In July, Roger Alford, Deputy Assistant Attorney General for Antitrust, and William Rinner, the Antitrust Department’s head of merger enforcement were fired. The reason for the firings was “insubordination” over the department’s dropping of a lawsuit challenging Hewlett-Packard Enterprises (HPE)’s purchase of fellow tech company Juniper.
The lawsuit blocking the merger was the first antitrust suit filed in the Trump 2.0 Administration. The suit was motivated by concerns that HPE and Juniper are two of only three companies that provide internet services for large organizations—like major corporations and universities. However, even after it acquires Juniper, HPE will control less than 30% of the WiFi market.
The Justice Department dropped the suit after HPE agreed to sell its Instant One business. Questions about the settlement were raised by the fact that Instant One doesn’t provide WiFi to large organizations. Further questions were raised by the fact that the settlement was not signed by any of the staff attorneys who worked on the case. However, Deputy Attorney General Chad Mizzle, Deputy AG for Antitrust Gail Slater, then-Deputy Attorney General Roger Alford, and head of Merger Enforcement William Rinner all signed the agreement—even though all four objected and (according to leaks from anonymous sources) argued against accepting the deal.
Signing the settlement deal did not prevent Rinner and Alford from being fired. Eyebrows were also raised by revelations that HPE paid MAGA influencers to lobby department officials to settle the case before it went to trial. In a speech before the TPI Aspen Forum, subsequently adopted for an article in Unheard, Alford said that the HPE-Juniper case was a skirmish in a larger war between “genuine MAGA reformers” and “MAGA in name only” lobbyists. According to Alford, genuine MAGA reformers are committed to an antitrust policy that reflects the populist agenda—while the “MAGA in name only” types support the pro-big business status quo. He describes the MAGA reformers as “legitimate lobbyists who have expertise and perform traditional functions of education and engagement.” In contrast, the “MAGA in name only” faction is represented by “bullying lobbyists with no relevant expertise who are perverting law enforcement through money, power, relations, and influence.”
Alford may be correct about individual cases where the advocates for approving a merger or acquisition are motivated by a paycheck. However, it is just as likely that advocates for denying a merger or acquisition are on the payroll of a company that would benefit from continuing to compete with two smaller companies rather than one large one. Therefore, the division between true believers and hired guns is not as simple as Alford claims. He also insults those whose study of economics has led them to understand that an aggressive approach to antitrust laws may provide some short-term benefits, but will cause long-term harm for workers, investors, consumers, and the general economy. In fact, some might say it is the free market advocates who offer expertise in the subject of antitrust. This is backed up by the fact that the aggressive approach to antitrust policy favored by Alford overturns the consumer welfare standard.
This standard judges a merger, acquisition, or other transaction by how it affects consumers—which makes sense since a business' success or failure in the free market is ultimately determined by how well it serves consumers. While it was developed by conservative economic and legal scholars led by future Judge Robert Bork, the consumer welfare standard enjoyed bipartisan support for almost half a century.
Alford and his allies also ignore the fact that the First Amendment protects the right to petition the government for redress of grievances. This means that businesses have a Constitutional right to hire lobbyists and others to attempt to influence government policies. HPE was exercising their constitutional right to petition the government when they hired MAGA influencers to plead their case before Justice Department officials.
Based on what we know now, the controversy over the Justice Department’s approval of HPE’s acquisition of Juniper is not a scandal. Rather, it reflects a genuine policy difference between those in the MAGA world who support an aggressive use of antitrust tools that parallels policies adopted in the Biden years—and those who support a return to something along the lines of the consumer welfare standard. The outcome of this debate will go a long way toward determining whether the Trump Administration succeeds in making the American economy great again.
