Sep 23, 2026
On September 23, Karina Lubell, Partner in Brunswick Group’s Global Antitrust and Competition practice, and Nicholas Cheolas, Partner at Wiley, joined us for a discussion on the evolving antitrust enforcement landscape under the second Trump administration. The full transcript, which has been modified slightly for accuracy, can be found below.
TEDDY DOWNEY: Hello everyone. Welcome. I’m Teddy Downey, Executive Editor here at The Capitol Forum. Today, I am extremely pleased to be joined by my former colleague Karina Lubell and Nick Cheolas.
TEDDY DOWNEY: Karina is a Partner in Brunswick Group’s Global Antitrust and Competition practice. Before joining Brunswick, she served as Chief of Competition Policy and Advocacy at the U.S. Department of Justice’s Antitrust Division, and before that was a Senior Correspondent here at The Capitol Forum.
Nick is a Partner at Wiley Rein, an antitrust litigator who advises clients on competition issues, merger strategy, and regulatory matters. He previously spent five years at the Justice Department’s Antitrust Division, including as Counsel to the Director of Civil Enforcement and as a Trial Attorney in the Technology and Digital Platform Section.
Today, we’re going to be talking all things antitrust during the second Trump administration, how the agencies are approaching investigations and remedies, how the broader enforcement landscape could evolve following the midterm elections. Karina and Nick, thank you so much for doing this today.
KARINA LUBELL: Thanks so much, Teddy. It’s nice to be back.
NICK CHEOLAS: Nice to be here.
TEDDY DOWNEY: So, we had a big conference at the beginning of the Trump administration, and the leaders in Trump world talked a big game. They were going to hold corporate power to account. They were going to continue off of a lot of the aggressive enforcement that you saw during the Biden administration.
We even heard some nice words about Lina Khan, to the surprise of very many in the audience. And what happened was very different. I would love to get your thoughts overall on what you’ve seen from the second Trump administration, what they promised, and whether or not they’ve lived up to that promise.
KARINA LUBELL: You want to kick this off, Nick?
NICK CHEOLAS: Sure. Well, I’ll kick it off somewhat anti-climatically with a disclaimer. But for today’s purposes, this is just intended to provide general news about legal developments – this should not be construed as providing legal advice or legal opinions. The discussion we’re having today represents my personal views on the subject matter, not intended to represent the views of Wiley Rein or its clients. I know you’re familiar with the DOJ disclaimer that we often had to use, and here’s the private practice analog.
But so, Teddy, to that question, I’d say the rhetoric that you mentioned at the outset of this administration is still there. And I think there were a number of antitrust conferences last week where we’ve got to hear from leaders at the FTC and at DOJ. And I think last week was Stanley Woodward’s first antitrust-centric speech in his role as head of the agency.
So, a lot of that rhetoric is still there. And I think what you would hear from agency leadership at both agencies is that one of the biggest changes we’ve observed is the posture on settlements. And there is this real acknowledgement of the trade-offs between settling a matter now or litigating a matter to an uncertain conclusion and uncertain relief. And so, I think the agency leadership is very acutely aware of those trade-offs. And over time, they’ve really come down on the side of “we are going to pursue settlements that get relief now.”
Now, the question is always, is that enough? What could you have gotten by proceeding to litigation? What would you get through a remedies trial and a fully litigated opinion? All of those questions are uncertain and different people will come down on different sides. But I think what you’ve seen is a pursuit of many of the same goals as the last administration in a very different manner. And I think people can understandably read that very different ways. Karina, what do you think?
KARINA LUBELL: I think we have to differentiate between FTC and DOJ for this. And I think Teddy, you’re talking about, at the beginning, agency leadership from both agencies coming in with this sort of populist pro-enforcement message. And at that Gail Slater was still the AAG. And so, it’s important to acknowledge at the outset that Gail has left. And now even [Deputy Assistant Attorney General] Dina Kallay, the last member of that original team, is no longer at the Antitrust Division.
And I think that if you’d ask people who heard that message at the outset, whether they think that today that we are seeing that message in practice, I think that the answer is, no, we’re not seeing it in practice at DOJ and people who had expected to see it are very disappointed.
On the other hand, I think at the FTC, it is very much business as usual, at least as far as merger review is concerned. I think there’s a different answer to that question if we’re talking about conduct, where we are seeing some of this more ideological-based investigation. But as far as merger control, we are seeing a continued commitment to those kitchen table or pocketbook issues and fairly aggressive enforcement.
And I think you make a good point, Nick, about settlement. But I also think we’re seeing settlement as a much more frequently used tool early and often at DOJ. And [Associate Attorney General Stanley] Woodward has even said as much. And he said that he’s questioned, I think at least reportedly, that blocking a merger may be a violation of a corporation’s due process rights.
And that’s very different than the message that we’re hearing from Ferguson. And yes, Ferguson, last week at Fordham, did say something about weighing the relative costs and benefits of settling versus pursuing a lawsuit, based on resources. But I think that weighing is something that we have seen sort of historically from agency leadership and not really a departure from the practice of thoroughly investigating and litigating where that will be the best outcome for consumers.
TEDDY DOWNEY: I would love to get your thoughts on just that no big mergers have been challenged by either agency, despite massive, massive mergers across the economy, historic allegations of corruption, both a tremendous legal overturning of norms at the Supreme Court in terms of revamping how the FTC works, the President making it very clear he makes all important high-level decisions when it comes to antitrust.
How does what you’re saying square with that reality? I mean, it doesn’t seem like business as usual or in any way consistent with what we’ve seen historically, to my view. I mean, I’m just playing devil’s advocate here. But are you guys acknowledging that all that has occurred? Are you saying that didn’t occur? What’s your take on this historic moment when it comes to antitrust?
KARINA LUBELL: Yeah. Well, I’m so curious to get Nick’s thoughts on this. But just quickly, I will mention I think, again, we have to treat the agencies separately. And the FTC, maybe it’s just that the agency has benefited from not having some of the most high-profile, biggest $100+ billion deals before it. And perhaps if it had reviewed more of those deals, we would be seeing a different outcome there. I don’t know. I think you’re right. We haven’t seen a lot of merger challenges go to court. Although, we have seen some, right? Edwards/JenaValve and Henkel/A-Paint Topco.
NICK CHEOLAS: Yeah, you had JenaValve and Liquid Nails on the FTC side.
TEDDY DOWNEY: Relatively small.
KARINA LUBELL: Smaller deals. But again, I think —
TEDDY DOWNEY: Yeah, I was saying no big mergers, which is like historically where it matters.
KARINA LUBELL: Right. But is that more a question of where they’ve the merger –.
TEDDY DOWNEY: Well, you could say the FTC has also allowed a huge number of mergers go without even getting a second request that even the market was expecting to be potentially challenged. So, I think there’s enough evidence here that and then we haven’t even gotten to the staff levels. They don’t even actually have enough staff at either of the agencies to do much, really. I mean, at the same level.
KARINA LUBELL: The FTC, yes, they lost and obviously, both agencies lost people, starting with DOGE and “The Fork”. But the DOJ, with Gail Slater’s departure, has seen a continued and continuing exodus from the Antitrust Division. The FTC has lost relatively fewer people and has been hiring. So, I’m not sure that resources are as much of an issue at the FTC than at DOJ. I don’t know if, Nick, you’re seeing the same thing.
NICK CHEOLAS: One thing I’d mentioned to your point about resources is when the new administration came in on the DOJ side, DOJ, the division, was committed on a lot of large litigations. I mean, they were still working through some of the remedies phases of some of the Big Tech cases. They were still heading to trial in the Live Nation matter. They have a few other large, ongoing litigations. Those big cases take a ton of people.
TEDDY DOWNEY: Well, they walked away from Live Nation in an historic caving, fake remedy situation.
NICK CHEOLAS: I appreciate the characterization. And look, I read the same reporting you do. I’m just talking about the institutional dynamics. And to your point about resources, it’s going to be tough to do anything when you come in, have a lot of people committed on litigations. And then you’re right, a lot of people have left the agencies. So, resource constraints are always an issue. Resource allocation is always an issue. I think that’s become more acute in the last 18, 24 months.
KARINA LUBELL: To go back to your original question, Teddy, I know that you’re dying for the answer here. Based on what we’ve all been hearing and seeing in the reporting, including much of The Capitol Forum’s reporting, there’s obviously something else — there are other influences at play in some of these decisions. And so, without naming specific decisions, I think we can acknowledge that there are other influences that go beyond a staff recommendation, both to open a second request and ultimately to file a complaint.
TEDDY DOWNEY: Yeah, I would just say from our perspective, I think stakeholders and mergers just think, I just hire the right lobbyist with Trump ties and get my deal through. That’s the best way to go about things. It’s not really a real antitrust investigation.
And as a result, the risk is more at the state level, internationally, as opposed to really I mean, if it’s a big merger. Maybe if it’s a small merger, it could get challenged at the FTC. But otherwise, we don’t see a lot of people caring too much about what’s going on at DOJ and FTC because they can say, well, just hire the right lobbyist and get it across the goal line.
But let’s talk about how this could change because I read polls, as I’m sure both of you do. Democrats are now favored to win the House and the Senate, shockingly, despite the map being absolutely awful for Democrats and the Democrats largely just having no seeming agenda on the table here.
So, them potentially winning some kind of historic landslide related to high prices, people being unhappy with high prices, people being unhappy with allegations of corruption, people unhappy with the war, et cetera. We’re going to probably see a change in Congress, state legislatures. What do you see in terms of risk to this current framework, risk to mergers, post-election? How would a shakeup of that magnitude change things?
KARINA LUBELL: You want me to take this one, Nick? Or do you want to go for it?
NICK CHEOLAS: So, I actually want to engage with your first point, Teddy, about the belief that if you hire the right lobbyist that you can get things through and get things done. I’ve heard that sentiment expressed. I understand some of the reasons why people might think that.
I personally think that would be a catastrophically bad miscalculation by any merging party. I just don’t think it’s a good strategic move to bank on that being the case. I don’t know whether or not it is true, but I think table stakes for any merging party, in any deal now, still has to be engaging with staff on the facts, on the law, on the economic analysis.
I do agree and we heard it last week that I think agency leadership at both agencies was clear that they are willing to talk to anybody. They will have anybody come in and tell them whatever they want. And then their line is they will decide whether or not it’s useful to their analysis. Agency leaders have also been clear that the President sets the priorities, and he is democratically elected and accountable to the people. And that can and should, in their view, drive antitrust policy.
So, I do think you need to incorporate those positions into your strategy. But to me, the bread and butter of staff engagement on the issues that have always been on the table is a prerequisite, even in this environment.
KARINA LUBELL: I think that’s right. I guess I’ll just say and again, to go back to your original question, or maybe premise, that people come into a deal and say, oh, if I just hire a fixer, then that’s really all I need to do. I think that’s incredibly short-sighted, particularly going into the midterms, and with the oversight that we expect coming in the next session of Congress.
But even without that, because as you pointed out, Teddy, you have the states. You’ve got international enforcement. There are a lot of other mechanisms to act as checks on what the federal agencies are doing. And so, if your only strategy is to hire someone who’s going to whisper in Woodward’s ear or Ferguson’s ear, it’s not going to take you very far.
And so, I think it’s a lot more important to build a broader strategy that, of course, includes all the things that Nick is talking about. Staff engagement is key there, but also just understanding who all the other stakeholders are.
And then to go to what you raised about the midterms and what we can expect there, the Democrats haven’t been shy about saying exactly what they intend to do when they take control of at least one, if not both, houses. And I think we can expect a fair amount of oversight, not of the agencies themselves. From what I’ve been hearing, Members of Congress have felt that that’s sort of a futile exercise because they’re not going to get any information from the agencies, at least for the remainder of this administration.
Instead, what we’re going to see is Congress hauling in executives from all these companies that are allegedly doing deals to either get their case dropped or get their deal through, whatever it happens to be. That’s to put businesses on notice that this is what happens: If you’re not playing by the rules, you will be held accountable.
TEDDY DOWNEY: Yeah, I would imagine Mike Davis will get subpoenaed almost immediately. All his clients will get subpoenaed almost immediately. So, you get your merger through certainly if you do it now, you get it through, but at a cost. Whereas earlier in the administration, you might not have known that cost was going to come back to bite you. Now that we have a clearer picture of the election, there’s a little bit more clear cost. We’ll see if he gets pardoned or what happens on that front.
What do you think at the state level obviously, states have been looked at and until this past weekend, as a real risk to your merger getting done, that there was a real coalition of people who would step in and challenge a merger.
Obviously, there’s still the Tegna case moving through. We don’t want to talk about any specific transactions. But what do you think the risk that state AGs play in mergers going forward? Is that something people should be worried about prioritizing in terms of thinking through when they do a merger? Or is it kind of a joke? You just get the right lobbyists and you can get it done anyway, and it’s all performative.
And particularly, California Democrats are laughable, pathetic, nonsensical agents when it comes to dealing with these mergers. It’s just impossible for me to understand that Bonta for months and months and months said it was a legitimate antitrust investigation, then settles for the exact thing he said he would not settle for, which is behavioral remedies. So, make sense of it for me, please. Or otherwise, make sense of what we should expect out of the states going forward.
KARINA LUBELL: Yeah. So, again, without talking about any specific matters that are before the states, I think that we can make some generalizations. One of which is the states have proven that they are extremely relevant in merger enforcement, even beyond where it’s just a state issue.
But one of the things that’s become apparent is the limits of state enforcement. And if you look at the relative budgets of the federal agencies to the states, the states’ combined budgets are a fraction of what the federal agencies have. And so, it’s no surprise that there are significant resource constraints. And the ability of states to be pursuing multiple investigations or picking up what they feel is some of the slack that’s left by a lack in federal enforcement, there are limits to that.
NICK CHEOLAS: Yeah, very much agree with Karina’s point. I don’t think anybody is taking the states lightly now, particularly in merger review. But certainly, the state AGs are active on other non-merger matters in the antitrust space. They’re very active on consumer protection matters as well. I think the general consensus, at least that I hear, is that that’s going to continue. And there are several states who are making moves to build their staff and build the infrastructure internally to bring and pursue cases that they might not have been able to do historically because of resource constraints. There are a number of federal antitrust enforcers who are now at different state AG offices and agencies.
So, I do think that is real. I think that’s going to continue. It will certainly continue to be a thought on the mind of merging parties and anybody in the antitrust space. But the other thing I go back to, Teddy, is you now have if you look back at the last seven years there was this groundswell against “Big Tech” in the latter part of the last decade. You had several cases brought by both agencies.
Some of them have reached their conclusion. Some of them were successful at the liability phase and, depending on who you ask, underwhelming at the remedies phase. And some were just not [successful at the liability phase]. And you have a couple other cases still pending.
But my point is those cases have a very, very long horizon and took a lot of resources for a very long time for uncertain relief at the end of the day. And so, it would be wild for any enforcer now to not really seriously engage with the trade-offs between settlements and litigating. Even in a merger case, because some of these are just the idea that any merger case is a slam dunk is just in my view, unserious. There’s a lot that can happen in litigation and there’s a lot that can happen in litigation involving fast moving tech or media or other markets.
So, I think one thing that is happening is that enforcers are more seriously grappling with real historical evidence, and recent history, with the trade-offs between settlement and pursuing a case to uncertain litigation conclusion. How much of what we see is a feature of that versus any one of the innumerable other factors out there, I don’t know. But that is a real factor.
TEDDY DOWNEY: It seems like an incredible time to be a monopoly, if that’s right. Let’s talk about money. It does seem like Democrats are interested we’ve reported on this in sending more money to the states for law enforcement generally, antitrust enforcement specifically. I would imagine the states will not entrust AG Bonta to lead any more merger challenges going forward or antitrust investigations, just given what happened this past weekend.
If there was going to be more money, what stages would you look to see potential leadership? We had some reporting about AGs in Connecticut and Minnesota potentially taking up the Paramount litigation, but ran into resource constraints. There wasn’t really much out of New York. There really has been a lot of talk and no action out of New York, I think, even though they have a large team there. You mentioned rumors of specific AGs hiring up. We’ve written about Oregon and New Jersey.
What are the AGs to watch now and after the election that you would say, hey, this is who you need to pay attention to now that no one is going to take Bonta seriously anymore?
KARINA LUBELL: So, I think that’s a really tough question. And first of all, I’m not sure I agree with your premise that no one’s going to take Bonta seriously anymore.
TEDDY DOWNEY: I don’t think the public I don’t think stakeholders, I mean, like people who watch this will. So, he might, I suppose, but I don’t imagine that anyone else will.
KARINA LUBELL: But look, I think this is one of the challenges with state AGs bearing the sole responsibility for investigating and challenging mergers or conduct is they need a coalition. And you can’t just hand the money over to [the] Connecticut [AG] and expect them to enforce the way that you historically saw enforcement coming out of the federal agencies. And building a coalition of states is really hard.
TEDDY DOWNEY: Why not? Because they can hire people. I mean, obviously, there’s a lot of talented people on the street right now. You’re seeing these other agencies ramp up. Why can’t a smaller state, with money from the federal government to do law enforcement, ramp up a staff?
KARINA LUBELL: Well, first of all, a state AG is held accountable to their constituents, right? So, Connecticut is ultimately going to do what is best for and I don’t know why we’re picking on Connecticut here but any state is going to do what is best for that state’s constituents at the end of the day.
And so, that is an important calculation when they decide to sign onto a case that is going to have national implications. It’s a much easier decision for them to say, look, there’s a hospital merger in my state and I’m really concerned about the competitive effects. I’m going to either join the FTC or bring my own case there.
I think it becomes a lot trickier — and you saw a huge coalition in Live Nation because that is an issue that drew so much concern from constituents across the states. I just think it’s a lot more difficult to assume that if you give one particularly active state AG all the money, that then they will be carrying the torch. I don’t know, Nick, if you want to…
TEDDY DOWNEY: I don’t want to characterize it as like one state getting all the money. It’s more like a lot of money goes to a lot of different states and you see a lot more activity. But someone’s going to have to like lead. One thing that we saw was that, if you are the lead and you are putting a lot of resources into it and everyone else defers to you in that coalition, there’s no real ability — it’s very difficult. I think the Live Nation situation is a rare situation where you did have a lot of states actually doing a lot of legwork, along with the DOJ. And so, they were able to — and they also had to get outside of council to continue that litigation.
But with Paramount — and you can see with other potential situations, if you’re relying on New York or California there’s just not the money, the staff, the resources, to continue the litigation, be a real threat or like a real check on the lead. I mean, to me, that’s part of the equation. You’re saying it’s a resource. I agree 100 percent it’s a resource constraint.
KARINA LUBELL: But not just money, Teddy. And I want to be clear about that because obviously money is incredibly important. You need to be able to hire staff and to pay your staff. But there are also statutory limitations that the states have, and a number of them have been trying to overcome those. Or we’ve seen all of these mini HSRs cropping up.
I think we’ve seen the states try to use the Tunney Act as a means to question some level of federal enforcement. But we’re seeing the limits of the Tunney Act. Look at the outcome in HPE/Juniper. I think something similar is expected in Live Nation.
All to say, beyond the money, there are a number of structural changes, I think, that we would need to see in order for the states to really be able to play a meaningful role as the sole enforcer in mergers and potentially conduct.
TEDDY DOWNEY: Yeah, go ahead, Nick.
NICK CHEOLAS: On the state front, the one thing I’d mention is that there are some states that are now looking at using outside counsel to pursue matters as sort of a force multiplier. California, in its most recent case, is one example. Other states are doing that too. It’s a good way for smaller states to enhance their impact.
But I’ll also say the type of federal-state collaboration that I think we are most used to is still happening. There was the asphalt merger settlement involving Tennessee. There was a concrete settlement in a merger case where DOJ partnered with California. They’ve done the same with Ohio. The FTC’s recent case has a number of states on it. That is still happening.
And the third point is, I do think you see a few states on different sides of the aisle pursuing and building coalitions to pursue matters that are important to them and a group of states. I think that will continue. That’s another way where states with smaller internal competition or consumer protection staffs can multiply their impact.
TEDDY DOWNEY: Yeah, there is some cooperation still between the agencies and the states. I do think, though, that the states and Congress, particularly the Democrats, don’t really view the White House and the agencies as good-faith actors all the time.
And then you have also this election. Again, the key issues that people are voting on are high prices and corruption. And basically, corruption is another way of saying close ties between concentrated economic and concentrated political power. You would think that there would be a lot of activity from the states’ AGs, legislatures, to try to do more about consolidated corporate power, especially when it’s got connections to Trump.
One thing I want to ask about is, you’re going to potentially have House and Senate investigators. They’re already saying they’re going to hold hearings on some of these questionable mergers, questionable antitrust activity, questionable corruption, between the White House and the agencies and some of these companies. What do you expect cooperation on that front between the House and Senate and the AGs? Do you see that as a concern for companies that want to merge or have merged?
KARINA LUBELL: That’s a good question. I don’t know. I think that where the states – certainly, one of the places where the state AGs are relevant is in helping build the record in the course of an investigation or litigation that ultimately gets through or that settles because it gives Congress additional material to point to as evidence of something that occurred other than through ordinary course. I think there’s that.
But you’re right, Teddy, that there are certainly certain state AGs who have built relationships on the Hill and we’re likely to see some level of cooperation between them. That said, we’ve got a federalist system. And I do think part of this conversation is just fascinating that we are — Democrats who historically have been in favor of more centralized government who are pointing to states to take the lead and to dissipate some of this power. You’re hearing from the formerly states’ rights Republicans, oh, no, no, no. We should just let the White House make decisions for everything. I think we’re at a fascinating time in history from that perspective.
TEDDY DOWNEY: Well, yeah, I would say most Democrats don’t really understand history and they think Hamilton is some kind of hero and multicultural hero. They think Jefferson was an idiot who thought there should just be agrarian economies. They don’t understand power, concentrated power, the history of why we have the government the way that we do. They love the Supreme Court, despite it handing tremendous power to the executive branch. I don’t have a lot of respect for those people that you’re talking about, obviously. But you’re right. It is an interesting time. People are learning about Jefferson, again, and why we have state separation of power.
Let’s stay on that theme a little bit because states also are doing a lot at the forefront of regulating competition, regulating issues in markets. You’ve got states calling for utility reform, calling for pauses on data center build outs that are unpopular.
When it comes to antitrust not just merger-specific, but antitrust more generally you’re seeing a lot of opening the door of, let’s expand our antitrust laws. Let’s get more information on mergers, to your point, Karina. Let’s allow for a lot more private litigation. Let’s change our state laws, allow a lot more litigation in state laws.
We’ve seen a tremendous number of really creative plaintiff’s firms pop up as a result of attrition at the DOJ and the FTC. Do you expect that trend to continue? Do you expect to see a lot of state-level plaintiff litigation, when it comes to antitrust, allowing for more litigation, state-level curbs on things like forced arbitration and stuff like that, so you can get a lot more litigation and actually get into discovery? It certainly feels like a trend, but I want to get your thoughts on if we can expect to see more of that going forward.
NICK CHEOLAS: Yeah, I’d say yes, as a short answer. I do think, having been in private practice for ten years, and then going into the government in 2020, and then coming back out again, I think the private plaintiffs bar appears more active and more creative in the theories they’re pursuing, the things they file suit over, for a variety of reasons. I expect that to continue.
One area that comes to mind, consistent with your question, is pricing. Necessarily, I think of things in a very antitrust-centric way. From a pricing standpoint, algorithmic pricing collusion is a hot topic in the antitrust space unto itself. But it has also spawned other elements like surveillance pricing, which I think is more of a consumer protection issue. And it’s also spawned a lot of state action, in both an enforcement capacity and a regulatory and legislative capacity, where certain states and even cities are banning certain pricing practices that, regardless of what they might do, and whether it’s legal or illegal, just rub people the wrong way. The idea that a company uses your own data to provide you an individualized price. Politically, that rubs people the wrong way.
So, you see a lot of these issues that have deep antitrust elements. But they’ve also elevated into the popular consciousness in such a way that they’re drawing scrutiny from multiple directions now. I think that dynamic will continue across a number of issues, and you mentioned some of them.
TEDDY DOWNEY: Last question for me, and then we’ll move to listener questions. If you have a listener question, please put it in the chat, put it in the Q&A. We are doing an event on September 29th with Congressman Raskin, who is a constitutional scholar and is interested in doing reform of the executive branch and a number of other things. He has a Tunney Act legislation.
What do you expect to see? Obviously, Congress — do you think there is a potential that if Trump gets beaten badly enough in the election that there will be any hopes of bipartisan legislation, like people peeling off from Trump on Executive Branch reform? Obviously, the FTC doesn’t really function the same way as it was envisioned in law. There’s no reason to have minority commissioners. The President really gets to run the place. The Tunney Act, to a lot of members, has not lived up to its billing to create transparency around potential corruption and mergers.
What do you see as (a) the prospects for any legislation around antitrust in the next Congress? And (b) if you don’t see a lot of hope for that, what do you see as interesting in terms of laying the groundwork for potential reform later, if there’s a new president at some point, or when there’s a new president? I guess maybe we do have to say if. Keep going. Yeah, go ahead.
KARINA LUBELL: That’s a great question. And I’ll be curious to hear how [Congressman Jamie] Raskin addresses it at your event. I think that, first of all, the House and potentially the Senate, if it flips, they’re going to be so focused on some of this oversight that I’m not sure how much room that is going to leave for active legislating.
And I think in part because we’ve seen some of the challenges that both chambers have faced when it comes to antitrust legislation. That’s not to say that we’re not going to get a new version of CALERA coming out. But I think the places that we are likely to see legislation are going to be much more sector-specific. I can imagine us seeing another version of the Open App Markets Act or some of the more tech-specific legislation that appear to be able to have some bipartisan support.
When it comes to structural changes to the antitrust laws and people keep talking about the One Agency Act. And we certainly know that Chairman Ferguson does not support the One Agency Act. And that the FTC provides a very different role than it would be able to if it were rolled into DOJ. I think that, on both sides of the aisle, people are quick to identify the problems with two agencies. But it becomes much more difficult to get any sort of consensus around what the solution is. And for that reason, maybe we see some legislation. But it’s more as a marker as opposed to something that we actually think is going to become a law.
NICK CHEOLAS: Teddy, the biggest question for me post-midterms is, as an antitrust practitioner, is how much bandwidth the Democrats might be willing to spend on antitrust or related issues, how much they’re willing to spend on oversight versus legislation? In an era of incredibly fast news cycles, what are the 20 new things that are going to happen between now and November, and November and the end of the year, that are going to take up some of that bandwidth and that are going to rise to the top of the priority list? I really don’t know how to ballpark all of that, but those are the things that are top of mind for me when I think through November and beyond on both an oversight and legislative/regulatory angle vis-a-vis antitrust issues.
TEDDY DOWNEY: It does seem like there’s a possibility for a pretty radical level of oversight and even legislation just because of the potential historic nature of the election, but also the historic nature of Trump’s power grab in the past two years.
I think we should point out, a certain percentage of the Democratic Party is either comfortable with some level of corruption or just openly pro-monopoly. I don’t know if there’s going to be enough Democrats who don’t think like that to actually — there’s just a lot of variables here. How many pro-monopoly Democrats will still be around after the election? Or will there be enough people that have a problem with monopoly that come in to be pushing this pretty aggressively? I think that is obviously a big open question. Again, it’s like this faction. It’s like the California Democrats versus the rest of the Democrats or what have you.
Let’s keep going here. We’ve got a listener question. Interesting. They still care about the personnel at the top of the FTC and DOJ. Who are the contenders for replacing Andrew Ferguson as FTC chair as rumored? What does a post-Ferguson FTC look like?
We’ve got another question here. Any tea leaves to read about Candeub’s antitrust enforcement priorities or philosophy, if he has any? I would suggest these people spend more time thinking about what Trump wants. Also, I think it’s an open question. Can you get anyone confirmed between now and the election and after the election? That seems an open question. What do you think about post-Ferguson FTC and Candeub antitrust priorities?
KARINA LUBELL: I’m going to take the Candeub one first because I think it’s easy. I don’t think it matters. I don’t think he has any particular antitrust philosophy. And I don’t think he’s being put in that position because he does. I think he is going to be a good foot soldier and is going to basically keep the trains running at the division. But I wouldn’t expect any radical departure from what the Division has been doing since the beginning of the administration, just because eventually we’ll have a new Senate-confirmed AAG of the Antitrust Division. I don’t know, Nick, if you agree on the DOJ front.
TEDDY DOWNEY: I think you might have meant keep the trains not running when it comes to antitrust.
KARINA LUBELL: Right, exactly.
TEDDY DOWNEY: Nick, good to see you. What are your thoughts?
NICK CHEOLAS: I think agency leadership of both agencies last week in particular, but even before that have leaned into the idea that they’re accountable to the President who is elected by the people and he sets the priorities and he sets the agenda. And they’ve said outright that unelected bureaucrats don’t have a right to exercise their own judgment adverse to the President’s priorities, in their view, the nature of democratic accountability.
So, if you take those things at face value and apply them to Candeub, I agree with Karina. I think there’s some reporting out there that he’s not a fan of Big Tech. I think a very good point that I’m borrowing from somebody else from last week as well is that the definition of “Big Tech” changes over time. Who you would conceive of as “Big Tech” several years ago is not necessarily who those companies would be today. So, I’m not even sure how that tracks onto an enforcement agenda.
But the upshot, and Karina’s made this point, I would not expect a dramatic change in posture or strategy from the division, if and when Candeub is confirmed.
KARINA LUBELL: Ferguson’s a little different. To me, that’s a trickier one. Because I think that right now, the other obvious choice is Commissioner Meador.
On the other hand, from everything I’ve been hearing, he seems unlikely to be the next Chairman and doesn’t always see eye-to-eye with Ferguson. We saw some dissents recently. And also, I think we have known that he has had a much more his view on antitrust enforcement is something that he has developed over the years, both as a staff attorney at the agencies, but as sort of a true antitrust practitioner.
And he’s talked a lot about the FTC and needing to make better use of Section 5 enforcement. He’s clearly someone who feels very strongly about the role of the FTC in federal enforcement. And I don’t know that the administration has an appetite for someone who has their own views to the extent that he does.
As for who else, I think we’re still waiting for oh, gosh, and I’m going to forget his name, the WeatherTech CEO, who I think we’re still awaiting confirmation. Is that right? Yeah. So, I haven’t heard of the other names.
TEDDY DOWNEY: He hasn’t passed the ethics, yeah. WeatherTech.
KARINA LUBELL: Yeah. So, I don’t know, Nick, any predictions on the FTC front?
NICK CHEOLAS: As far as personnel or individuals post-Ferguson if that’s the case, which I’ve heard mixed things on I don’t know. I was struck last week by hearing Commissioner Meador, he’s no shrinking violet, at least rhetorically, when it comes to the FTC’s mandate and how Section 5 of the FTC Act, which prohibits unfair methods of competition, and even Section 6 and Section 7 [of the FTC Act], industry studies and sort of using the FTC as an advisory agency. Like, this is a pretty expansive view of the FTC’s mandate that is not all that dissimilar from prior leadership of the FTC, even though there are very stark differences on how they think the agency should operate.
So, I don’t know if that’s an answer so much as that may be a future direction of the FTC, regardless of who the chair is. I was also struck by how much Ferguson talked about it was sort of a corollary point last week about the operations and budgeting of the division setting budgets for individual matters and then really holding people to them. I mean, it’s realistic if you have a budget and have to prioritize accordingly. But I do think some of those institutional changes are likely to outlast Ferguson’s term whenever that is up, and maybe even beyond 2028 as well.
TEDDY DOWNEY: We have a question here. AI has become a major public policy and political issue. How does the AI landscape affect antitrust policy and enforcement?
KARINA LUBELL: You want to go for it, Nick?
NICK CHEOLAS: Yeah, I’ll kick on that one. Look, from an enforcement standpoint, once AI really started to elevate in the public consciousness and gain traction, you would hear from many this is when I was at the Division very different views about how AI was going to affect competition, how it would impact the future after a merger, or how it’s impacting the market and who the competitors are and who the competitors could be.
And it seemed like, very abruptly, everybody had an opinion on that. And the opinions were different, and sometimes at odds. One would say AI is going to change everything. It’s going to lower entry barriers. So, you’re going to see people be able to compete in this space that haven’t historically, even when they might have faced barriers in a prior universe. And on the flip side, you’d hear people say, well, look, AI is going to make scale advantages in this space completely insurmountable, and this is going to lock in the competitive set of competitors.
And it’s really hard to evaluate that when the potential universe of AI outcomes is very, very wide. So, I do think AI is going to be a difficult issue for enforcers to tackle, and it’s going to cut across many different industries and many different matters going forward.
KARINA LUBELL: The only thing I’ll add to that and one of the things that I’m going to be watching is this debate over whether there should be an antitrust exemption for collaboration among AI companies. And we saw the I guess it was in July the House and Senate introduced that Collaboration on Adversarial Threats and Security Risks bill.
Obviously, we particularly those who are very pro-enforcement tend to view any sort of antitrust exemption with skepticism. And I think even for AI, that’s no exception. I know former AAG Jonathan Kanter was on the Decoder podcast recently talking about this and questioned why you need to give an exemption when part of innovation is controlling for safety and security. Noting you shouldn’t be developing something that’s going to end humanity, in the first place. And that we should have competition to that end.
But I think that there is a growing set of voices that think that we really should think about all the ways that government can play a role in restraining the or at least putting guardrails on the development of something that could have such a catastrophic potential.
And so, unlike when we’re talking about the baseball exemption or ocean shipping or some of these other exemptions, where this could have a potentially existential impact, I think that we’re going to see people’s positions on the role of the antitrust laws in the development and AI changing.
NICK CHEOLAS: Yeah, Karina, that was an interesting one. I think we had Jonathan Kanter, Lina Khan, Stanley Woodward, and Andrew Ferguson all throw varying temperatures of cool water on the AI exemption issue. Which I think the AI exemption issue is a bit overblown if you go back and look at the blog post that spawned it. But they also took the view that existing antitrust frameworks, and in particular, the 2014 cybersecurity policy statement from FTC and DOJ, are able to address and deal with these forms of collaboration for safety purposes. And so, I think that’s a bit of guidance from a number of folks who are on different sides of many issues, but seem to be on the same side of this one.
KARINA LUBELL: Great point.
TEDDY DOWNEY: We’ve got another listener question here, sort of related. Beyond the DOJ, FTC, what other agencies are doing things on antitrust, Department of Ag, meat, alcohol, Southern Glazer’s fine, energy? Question mark.
KARINA LUBELL: That’s a great question. Because I think that’s obviously something we saw a lot during the Biden administration. And one of my primary responsibilities when I was at DOJ and heading the Policy Section was to engage with those other agencies on competition advocacy, and to ensure that they were accounting for competition in the sectoral regulation that they oversaw.
So, yes, to some extent, that is continuing today. But my sense and based on conversations I’ve had with folks who are still doing this sort of work is that it’s just not happening to the same extent. There’s not the same level of coordination there was before. And part of this is a question of resources. Part of this is a question of agency priorities.
And so, I’ll just say that, to some extent, I think there is, across the board, a greater appreciation, certainly at a staff level, at these [sectoral regulatory] agencies of the role of competition in shaping industries. That said. I wouldn’t hold your breath that there’s going to be some new Packers and Stockyards litigation that the Department of Agriculture brings and DOJ stands behind.
TEDDY DOWNEY: We’ve got a lot of people interested in the Robinson-Patman Act in this audience. Will FTC get anything out of Southern Glazer’s RPA lawsuit? Or will they just do fig leaf, close out? Any future federal Robinson-Patman Act investigation is going to see the light of day. What about state RPA? Why are they not jumping in on RPA litigation? And then another question asked about the recent TTB fine related to Southern Glazer’s. So, a lot of RobinsonPatman Act questions here.
KARINA LUBELL: A lot of people are betting on Southern Glazer’s here.
TEDDY DOWNEY: Personally, I find this interesting. Because, for so long, we have heard Robinson-Patman, oh, that will make prices go up. That will make prices go up. And yet, in the greatest time of price inflation, this issue keeps coming up over and over again as potentially a way for prices to go down. Subsequent to some of the documents that came out in that Pepsi lawsuit.
What are your thoughts? Has there been enough of a sea change in the understanding of what the effects of the Robinson-Patman Act, that we could see more enforcement? And any thoughts on some of these individual situations related to Southern Glazer’s and others? I should mention, we also heard Ferguson recently say that he wanted to do another RPA enforcement case potentially. So, what do you guys think about Robinson-Patman Act?
NICK CHEOLAS: It feels like for the entirety of my career, the Robinson-Patman Act has been alternating between dead and imminently being revived. And I don’t know that it ever got out of that cycle.
To your point about pricing, Teddy, you’re right that, in an environment where you want to be very careful about conveying any message that you are not in favor of lower prices, this might be a difficult one through which to maintain that message. So, you might see some reticence from federal enforcers to bring those sort of cases. I don’t necessarily think that applies to the private bar. But you’re right. I mean, Ferguson and Meador have talked about it. It’s been on the radar. I suppose I’ll believe it when I see it. But you’re right. It keeps coming up in this environment, even when you expect it might not.
KARINA LUBELL: Well, yeah, I was just going to say, look, it’s a great messaging point. If one of the things that we’re talking about is more of this sort of populist message and supportive of smaller businesses and Main Street, then RPA feeds into all of that.
Practically speaking, though, whether Southern Glazer’s or another RPA suit can get the kind of traction, if it’s enough to sustain Ferguson’s attention with other competing priorities, to me, that’s to be seen. And I just don’t know enough about how he’s thinking about that issue as compared to some of the others that he’s pursuing.
TEDDY DOWNEY: Last question here, and then we’ll let you go. This listener asks, given the relative lack of enforcement at DOJ/FTC, do deals that actually receive a second request under HSR have a higher likelihood of running into trouble? I’m guessing that they’re asking, since there are so few second requests, if you actually get one, does that mean it’s really in trouble?
KARINA LUBELL: Nick.
NICK CHEOLAS: Yeah. I mean, it depends on how you define trouble. One thing I’m really watching is whether in a very resource constrained environment for both agencies, but particularly DOJ whether the agencies pursue settlements in cases that are closer to the line when they might not have pursued a full litigated challenge.
And I think this is true. It’s certainly true of “horizontal mergers.” I know mergers have different aspects, different elements. But when there’s a divestiture to be had and that resolves the issue, from both an agency and a party standpoint, you might be talking about that. Both agency leadership have been really vocal about come in, talk to us, work with us, help fix your deal. If that’s a path to close for merging parties, that might be something you pursue now in this environment, even when you might have gotten through a second request without a challenge in a prior universe.
And the second aspect is for vertical cases, Karina, you mentioned the vertical merger in the quantum computing space where [FTC Chair] Ferguson and [Commissioner] Mark Meador reached different opinions. And with only two commissioners, that wasn’t enough to move forward. But we saw this in a couple of FTC mergers where you have behavioral remedies of non-discrimination, interoperability, and data sharing. And just from experience, a lot of mergers will present those sorts of concerns. They’re tough to investigate. They’re tough to litigate.
If the agencies take a very settlement-forward posture, then you might have deals that get a second request and then end up with those sort of behavioral commitments when, again, in the past, you might not have seen a litigated challenge. So, there’s a zone of deals for which you might see activity now that you wouldn’t have historically, even though I think it is generally true that this is a much more “merger friendly” environment.
KARINA LUBELL: I would just add, in response to the listener’s question, I don’t think you can read from the fact that a deal gets a second request that it is more likely to get challenged because all these other deals are going through and only the problematic ones are getting second requests. I think, from what I’ve been hearing especially on the FTC side is there have been many more second requests. Particularly in somewhat surprising circumstances, that the scope of the second request has been broader, that the number of custodians from whom they’re requesting documents has been broader. But that’s still part of the kicking the tires on a deal and does not necessarily mean–and should not be–an indication that the deal is running into trouble and is definitely going to require some sort of remedy before clearance.
TEDDY DOWNEY: We should probably have had a disclaimer in there. Mergers that don’t involve some kind of woke company, that’s the niche where it’s like or does the woke company have a higher risk of getting a second request? Well, that’s a question for another time.
KARINA LUBELL: Omnicom, right? If we can go back to Omnicom.
TEDDY DOWNEY: Look, you don’t want to get in the way of this anti-woke crusade, right? You don’t want to be in the crosshairs in this administration.
So, before we wrap up, be sure to come to our event September 29th. We’ll be talking about this exact thing. We’ve got state enforcers. We’ve got Congressman Raskin, talking about his agenda, if the Democrats win the House, it’s going to be a great event next Tuesday, September 29th. Please attend. Thank you, Karina. Thank you, Nick. This was an awesome conversation. I really appreciate you doing this today.
KARINA LUBELL: Thanks so much for having us.
NICK CHEOLAS: Thanks, Teddy.
TEDDY DOWNEY: And thanks to everyone for joining us. This concludes the call. Bye-bye.
NICK CHEOLAS: Bye.
