Jonathan Kanter Undergoes Senate Confirmation Hearing to Lead Antitrust Division at the Justice Department
On October 6, 2021, Jonathan Kanter, President Biden’s pick to lead the U.S. Department of Justice’s (“DOJ”) Antitrust Division (the “Division”) testified before the U.S. Senate Judiciary Committee at his confirmation hearing. Kanter signaled plans for aggressive enforcement across several industries but also distanced himself from some progressive antitrust proposals and avoided taking a position on pending antitrust reform legislation.
Below, we lay out a few highlights from the hearing.
Consumer Welfare Standard & Big Tech
In a possible departure from Federal Trade Commission (“FTC”) Chair Lina Khan, Kanter suggested that he sees no need to depart from the consumer welfare standard, the standard under which antitrust enforcers and courts have analyzed antitrust conduct for several decades. Kanter agreed with Senator Mike Lee (R-UT) that the consumer welfare approach encompasses factors beyond price, such as quality, innovation, and consumer choice. Kanter clarified that he does not object to the standard itself, but rather to the way in which judges have historically interpreted the standard. In contrast, Khan has argued that the consumer welfare standard is short-sighted and not up to the task of policing online platform mergers.
Nevertheless, Kanter echoed at least some of Khan’s concerns about the current antitrust framework’s efficacy against big tech. For example, Kanter remarked on the changing landscape of anticompetitive harms over the past 20 to 30 years, including privacy, the marketplace of ideas, the distribution of information, and political discourse. Antitrust laws must adapt to these new circumstances, Kanter asserted. Kanter also stressed that while supporting competition is the goal of antitrust enforcement, there are secondary benefits to such enforcement, including the protection of free flow of information and, thereby, democracy.
ESG Considerations in Merger Review
Kanter’s stance on whether Environmental, Social, and Governance (“ESG”) considerations ought to play a role in merger review suggests he is likely to deviate from the emerging practice at the FTC of asking parties about ESG policies, including equity and inclusion. When asked about his intent to query parties under investigation about ESG policies, Kanter replied that he intended only to ask questions about competition and, when pressed, added “I don’t see situations where ESG policies that are unrelated to competitive issues are relevant to antitrust enforcement.” Kanter declined to express a view on the impact of antitrust enforcement on communities of color and gig economy laborers engaging in collective bargaining, further suggesting Kanter may be skeptical of using antitrust law as a substitute for social justice and labor reform. Kanter did, however, discuss the importance of competition in labor markets in the context of overly broad non-compete clauses in labor contracts, and stated that the Division must have a vigorous and comprehensive program to protect competition for the benefit of workers.
IP and Technology Sector Issues
Kanter emphasized his big tech agenda, noting he is a strong proponent of vigorous antitrust enforcement in the tech sector, among others. He agreed with the notion that interoperability is an important principle in antitrust enforcement and that lack of interoperability can contribute to “moated castles.” In addition, interoperability obligations can be an appropriate part of a consent decree remedy, depending on the case at hand.
On other tech-related topics, Kanter declined to express an opinion. When asked about a recent DOJ speech on standard-essential patents, Kanter refrained from expressing a view on his intentions to withdraw or revise specific policies. Similarly, Kanter refrained from commenting on the ACCESS Act, a bill focused on platform interoperability and data portability that is intended to address barriers to entry in the tech space.
Agriculture and Pharmaceutical Industries
While much attention has been given to Kanter’s statements regarding big tech, Kanter agreed with Senator Chuck Grassley (R-IA) that the agriculture industry is “critical to the health of the country” and would be a high priority for enforcement. Further, when asked what steps he would take to combat the rising cost of prescription drugs, Kanter argued that effective antitrust enforcement keeps prices down and increases access to care, thus “vigorous and responsive enforcement” is necessary.
Antitrust Enforcement Structure & Whistleblower Protection
Kanter took a neutral position on the topic of structural changes to antitrust enforcement, deferring to Congress on whether enforcement should be consolidated to one agency. Additionally, Kanter signaled that he supported congressional oversight of the Division and its contacts with the White House, but cautioned that political influence should not be relevant when determining whether to take enforcement actions. Kanter went on to emphasize the importance of agency funding, saying that the Division required more trial attorneys and more substantive expertise. Further, in response to a query as to whether the benefits that currently exist for criminal whistleblowers should be extended to the civil context, Kanter committed his support of “any effort to ensure that the enforcement authorities have access to relevant information and witnesses.”
What This Means for You
Kanter’s hearing did not reveal any plans for a dramatic shift in enforcement at the Division. To the contrary, Kanter avoided taking some of the more controversial positions espoused by his future FTC counterpart. When asked by Senator Amy Klobuchar (D-MN) about mergers that are too anticompetitive to fix and the role of settlements in antitrust enforcement, for example, Kanter agreed that remedies must work for a settlement to be viable, but did not remark on whether some deals ought not to be considered for remedies altogether. While not wholly immune to the antitrust reform zeitgeist that has swept the nation in recent months, particularly when it comes to a desire for additional antitrust enforcement in the tech sector, Kanter appears to be inclined to take an approach to enforcement similar to prior Democratic heads of the Division.
The Senate is expected to confirm Kanter late this year or in early 2022. Until then, Acting Assistant Attorney General Richard Powers, a long-term member of Division staff, will continue to act in his place.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.