Antitrust issues are increasingly influencing the corporate landscape, with generative artificial intelligence (AI), changes in merger enforcement, and risks associated with antitrust trials being prominent factors for consideration in 2024.
The rise of generative AI has spurred regulatory concern, particularly in relation to AI-enhanced algorithms. Such systems are capable of parsing vast, intricate datasets at a pace far beyond human capacity and identifying patterns yielding valuable insights for their users. However, companies need to ensure their usage of AI-based algorithms remain compliant with federal antitrust laws. The past few months have seen a surge in lawsuits and government probes investigating whether industries are exploiting AI tools for price coordination, meaning a careful balance needs to be struck between the competitive benefits and potential risks of AI.
Another topic of note is the Biden administration’s aggressive approach to merger enforcement. New merger guidelines issued recently by the Federal Trade Commission and the Department of Justice indicate that this approach will persist. Although lacking the force of law, the new merger guidelines – a significant update on those from 2010 – explain the agencies’ approach to transaction and market analysis. They are expected to widen these agencies’ capacity to identify anticompetitive behavior and pursue more frequent enforcement actions.
Additionally, there is a need for companies to rethink the risks related to antitrust trials. Traditionally, fear of severe penalties, such as deal blocks, enforced divestitures, and sizeable damages awards, have driven many defendants to settle. However, a growing trend to take cases to trial rather than settling has been observed, despite the risk of potentially enormous judgments, with results being mixed so far. Among the factors influencing this trend are views that harm theories in antitrust complaints are increasingly challenging to substantiate, making them easier to defend in court, as well as some proposed settlement terms having potentially dire implications for business models.
This article was authored by Craig P. Seebald of Vinson & Elkins, leader of the firm’s global antitrust practice.