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The Federal Trade Commission is showing no signs of backing off from aggressive antitrust enforcement under President Donald Trump if two recent high-profile deals are any indication, practitioners said.
Fantasy sports rivals DraftKings Inc. and FanDuel Inc. walked away from a merger agreement after the FTC filed a legal challenge. And Walgreens Boots Alliance Inc. decided to rework an acquisition deal with rival Rite Aid Corp. after signs that it might not get FTC approval.
The failed mega-mergers serve as a reminder that problematic deals won’t necessarily get a free pass from Republican antitrust regulators, according to practitioners. The direction of the FTC might shift slightly from one administration to the next, but much of the day-to-day work is done by career staff, who tend to focus on the law and facts instead of politics.
“With a Republican administration, there are often concerns that you might not see active enforcement, but we haven’t seen any evidence of that so far under Trump,” Andre Barlow, an antitrust partner at Doyle, Barlow & Mazard PLLC, told Bloomberg BNA. “What we’re seeing is business as usual.”
Alicia Batts, an antitrust partner at Squire Patton Boggs LLP, said the FTC has continued “humming along,” despite personnel vacancies. The agency’s chairman is serving on an acting basis, and three commission seats are empty. The top two deputies running the competition division recently left the agency, as did the head of the economics bureau.
The commission is currently down to just two members — Acting FTC Chairman Maureen Ohlhausen, a Republican, and Terrell McSweeny, a Democrat. A deadlock would allow a merger to go through with no conditions.
But Ohlhausen and McSweeny appear to be listening to staff recommendations and working together. “The career staff is doing the bulk of the work,” Batts told Bloomberg BNA.
Ohlhausen has talked about moving the FTC in the direction of “regulatory humility,” which could signal less enforcement. But she’s also a thoughtful regulator who takes staff concerns seriously, Seth Bloom, an antitrust attorney at Bloom Strategic Counsel LLC in Washington, told Bloomberg BNA.
“She’s not going to just sign off on any merger or just be completely hands off,” he said.
The FTC’s complaint challenging the DraftKings-FanDuel merger said the combined entity would have become a “near monopoly,” commanding more than 90 percent of the fantasy sports market. Ohlhausen and McSweeny agreed the government should act to stop the deal.
Rite Aid said it received feedback from the FTC suggesting that its deal with Walgreens would have been rejected by the two commissioners, had there been a vote.
“The Bureau of Competition probably recommended against approval,” Bloom said. “It would have been difficult, although not impossible, for Ohlhausen to disregard that recommendation.”
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