Prez's restrained antitrust enforcement is a good thing

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Omeed Assefi, who became acting head of the Justice Department's Antitrust Division in February, left the department after just four months. When Assefi took over the Antitrust Division, it was being attacked by supporters of aggressive antitrust policy on both the left and the right.

The attacks were motivated by reports the reason Gail Slater, President Trump's first head of the Justice Department's Antitrust Division, resigned was due to conflicts with then-Attorney General Pam Bondi. The conflicts concerned Bondi's support for settling high profile cases, such as the antitrust case against Ticketmaster (parent company of Live Nation) and the merger between tech companies Juniper and Hewlett-Packard.

Slater, in opposition to Bondi, wanted to bring these cases to trial.

Before Assefi left the Justice Department, he gave an interview to Politico, in which he defended the Antitrust Division's policy of seeking settlements instead of pursuing litigation as reflecting its commitment to providing instant relief to American consumers. He also said settlements quickly provide finality in antitrust cases, which benefits businesses, workers, and consumers.

Assefi responded to the critics who say his settlement-friendly approach to antitrust is soft on big businesses by saying every merger or acquisition brought before the Justice Department receives a thorough review before a decision on how to proceed is made. Settling a case gives involved businesses an opportunity to address any concerns resulting from the review.

For example, the government may require one of the parties to sell one or more of their existing subsidiaries as a condition of getting the merger or acquisition approved. This can help alleviate concerns over the merger increasing market concentration to what the government considers unacceptable levels.

Assefi contrasted the Trump approach with the Biden Administration's practice of, “spending years on uncertain courtroom battles aimed at reshaping antitrust law.” Biden's antitrust team of Federal Trade Commission Chair Lina Khan and Antitrust Division head Jonathan Kanter supported a return to the “big is bad” approach to antitrust policy. This justified bringing legal challenges against almost every merger or acquisition brought before the FTC or the Justice Department, regardless of how they would benefit consumers.

Perhaps the best example of how overzealous antitrust enforcement can harm consumers and workers is the fate of discount airline Spirit Air.

Spirit Air started facing financial problems when the government's (over) reaction to COVID shut down air travel. After struggling for a couple of years, Spirit thought it had found a lifeline that would not only save the airline but make it stronger: a merger with fellow discount airline JetBlue.

The merger would have enabled these two airlines to more effectively compete against the larger airlines that dominate the market. Consumers were denied this option because the Justice Department decided a JetBlue-Spirit Air merger would make the air travel market “uncompetitive.”

This argument only make sense if you consider discount airlines like JetBlue and Spirit to be in a separate market from the big airlines. This is not how consumers or the airlines themselves view the market. Rather, both airline passengers and businesses see discount airlines as competing with the larger carriers.

Spirit made one last attempt to combine with another discount airline, Frontier. Once again, the Justice Department crushed Spirit's efforts to save itself and Spirit was permanently grounded earlier this year. The death of Spirit left many of their employees without jobs and American consumers without one of the leading options for low-cost air travel. The only beneficiaries of Spirit's downfall were the large airlines.

Assefi's approach to antitrust policy is far from the free market ideal. It still trusts government bureaucrats to know what level of market concentration is too much and whether a proposed merger or acquisition will cause too much market concentration, as well as prescribing what the business can do to avoid this outcome. However, it is vastly superior to the Khan-Kanter approach that dominated antitrust policy in the Biden years, when the federal government filed a record number of court cases challenging mergers and acquisitions.

Hopefully, Adam Candeub, whom President Trump has nominated to head the Antitrust Division, will continue to seek settlements of antitrust cases instead of dragging companies into costly and time-consuming litigation. Unfortunately, there are signs that he is a Khanservative, meaning someone who favors a Lina Khan-type approach to using antitrust policy to achieve conservative goals.

Before voting to confirm him, senators should ensure Candeub does not intend to use his position to advance a political agenda instead of continuing Assefi's light touch approach to antitrust enforcement.

Charles Sauer is a seasoned economic policy expert, author, and founder of the Market Institute. Sauer authored the book, "Profit Motive: What Drives the Things We Do" and is a frequent voice appearing in outlets like the Washington Examiner, Forbes, Investor's Business Daily, and many more. Charles has also been named to Washingtonian's list of the "Most Influential People Shaping Policy" for four years.

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