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federal trade commission
Wall Street Giddy Over Coming Merger Boom as Trump Expected to Fire Lina Khan
One corporate CEO welcomed the Republican's victory as "an opportunity for consolidation."
Nov 08, 2024
Wall Street is "foaming at the mouth," as one leading business magazine put it, at the prospect of a corporate merger frenzy following Republican Donald Trump's victory in the 2024 presidential election—a win that's set to spell the end of antitrust champion Lina Khan's popular tenure at the helm of the Federal Trade Commission.
Trump's second administration, which is likely to be stacked with billionaires and corporate-friendly officials, is expected to take aim at merger and acquisition guidelines issued last year by Khan's FTC and the U.S. Department of Justice after decades of relentless corporate consolidation.
David Kostin, chief U.S. equity strategist at the Wall Street behemoth Goldman Sachs, predicted in a note published Wednesday that under Trump's incoming administration, "the regulatory posture of the Federal Trade Commission and the Department of Justice Antitrust Division that during the past four years challenged many proposed business combinations will likely be more relaxed."
That more relaxed posture, according to Kostin, could result in a 20% increase in merger activity in just the first year of Trump's second term.
Raul Gutierrez, the head of mergers and acquisitions at the investment banking firm Truist Securities, echoed Kostin's assessment, tellingBloomberg that "you should be able to see larger transactions move forward" under the incoming Trump administration.
"Some of these had been put on hold given the current antitrust stance," said Gutierrez, "and I think you'll see a greater willingness to test agencies out once the administration takes over."
Khan's term officially expired in late September, but she's expected to stay on at the FTC until Trump is inaugurated in January and chooses a replacement. While Vice President-elect JD Vance has praised Khan, "Trump and his allies are likely to get rid of anyone associated with the Biden administration's antitrust battles with the big Silicon Valley tech companies," The New York Timesreported earlier this week.
Tesla CEO Elon Musk, who pumped upward of $118 million into Trump reelection efforts, wrote days before the November 5 election that Khan "will be fired soon."
According to the FTC's latest data, the Biden administration brought a record number of merger enforcement actions in fiscal year 2022. A recent analysis by the American Economic Liberties Project found that the Biden administration "brought to trial four times as many billion-dollar merger challenges as Trump-Pence or Obama-Biden enforcers did."
Under Khan's leadership, the FTC has taken legal action against some of the most powerful companies in the world, including Amazon and Microsoft.
But Trump's election victory has sparked hopes on Wall Street that aggressive merger enforcement could soon end.
"We think that under a Trump administration, deal approvals will speed up markedly and the process will be more clearly delineated," Mark Fitzgibbon, managing director of the banking company Piper Sandler, wrote in a research note.
David Zaslav, the CEO of Warner Bros. Discovery, hailed Trump's victory as "an opportunity for consolidation."
Kroger, a company that is currently locked in a legal battle with the Khan-led FTC over its attempt to acquire competitor Albertsons, saw its stock price jump in the wake of Trump's election victory, with investors anticipating "a more lax environment for corporate mergers" under the Republican, Barron'sreported.
Axiosreported Friday that "the $35 billion credit card merger of Capital One and Discover will be a bellwether for how Trump's antitrust crew views the M&A environment."
"Shares of each company rose 15% after his election," the outlet observed, adding that shares of the airline companies Frontier and Spirit also surged in a "sign their previous attempt at a merger could be revived."
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Billionaire Trump Supporter Elon Musk Calls for Firing of FTC Chair Lina Khan
"How do we know that Lina Khan has done an excellent job as FTC chair? Because billionaires and business leaders want her gone."
Nov 01, 2024
The world's richest man on Thursday joined the billionaire chorus calling for the firing of Federal Trade Commission chair Lina Khan, a consumer and antitrust champion whose aggressive actions against corporate consolidation have made her a target of prominent executives and Republicans in Congress.
"She will be fired soon," Elon Musk, a billionaire supporter of Republican nominee Donald Trump, wrote on his social media platform in response to a GOP-led House Oversight Committee report accusing Khan of abusing her authority to "launch an intimidation campaign to chill mergers of all kinds."
Democrats on the committee said the GOP report is "riddled with misinterpretations, mistruths, and cherry-picked experts" attempting to discredit Khan's "work taking down greedy monopolies, lowering drug and food prices for Americans, and ensuring scammers don't prey on our most vulnerable neighbors—a pro-consumer agenda celebrated even by Republicans."
One of the Republicans who has praised Khan is Trump's running mate, Sen. JD Vance (R-Ohio), who said in August that the FTC chair has "been very smart about trying to go after some of these big tech companies that monopolize what we're allowed to say in our own country."
Under Khan's leadership, the FTC has filed suit against Meta, Amazon, and Microsoft and has taken concrete action to fix problems that Trump has claimed to want to solve.
American Economic Liberties Project (AELP), an anti-monopoly advocacy group that has celebrated Khan's work, said Thursday that Musk—who has spent at least $118 million supporting Trump's presidential campaign—"joins a long list of oligarchs who want [the FTC chair] fired for using her office to serve the public, not the rich and well-connected."
In a report released earlier this week, AELP noted that thanks in significant part to Khan's FTC, the Biden-Harris administration has "brought to trial four times as many billion-dollar merger challenges as Trump-Pence or Obama-Biden enforcers did."
"The durability of this progress depends on executive branch commitment—especially in the face of deep-pocketed lawbreakers fixated on kneecapping antitrust law enforcement through constitutional challenges and personnel changes," said Laurel Kilgour, AELP's research manager.
Khan's term officially expired at the end of September, but she is set to stay in her position indefinitely until the winner of next week's presidential election decides whether to keep or replace her.
Vice President Kamala Harris, the Democratic nominee, has been quiet about whether she would retain Khan as some of her billionaire donors—including LinkedIn co-founder Reid Hoffman and investor Mark Cuban—have called for the FTC chair's removal.
"How do we know that Lina Khan has done an excellent job as FTC chair? Because billionaires and business leaders want her gone," former U.S. Labor Secretary Robert Reich wrote Thursday in response to Musk, whom Trump has pledged to put in charge of a "government efficiency" commission tasked with identifying regulations and spending to slash.
"She's been an avid anti-trust enforcer and defender of working people," Reich added of Khan. "She's also been an oligarch's worst nightmare."
NBC Newsreported Thursday that progressives are gearing up for a fight to keep Khan in place as FTC chair if Harris defeats Trump on November 5.
"If Vice President Harris wins, her decision whether to replace Lina Khan and other enforcement officials will be the first big test of whether she wants to preserve the broad coalition built by the Biden-Harris administration, or whether she'll choose ongoing conflict with progressives instead," Dan Geldon, a consultant and former chief of staff to Sen. Elizabeth Warren (D-Mass.), told NBC.
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16 AGs Push Congress to Pass Federal Ban on Price Gouging
"During and after a crisis, it is unfair—and harmful to our economy—for companies to reap higher profits for selling goods and services that families need to survive."
Oct 30, 2024
The attorneys general of 15 states and the District of Columbia on Wednesday wrote to the top Democrats and Republicans in Congress to advocate for a federal prohibition on price gouging.
"Businesses should never be able to hike prices during an emergency just to increase their profits," said New York Attorney General Letitia James, who led the letter. "When companies take advantage of major disruptions and raise prices of food and supplies that New Yorkers rely on, my office holds them accountable, getting people their money back and protecting their wallets."
"Our federal government should have the same power to protect Americans when disaster strikes and stop price gouging at the national level that threatens both hardworking families and small businesses," asserted James, a Democrat.
The letter points out that "over 40 states across the country make price gouging unlawful, reflecting the widespread national consensus that exists, across ideological and regional differences, that in the immediate run-up to and aftermath of a crisis, it is unfair—and harmful to our economy long-term—to reap higher profits for selling goods and services people need to survive."
"As crises, whether natural or human in origin, become more common... now is the time to work constructively in a bipartisan fashion to create federal price gouging protections."
"Despite that consensus, there is currently no federal price gouging prohibition—and individual states face heightened challenges when protecting consumers from price gouging when so many product supply chains are nationwide," it continues. "A federal price gouging prohibition would provide critical partnership to state enforcement and protect consumers and small businesses alike."
The letter—addressed to House Speaker Mike Johnson (R-La.) and Minority Leader Hakeem Jeffries (D-N.Y.) as well as Senate Majority Leader Chuck Schumer (D-N.Y.) and Minority Leader Mitch McConnell (R-Ky.)—lays out how price gouging bans address market failures and strengthen the economy, explaining that "they act like 'circuit breakers' in a stock market: They put a pause on panic-driven price changes and give everyone a chance to make sure they are making the right pricing choices for the long-term."
Price gouging prohibitions also "prevent inefficient pricing overreactions in the heat of a crisis" and "help to prevent hoarding," the letter adds. Further, they "can restrain inefficiently high prices for products where there is very little competition."
"A federal price gouging prohibition that complemented state prohibitions would allow federal enforcement agencies, such as the Federal Trade Commission, to identify and restrain unjustified and irrational price increases throughout the entire supply chain, unconstrained by the complications of state-by-state enforcement," the attorneys general wrote. "Such a prohibition should not preempt state laws, but complement and strengthen them by focusing federal enforcement on price gouging that cannot practicably be stopped by a single state."
"Our states provide many different models for how such a price gouging statute might be framed," the coalition noted. "But as crises, whether natural or human in origin, become more common and the cost of living continues to be too high for working families, we believe now is the time to work constructively in a bipartisan fashion to create federal price gouging protections to complement price gouging protections that already exist in almost every state."
In addition to the D.C. attorney general, James was joined by the AGs in Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Oregon, New Jersey, New Mexico, New York, Pennsylvania, and Vermont.
"During and after a crisis, it is unfair—and harmful to our economy—for companies to reap higher profits for selling goods and services that families need to survive," said California Attorney General Rob Bonta. "That is why California's price gouging law protects Californians during and after wildfires, severe weather storms, and other emergencies."
"A federal price gouging prohibition that complements state law would build on successful partnerships between states and the federal government to protect consumers by making it easier to enforce price gouging prohibitions nationally, up the supply chain," the Democrat added. "This would benefit California consumers and small businesses who currently bear the brunt of their suppliers' price setting."
The letter comes amid a fossil fuel-driven climate emergency featuring extreme weather that is increasingly impacting U.S. communities and less than a week away from Election Day, when Americans will choose the next Congress and President. In the race for the White House, former Republican President Donald Trump faces Democratic Vice President Kamala Harris. In August, the Democrat proposed a federal ban on price gouging by food supplies and grocery stores.
"I still remember our mother sitting at that yellow formica table late at night, cup of tea in hand, a pile of bills in front of her, trying to make it all work. And I've heard from so many of you who are facing even greater financial pressures," Harris said in a Tuesday campaign speech. "I will enact the first-ever federal ban on price gouging on groceries, cap the price of insulin, and limit out-of-pocket prescription costs for all Americans. I will fight to make sure that hardworking Americans can actually afford a place to live."
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