Big deals are waiting on the runway as Wall Street and the business world anticipate how the presidential election will change antitrust enforcement.
President Biden has taken an aggressive approach to policing deals that some have called overreach and others have praised as a necessary return to scrutiny of the power wielded by big business. Negotiators say they are delaying some deals in hopes of a more lenient approach in the next administration.
Doha Mekki is on the ground executing the strategy. She has worked at the Justice Department for three administrations: as a trial attorney under President Obama, in the front office under President Trump, and now as senior deputy attorney general under Jonathan Kanter.
In a recent interview at the Penn Carey Law Antitrust Association’s annual symposium, DealBook spoke with Mekki about the department’s big wins and losses, and what could happen if Biden gets another four years. This interview has been edited and condensed for clarity.
you led the lawsuit that successfully blocked JetBlue’s acquisition of Spirit Airlines (the decision is appealed). In a case like that, how do you weigh the risk of a company failing because it is too weak on its own against the risk of a more established industry?
there is an entire antitrust doctrine that specifically deals with companies that are not financially viable. And it should be noted (and certainly the court noted) that the company did not make that argument. In fact, I think what Spirit projected to its shareholders for a long time was that they still intended to grow.
But a company probably doesn’t want to argue in court that a deal is life or death, because it probably doesn’t want to indicate that to shareholders.
I’m probably contractually obligated to say that you should always be honest.
Several companies, including JPMorgan Chase, abandoned Climate Action 100+ this week, citing antitrust concerns, among other reasons. Some regulators Abroad they have protected green initiatives from antitrust enforcement. Should the United States do the same?
We have a first antitrust law from 130 years ago and a Clayton Act from about 110 years ago, and nowhere in that statute are we allowed to take non-economic considerations into account. And that’s a good thing, because we, as an agency, are not really prepared to make those judgments.
Would a deal that promised a more diverse board or management be viewed more favorably?
We are quite clear that we do not have the capacity to take those types of considerations into account. To the extent that there is any suspicion that agencies elevate or scrutinize these types of agreements less, in fact the opposite is true. In reality, it is the companies that propose these social values that they intend to promote through their agreements. And many times we say: “Thanks, but no thanks. “We cannot consider that.”
If President Biden is re-elected, what will be first on the agenda?
This year everything will continue as usual. We have research that we are very excited about. We have potential enforcement actions that we are very excited about.
As Are you evaluating the success of the last four years?
We have recommitted ourselves to the real law, as written by Congress and interpreted by the Supreme Court and appeals courts. We have been concerned that the law has truly been disintermediated by political objectives and preferences that cannot really be justified by a verbatim reading of statutes and case law.
Is it the fact that there are fewer offers a sign of success?
Overall, I’d like to know how much this is about antitrust enforcement versus the macroeconomic environment.
Anecdotally, the number of antitrust settlements has also decreased, and that’s good for everyone. And it’s also allowed us to pursue a more robust conduct record, which is a really important part of the agency’s mission.
It has also had some high-profile losses. Will that change your willingness to litigate?
It is important as we are losing. I don’t know of a time when we have lost squarely on the law, even in cases like UnitedHealth Group-Change, where we had not previously pursued a theory of harm based on competitively sensitive information. The theory stuck, right? We have tended to miss out on how persuasive we are with our facts.
We take that feedback in stride, internalize it, and try to make better arguments in the future. I think you see it at Penguin Random House-Simon and Schuster, where we rely on stories about how mergers hurt authors and threaten to harm whose ideas are published. You see it on JetBlue-Spirit.
We prefer to win, without a doubt. But those hard lessons have truly made us better, and we are going to continue to be better storytellers because that is our obligation to the audience. —Lauren Hirsch
IN CASE YOU HAVE MISSED IT
Nvidia surpassed Alphabet and Amazon, making it the third largest listed company in the US with a market capitalization of approximately $1.8 trillion. Its shares have risen nearly 50 percent this year, adding about $560 billion to its market valuation since Jan. 2, as investors bet it will make huge profits from building the chips that power data services. artificial intelligence.
Elon Musk continued his escape from Delaware. The billionaire moved the incorporation of private company SpaceX to Texas after a Delaware judge voided his nearly $56 billion Tesla salary. It’s not yet clear whether Tesla itself will be able to make the same trip.
OpenAI introduced a new video tool called Sora, which generates high-quality videos from text prompts. Investors are still eager to pour money into generative AI companies. On Friday, The New York Times reported that OpenAI had closed a deal with Thrive Capital that values it at $80 billion or more, nearly tripling its valuation in less than 10 months.
Why do you keep talking about that Dunkin’ ad?
A week after the Super Bowl, the marketing industry is still buzzing about the ad Dunkin’ ran during the game and its numerous side effects. (In case you’ve been living under a rock: Ben Affleck tries to impress Jennifer Lopez with an embarrassing song and the help of her cronies Matt Damon and Tom Brady.)
Dunkin’ has flooded the internet with bonus content, including images of Affleck not being able to catch a pass from Brady (Dunkin’ told DealBook it wasn’t written) and a collaboration with the social media influencer Charli D’Amelio. The brand sells pink and orange tracksuits inspired by the one Affleck wore and has released the full song, “Don’t Dunk Away at My Heart.” In total, the campaign has accumulated more than 12 million views on YouTube.
“We believe this widespread buzz highlights the ad’s ability to not only capture but also hold the audience’s attention,” Jill Nelson, Dunkin’s chief marketing officer, told DealBook in an email, adding that the company sold more donuts on Valentine’s Day this year than any other day in history.
The campaign demonstrates how marketing around the big game has changed.
“There is immense power in using the Super Bowl as a core,” Derek Rucker, a professor at Northwestern’s Kellogg School of Management who studies effective advertising, told DealBook. With the average 30-second Super Bowl ad space costing $7 million, brands are looking to generate campaigns on other channels such as social media, in-store promotions and other ads.
It’s easier to start selling a Dunkin’ brand tracksuit if there are already millions of people involved in the Ben-Jennifer plot. “There is a large base of people who understand ‘Phase A’ of the campaign,” Rucker said.
Talent has more and more participation in the game. Artists Equity, the production company Affleck and Damon founded, handled almost every aspect of the campaign. (Affleck and Gerry Cardinale, founder of RedBird Capital, spoke at the DealBook conference in 2022 right after announcing the company.) When Artists Equity started, actors said they intended to give talent a share of the profits.
The concept behind the Dunkin’ ad was initially introduced as part of a commercial that would run during the Grammys. Dunkin’ liked the idea so much that “it inspired us to turn the narrative into two separate chapters and do a Super Bowl ad,” Nelson said. (In the Grammy announcement, Affleck reveals his aspiration to become a pop star.)
“Some of the most engaging content didn’t even appear in the final commercials because we reserved it for social media,” Nelson added.
Four things we learned from “super communicators”
What makes some experts at providing feedback, solving problems, or communicating strategies? In “Supercommunicators,” out Tuesday, Charles Duhigg answers that question based on decades of research.
“Supercommunicators are not born with special abilities, but they have put more thought into how conversations unfold,” he writes. Here are four lessons from the book:
The right question can show that you are listening. A key to developing an emotional connection is “deep questions that delve into values, beliefs, judgments, or experiences,” Duhigg writes. (Think “what is the best part of your job?” instead of “where do you work?”)
You can also demonstrate your understanding by asking questions, summarizing what you heard, and asking if you understood it correctly, a technique called “looping.”
The goal of conflict conversations is to understand, not win. Helps demonstrate understanding through “loops”; recognize points of agreement; and speak specifically rather than in broad statements.
Effective online speech requires a new approach. The speech in Letters and telephone conversations have evolved. “We have developed almost unconscious norms and behaviors: the tone of our voice when we answer a phone; the signature on a letter that indicates our affection for the reader, that facilitates communication,” Duhigg writes.
He hopes that online communication will develop similar norms, such as being very polite and avoiding sarcasm and criticism.
Difficult conversations need structure. Duhigg suggests establishing guidelines; share your goals for the conversation and ask others to share theirs; and acknowledging discomfort is expected, and that’s okay.
Quiz: Startups wanted
The partners of Y Combinator, the startup accelerator that incubated Airbnb, Dropbox and DoorDash, have published their latest “startup application”, a wish list of the type of companies they would like to invest in.
Which of these categories of startups did No make the list?
Find the answer at the end of this newsletter.
Sara Kessler contributed with reports.
Thank you for reading! See you on Monday.
We would like to receive your comments. Email your ideas and suggestions to dealbook@nytimes.com.
Quiz answer: B.