And they've also sued Amazon, which was widely expected given you know, Lina Khon's well known antagonism

toward Amazon and the way Amazon does its business. So I think these cases all just play out in courts. I don't really see the course of these cases changing much no matter who wins the presidency. First, the DOJ cases against Google are both very well advanced. I mean, trials have completed for both Search and add tech, and

we already have a liability decision on Search. So we're on the remedies phase there, and I highly doubt that the remedy, even though the DOJ might ask for a breakup of Google as a remedy, I doubt that will be what the judge orders and so in that case, you know, people say, oh, it could be a repeat of Microsoft, where a court ordered under Clinton's administration a structural remedy, but then it was remanded and in the

meantime George Bush became the president and then settled. I don't really see that happening because I don't think the structural remedy is going to be ordered in the first place. And nonetheless, I don't see settlements here because we know that Google. You know, Trump is no friend to Google. Google's no friend to Trump, and he has said in an interview with John Micklethwaite of Bloomberg that he does think Google needs to be regulated, that it needs to

be contained. He didn't necessarily say it needed to be broken up. So to the extent there's a behavioral remedy in the case, I think Trump would agree with that, as what Harris. The other cases have a long way to go, not Antech, just the ones against Meta Amazon and lave Nation, and yeah, and I think that still

they play out in court. The only way I see under either administration potential settlements, but way down the road is if they seem to be doing very poorly in the litigation, if they get some hint that they're just really struggling. Maybe they're already in trial. You know, sometimes the judge will really reveal how they view a case. Sometimes they don't, but sometimes you can get that feeling that you're going to lose, and at that point maybe

there'd be some possibility of settlement. But I think that would be the case no matter who was the president. I think maybe if you know, if it was still the Biden administration's enforcers. So you know, that's where we are in Live Nations, the last one, and I think you know that goes through court no matter what, because it's it's a popular case with consumers. It's you know, politically desirable for either either administration to continue to pursue

Live Nation. Nobody likes the fees they're charged when they buy tickets first sports.

rejection of just at least behavioral remedies. That DOJ certainly accepted structural remedies and allowed deals to clear with that, but said, hey, we don't think behavioral remedies make sense because we're not a regulator and they don't work. You know, it's hard to keep companies to those promises they make. This administration basically says, look, if it's a problematic deal,

it should be stopped. Remedies usually don't work, and in the few cases they have agreed to a remedy, it's really only been where they clearly were going to likely lose in the litigation, and there've been very few. That was one of the first big changes because it used to be that almost all deals cleared with a behavioral or structural remedy are both. Now they also the end of last year, the guidelines that are used to evaluate

deals were changed. These guidelines are meant to be guidance for businesses to say, here's how we're going to evaluate your deal, guidance for the agencies and their own lawyers to go through their investigation, and guidance for judges in courts when the deals are challenged. Now they're not binding

on the courts, but most courts have accepted them. But the revision at the end of last year was really done on a partisan basis because we only had Democrats at that time at the FTC and at the DOJ, and usually these revisions have been done in the past on a bipartisan basis. So it's unclear yet whether the courts will adopt them. And these guidelines are troubling for merging companies because they have lowered the threshold for finding that a deal is presumed to be anti competitive at

the outset right. There are other changes beyond that, but in general, all of these changes essentially mean that more deals than before will be considered harmful. And I do think that these guidelines in general are here to stay. The question would be, with the next administration rescind them, go back to old ones, rewrite them, what would they do?

I think a Harris administration probably would not. I did see a Q and A with Commissioner Andrew Ferguson not that long ago by the George Mason Mercadas Center, I believe, and asking him about this. He's a Republican, by the way, and he had said, look, I don't think they should be rescinded, but I do think they should be tweaked. So that gives us some good guidance that if we have a Republican president and the FTC flips to a

majority Republican, they'd be able to do that. At the FDC, you need a majority vote to get anything done, and so they may be tweaked. It pulled back a little bit, justin and you know what, that pulling back could even happen under Harris. I just I doubt it more and I think it's more likely under Trump. So companies are going to have to live with slightly tougher guidelines. But again I said, the courts haven't accepted them yet, and

they may not. With respect to remedies, I think there's a lightning up there across the board, and that's because, honestly, it's a really rigid position, and what it does is it forces the agencies to bring cases that they're unlikely to win because there are strong anti trust theories of harm, and there are weak anti trust theories of harm. And there are vertical deals where there are also arguably a lot of pro competitive benefits from vertical integration, and that's

another case that's hard to win in court. So if you were completely across the board refuse to accept a remedy, you're forced to challenge a deal. Essentially, assuming the companies stick with it and fight, you're forced to fight a deal in court where you probably can't win. And I don't think Harris is going to want Harris's people, or

even Harris will want to be in that position. So I do think we'll have a little lightning on whether or not a little more flexibility on the acceptance of remedies to resolve mergers that raise issues.

US globally regarding enforcement activity around a right. There were reports of a raid of offices in France by enforcement authorities there for Navidia this past year. There was news reports over the summer that the DOJ and FTC are splitting responsibility for investigating Navidio's at purported consolidation in the

AI infrastructure space. And then you know DOJ looking at Visor excuse me, FUC looking at Microsoft's investment in open ai to twelve twelve point five billion dollar investment that happened there. Does that raise questions as to whether or not those those kinds of investments are really acting as an acquisition that would otherwise have to be reported under the Hartscott Redino Act for review. So that's kind of what we're seeing from this enforcement perspective. I think your

points about big tech are well taken. Right, do we see a more measured approach from a new FTC or DOJ and what does that look like under either Harris or Trump? You know, again, I think everything you said regarding the reviews on big tech is relevant and important here, and the reason why is that we're seeing really the same act in the AI space that we're seeing with every other aspect of tech that's already been kind of

you regulated or or enforcement has been taken. And you know, as I said, we've got Microsoft investing in open AI, We've got Navidia, We've got Apple now with the advent of Apple Intelligence and Sery integration. So all of those same players that have already been under that antitrust microscope are likely to be under that microscope again with regard to their activity around AI. And I don't think that's something that's going to entirely go away no matter who's

elected to office. Big tech just doesn't have those friends and enforcers that some other industries might. So that's something to keep in mind. I think something we're going to see a lot more happen on no matter who wins the White House in the company weeks. But a big question here, I think is the issue of China's dominance in this space and to what degree that consideration for a poor foreign policy and economics perspective plays into enforcement factors.

So you know, I think it's no surprise. In the same Bloomberg interview that you reference, Jen Trump talked about Chinese dominance in several economic areas last week, and you know, AI seems to be a space where that conversation really is developing out. You know, if we're raining in US companies from developing their AI infrastructures and power, if you will, is that coming at the cost of allowing a nation with which which we might not have the tightest ties, like China at the moment?

to AI. And also kind of tied into all of this is the aspect of privacy, right We've got issues of biometric surveillance and you know kind of you know, looking at your research and where you're headed and how that informs and educates AI. So there really is this

multifaceted legislative approach here. From an anti trust perspective, I think it's really looking at those investments that are made and AI startups and the consolidation that is said to be happening already, but none of that's happening alone in a silo. There really is this mix with issues of privacy and foreign policy that's really emerging, I think, to dominate how we're going to look at AI under either administration come next year.

could again. So let's talk about legislation. Are you seeing any situations where Congress might move the needle on any pending or newly introduced legislation.

both chambers the last couple of years. So everything I'm about to say, I think that really hinges on whether or not we're in another divided Congress come come next year, which looking at polling data, it suggests we could see a red set and a blue house. We could find ourselves in a reverse but a similar situation to what we're seeing right now. But you're you're correct, you know, we've seen really specific legislation on the table that is

aimed at particular industries. Senator Michael Is America Act is a great example of that, really aimed at you know, breaking up and reading in Google's behavior without mentioning them by name. And then you see broader moves to tackle things like self preferencing by companies and having their products

appere first in search and things like that. So you know, the question becomes, is there any political will or an appetite to even move forward on more standalone legislation that might focus on specific industries versus everything in anti trust as a whole. And I think that remains to be seen, you know, just keeping our eye on whether we're in

a divide Congress again next year. But one area I will point out where we're seeing a lot more conversation and bipartisan you know suggestion of activity is on pharmacy

benefit managers or PBMs. Right, So, you know, we saw the FTC file a lawsuit just a few weeks ago under section five of the FTC Act, which really you know, there was a report in July they had put out that really seemed to touch upon anti trust concerns that PBM's cause with their kind of vertical consolidation relationships with insurance and the effect that their activities are having on smaller independent pharmacies that are trying to survive in more

rural places in America. However, when they filed that lawsuit, that was really left out and the focus really was on this consumer protection aspect of what they had reported on earlier this year. So you know, I think what that does is in some ways might point to a situation where existing law might be inadequate to tackle a problem, and perhaps suggest to Congress that, hey, if there is this bipartisan agreement that something needs to be fixed, it's really going to be up to you to act. So

we'll see how that shakes out. But you know, that's the one industry I really point to you, in addition to tech, where I'm starting to see this really bipartisan consensus for some kind of activity to be coalescing where we could see some actions, so tech and PBMs, but I'm also going to point to a theme we're seeing across you know, litigation as it's evolving and the impact

that that's having on Congress. And what I mean by that, and this is just an example, is that you know, we've seen a swarm of these consumer class actions dudes that have been filed around the issue of these AI pricing algorithms, and you know whether or not and specifically

in areas like you know, residential rents and hotels. But you know, the question is, you know, when companies get together and they submit, they're you know, kind of confidential or non public data to these these operators of AI algorithms and in return are receiving suggestions as to how they should be pricing apartments or pricing hotel rooms. Is that akin to what we would see in a classic conspiracy under the antitrust laws.

in those situations. So it's it's kind of this mishmash, if you will, of different rules and trying to apply existing legislation to new technologies like this. But it suggests that, you know, new new legislation and new law might be necessary to curtail those behaviors if it's something that really there's a political will to take care of. So it's

that mix of things. Is there a move against an industry, is there an effort to move against an issue, and is that political will there in a divide in Congress? Probably not for these broader questions, but I think we could see some action on some industries if there's enough of an outcry from the public on them.

or so. What do you think about them acting on anti trust policy enforcement in the coming years.

And what I mean by that is that, you know, if you think back to twenty seventeen with the election of Trump, or even to twenty twenty one with the election or with Biden taking office, you know, you really see activity in the states by attorneys general and state legislatures who might be from opposing political parties that really trying to have you know, it seems to be that create a political will, if you will, in legislatures and among state ags that take action where they see, you know,

problems with how the federal government might be proceeding with certain issues. So I think we probably see that again regardless of you wins the White House. I think we see pushback from states that have majorities of a different color, if.

kind of done. You know, nothing's happening in Washington, right, But I think Advocate seeing some opportunity at the state level. They've been able to have some of these bills introduced and passed in certain state legislatures.

of the Sherman Act to add monopsonies to that definition. Right, So what is that where someone has a buying power in a market like Amazon for instance?

different states. And we could also see movement from those states as kind of a pushback mechanism as things they don't particularly enjoy.