DOJ pushes back against state antitrust enforcement
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State attorneys general have become America's top antitrust cops, believing that federal regulators have become too quick to approve or settle the thorniest of deals.
- Not surprisingly, the Trump administration doesn't like that too much.
Driving the news: Stanley Woodward, who oversees the Justice Department's antitrust division, sought to reassert federal primacy last week during a speech at Fordham Law School.
- To be clear, this wasn't a fire-and-brimstone rant. It was academic and measured, as befitting the setting, with Woodward acknowledging overlapping regulatory authorities.
- But it still took aim at state AGs he says engage in "gamesmanship" and "antitrust overenforcement."
- "When a merger harms local markets, we want the states in the room," Woodward said. "When it is national, we expect to lead."
Zoom in: Woodward also took issue with those arguing that political appointees like himself are less qualified to make antitrust determinations than are career staff — arguing that both federal executive and state officials have voter-validated roles to play.
- This seemed to be a direct response to a speech at Georgetown earlier in the week by Colorado AG Phil Weiser, who is among those who challenged Paramount's pending deal for Warner Bros. Discovery, the Nexstar-Tegna merger, and Kroger's failed deal for Albertson's.
State of play: All of this could come to a head in the aforementioned Paramount situation, with multiple reports that the states could be poised to settle.
- If California and other states settle with significant concessions — even over the objections of progressives like Lina Khan — then it may validate their more active posture.
- For example, the WSJ reports that one proposal would include Paramount investing $1.5 billion in California production. Bloomberg notes that Paramount might agree to a $30 million-per-film penalty if it "fails to make good on a promise to distribute 30 films per year in theaters."
- DOJ, meanwhile, signed off on the deal without any remedies and last week filed a statement of interest in favor of Paramount's request that the state AGs put up a $1.88 billion bond.
- It could view the settlement talks as an admission that the states' legal case is weak. If the states walk without a major trophy, it would help validate Woodward's argument that state AGs are choosing politics over policy.
The bottom line: When everyone thinks they're in charge, no one really is. And that makes it tougher for companies to make future plans.
