Top brass firings at DOJ raise new questions about Trump's antitrust agenda
A shake-up that led to the departure last week of two of the Justice Department's most senior officials came as corporate America was getting its bearings around the administration's competition enforcement posture, which seemed to take an aggressive yet negotiation-friendly shape.
The Wall Street Journal reported on Tuesday that the antitrust officials were fired after an internal clash over the division's autonomy to police competition. The report raises concern that the White House would use the division as a political tool.
The fired officials, Roger Alford and William Rinner, who served in Trump's first administration, had been working on the department's challenge to Hewlett Packard Enterprise's (HPE) acquisition of rival Juniper Networks (JNP.SG), the report said — before a settlement was reached with HPE's politically connected lawyers, who lacked antitrust expertise.
Alford was the principal deputy to President Trump's hand-picked antitrust chief, Gail Slater. Rinner, a deputy assistant attorney general, headed up merger enforcement.
"Those are two of the most important deputy assistant attorney general positions," former DOJ Antitrust Division attorney William Vigen of Venable said, "and they are key advisors to the Assistant Attorney General."
Boston University antitrust law professor David Olson described the new uncertainty surrounding the administration's antitrust policy as "a bit schizophrenic."
Paul Steidler, a fellow with the conservative-leaning Arlington, Va.-based think tank Lexington Institute, said it's difficult to gauge if the DOJ changes mean that enforcement policy has softened.
"I think it's erratic. I think it's unpredictable," he said, possibly in part because the administration is new. Steidler called the terminations "troubling" and "confusing," especially given that the White House has offered no official reason for the decisions.
Merger challenges like the one against HPE — filed roughly a week after Trump took office — appeared to signal the administration's plans to vigorously pursue competition concerns. Further underscoring its offensive approach, the administration pushed ahead with antitrust prosecutions targeting the biggest names in tech, including Google (GOOG), Apple (AAPL), Amazon (AMZN), and Meta (META).
"So early on, it seemed there would be a lot of continuity from the Biden Administration's antitrust enforcement to the Trump Administration," Olson said. "But this pro-enforcement approach is facing headwinds."
Olson and other antitrust experts said the mysterious enforcement tactics may be related to administration goals that act as a double-edged sword.
On one hand, Trump has repeatedly said he would crack down on Big Tech's dominance. And under his administration, the DOJ and its enforcement partner, the Federal Trade Commission, confirmed they would keep in place stricter Biden-era 2023 merger guidelines.
Alford said during a panel discussion at George Washington Law School in May that the administration's focus was on mergers that threatened to drive up prices on goods and services that impact everyday Americans. But at the same time, the president has encouraged regulators to get out of the way in the interest of advancing US artificial intelligence.
An "AI Action Plan" announced by the president two weeks ago calls for reviewing and potentially recalibrating Biden-era antitrust enforcement actions in the AI sector.
Steidler said those competing interests make Slater's role a difficult balancing act under an administration seeking to appeal to two different constituencies: conservatives who don't like Big Tech and the business community that wants sensible, fair mergers to go forward.
Gaynor said that if the enforcement agenda is left in limbo, it could counteract economic growth. Companies, he added, make decisions in part based on what actions are likely to trigger antitrust investigations.
"If it looks to people in business like enforcement is either completely unpredictable, or might be based on political considerations," Gaynor said, "that's not good for business. It's not good for the economy. It's not good for consumers. And it's not good for America."
Olson added that President Trump's hands-on approach to dealmaking could also spell uncertainty for business, because antitrust officials have historically maintained autonomy to enforce the nation's competition laws.
"It seems that Alford, Rinner, and also Slater were opposed to this method of settling an antitrust case because it violates long-standing norms of insulating antitrust enforcement from political pressure," Olson said.
The Justice Department sued Hewlett Packard in January, alleging that the $14 billion tie-up to combine the nation's second- and third-largest providers of enterprise wireless networking would substantially lessen market competition.
Five months later, in June, the department announced it had settled with HPE and would allow the merger to go forward by requiring HPE to divest its global "Instant On" WLAN business to a DOJ-approved buyer, plus ensure it would license key software assets to rivals.
One of the lawyers who reportedly took part in the negotiations, Mike Davis, called Slater his "good friend" in an April 29 post to the social media platform X. The Wall Street Journal reported that during the negotiations, Slater ceased communications with Davis.
Vigen agreed that it's too early to assess if the administration has softened its enforcement approach. However, he said, mid-litigation shifts could jeopardize staff morale.
"It's not just the Assistant Attorney General and her people in leadership," Vigen said. "Think about the trial attorneys that put in the work on these cases ... it can be quite demoralizing."
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
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