Biden’s Antitrust Effort Is Attempting To Avoid Transactions Across Agencies

Biden’s Antitrust Effort is Attempting to Avoid Transactions Across Agencies

The Biden administration’s tactic of relying on industry regulators to stop agreements that would be difficult to dispute in court is working.

Just in the last month have telecom and airline authorities ruled against Standard General LP’s purchase of Tegna Inc. and JetBlue Airways Corp.’s acquisition of Spirit Airlines Inc.


Meanwhile, federal railroad officials imposed conditions on Canadian Pacific Railways Ltd.’s $27 billion takeover of Kansas City Southern on Wednesday, falling short of the Justice Department’s push to block the deal but taking “unprecedented” steps to ensure the railroads keep promises made during the merger review.

These actions demonstrate that President Joe Biden’s July 2021 executive order promoting a “whole-of-government” approach to competition is having an impact, according to Tim Wu, one of the order’s architects. For decades, the Justice Department and the Federal Trade Commission have been at the forefront of competition problems and merger reviews. The presidential order, however, expressly directed industry authorities to conduct “independent scrutiny of mergers, acquisitions, and joint ventures.”


“The overarching goal of agencies being considerably more engaged in their joint merger assessments was clear in the language and in our reasoning,” said Wu, who left the White House in December to return to Columbia Law School. “The White House isn’t saying ‘stop this merger,’ but rather ‘you have these authorities, and this is what the government stands for.”

According to Diana Moss, head of the advocacy organization American Antitrust Institute, several federal regulators have the jurisdiction to examine whether acquisitions are in the “public interest,” which might encompass factors such as employment, public safety and security, or network stability. That threshold, she claims, is wider than the Justice Department’s and FTC’s mission to investigate whether transactions undermine competition.


Together with the Justice Department, the Federal Communications Commission has long been engaged in mergers involving telecommunications and broadcasting.

The Federal Communications Commission sent Standard General’s planned acquisition of Tegna to an administrative hearing on Feb. 24, a step that normally kills deals since the long procedure often pushes a final decision beyond the merger’s timeframe. Standard General has not given up on the takeover and has threatened legal action, despite the fact that its funding for the Tegna transaction ends on May 22.


The ruling was one of the first times the FCC proceeded against a deal without being opposed by antitrust authorities, and it was also the first time the FCC fought a merger of this scale through a bureau action. With large mergers, the agency’s five commissioners usually vote.

Nevertheless, other agencies, such as the Department of Transportation, have been less active in the merger arena, deferring to the Justice Department on whether or not to stop a planned acquisition.

The regulator issued a change last week, refusing JetBlue and Spirit’s proposal to operate as a single airline and proceeded with a public interest case on the topic. The Justice Department also filed an antitrust complaint in federal court in Massachusetts, opposing the agreement.


The DOT action was the first time in decades that the agency utilized its authority to prevent the transfer of a certificate, which is the legal government clearance to fly planes and transport people.

Transportation Secretary Pete Buttigieg said the federal government will defer a decision on the certificate transfer request until the DOJ case is resolved.

“We’re looking at everything,” Buttigieg said in a Bloomberg interview on Monday. “We can’t put toothpaste back in the tube in terms of what’s happened over the last few decades, but we can hold the line when things happen on our watch.”




While the Surface Transportation Board authorized Canadian Pacific’s acquisition of Kansas City Southern on Wednesday, Chair Martin J. Oberman stated that the rail agency will keep a tight eye on the railways and imposed a “unusual” seven-year supervision term. The approval order also includes “additional measures,” he added, such as a commitment to maintain gateways open to other railways, to establish a dispute resolution system to handle commuter delays in Chicago, and to require Canadian Pacific to submit written reasons for any price increases over inflation.


Oberman admitted at a rare press conference that there is “understandable doubt” that the merger, which would become the only train operator servicing the United States, Canada, and Mexico, will be advantageous. The Justice Department, numerous members of the Federal Maritime Commission, and STB Democratic Commissioner Robert Primus, who dissented from the agency judgment, were among those who criticized the agreement.

Wu highlighted that the railroad regulator had already banned Canadian National Railway Co.’s proposal to purchase Kansas City Southern in August 2021 and set extra conditions on the new transaction.

“Sometimes authorities feel pressured not to do things by the industries they govern,” he explained. The executive order serves as a “political counterweight” to them.


More might be on the way. Bank mergers, according to AAI’s Moss, are a prospective “poster child” for the Biden administration’s new whole-of-government strategy, given the failures of Silvergate Capital Corp. and SVB Financial Group’s Silicon Valley Bank.

“We’re really just touching the surface” of the executive order’s possibilities, she added.

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