The Antitrust Week In Review
Here are some of the developments in antitrust news this past week that we found interesting and are following.
Analysis: Dealmakers see M&A rush, then chills, in Biden’s antitrust crackdown. Dealmakers expect a new wave of transformative U.S. mergers and acquisitions (M&A), as companies rush to complete deals before President Joe Biden’s antitrust push takes shape, to be followed by a slowdown when regulators start cracking down. Biden signed a sweeping executive order to bolster competition within the U.S. economy. This included a call for regulatory agencies to increase scrutiny of corporate tie-ups which have left major sectors such as technology and healthcare dominated by few players. The order came amid an unprecedented M&A frenzy, as companies borrow cheaply and spend mountains of cash they have accumulated on transformative deals to reposition themselves for the post-pandemic world.
Facebook seeks U.S. FTC Chair Lina Khan’s recusal in antitrust case. Facebook on Wednesday asked for the recusal of Federal Trade Commission Chair Lina Khan from the FTC’s antitrust case against the company, a step that could imperil the agency’s lawsuit against it. A prominent critic of Big Tech who was sworn in as FTC chair in June, Khan previously worked for the House Judiciary antitrust subcommittee, which issued a report in October that spelled out what it said was anti-competitive conduct. “Chair Khan has consistently made well-documented statements about Facebook and antitrust matters that would lead any reasonable observer to conclude that she has prejudged the Facebook antitrust case brought by the FTC,” a Facebook spokesperson said in a statement.
Regulators Feel Torn About Cryptocurrencies. Even crypto enthusiasts have mixed feelings about their culture and markets. So it’s no wonder that lawmakers and regulators are torn over digital assets, as developments this past week made clear. Cryptocurrencies have “completely failed” to become a legitimate payment system, the Fed chair, Jay Powell, said yesterday at a Senate hearing. He added that so-called stablecoins — cryptocurrencies whose value is pegged to the dollar or another asset like gold, with the idea of making them a predictable means of exchange — are dangerously unregulated. Central banks could step in and develop digital versions of their currencies, but Powell is “legitimately undecided” about the benefits of doing so, he told senators.
EU regulators may revise rules defining companies’ market power. European Union antitrust regulators may revamp decades-old rules covering the market power of companies to take into account cases such as when tech giants offer products for free while harvesting users’ data, or the impact of deals on innovation. The comments from the European Commission on Monday followed feedback from national competition watchdogs, experts and other parties during a 16-month consultation of the Commission’s rule known as the market definition notice. The rule, which dates back to 1997, helps regulators measure a company’s pricing power in a merger or its power to shut out rivals in an antitrust case. The regulators use that information to decide whether to demand concessions from the company.
Edited by Gary J. Malone