Jul 9, 2021 - Politics & Policy

Joe Biden, trustbuster

Joe Biden

Photo: Yuri Gripas/Abaca/Bloomberg via Getty Images

President Biden has decided to become the antitruster-in-chief, today signing a sweeping executive order that could limit corporate consolidation.

The big picture: Biden is explicitly asking regulators to not only block new mergers, but also to consider unwinding prior mergers that were not challenged by past administrations.

Impact on tech deals: The EO implements a "greater scrutiny of mergers, especially by dominant internet platforms, with particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by 'free' products, and the effect on user privacy."

  • It also asks the FTC to establish new rules on data accumulation and surveillance.

Impact on healthcare deals: The EO takes aim at hospital mergers, directing the DOJ and FTC "to review and revise their merger guidelines to ensure patients are not harmed by such mergers."

  • It also directs HHS to finish implementing federal legislation to limit surprise hospital billing, something that's been prevalent at private equity-owned facilities.

Impact on transportation deals: The EO argues that the airline, maritime shipping and freight railroad industries have become too consolidated, and puts new restrictions on fees and rights of way.

Impact on financial deals: The EO argues that the banking sector has become too consolidated because of mergers (resulting in closures that disproportionately impact rural areas and communities of color). It asks several agencies to "update guidelines on banking mergers to provide more robust scrutiny of mergers."

The bottom line: None of this changes actual antitrust law, to which judges remain beholden. But Biden is staking out a political philosophy that consolidation is antithetical to competition, and likely believes that the threat of regulatory action could scare off some deals from getting signed.

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