David Zalubowski/AP Photo
Union members hold placards against the proposed merger of grocery store chains Kroger and Albertsons, September 30, 2024, in Denver.
Ankush Khardori is a former prosecutor and BigLaw litigator at Paul, Weiss who, in between analysis of Trump legal cases, loves to make grandiose pronouncements about antitrust that are immediately contradicted by events. In late 2023, Khardori wrote “Lina Khan’s Rough Year” for New York magazine, which alleged that the Federal Trade Commission (FTC) chair had stumbled through her leadership at the agency, losing cases and facing roadblocks. Most of the criticisms came from anonymous former officials.
Khan never lost a case after the “Rough Year” story was published, including blocking mergers between Kroger and Albertsons, Choice-Wyndham, Sanofi-Maze, and Tapestry-Capri; and beating Meta on summary judgment in a monopolization case that goes to trial this April. The merger review policy that Khardori claimed drew “widespread criticism” has been cited in nearly a dozen federal cases and is being maintained by even Trump’s antitrust enforcers. The merger review filing form was updated, and junk fees for hotels and ticketing banned with bipartisan support. Many inhalers now cost $35, corporate landlords had to pay up $48 million for illegal junk fees on renters, Epic Games refunded $245 million to gamers for illegal charges, and a private equity firm was forced to limit its involvement in an anesthesia industry rollup.
Some rough year.
Last week, Khardori returned to throw cold water on the idea that the Trump administration would adopt Biden antitrust enforcer techniques, as if “whether Trump will adopt it” should be the standard by which Democratic policymakers determine what to do. His opening anecdote, about JetBlue and Spirit having their merger blocked by the Justice Department and Spirit moving into bankruptcy, omits the information that Spirit had the opportunity to make a “failing firm” defense to support the merger but explicitly declined to do so. He downplayed in one paragraph the Trump enforcers’ unusual maintenance of the 2023 merger guidelines, despite the fact that it would be hard to find another remaining Biden policy across the entirety of the federal government.
But Khardori’s reverse-Midas touch on antitrust hit pieces has endured. Even though progressive antitrust advocates weren’t really expecting a ton of continuity between Biden and Trump’s antitrust teams, in the days since Khardori released his piece we’ve seen it in action. Indeed, the very people whispering to Khardori about more mergers and fewer breakups under Trump are now the ones pining for the return of … Lina Khan.
As the evidence keeps coming in, rather than kicking around all the reasons why this transpartisan agreement won’t last or is a convenient way for Trump to weaponize attacks on corporations he doesn’t like, we should maybe try to assess why this one area, alone amid governmental chaos, is producing this level of stability. I think the answer lies in the willingness of neo-Brandeisians to build coalitions, even when it’s unpopular to some, and cement an intellectual revolution at odds with the consensus of both parties in the past.
Trump is a corporatist, and nothing about his administration’s moves on antitrust really changes that. The richest men in the world witnessed his inauguration, and one of them is basically running his government. The idea that a populist Trump would not be swayed by his rich allies is silly.
The contentment on Wall Street is largely gone, with deal-makers confused and resigned.
Yet here’s the Khardori effect in action. The day after his Politico story, the FTC challenged a private equity rollup of the hydrophilic coating market, a component of medical devices that help them operate inside the body. The acquisition of Surmodics by private equity firm GTCR would put half of the hydrophilic coating market in the hands of one company. The decision to challenge the merger was unanimous, with Democratic and Republican commissioners in agreement.
A couple of days after that, the Justice Department issued a “revised proposed final judgment” in the Google monopolization case. As you may remember, the Justice Department won this case (which, as Khardori concedes, was initiated by Trump’s DOJ) last year, with the judge ruling that Google illegally monopolized the search market by paying off devices and browsers to be the default option. We are now in the remedy phase. Biden’s enforcers proposed a sprawling set of remedies for Google in this case; everyone was waiting to see whether Trump’s team would modify or weaken them.
They largely did not. Despite Sundar Pichai appearing at Trump’s inaugural, despite Google donating $1 million to the inauguration festivities, and despite last week lobbying the government that national security would be harmed by a breakup, Trump’s DOJ insisted that Google be forced to end all payments for search defaults on any device or browser (though other payments unrelated to search would be allowed), divest its own Chrome browser and potentially the Android operating system, and give rival search engines access to Google’s data for an extended period.
There is one important change. The Biden proposal asked that Google be prohibited from investing in other generative AI companies, seen as the next evolution of search. The Trump team, which has been friendly toward AI, merely suggested that Google notify the Justice Department and state law enforcement if it made such investments. Even that offers an opportunity to block those investments. And for the most part, DOJ kept arguing for what is a plan to break up Google. Most of the changes, Matt Stoller reasoned, were about getting the remedy past Judge Amit Mehta.
Finally, this weekend, news leaked that the Justice Department has opened an investigation into skyrocketing egg prices, in particular whether dominant egg firms are colluding to hold back supply beyond what has already occurred with the avian flu. This could certainly be busywork to take the heat off inflation, and the investigation is in the early stages. But the nature of the investigation resembles the work Basel Musharbash and Farm Action have been doing for a couple of years, and it even sounds like allegations made by the left-wing advocacy group Food and Water Watch.
Separately, I have heard from former employees in Biden’s FTC who have been “shocked” by the level of continuity and don’t fully understand it.
Recall that after the election, there was absolute giddiness on Wall Street and among their house organs on CNBC for a new age of consolidation. That contentment is largely gone, with deal-makers confused and resigned. There were fewer mergers in January than at any time in a decade, and private equity assets under management actually shrank last year, an almost unthinkable event. The pent-up excitement was because of the expectation of a reversal. But check out this amazing quote from a mergers and acquisitions banker in the Financial Times. “Under Khan and [DOJ antitrust chief under Biden Jonathan] Kanter we knew they had a specific agenda. It was coherent even if … Wall Street disagreed with them. You could navigate it. Now it’s a mess.”
There could easily be more mergers later in the year, though we are headed into possible recession, and if Khardori writes about antitrust again he might re-summon the curse. But it’s interesting to see this handoff from Biden to Trump in this one small area. I think part of it was that, contra Khardori, Khan and Kanter were unusually effective for what they were able to do with a tiny fraction of the U.S. budget and a practice predicated on long court timelines and reliant on judges.
But more than that, Khan and Kanter did a lot of outreach across party lines, explaining clearly what they intended to do. They won over at least some policymakers as adherents, and outside of them coalitions were formed. I didn’t think—I still don’t think—that will be enough to prevent Trump meddling or the influence of his new billionaire pals. But it’s useful for the future, if and when another Democratic president takes power, to have this one area of, yes, consensus. Not having to rebuild the merger guidelines again is important. Having some support among conservatives on these competition policy issues is important. It should be studied, since it’s nowhere to be found anywhere else in the government.
Or you can write a pro-industry piece for Politico and immediately have it blow up in your face.
