FTC’s “Avant Garde” Antitrust

May 7, 2024

Jeffrey Oliver of Baker Botts LLP told Bloomberg that FTC’s bar on Scott Sheffield, founder of Pioneer, from serving on the board of its merged company with ExxonMobil is “avant garde antitrust.”

“It’s way for them to appear tough on a deal that they couldn’t find a route to try and block on any other grounds,” Oliver said.

Hmmmm. Does this Federal Trade Commission under Lina Khan actually need any economic or legal grounds to block a deal? Many of their suits, like the ones against Apple, Amazon, Meta, and Google, are thinly justified, resting on novel legal theories. ExxonMobil, which can trace its ancestry to Standard Oil, would surely be on the wish list of any progressive antitruster putting together a calendar of cases. So why didn’t Khan pull the trigger on that one?

My guess is that the FTC let the merger proceed because the administration feared the political talking points against President Biden in a tight election if gasoline prices should jump. Characterizing Sheffield as conspiring against the market, however, gives Khan and President Biden some degree of cover from the progressive allies they fear. “Okay,” they can say, “we let them go – but we spanked them!”

One thing is for certain. With a slew of oil-and-gas mergers pending before FTC –

Chevron, Occidental Petroleum, Chesapeake Energy, and Diamondback – expect to see more searches for political cover for any deals that are allowed, more executives to be defamed. And I wouldn’t recommend taking the approval of the Exxon-Pioneer deal as a sign the FTC will necessarily greenlight the remaining deals.

This administration is notoriously anti-(U.S.) energy and anti-business. Don’t mistake a tactical retreat for reproachment.