Trump's Merger: Legal Or Lawbreaker?

Donald Trump's second term as president has raised questions about the future of antitrust policy and enforcement, with many expecting him to dial back some of the antitrust policies pursued under the Biden administration. Trump has been critical of breaking up big tech companies like Google and is expected to continue cases against them. However, his approach may be softer, as he has expressed skepticism about breaking up these companies. Trump's administration has blocked or threatened to block several mergers and acquisitions across various sectors, including media, healthcare, tech, and defense. While there may be a shift in focus, the bipartisan antitrust attention on healthcare and big tech is likely to remain. Trump's impact on antitrust policies and merger reviews remains uncertain, but experts predict a cautious optimism for the tech industry, with a potential focus on divestitures and joint ventures rather than traditional M&A deals.

Trump's second term and its impact on antitrust merger review

Overview

The impact of Trump's second term on antitrust merger review is expected to be complex and multifaceted. While there are predictions of a more pro-business and laissez-faire approach, the reality may be more nuanced. Trump's first term saw a blend of traditional Republican preferences for deregulation and a populist skepticism towards Big Tech and market concentration. This suggests that his second term may continue to exhibit a complex interplay of ideologies.

Merger Policy

Merger policy under Trump's second term is anticipated to be more favourable to businesses, particularly those planning expansions through mergers and acquisitions. The administration is likely to abandon the 2023 merger guidelines, which lowered the market share and concentration levels required for a merger to be presumed illegal. This shift will make it easier for deals to proceed, provided there are significant competitors to the merging firms. However, "3 to 2" and "4 to 3" mergers will still likely face scrutiny and potential blockage.

Antitrust Analysis

The Trump administration will likely focus antitrust analysis solely on traditional economics, dismissing labour effects. This means that transactions' impact on prices and innovation will take centre stage, marking a departure from the Biden administration's broader scope that included labour considerations.

"Fixable" Deals and Vertical Deals

"Fixable" deals, where merging parties can address problematic aspects to avoid regulatory challenges, are expected to make a comeback. The Trump administration will likely permit more deal fixes through divestitures and consent orders. Additionally, vertical deals, which were largely foreclosed under the Biden administration, are expected to be viewed more favourably by the Trump administration. They are less likely to be scrutinised and more likely to be recognised for their cost-saving benefits.

Agency Leadership and Staffing

The leadership and staffing of antitrust agencies will also undergo changes. Gail Slater, an economic advisor to J.D. Vance, has been nominated for Assistant Attorney General for Antitrust at the Department of Justice (DOJ). Slater's focus on tech policy aligns with Trump's stated intentions to tackle Big Tech. Plans for the Federal Trade Commission (FTC) are less clear, but typical turnover during a presidential party change means that one of the two Republican Commissioners is expected to be named acting FTC Chair, creating an impasse for non-bipartisan decisions.

Criminal Enforcement

Criminal enforcement of antitrust laws is expected to continue its current trajectory, with a particular focus on collusion related to government contracts, procurement, and funding. Criminal enforcement of labour-focused cases, including no-poach and wage-fixing investigations, is also anticipated to continue, as it was a priority during Trump's first term.

In conclusion, Trump's second term is expected to bring changes to antitrust merger review, with a general shift towards a more pro-business and merger-friendly environment. However, the impact will vary across industries, with Big Tech and healthcare remaining areas of focus. The specific appointees to key positions within the DOJ and FTC will also play a significant role in shaping the direction of antitrust merger review during Trump's second term.

Trump's stance on big business and corporate mergers

While Donald Trump is viewed by many on the left as a tool of big business, his stance on corporate mergers and acquisitions is more complex. On the one hand, his administration has blocked, sued to block, or threatened to block several big deals in a range of sectors, including media, healthcare, tech, printing, and defense. In some cases, this has been done on antitrust grounds, while in others, national security has been the reason given. This has led to uncertainty for merging companies, as "subject to regulatory approval" is no longer seen as a foregone conclusion.

On the other hand, Trump's victory has ignited hope that mergers and acquisitions will surge under his light-touch regulatory administration. A softer stance by Trump's merger cops would likely open the floodgates to a wave of deals seen as uncertain under the current antitrust regime. Progressives have applauded regulators' efforts in the last few years to curtail corporate consolidation, but these efforts may be rolled back under Trump.

Trump's first term saw a mixed approach to mergers. While some deals were blocked, others were allowed to go ahead, albeit with significant divestitures required in some cases. For example, AT&T was eventually able to close its purchase of Time Warner, but it took years. Similarly, DaVita, Bristol-Myers Squibb, and CVS were forced to make significant divestitures to gain approval for multi-billion-dollar acquisitions in the healthcare sector.

Trump's second term is expected to be more deal-friendly, with a focus on speedier approvals and less uncertainty. However, large-scale consolidations in the tech sector may remain constrained due to regulatory and public concerns over monopolistic power.

In summary, while Trump's pro-business policies and reduction in regulatory barriers are expected to foster an environment conducive to deal-making, his administration's approach to corporate mergers and acquisitions is unpredictable and subject to change.

Trump's pick for SEC chair and its implications

In December 2024, it was reported that former SEC Commissioner Paul Atkins was President-elect Donald Trump's top choice to lead the U.S. Securities and Exchange Commission (SEC). Atkins, a former SEC commissioner appointed by former President George W. Bush, is the founder and CEO of Patomak Global Partners, a global consulting firm with clients across various industries. Atkins is well-regarded in conservative circles and has connections with Trump's pick for Treasury Secretary, Scott Bessent.

Atkins' potential nomination has raised concerns about his ability to lead the SEC effectively. He is hesitant to take on the role due to the amount of work required to reform the agency, which he believes was mismanaged by the outgoing SEC chair, Gary Gensler. The SEC has faced criticism for its handling of the digital assets market, and there are doubts about its willingness to investigate Trump Media, a publicly traded company majority-owned by Trump, due to potential conflicts of interest.

Trump's selection of Atkins also has implications for the crypto industry. Atkins has spent the last seven years as co-chair of a crypto advocacy group, and crypto executives have expressed support for other candidates with pro-crypto views, such as crypto attorney Teresa Goody Guillèn. Trump's campaign theme included deregulating crypto, and he has indicated support for the industry by stating that "the rules will be written by people who love your industry, not hate your industry."

The implications of Trump's SEC chair pick extend beyond the crypto space. With Trump owning a publicly traded company, there are concerns about how he might use the agency to target competitors or influence enforcement actions. Trump has already called for investigations into short sellers, and his influence could impact the SEC's independence. Additionally, Trump's choices to lead the FBI and Department of Justice have connections to Trump Media, further complicating the regulatory landscape.

Trump's nomination of Atkins highlights the potential for conflicts of interest and the need for effective regulatory oversight. While the SEC operates independently of the White House, the president's influence and ownership of a publicly traded company create a complex dynamic. The implications of Trump's SEC chair pick will be closely watched by various stakeholders, including those in the crypto industry and those concerned with maintaining fair and transparent markets.

Trump's history with the SEC

Trump Media has had a combative relationship with the SEC, even though it has never been charged with wrongdoing by the agency. In 2022, as Trump Media was seeking to go public through a merger, the company threatened to sue the SEC, accusing them of "inexcusable obstruction" and "obvious conflicts of interest." However, the lawsuit never materialised. The following year, the company that took Trump Media public settled fraud charges with the SEC for $18 million, and the SEC also brought insider trading charges against several people who invested in the deal.

Trump's involvement with publicly traded companies and his impending appointment power over the head of the SEC have sparked concerns among former SEC officials. They worry that Trump could attempt to use the agency to target competitors of his company or that the SEC may struggle to take action if Trump Media violates securities laws. Trump has already called for an investigation into short sellers, and his selections to lead the FBI and Department of Justice in his second term have ties to his social media company, further complicating the independence of these agencies.

In summary, Trump's history with the SEC, particularly with his involvement in Trump Media, has sparked concerns about potential conflicts of interest, regulatory capture, and political interference. The effectiveness of the SEC in regulating and investigating Trump's business ventures remains uncertain, and his impending appointment power over the head of the SEC further complicates the situation.

Trump's crypto investments and their conflict of interest with the SEC

Trumps Crypto Investments and Their Conflict of Interest with the SEC

Donald Trump's involvement in the crypto industry has sparked concerns about a conflict of interest with his public duties. Trump has deepened his personal involvement in the crypto industry while simultaneously promising to champion it while in office. His plans include regulatory rollbacks and ideas such as a national Bitcoin reserve.

Trump's ties to the crypto industry include a partnership with a crypto platform that has been linked to Middle East militants. World Liberty Financial Inc., founded by the Witkoff family, has partnered with the Tron crypto platform, which has been used by criminal groups and Iran-backed militant organisations such as Hamas and Hezbollah. Tron's founder, Justin Sun, is currently facing SEC fraud charges and has joined the Trump-Witkoff venture as an advisor. Sun invested $30 million in World Liberty Financial, which allowed Trump to begin profiting from the venture. Trump and his family are now in a position to collect roughly $20 million, and potentially much more.

This entanglement between Trump's business interests and his public duties as president has raised alarm bells among government ethics experts. Richard Painter, who served as the White House's chief ethics lawyer during the George W. Bush administration, stated that "the conflicts have grown substantially with the scope of his business empire." Trump's expanding business ventures, which now include a publicly traded social media company, a cryptocurrency firm, and ties to a Saudi-backed golf league, make it easier for those seeking to influence US policy to direct money his way.

Trump's potential conflicts of interest extend beyond his involvement with World Liberty Financial. He has also appointed David Sacks, a Silicon Valley entrepreneur and venture capitalist, to the role of "AI & Crypto Czar" in his administration. Sacks has significant financial exposure to Solana, a cryptocurrency attached to its own blockchain. Additionally, Sacks' VC fund, Craft, has invested in the crypto companies BitGo and Bitwise. There are concerns that Sacks' role in the White House will provide him with influence over policy decisions in the tech industry, despite the murkiness of his position's power and the lack of a Senate confirmation process.

Furthermore, Trump has nominated Paul Atkins, who has lobbied for the crypto industry, to lead the Securities and Exchange Commission (SEC). Atkins is expected to dial back enforcement at the agency, which could benefit Trump's crypto ventures. Under Atkins' leadership, the SEC could drop cases against Sun and the World Liberty Financial investor, who were charged with failing to properly register with the government while selling certain digital assets, among other charges.

Trump's involvement in the crypto industry and his appointments of individuals with ties to the industry to powerful positions within his administration have raised serious concerns about conflicts of interest and the potential for corruption.

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