Federal Antitrust Agencies Ramp Up Hiring Efforts and Request Additional Funding to Support Aggressive Enforcement Agendas

The Department of Justice (DOJ) and the Federal Trade Commission (FTC) have made no secret of their intentions to revamp antitrust enforcement and merger control efforts across wide swaths of the U.S. economy to curtail what they view as monopolistic conduct by some of the country’s largest businesses. Consistent with President Biden’s July 2021 Executive Order on Promoting Competition in the American Economy, the agencies have been tasked with using the full breadth of their authority to investigate and prosecute potentially anticompetitive conduct and transactions in the technology, health care, pharmaceutical, agriculture, banking, and consumer finance sectors. In furtherance of those goals, and as previewed in a previous alert relating to the agencies’ enhanced corporate enforcement strategies, over the last several months, the enforcers have renewed their hiring efforts to build larger legal teams and internal infrastructures, which may foretell increased antitrust activity from the agencies in the coming years.

Recent Hires and Retention Challenges

In recent months, the DOJ has recruited and hired partners and associate trial attorneys from some of the country’s best-known law firms. According to a September 2022 Bloomberg Law article, Jonathan Kanter, who leads the DOJ’s Antitrust Division, has hired away several of his own former colleagues from Weiss, Rifkind, Wharton & Garrison LLP, with other senior-level recruits coming from Kirkland & Ellis LLP, Latham & Watkins LLP, Davis Polk & Wardell LLP, Winston & Strawn LLP, as well as from plaintiffs’ firms Hausfeld LLP and Robins Kaplan LLP.

However, despite growing demand for antitrust attorneys at the agencies, the FTC in particular has had difficulty retaining its existing talent pool. A July 2021 article by Washington journalist Bruce Love explained that many of the country’s most prestigious private law firm antitrust practices, as well as top technology companies like Amazon and Meta Platforms, were seeing significant upticks in the number of resumes they received from FTC attorneys, which they largely attributed to unease surrounding the appointment of FTC Chair Lina Khan and her novel and unusually aggressive approach to antitrust enforcement. Speaking on the condition of anonymity, one practice group leader summarized the complaints he had heard from existing staff attorneys who felt they were being told that “the mission they’ve pursued and the policies they’ve implemented” had been wrong, and that new leadership had created a “tense environment” within the agency. That said, the same practice leaders also acknowledged that increased demand for experienced agency attorneys in the private sector likely helped speed the exodus of FTC attorneys from their public service careers.

2023 Budget Requests

Consistent with the agencies’ intentions to increase their antitrust enforcement and merger control activities, they each have requested significant increases in their budgets for 2023. Earlier this year, the DOJ’s Antitrust Division requested $273 million to fund its FY 2023 activities, which represents a 35.7% increase over its 2022 budget, to “fully address its historically high investigative, litigative, and program support workload,” and support the “growing volume and complexity of its investigations and litigation.” The request allocates $27.4 million for new hiring, including for 112 new Antitrust Division attorneys, as well as $38.5 million for modernizing outdated IT infrastructure that currently “strains to support litigation against sophisticated defendants” and “threatens the ability of the [Antitrust Division] to execute its mission.”

During a recent Senate Judiciary Antitrust Subcommittee oversight hearing on September 20, 2022, Assistant Attorney General Jonathan Kanter explained that the DOJ would litigate more mergers this year than during any fiscal year on record, and that it remains “committed to bringing difficult cases,” although it “lack[s] the resources [it needs] to fully address these challenges.” He also emphasized that the Antitrust Division alone has 350 fewer people today than it did in 1979.

Similarly, the FTC has requested $490 million in its 2023 budget request, an increase of 30.1% over this year’s budget. The budget request contemplates the hiring of approximately 300 new employees, many of whom will be attorneys who will be cross-trained to support both the competition and consumer protection missions of the agency. Like the Antitrust Division, the FTC’s total headcount is down one-third from 1980 levels. The 2023 budget also is intended to cover “additional expert witness[es]. . . given [its] need to support expert work in litigation, particularly in cases against large, well-financed defendants.” During a May 18, 2022, hearing before the House Appropriations Subcommittee, Chair Khan supported her agency’s budget request by presenting data showing that “every $1 of the FTC’s cost returned an estimated $36 in FTC-provided benefits to consumers.” Citing the FTC’s current antitrust lawsuit against Meta Platforms, Khan emphasized that, at current staffing levels, the FTC is “outgunned one to 10.”

Notably, a large portion of the DOJ’s and the FTC’s respective funding is derived from the Hart-Scott-Rodino (HSR) premerger filing fees paid by companies planning to merge or engage in significant transactions. Based on current filing fees, the DOJ has estimated filing fee revenues of approximately $549.0 million for 2023, which revenues will be divided evenly between the DOJ and the FTC. Longer term, the Merger Filing Fee Modernization Act, which was passed in the U.S. House of Representatives in September 2022, and also has been introduced in the U.S. Senate, would increase filing fees for the first time since 2000 and potentially could generate significant new revenues for both agencies. For example, for proposed transactions over $5 billion, the Act would increase filing fees from $280,000 to $2.25 million, more than a 700% increase to the top fee bracket.

Takeaways

The DOJ’s and FTC’s recent hiring efforts and budget requests reflect their respective missions under President Biden’s administration to make aggressive moves to reign in monopolistic and otherwise anticompetitive corporate conduct. Businesses and their leadership should expect the bolstered agencies will now have more resources to pursue alleged bad actors both under traditional and novel theories of antitrust law, and that proposed transactions that once may have evaded serious agency review will now be subject to additional scrutiny. Questions regarding how the agencies’ aggressive antitrust agenda is likely to affect individual businesses should be addressed to antitrust counsel.