In March of this year, the Antitrust Division of the U.S. Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) jointly announced a series of “listening forums” that would help gather real world input from participants in key industry segments on possible reforms to the antitrust regulations pertaining to mergers and acquisitions.1 Co-led by DOJ Assistant Attorney General (“AAG”) Jonathan Kanter and FTC Chairperson Lina Khan, the fourth and final announced forum, focusing on technology, was held on May 12, 2022.2 In addition to AAG Kanter and Chairperson Khan, the program included eight panelists that provided perspectives from restaurant owners, privacy advocates, software start-up entrepreneurs, venture capitalists, podcasters, booksellers, small business owners, and union workers.3

AAG Kanter began the session by noting that more than 5,000 comments had been received by the close of the merger guidelines comment period and that the listening forums have been an important part of the input process. Kanter went on to acknowledge that “[t]here is perhaps no more consequential topic in antitrust enforcement today than digital markets.” He noted that competition policy must adapt to new technologies and realities and that enforcement is a key piece of this policy. The government, according to Kanter, must promote innovation and in turn competition. 

The panelists expressed a wide range of concerns in the industry, such as delivery apps and ghost kitchens and their respective impacts on the restaurant business, student data privacy, monopoly power in the tech industry and the impact on tech start-ups, including investing in tech start-ups, media collusion, challenges of small brick and mortar stores with e-commerce, and the ongoing pressures in the labor market. 

Chair Khan provided closing remarks by noting an “imbalance in power between platforms and the businesses that depend on them [that] enable[s] potentially harmful business practices,” which she analogized to “tenant farming.” Khan reiterated what she has been stating for quite some time in that she would like the FTC to “make sure that [the analytic] tools are up to the challenge” of assessing anti-competitive practices in new and novel markets, including but not limited to digital markets. 

After some additional comments from AAG Kanter regarding the information provided by the panelists, other public comments (more than the other sessions) were offered, which provided additional, wide-ranging opinions. One commentator noted that a goal for many start-ups is to get acquired by larger companies so that entrepreneurs can use that capital to continue to innovate, and so the agencies ought to be mindful of that strategy when looking at merger reform. Others noted the dangers of bigoted messaging and business practices on platforms as well as the disparate impact of unfair business conduct on minorities. Others noted how consolidation in technology adversely impacts competition in other industries, such as electronic medical records and healthcare. And yet there was one commentator who indicated that the current merger guidelines are sufficient in assessing tech mergers and acquisitions.

With the end of the Listening Forum and the comment period for the horizontal merger guidelines, the next step is to see what the Agencies propose for the draft revisions. There has been a lot of discussion of significant, substantive changes to the guidelines because the FTC and DOJ are both ready to test their enforcement mandate from the Biden Administration in this sector and others.

FOOTNOTES

¹ “Forums to focus on markets commonly impacted by mergers: food and agriculture, health care, media and entertainment, and technology,” March 17, 2022, available at: https:// www.ftc.gov/news-events/news/press-releases/2022/03/ftc-justice-department-launch-listening-forums-firsthand-effects-mergers-acquisitions

² See “Antitrust Enforcers’ First ‘Listening Forum’ On Merger Reform Highlights Ongoing Concerns in the Food and Agriculture Industry” May 10, 2022, “Antitrust Enforcers’ Second ‘Listening Forum’ On Merger Reform Highlights Ongoing Concerns in the Healthcare Industry,” and “Antitrust Enforcers’ Third ‘Listening Forum’ On Merger Reform Highlights Ongoing Concerns in Media and Entertainment” available at: https://www.polsinelli.com/intelligence/ antitrust-forum-highlights-concerns-in-food-and-ag and https://www.polsinelli.com/intelligence/ antitrust-forum-highlights-healthcare-industry and https://www.polsinelli.com/intelligence/antitrust-forum-highlights-media-entertainment

³ Transcript available at: https://www.ftc.gov/system/files/ftc_gov/pdf/FTC%20and%20 Justice%20Department%20Listening%20Forum%20on%20Firsthand%20Effects%20of%20 Mergers%20and%20Acquisitions-%20Technology%20-%20May%2012%2C%202022_0.pdf