After eight years of antitrust enforcement under the Obama administration that some consider robust, while others are more critical, it is fair to wonder what we can expect from a Trump or Clinton administration. Of course, it is often difficult, if not dangerous, to make such prognostications, but it is worth considering the question nonetheless.
Donald Trump has had little to say so far on his position concerning antitrust enforcement. But, he has had one high profile run-in with the antitrust laws that may inform his perspective on the topic. Way back in 1986, Mr. Trump owned the New Jersey Generals football team, which was part of the now defunct United States Football League (USFL). The USFL held their games only in the spring until Mr. Trump came along and convinced other owners they should move the games to the fall with the idea that the league might eventually merge with the NFL. When the USFL was unable to secure a broadcast television contract for showing fall games, he backed a lawsuit against the NFL for violations of the Sherman Act. Ultimately, the jury found that the NFL had violated Section 2 of the Act, but they rejected the USFL’s primary claim that the NFL had monopolized the television market or attempted to do so. As a result, the jury awarded just $1 in damages (trebled to $3). An appeal to the 2nd Circuit did not overturn the verdict, and the league disbanded.
To date, the only salient comment on antitrust enforcement Mr. Trump has made concerns Jeff Bezos and Amazon. On Fox News in May of this year, Mr. Trump commented that Amazon is controlling too much, calling it a monopoly. According to Mr. Trump, “[Mr. Bezos’] got a huge antitrust problem because he’s controlling so much, Amazon is controlling so much of what they are doing.” Of course, it is unclear what precisely motivated the comment, given the negative treatment of Mr. Trump and his campaign by the Washington Post, which is owned by Jeff Bezos. Thus, whether this says anything about Mr. Trump’s antitrust enforcement philosophy is anyone’s guess. But what may be clearer from his past experience and his acknowledged combative nature is that a Trump administration might not hesitate to challenge activity with which it disagrees. After all, Mr. Trump has reportedly been involved in approximately 3,500 lawsuits to date.
Hillary Clinton has stated more clearly her position on antitrust enforcement, often stressing her promise to be the “small business president.” Moreover, at a roundtable event with small businesses held in Cedar Falls, Iowa on Oct. 20, 2015, Secretary Clinton said that as president she will actively seek to curtail corporate concentration in an industry where competition is being unfairly limited. She further pledged that she would allocate more resources to the Department of Justice (DOJ) and the Federal Trade Commission (FTC) to allow for rigorous antitrust enforcement to prevent such corporate concentration from occurring in the first place.
It is also worth noting that Elizabeth Warren, who is notably vocal in sharing her belief that there exists a need for stronger antitrust enforcement, is both an advisor to the presumptive Democratic nominee, as well as reportedly on the short list for vice president. Senator Warren believes that the government must be even more vigorous than it has been in enforcing the antitrust laws. That is especially true with respect to mega-mergers (deals valued at over $10 billion). Senator Warren also believes that vertical mergers are as damaging to competition as horizontal ones, and thus they deserve greater regulatory scrutiny than they currently receive. In a June 29, 2016 speech, Senator Warren stated that more mergers should be challenged outright and not simply allowed to proceed with conditions attached. Indeed, Senator Warren seems to believe that the DOJ and FTC should presume a merger unlawful, placing the burden on the parties to convince the government why it should be allowed to take place. She also believes that the agencies must better ensure that the concessions they accept to allow the parties to consummate the transaction are in fact compiled with.
Senator Warren has been especially critical of technology giants such as Google, Apple and Amazon. She is greatly concerned that these three companies in particular are using their strength to leverage control over product areas that overextend their reach and kill competition, echoing Secretary Clinton’s stated concerns about corporate concentration. The Senator notes that Apple has used its iPhone platform to promote Apple Music over alternatives. She also criticized Google’s prioritizing of their own content in search results that, she says, effectively squeezes out content from other sources. And Senator Warren believes that Amazon has exerted its control of the e-book market to provide titles it publishes a significant advantage over those from other publishers. The Senator is calling for comprehensive regulatory scrutiny over these technology companies and has made clear that she believes that the best way to foster a healthier economy that is both more competitive and consumer friendly is through stopping already large and powerful technology companies from expanding their reach into new industries. Thus, it seems reasonable that if she joins Secretary Clinton on the Democratic ticket, big business can expect even greater antitrust enforcement than has been seen under Obama.
Another influential source to Secretary Clinton is the Center for American Progress, which also calls for stronger antitrust enforcement. The liberal think tank released a report last month that points to the need to crack down on anticompetitive practices for several important reasons. First, corporations that dominate a market can stifle innovation and block entry of new competitors. Second, product quality can suffer. Third, wages go down, and finally, suppliers see reductions in the prices they earn when they sell to these huge companies. They also cite the potential for increased influence by big business on government officials. Will the Center for American Progress’ report inform specific policies that Secretary Clinton may eventually discuss as the campaign enters its final months? It is certainly a possibility, especially when considered alongside the influence, and possible teaming up, of Elizabeth Warren.
Predictions of this sort are never easy to make and even when they may appear to be, surprises will inevitably arise once a new administration is actually in the White House. Perhaps the candidates will provide the public with more clearly articulated positions on this topic before Election Day. Or perhaps not.
