Client Alert

We (Finally) Have a Senate-Confirmed Leader of the Antitrust Division: What Happens Next?

18 Nov 2021

On November 16, 2021, the Senate voted 68–29 to confirm Jonathan Kanter as the Assistant Attorney General for the Antitrust Division at the U.S. Department of Justice (DOJ). Kanter’s confirmation is significant because the Antitrust Division has not had permanent political leadership under the Biden administration. This stands in stark contrast to the Federal Trade Commission (FTC), the other primary federal antitrust enforcer, which has been instituting a series of (often controversial) reforms under its new chair, Lina Khan. With Kanter now in place, the Antitrust Division is likely to start clarifying its role in implementing the Biden administration’s ambitious “whole-of-government” approach to antitrust.

The expectations for Kanter are high. President Biden signaled early this year that pursuing new approaches to antitrust enforcement is a top priority for his administration. In March 2021, he appointed Timothy Wu to the National Economic Council and, in May 2021, he appointed Lina Khan to be a commissioner of the FTC. (President Biden did not name Khan as FTC chair until soon after her confirmation in June 2021, which some senators viewed as a breach of protocol.) Both Wu and Khan are advocates for aggressive and novel antitrust enforcement, especially against “big tech,” and both have begun using their positions to effect change. Among other actions, Khan led the recent Democratic FTC majority to revoke the agency’s 2015 policy statement on unfair methods of competition, withdraw its support for the 2020 Vertical Merger Guidelines it approved along with the DOJ, and revoke a 1995 policy that called for narrow use of prior approval provisions in agency settlements and replace it with a broader policy that prohibits an acquiring company from engaging in future transactions without agency consent. From the White House, Wu orchestrated President Biden’s July 9, 2021 sweeping executive order—Executive Order 14036—on promoting competition in the American economy, which effectively deputizes more than a dozen federal agencies to work in concert with the DOJ and the FTC to implement antitrust reforms using their own regulatory authorities.

Although the general perception is that Kanter will be a partner in these efforts, it remains to be seen how perfectly he will align with Khan and the FTC. One fundamental issue is the different statutory authorities and mandates for each agency. For example, unlike the DOJ, the FTC has asserted substantive unfair competition rulemaking authority, and Khan has indicated she will attempt to use it broadly (the Republican-appointed commissioners have raised questions about the scope of this authority). One practical difference between Kanter and Khan is that Kanter has decades of experience as an antitrust litigator. Most recently, he represented companies pushing back against big tech firms, but Kanter previously served as a staff attorney at the FTC and defended big technology companies as a partner at large international law firms. This experience means that Kanter likely has a defense counsel’s perspective of the consequences and burdens of agency actions on private parties. In tandem, these two factors suggest that change at the Antitrust Division will likely be more incremental than change at the FTC.

But there is no shortage of issues for Kanter to start making his mark. Some of the significant issues and decisions that await Kanter and his team on day one include:

  • the DOJ’s position on the 2020 Vertical Merger Guidelines after the FTC withdrew its support in September 2021;
  • the DOJ’s view on new Horizontal Merger Guidelines, which the Executive Order encouraged the DOJ and FTC to review and revise;
  • the implementation of the Executive Order regarding a host of other issues, such as ensuring competition among financial institutions and in the markets for beer, wine, and spirits;
  • the DOJ’s ongoing review of digital platforms and related litigation;
  • the DOJ’s pending lawsuit challenging Penguin Random House’s proposed acquisition of Simon & Schuster;
  • the DOJ’s pending lawsuit related to American Airlines’ and Jet Blue’s select “Northeast Alliance” joint operations and revenue sharing agreement;
  • the DOJ’s position on disputes at the intersection of intellectual property and antitrust, including in particular its views on the extent to which antitrust should apply to the pursuit of injunctive relief against infringers by owners of standard essential patents;
  • the ongoing criminal prosecution of at least four labor market cartel cases, including pending motions to dismiss these novel charges;
  • managing the prosecution of multiple criminal antitrust cases that are all scheduled for trial in the upcoming year; and
  • determining the DOJ’s position on several antitrust reform bills pending before Congress.

From an enforcement perspective, the most immediate effect is that Kanter is likely to encourage Division career staff to consider broader theories of harm in reviewing mergers, consistent with the Executive Order, which attempts to expand the focus of antitrust to include workers, farmers, small businesses, protecting the environment, and promoting equity, among other issues. Such an approach will likely expand the scope of reviews, slow the review process in certain deals, increase costs of compliance with agency requests for information, and carry greater risk of litigation as parties grow concerned about agreeing to settlement proposals that include non-traditional terms that might hamper their ability to compete or invest effectively in the future. 

For criminal enforcement, Kanter inherits the first four criminal cases filed for alleged collusion in labor markets. Although these charges are novel and currently facing significant legal challenges, they received bipartisan support across the two prior administrations and seem to align well with the antitrust goals outlined in the President’s Executive Order. The Division under Kanter is likely to continue and expand criminal investigations into the labor market over the next few years, barring any major setbacks in court.

Kanter is likely to be active on policy issues as well.  As noted earlier, one of his first policy decisions will be determining the Division’s position on the 2020 Vertical Merger Guidelines, which the Khan FTC recently abandoned on a 3–2 party line vote.  Kanter’s ability to coordinate with Khan and the FTC on a revised set of guidelines will be an early indicator of how well the agencies are able to work together to address issues of shared interest. A potential revision of the 2010 horizontal guidelines, one focused on adding less traditional theories of harm as considerations, may be next in line. In addition to these internal policies, Kanter will help guide the Biden administration’s response to the many antitrust reform bills in Congress. Identifying the current proposals most likely to become law will depend in significant part on which bills ultimately enjoy the support of the White House and Antitrust Division.

In practice, Kanter first will have to get settled at the Division. He will need to bring in his leadership team and get up to speed on a variety of cases, investigations, and policy issues. All of this takes time. Kanter also is likely to be cognizant of the political time constraints; there is only one more year left for the current Congress, and he is starting almost a year into the Biden administration. In light of these considerations, Kanter will need to balance the desire for aggressive enforcement against the risk of litigation or policy failures and a ticking clock.

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