RECENT DEVELOPMENTS

Personnel

• CHANGING OF THE ANTITRUST GUARD. A new set of antitrust enforcers is entering government. Omeed Assefi is acting DOJ Antitrust AAG as President Trump’s nominee and former J.D. Vance Senate staffer, Gail Slater, awaits confirmation. Slater expressed concern over noncompete agreements and committed to looking at ways to lower consumer prices during her nomination hearing. Newly confirmed U.S. Attorney General Pam Bondi suggested in her confirmation hearings that she would defer to Slater on antitrust enforcem ent. At the FTC, Republican Andrew Ferguson has taken over from Lina Khan as chair, and Trump has nominated Mark Meador for the last Republican seat. Democratic minority commissioners Rebecca Slaughter and Alvaro Bedoya remain, along with Republican commissioner Melissa Holyoak. Ferguson’s first move as chair was implementing Trump’s DEI executive order. Bedoya sent him a letter suggesting 10 things the agency could do to lower consumer prices.
  ‌
• RIP CFPB? Attempts to eliminate the CFPB have been a constant in Washington since the Dodd-Frank Act mandated the agency’s creation. This week, it appears the Trump Administration is going where the Supreme Court would not. Acting Director Russell Vought shuttered the agency’s operations and put staff on administrative leave. While nominally, this effort is in the name of efficiency, CFPB’s ~$800 million budget with proven returns to consumers of billions draws that argument into question. More likely, this move is a giveaway to Big Tech, who want to milk consumer finances without the guardrails applied to traditional banks. Newly-nominated direct or Jonathan McKernan’s confirmation hearings should be interesting. Read more in Matt Stoller’s BIG and Economic Populist’s substack for more on the risks of a gutted CFPB.

Agriculture 

• FARMERS’ REPRIEVE? In 2022, John Deere was the largest farm machine manufacturer in the U.S. For decades, farmers have complained the giant used this market power to block them from repairing their own equipment. In her final days at the FTC, Lina Khan sued John Deere for these unfair repair policies, alleging they drive up equipment owners’ costs and reduce the quality of service. New Chair Ferguson, however, dissented, citing the need for more time to understand the market. Arizona AG Kris Mayes has joined the FTC lawsuit along with several other state Attorneys General.

Housing

• LANDLORDS GET SERVED. Between 2019-2023, rent prices nationally increased roughly 30%, in part due to landlord malfeasance. In their final days, Biden enforcers took aggressive steps to combat these practices. The FTC filed a lawsuit against the largest U.S. landlord, Greystar Real Estate Partners, for hiding fees, including for pest control and trash services. DOJ Antitrust also added six of the largest landlords to their lawsuit against RealPage for directly engaging in price-fixing schemes. On the Hill, Sens. Wyden (D-OR) and Welch (D-VT) have proposed banning algorithmic price fixing in rental housing. And at the state and municipal level, 16 bills have been introduced across the country from New York to Idaho to Kentucky to California and even Hawaii.

Trade

• TRADE FLIP FLOPS. Tariffs typically help enforce trade agreements and support domestic industrial policy goals. President Trump’s latest tariffs, however, are negotiation tools to stem the flow of immigrants and fentanyl. Specifically, he proposed 25% tariffs on all goods from Canada and Mexico, and a new 10% tariff on all goods from China (on top of existing tariffs). He paused the Canada and Mexico tariffs after they committed to additional border security, and China issued retaliatory tariffs of their own. Trump imposed tariffs on goods under $800 entering the U.S. per the de minimus exception, a loophole many e-commerce brands like Shein utilize, but he retracted it after FedEx’s CEO went to the White House, and Trump notably did not require those goods to be subject to customs inspection, which would intercept fentanyl shipments. Watch Rethink Trade Director Lori Wallach’s interview for a break down of the proposals.

Reining in Big Tech 

• A.I. & THE FUTURE OF TECH. Chinese startup DeepSeek’s release of a new and potentially more efficient, open-source A.I. model sent U.S. tech stocks plumme ting. Though stocks partially rebounded and the facts around DeepSeek’s cost-efficiency are murky, questions remain about the future competitiveness of the U.S. tech industry. Last month, all FTC commissioners voted to release a 6(b) study into partnerships between Big Tech’s cloud service providers and A.I. companies like Anthropic and OpenAI, finding these contracts might give Big Tech access to sensitive data and limit A.I. developers’ ability to switch providers. And in a New York Times op-ed, former Chair Khan argued allowing Big Tech to dominate A.I would stifle American innovation.

Improving Health Care

• PBM MAFIA EXPOSURE. All FTC commissioners voted to release part two of its PBM study, finding the Big Three—CVS Health’s Caremark Rx, Cigna Group’s Express Scripts, and UnitedHealth Group’s OptumRx—raised prices on medication by as much as 7,736%, generating $7.3 billion in excess revenue within five years. The report also details how the Big Three paid their proprietary pharmacies hundreds of millions in excess dispensing revenue, while underpaying independent pharmacies. But the tides are turning. Rep. Murphy (R-NC-03) highlighted United Healthcare’s conflicts of interest, owning both an insurer and a PBM, and called to break them up. And the AIDS Healthcare Foundation and independent pharmacists recently won a $10M verdict against PBMs for price-fixing.

Promoting National Security

• WILL DOGE CONFRONT CONTRACTORS? Ostensibly, the Department of Government Efficiency initiative is supposed to eliminate waste in the federal government, but to date, their focus has not been on the agencies contributing the most to federal bloat. For example, DoD’s over $800 billion budget vastly outpaces USAID’s $40B in appropriated funds. Even worse, private defense contractors claim nearly half of Do D’s budget, mainly through price-gouging. So it’s no surprise, L3 Harris, a top defense producer, recommended DOGE eliminate “Cost Accounting Standards” that ensure defense contractors provide the government wit h accurate pricing information. Secretary of Defense Pete Hegseth said he would welcome DOGE, and highlighted cuts to weapons acquisitions. For ideas to lower DoD’s budget, see Public Citizen’s proposals.

Blocking Mergers

• DOJ ANTITRUST KEEPS ROLLING. The new acting DOJ Antitrust AAG is already blocking mergers, specifically Hewlett Packard Enterprises (HPE) and Juniper’s $14 billion merger.  Currently, three companies, HPE, Juniper, and Cisco, control 70% of the wireless local area network market, which link devices to Wi-Fi. HPE’s portfolio would double if the deal goes through. Though Wall Street has expressed optimism Trump’s appointees will back off on strong enforcement, the Hewlett complaint cites the 2023 Merger Guidelines, and could be yet another sign of strong bipartisan support for blocking illegal mergers. Check out Economic Liberties’ Merger Tracker to stay up to date on new deals.
  ‌
• NIPPON/US STEEL MARCHES ON? Before leaving office, President Biden blocked Nippon’s attempted acqui sition of U.S. Steel on national security grounds, though the government’s analysis didn’t find conclusive evidence of a security threat. United Steelworkers also opposed the deal. Now, President Trump is working with the Japanese government to broker an investment from Nippon into U.S. Steel instead of a purchase. The details of the deal have not yet been revealed. Trump also announced a 25% tariff on all steel and aluminum imports that will take effect in March. Currently, the U.S. is the top steel importer, with Canada, Mexico, and Brazil the main suppliers.
  ‌
• GOODNIGHT, VENU.  Sports shows are the most watched in the U.S., so the stakes are high for platforms to get a cut. In early 2024, Disney, Fox, and W arner Bros proposed a joint venture to combine sports streaming on one platform, Venu, that would have consolidated 80% of all nationally broadcast sports. Last year, Fubo, a smaller sports streamer, successfully sued to temporarily block the deal as anti-competitive. But in January, Disney’s Hulu and Fubo announced an intent to combine, Fubo got the lawsuit against Venu dropped, and two satellite companies, DirecTV and Echostar, suggested they may file lawsuits of their own to block further consolidation. The next day, Venu was dead. On the Hill, Sen. Chris Murphy (D-CT) and Rep. Pat Ryan (D-NY-18) have introduced legislation to ensure leagues keep their games accessible to fans as they cut deals with streaming services.

Private Equity 

• HARDER FOR PE TO HIDE? Since 1976, the Hart-Scott-Rodino (HSR) Act has required businesses to share information about larger deals with the DOJ and FTC before approval. The last administration modernized the forms to account for market realities like the prominent ownership stake private equity firms have in many deals. The new HSR form took effect last week. Separately, DOJ Antitrust recently sued KKR & Co., the second largest global PE firm, for giving incomplete or inaccurate information or failing to file HSR forms for at least 16 mergers.
  ‌
• FIRE TRUCK ROLL-UPS WREACK HAVOC. Over half of Los Angeles’ firetrucks were out of service as recent fires destroyed 12,000 buildings and displaced thousands. LAFD’s shortage of operational trucks is not unusual. Private equity firm AIP, American Industrial Partners, has rolled up the fire truck market, driving up costs and creating repair back-logs because they manage maintenance, similar to John Deere. The price of trucks has jumped by roughly 50%, reaching as much as $1–$2 million per truck, and departments often have to wait years to receive a new order. Read more from Basel Musharbash in BIG.

Small Business

• PEPSI HEARTS WALMART? Under Chair Khan, the FTC sued PepsiCo for offering a “large big-box reta iler” (assumed to be Walmart) lower prices than other retailers, in violation of the Robinson-Patman Act and to the detriment of small businesses. Wholesalers can offer discounts based on volume, but they must make that rate generally available. This was the second RPA case the FTC filed before the end of the year, after a 20-year drought from enforcin g the law. Chair Ferguson voted aga inst pursuing b oth cases. Read Democratic Commissioner Alvaro Bedoya’s NYT op-ed on the importance of the RPA.

Lowering Prices

• CREDIT CARD FEE CONSENSUS? Over 80% of Americans have a credit card. With the average credit interest rate clocking in at 20%, it’s no surprise Americans owe over $1 trillion in credit card debt, attracting concern from bipartisan lawmakers. On the campaign trail, President Trump called for capping interest rates at 10%. And just last week, Sen. Hawley (R-MO) and Sen. Sanders (I-VT) introduced legislation mirroring this proposal. Before Rohit Chopra’s firing, the CFPB was also requesting information from the public about the impact of credit card fees, deceptive credit card practices, and the safety of using a credit card.
  ‌
• COURTS OK JUNK FEES. The average consumer pays nearly $600 in junk fees annually. The FTC attempted to lower these fees by finalizing its Combating Auto Retailer Scams (CARS) rule to prevent predatory pricing at dealerships, estimated to save American car buyers $3.4 billion annually. Buttigieg’s DOT issued a rule requiring airlines to display the cost of fees upfront, such as for checked bag fees or Wi-Fi. The rule was expected to collectively save consumers $500 million annually. Auto dealers and airlines succes sfully sued in the Fifth Circuit to block the rules. It’s unclear how new leadership at each agency will proceed. This action comes as a new CBS News poll indicates over 66% of voters are concerned President Trump isn’t focusing enough on lowering prices.

Industrial Policy

• UTILITIES GONE WILD. 70% of electricity and 95% of natural gas companies are government-sanctioned monopolies known as investor-owned utilities (IOUs,) which are often publicly traded. Government regulators set “just and reasonable” rates for IOUs to charge consumers while still collecting a profit. However, these rates are 15% higher than other utility models, and in the last three years rates have been 49% higher than inflation. In a new paper, Economic Liberties’ Senior Fellow, Mark Ellis, explains how shareholder payouts incentivize this overcharging and what Congress can do to stop it.

ICYMI

• Google is trying to overturn a verdict, forcing them to open up the PlayStore to rival app stores. Check out Economic Liberties‘ explainer for the latest on all the Big Tech lawsuits. 
  ‌
• Spirit denied a second acquisition attempt by Frontier, a decision that would create the fifth largest airline in the United States.
  ‌
• Nissan and Honda dropped their $60 billion merger deal after Honda suggested Nissan close factories and become a subsidiary under Honda.
  ‌
• A disabled veteran is trying to intervene to save the FTC’s rule banning noncompete agreements, which has been challenged by the Chamber of Commerce.
  ‌
• Former big airline lobbyist, and now Secretary of Transportation, Sean Duffy, got a free pass at his nomination hearing.
  ‌
• Sen. Warren (D-MA) committed to working with Trump on legislation that would lower prices and restore competition in a WSJ op-ed.
  ‌
• CFPB finalized its rule to ban medical debt on credit reports, debt collectors are asking courts to block the rule.
  ‌
• Sen. Hawley (R-MO) and Teamsters are working to develop a more conservative friendly PRO Act, legislation that would ban union-busting tactics.
  ‌
• The monopolization case against Google brought by Texas and fifteen additional state AGs survived a motion to dismiss.
  ‌
• In January, Biden’s DOT sued Southwest Airlines, and fined JetBlue $2 million and Frontier $650,000 for chronic delays.
  ‌
• FTC approved Chevron’s acquisition of Hess, both natural gas producers, on condition its former CEO John B. Hess is barred from advising the company, Hess has considered appealing the decision.
  ‌
• Biden’s HHS found private equity consolidation was a main factor in contributing to health care inflation.