By: Christopher J. Allen
The National Association of Attorneys General (NAAG)’s Eastern Region Meeting, held August 1-3, 2023 in Connecticut in conjunction with the Attorney General Alliance, included an “Antitrust Bootcamp” that surveyed the history and current state of and future challenges for state and federal antitrust enforcement. AGs from 9 states (CT, DE, ME, NH, NY, OK, RI, TN, and VT) and Puerto Rico were in attendance, plus senior staff and antitrust AAGs from at least 10 additional states (CA, CO, DC, MA, MS, NV, NJ, NC, PA, WI).
In this first in a series of three articles about the Antitrust Bootcamp, we summarize the discussion that took place on the history and development of antitrust law, and how it applies to new developments in the modern economy, such as market consolidation, big data, and artificial intelligence.
Changing Antitrust Concepts
NAAG’s Antitrust Bootcamp began with “Antitrust Basics” by Wayne State University School of Law Professor Stephen Calkins. Professor Calkins spent some time discussing the Biden administration’s proposed revisions to the DOJ’s Merger Guidelines. He noted that the 1982 edition has been a cornerstone of antitrust law in the US and abroad for decades, whereas the proposed revisions revert to an older conceptualization of competition dominant in the 1960s that focused on broader questions of fairness and was more inherently skeptical of mergers.
Professor Calkins enumerated the comparative advantages of state AGs compared to their federal counterparts when it comes to antitrust:
- Familiarity with local market conditions; local expertise regarding the effectiveness of potential remedies; and local credibility and connectedness.
- Broader legal tools than federal enforcers, including the variety of available remedies (most notable, significant monetary penalties); additional statutes and case law, e.g., state statutes and decisions repealing Illinois Brick, broad unfairness doctrines, and the ability to wed antitrust claims with more general deceptive acts and practices claims, and
- AG cooperation – one of the most prominent areas of bipartisan cooperation in our increasingly hyper-partisan environment.
Long-time Connecticut antitrust chief Robert Langer added that states have unique roles in enforcing antitrust laws. From the first coordinated consumer protection multistate case against GM in 1978, to the creation of the NAAG Multistate Antitrust Task Force, states have sought divestiture even after federal approval for a deal—a factor that drives AG independence and continues to shape antitrust law to this day.
Distrust and Skepticism Reign Supreme
Matthew Stoller, the Director of Research at the American Economic Liberties Project, took a historical perspective on antitrust law, which has been informed by a general distrust of big business among the American public dating back more than a century, further fed by the recent consolidation of industry. He argued that this skepticism will continue to underpin policy as new trends, such as big data, become more important to the economy and society.
States Are Central To Antitrust Law
In a subsequent fireside chat between US DOJ Assistant AG for Antitrust Jonathan Kanter, Connecticut AG William Tong, and Tennessee AG Jonathan Skrmetti, AAG Kanter noted that antitrust enforcement is one of the few areas where there is real bipartisanship and emphasized the centrality of states to antitrust law. He expressed his view of the new proposed Merger Guidelines, born out of a perception by US DOJ that the current merger guidelines had deviated from the statutes and case law interpretation. He also contended that the vertical/horizontal merger distinction is a vestige of an old economy, and the modern focus should be on how competition in a given market presents itself and how a specific merger will impact that dynamic. Similarly, he stated that the proposed changes to HSR premerger notification being done by the FTC with significant DOJ input, was intended to revise the current HSR form to make it more relevant to modern antitrust enforcement, instead of something that has basically become irrelevant to modern premerger review and is burdensome to businesses, especially smaller ones.
Current and Upcoming Federal Enforcement Priorities Include Limiting Non-Competes, Data Concentration
Foreshadowing subsequent panels, AAG Kanter identified current and upcoming federal enforcement priorities, including combatting the use of employee non-compete agreements in ways that limit opportunities for workers. He also identified the rise of “dataopolies,” in which the concentration of big data in the hands of a few companies creates barriers to competition. These raise concerns that will only be exacerbated by the availability of AI for parsing huge data sets, so increasing the advantage of companies that possess large amounts of data have over rivals. He urged that enforcers and regulators understand and not be intimidated by new technologies like AI and approach enforcement with the philosophy that overtechnical application of antitrust laws—such as an overemphasis on economics—to the point where the law is not understandable by and concerned with impacts on real people, strays too far from the purpose of these laws. He complimented AGs as bringing to their enforcement role a convergence of expertise and pragmatism that looks for the right thing to do to advance public goals, and as a balancing force and counterpoint to US DOJ.
Enforcement Priorities in the Wake of the Biden Competition Order
Former FTC Commissioner Noah Joshua Phillips addressed current issues in antitrust enforcement in the wake of the Biden Administration’s Executive Order on Competition. The executive order was a function of a number of Biden Administration appointees having very different views of antitrust than has been traditional. The order mandates a “whole of government approach” to competition characterized by a shift from “antitrust” to “anti-monopoly”, a move away from focusing on “consumer welfare” to a broader concept of “fairness” and “openness,” and a willingness to view regulations not as burdens on economic growth but as necessary and useful tools. The result has been the use of both general antitrust laws and industry-specific laws to focus on competition issues related to labor and non-competes, especially in the pharmaceuticals, Big Tech, and private equity industries. It also has led to an adoption of new concepts, such as enforcing long-dormant criminal offenses involving monopolization, assessing labor monopsony, assessing potential impacts of activity on competition as well as immediate ones, scrutiny of cross-market/cross-benefit bundling, and revisiting the long-standing presumption that vertical mergers are pro-competitive. This also has involved a shift in processes, including the FTC’s suspension of early termination, use of more frequent and broader second requests, and willingness to refuse party-proposed remedies or require prior approval for divestitures as part of a proposed remedy.
Phillips contended that, contrary to perception, the FTC under its new policies and aggressiveness is not “losing all the time” because parties are more often giving up after enforcement is brought, which counts as a “win.” He also noted that many agencies beyond FTC and US DOJ, including the Departments of Defense, Treasury, Commerce, Agriculture, and Health & Human Services, as well as industry-specific regulators like the FCC, have issued a large number of policy statements and reports, removed old guidance and issued new guidance, and focused on industry-specific competition issues involving healthcare, banks, meat processing, and defense contracting. Finally, a follow-on effect of this increased focus on competition has been more frequent consumer protection regulations and enforcement actions not clearly focused on competition but in the wheelhouse of the FTC and US DOJ.