USA – ILLINOIS Trends and Developments Contributed by: Craig C. Martin and Matt Basil, Willkie Farr & Gallagher LLP
nonetheless, the shift in interests considered may result in a shift in practices downstream. Second, agreeing that antitrust must rein in corpo - rate power does require agreement as to who has (or should have) it. That is, the difference may lie in each administration’s respective targets. The underlying law may remain consistent – both Slater and Khan have endorsed older Supreme Court precedents, and the 2023 Guidelines’ lower Herfindahl-Hirschman Index (HHI) thresholds and distrust of conduct remedies remain – but the firms or industries in the spotlight, to whom the law will be applied, may vary by administra - tion. That will inevitably lead to different enforcement outcomes and remedies used. The Biden Administra - tion’s suspicion of private equity led to fewer dives - titure remedies and more litigation, prompting many companies to attempt “fix-it-first” DIY remedies or abandoning mergers and acquisitions altogether. (Synopsys Statement, supra at 5-6.) The potential side effect of a divestiture remedy – pri - vate equity scooping up the divested company – was often thought to outweigh the cure. In contrast, even if it recognises the same ailment of consolidated power, the Trump Administration is more neutral toward pri - vate equity and, as such, more willing to order dives - titure over litigation to cure it. Being less concerned with the buyer of a divested company means more opportunities to use a divestiture remedy, leading to more mergers and acquisitions downstream. Thus, even if the current administration has embraced some of the spirit of the Biden Administration (and the 2023 Guidelines embodying it), the Trump Administration may appear more merger-friendly by simply shifting the enforcers’ scrutiny elsewhere, like to online con - tent moderation. Ironically, however, this relative emphasis on divesti - ture requires more direct intervention than the Biden Administration’s view that the FTC lacks “the mandate to function as an industrial planner.” Ferguson admits some “sympath[y]” for that view, but maintains set - tlements “must be on the table... to protect competi - tion efficiently and as fully as [FTC] resources allow.” (Synopsys Statement, supra at 7.) Favouring structural remedies over behavioural ones, and ensuring divest - ed businesses are able to compete, in his view, strikes
an appropriate balance between protecting competi - tion and FTC resources. In short, the administrations’ favoured remedies have different side effects and the Trump Administration’s preference is increased
merger activity. Looking ahead
At the moment, the impact on private equity is unclear and there are at least a couple of different paths that this may take in the coming years. Ferguson’s Welsh Carson concurring statement reflects this, writing that whether or not one party “is a private equity firm is irrelevant; the antitrust analysis would be the same if [the private equity firm] were, for example, an individual or institutional investor.” (Welsh Carson Concurrence, supra at 1-2.) One could resolve the matter using the “traditional approach to competition law” under Section 7 of the Clayton Act, he reasons, because it “prohibits mergers that may substantially lessen competition” in general. (Id.) In that regulatory light, private equity and serial acquisitions are not, as Ferguson writes, inherently “extraordinary.” (Id.) On one hand, that private equity is out of the spotlight may cool tensions everywhere. The Biden Administra - tion’s relative preference for litigation, paired with a more hostile view of private equity, led to fewer dives - titure remedies and mergers. The Trump Administra - tion appears to have trained its sights elsewhere, so divestiture will likely become more common, giving well-positioned private equity firms opportunities to acquire divested entities in the coming years. On the other hand, like much of antitrust, the “tra - ditional approach to competition law” is a matter of interpretation. Enforcers’ recent and broader under - standing of consumer welfare is simultaneously old and new, much like courts’ post-Bork emphasis on allocative efficiency. (See Hovenkamp, supra at 45.) In his Welsh Carson statement, Ferguson spoke to the latter “traditional” approach embraced by courts, using price and output effects. But he also believes in another “traditional” approach, embraced by many modern enforcers, holding that Congress intended antitrust to protect far broader interests – just often different ones than the prior administration consid - ered . Accordingly, private equity firms hoping to engage in serial acquisitions must be careful to justify
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