Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Major Merger Enforcement Shift Under Trump Administration

Author: Fred D. Zemel

Date: December 29, 2017

Key Contacts

Back

New Head of DOJ’s Antitrust Division Announces Changes To How the Agency will Approach Merger Enforcement

In his first public remarks, Makan Delrahim, the new head of the Department of Justice’s (DOJ) Antitrust Division, outlined several changes that will impact how the agency approaches antitrust cases. Most notably, Delrahim indicated that the DOJ will limit the use of “behavioral remedies” to address legal concerns with proposed mergers. “[I]f a merger is illegal, we should only accept a clean and complete solution, but if the merger is legal we should not impose behavioral conditions just because we can do so to expand our power and because the merging parties are willing to agree to get their merger through,” he stated.

Key Merger Enforcement Changes Under Trump Administration
Photo courtesy of Joel Filipe (Unsplash.com)

Use of Behavioral Commitments to Resolve Antitrust Concerns

In his remarks at the American Bar Association’s Antitrust Fall Forum, Delrahim noted that he is frequently asked how President Trump’s directive to reduce federal regulations will impact the enforcement of the antitrust laws. He started by stating that antitrust is law enforcement, not regulation. He added:

At its best, it supports reducing regulation, by encouraging competitive markets that, as a result, require less government intervention.  That is to say, proper and timely antitrust enforcement helps competition police markets instead of bureaucrats in Washington, D.C. doing it.  Vigorous antitrust enforcement plays an important role in building a less regulated economy in which innovation and business can thrive, and ultimately the American consumer can benefit.   

Delrahim went on to address how this approach will impact the agency’s use of behavioral commitments, which he characterized as “fundamentally regulatory, imposing ongoing government oversight on what should preferably be a free market.” In his remarks, Delrahim outlined several theoretical and practical criticisms regarding the use of behavioral remedies to address antitrust concerns.

Theoretically, Delrahim argued that a behavioral remedy interferes with the free market process by “supplanting competition with regulation” and replacing “disaggregated decision making with central planning.” He also noted several practical problems, namely that consent decrees are difficult to both draft and enforce. “Behavioral remedies often require companies to make daily decisions contrary to their profit-maximizing incentives, and they demand ongoing monitoring and enforcement to do that effectively,” he stated. In support, Delrahim noted several instances where the DOJ found consent decrees were being violated but found it too onerous to collect information or satisfy the exacting standards of proving contempt and seeking relief for violations. 

Delrahim emphasized that he was not saying that the DOJ would never accept behavioral remedies. “In certain instances where an unlawful vertical transaction generates significant efficiencies that cannot be achieved without the merger or through a structural remedy, then there’s a place for considering a behavioral remedy if it will completely cure the anticompetitive harms,” he stated. As far as what types of consent decrees might meet the DOJ’s new “high standard,” Delrahim stated the agency should only settle federal antitrust violations when it has a “high degree of confidence that the remedy does not usurp regulatory functions for law enforcement.”

DOJ Challenging Proposed AT&T/Time Warner Merger

The policy shift may have played a role in the DOJ’s decision to challenge the proposed merger between AT&T and Time Warner. “This merger would greatly harm American consumers,” Delrahim said in a statement. “It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy. AT&T/DirecTV’s combination with Time Warner is unlawful, and absent an adequate remedy that would fully prevent the harms this merger would cause, the only appropriate action for the Department of Justice is to seek an injunction from a federal judge blocking the entire transaction.”

In the past, the DOJ has rarely challenged vertical mergers, largely because they do not involve direct competitors. In 2011, the proposed merger of Comcast and NBCUniversal resulted in a consent decree, the type of remedy Delrahim announced would no longer be a preferred option for the DOJ.

Do you have any questions? Would you like to discuss the decisions further? If so, please contact me, Fred Zemel, at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
How Understanding Bankruptcy Trends Can Benefit Your Business post image

How Understanding Bankruptcy Trends Can Benefit Your Business

The bankruptcy legal landscape presents both challenges and opportunities for businesses navigating financial distress. Understanding current bankruptcy trends can help businesses make more informed and strategic decisions. Corporate Bankruptcy Filings Trending Upwards Bankruptcy filings continued to trend upwards in 2024. According to statistics released by the Administrative Office of the U.S. Courts, personal and business […]

Author: Brian D. Spector

Link to post with title - "How Understanding Bankruptcy Trends Can Benefit Your Business"
SEC Takes Actions Against Issuers for Failure to File Form D post image

SEC Takes Actions Against Issuers for Failure to File Form D

In December, the U.S. Securities and Exchange Commission (SEC) announced charges against two privately held companies for failing to file a Form D notice, which is generally utilized for exempt securities offerings. Here, the SEC’s enforcement sends a strong message: compliance with regulatory requirements is not optional and failure to comply can have significant consequences. […]

Author: Kenneth C. Oh

Link to post with title - "SEC Takes Actions Against Issuers for Failure to File Form D"
Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda post image

Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda

On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]

Author: Matthew F. Mimnaugh

Link to post with title - "Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda"
What Are FIRPTA Withholding Requirements? post image

What Are FIRPTA Withholding Requirements?

If you purchase real property from a foreign person or entity, you may be required to withhold taxes from your payment to the seller under the Foreign Investment in Real Property Tax Act (FIRPTA). The federal tax law is designed to ensure that foreign sellers pay any applicable capital gains tax on profits realized from […]

Author: Jesse M. Dimitro

Link to post with title - "What Are FIRPTA Withholding Requirements?"
Does Your Homeowners Insurance Provide Adequate Coverage? post image

Does Your Homeowners Insurance Provide Adequate Coverage?

Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]

Author: Jesse M. Dimitro

Link to post with title - "Does Your Homeowners Insurance Provide Adequate Coverage?"
Understanding the Importance of a Non-Contingent Offer post image

Understanding the Importance of a Non-Contingent Offer

Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]

Author: Jesse M. Dimitro

Link to post with title - "Understanding the Importance of a Non-Contingent Offer"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!

Please select a category(s) below: