In-house competition lawyers interviewed as part of the latest edition of GCR’s Corporate Counsel survey have warned of increased risk, uncertainty and politicisation in antitrust enforcement.
Shining a spotlight on some of the world’s best in-house competition attorneys, the survey presents a rare snapshot of changing enforcement winds across multiple jurisdictions and sectors.
In-house antitrust lawyers from the likes of Meta, Microsoft, VMware, HSBC, American Express, GSK, Amgen, Axel Springer, Deutsche Telekom and Siemens paint a varied picture. They grapple both with very similar and very distinct issues on a daily basis – but almost uniformly, agree that risk and uncertainty have increased, compliance is harder, and enforcement is expanding both geographically and thematically.
Fresh from celebrating the successful $68.7 billion acquisition of Activision, David Smutny, head of M&A and antitrust within Microsoft’s competition and market regulation group, offers first-hand insight into these “interesting times”.
“I think there’s little question that the antitrust risks and scrutiny facing companies have increased in recent years,” he says. “Competition enforcers in the US and around the globe are flexing their muscles and pursuing increasingly novel theories of harm, and some jurisdictions are imposing quasi-competition regulatory regimes – such as digital markets regulations – on top of existing laws.”
Navigating this increased scrutiny and adapting to the changing environment has been a challenge, Smutny adds.
“These are definitely some very interesting antitrust times,” he says. “Like other large technology companies, Microsoft has had to adapt to the changing regulatory environment, heightened scrutiny of deals and activities, and shifting rules. Fortunately, the company has worked hard over many years to be proactive and to try to embrace these kinds of changes, so I think we are actually a little ahead of the game.”
Smutny notes that increasingly politicised antitrust enforcement has, to some extent, affected the instructions his company gives to external counsel.
“Relying on what you know about ‘the law’ for a given scenario is increasingly only the beginning of the analysis,” he says. “We work with extremely talented external counsel and, like us, they have been working to adapt to this new world quickly. They understand that the rules of the game have changed and that they need to think creatively and proactively to help us navigate these new challenges.”
Matt Marquis, VMware’s vice president and deputy general counsel responsible for competition, also features in the survey. With inside knowledge of recent merger investigations into the company’s €56 billion sale to Broadcom, he says it is key, as far as possible, to dial down the “political” nature of a deal.
“Without a doubt, it is quite common to turn on the TV and see the lead story covering an antitrust review or litigation filed. The prominence of antitrust policy debates is impossible to overlook,” Marquis says. “One is not blind to politics, but we find it far more effective to let the facts speak for themselves.”
Meanwhile, Barbara Blank, Meta’s director associate general counsel for competition and regulatory matters in Washington, DC, says actual antitrust risk itself hasn’t necessarily increased, but regulatory uncertainty has.
“Right now, companies across all industries are in a period of significant uncertainty – especially with respect to M&A,” she says. “It’s becoming harder to anticipate whether a deal will raise concerns or be cleared, and we are seeing a number of deals that are subject to conflicting outcomes globally, which is highly unusual.”
Meta’s antitrust concerns are similar to many companies, in that they relate to doing deals, launching products and competing in a rapidly changing environment, Blank adds.
“When clarity is lacking, or different enforcers are taking different positions or imposing different – sometimes conflicting – standards, that adds risk across the board, even when the business is doing things that we know to be good for our customers and partners,” she says.
Advice from external counsel is more wide-ranging and less predictable as a result, Blank says.
“We certainly need more external counsel support on a greater swathe of issues,” she says. “And, because of the arbitrariness and conflicts we’re seeing among regulators, especially on the deal side, it also means that the advice we get back is often necessarily less predictive.”
Long-standing, more traditional industries are also facing a host of new challenges. Sabrina Frank, senior legal counsel responsible for competition and M&A at Axel Springer in Germany, says the most pressing question facing the media giant is how to deal with the ongoing transformation of the sector.
“Markets are changing through evolving reader and user behaviour, and so are business models and relationships with suppliers and competitors,” she says. “This raises all kinds of antitrust questions. Also, changes to be brought about by the increasing use of AI are still to come.”
The platform economy is at the centre of a new regulatory focus and competition authorities are more self-assured – so much so, that antitrust as a topic of discussion is now almost mainstream, Frank says.
“This means that, finally, more people understand what you do when you say you are an antitrust lawyer,” she jokes.
For Amgen’s US-based chief antitrust counsel Will Diaz, an increase in noise surrounding antitrust isn’t necessarily cause for any concern.
“The way that the courts and agencies interpret antitrust laws continues to evolve over time,” he says. “Ultimately, challenges to business practices must go through the judiciary and be subject to legal precedent and the rules of evidence. Our judges and juries scrutinise plaintiffs’ allegations and expect them to meet their burdens of proof, and there is little room for politics in these venues.”
Shifting enforcement winds have major repercussions for emerging industries and rapidly growing sectors, especially those that are key to economies becoming more sustainable, says Monica Hilseth-Hartwig, a competition lawyer at Norsk Hydro in Norway.
“Succeeding in industries like renewables, batteries and hydrogen calls for significant investments and risk tolerance, which can be a demanding undertaking for any single company,” she says. “Partnerships may be essential for success… While partnerships hold great potential, they also raise intricate competition law considerations.”
Work by competition authorities to update and refine regulations and guidelines for applying the competition rules to sustainability agreements is welcome, but the landscape is evolving rapidly and time is of the essence, she says.
“Substantial investments are anticipated, and many emerging industries will rely on partnerships and collaborations to engage in new technologies and sectors crucial for this shift,” she says. “A discussion remains on whether the current competition law framework provides sufficient room and clarity to facilitate the green transition.”
Keira Campbell, chief antitrust counsel at American Express, and Peggy Leung, regional competition head at HSBC in Hong Kong, are both mindful of shifting enforcement approaches and their impact on financial services markets and beyond.
“Increasingly, antitrust enforcement is not limited to a couple of jurisdictions – historically, it was limited to the US and the EU,” says Campbell. “This means an antitrust practitioner has to monitor and track developments around the world, which is a huge challenge given the volume of activity happening across sectors and geographies.”
Antitrust matters have always had the potential to be front-page news, but the ubiquitousness of antitrust coverage these days reflects the heightened focus by regulators, she says.
And Leung says risk has increased not just in traditional antitrust hubs, but especially in Asia, where more jurisdictions are enacting competition law regimes.
Within this context, HSBC’s main antitrust concerns are “unharmonised rules where some harmonisation will be beneficial”, she adds.