Biden’s tech M&A antitrust crackdown may extend into Trump administration

When Donald Trump starts his second term on January 20, there may be some big shifts happening in the tech world, especially when it comes to mergers and acquisitions. For those hoping for fewer regulations, they might be in for a surprise.

Under the Biden administration, there has been a sense of increased scrutiny and enforcement when it comes to antitrust matters. This has left many in the tech industry feeling uneasy. Even those who supported Vice President Kamala Harris in the past were not thrilled about Chair Lina Khan’s presence at the FTC.

According to Andrew Luh, a partner at Gunderson Dettmer law firm, there has been a noticeable increase in objections to proposed transactions under the current FTC. Some high-profile deals, like Microsoft’s acquisition of Activision-Blizzard, have faced challenges, leading to a more cautious approach among companies considering mergers.

Despite these high-profile cases, the overall pace of tech mergers and acquisitions hasn’t slowed down significantly. Luh mentioned that his firm works on about 150 deals a year, which is substantial. In fact, according to S&P Global, the total number of large-scale tech, media, and telecom acquisitions valued over $500 million has been higher under Biden than during Trump’s first term.

While there has been added scrutiny, the average number of days it takes to complete these deals has only seen a slight increase under Biden. Economic factors, such as post-COVID uncertainties, play a role in the fluctuation of deal activity as well.

Moving forward, experts like Lori Bistis and Andrew Luh anticipate a continuation of divestitures and joint ventures as companies navigate the shifting regulatory landscape. These alternatives to traditional mergers may face fewer hurdles while still allowing companies to extract value from non-core assets.

As the Biden-era regulations solidify, it’s expected that M&As will continue to face more challenges and complexities. Divestitures and joint ventures are likely to become more common as companies seek efficiency and navigate the evolving regulatory environment. The legacy of Chair Lina Khan’s tenure at the FTC is expected to leave a lasting impact, shaping the landscape of tech mergers and acquisitions for years to come.