Antitrust Investigator: Deep Pockets Gobble with Impunity

March 27, 2021

Kathleen S. O’Neill, senior director of investigations and litigation for the Antitrust Division, told Law 360 that merger filings are coming in at an “unprecedented volume.”

She also said something that indicates that the philosophy of the Antitrust Division has completely abandoned the Consumer Welfare Standard and reverted to the Brandeis-Douglas years of legal analysis by lurid adjective and disturbing verbs.

“To conclude that such transactions cannot be challenged under the antitrust laws is untenable because it would allow dominant firms with deep pockets to gobble up nascent competitive threats with impunity,” she said. “I believe you will continue to see enforcement in this area.”

Ms. O’Neill’s vocabulary is telling. Companies are bad because they are “dominant,” have “deep pockets” and “gobble” nascent competitive threats. Her standards jettison the historic metric of whether or not a given merger or acquisition harms consumers. It overlooks the evidence that the fondest dreams of innovators is to have their start-ups “gobbled up” for billions of dollars by companies with the capacity to realize their services with scale and depth.

​If anything, the larger big tech companies are acting as venture capital funds. As for their dominance, the emergence of blockchain, AI and quantum computing promises to disrupt the current ecosystem. We should let this wave of disruption unfold before throwing out almost a half-century of judicial doctrine that has served us well.