While on the campaign trail, President-Elect Donald Trump spoke on several occasions about the importance of tackling corporate antitrust issues. Most notably, Trump targeted the acquisition of The Washington Post by Amazon CEO Jeff Bezos and the proposed AT&T-Time Warner merger. Regarding the Post acquisition, Trump stated that “[Bezos has] got a huge antitrust problem because he’s controlling so much, Amazon is controlling so much of what they are doing.” In October, Trump branded the AT&T-Time Warner merger as “an example of the power structure I’m fighting… a deal we swill not approve in my administration because it’s too much concentration of power in the hands of too few.”
At the time, Trump sounded every bit the reform-minded populist, willing to tackle the increasing concentration of market power that has resulted from the dominant, business-friendly approach to antitrust championed by the “Chicago School.” But Trump’s tune has changed drastically with the announcement of Joshua Wright to head transition efforts at the Federal Trade Commission (FTC), one of the U.S.’s two key antitrust watchdogs. Wright, far from a reformer, is a loyal disciple of the Chicago School. A former Federal Trade Commissioner and consultant for Charles River Associates, and currently the executive director of the Global Antitrust Institute at George Mason University and senior counsel at Wilson Sonsini Goodrich & Rosati, he has benefited greatly from the status quo of antitrust jurisprudence.
(The other antitrust enforcer is the Antitrust Division of the Department of Justice. David Higbee, who served as the Deputy Assistant Attorney General at the Antitrust Division under George W. Bush, has also been named to Trump’s transition team, signaling a similar hands-off approach there.)
Most indicative of Wright’s position on antitrust enforcement is the op-ed he penned recently arguing for an adherence to the more lenient (and business-friendly) standards of merger review. Largely a recital of Chicago School tenets that were drawn up nearly half a century ago, Wright’s arguments fail to demonstrate the foresight needed to update U.S. antitrust enforcement to better meet the challenges of the 21st century. His reference to Uber as an example of high concentration with greater competition glosses over the double-edged nature of giant tech platforms. While it is true that there are inherent benefits derived from a broad user network, platforms can abuse the very same user network to reap benefits both upstream and downstream in ways that are difficult to capture using a theoretical lens devised in the 1970s.
Having been tapped by Trump, Wright will be leading efforts to select the future Federal Trade Commissioners. As there are currently two seats vacant on the five-person commission, the FTC will return to a Republican majority shortly after January 20, 2017. And should Wright himself be nominated, he would wield broad influence over the future direction of the FTC and would be well-positioned to restrain the regulator from engaging in the increased level of enforcement that has taken place under the Obama administration.
Wright at the helm of FTC would be a far cry from candidate Trump’s campaign trail talking points. Rather than standing by his criticisms of the “establishment” and “big corporations” as president-elect, Trump has fully embraced the least reformist elements of the establishment, as he’s done with a string of recent transition picks and cabinet nominations. It is hardly surprising to hear, then, that in a recent meeting with AT&T’s executives, Trump’s transition team assured the executives that the merger “will be scrutinized without prejudice,” giving AT&T greater confidence that the transaction will go through.
When all is said and done, President Trump will likely not deliver on his promise to tackle corporate power. Insiders, including mergers and acquisition attorneys, are betting that Trump, a lifelong opportunist, will look favorably on mergers that line up with his policy agenda by boosting domestic private-sector capacity in infrastructure, energy, and defense, though given his nationalist tendencies, he may oppose the takeover of American companies by foreign entities. If so, America’s corporate executives can sleep soundly knowing that, for the next four years, they can expect to profit from a reversion to the Republican establishment norm of business-friendly antitrust enforcement.