The new Lina Khan
Donald Trump’s picks for merger enforcement is complete: The president-elect has chosen Andrew Ferguson to lead the Federal Trade Commission, making him one of the nation’s top antitrust cops — and an almost polar opposite to the agency’s current leader, Lina Khan.
The choice validates the view of corporate deal makers that a second Trump administration would be good for M.&A., after Khan challenged big takeovers to help shift antitrust case law. (More on that below.) But Ferguson shares a belief with his predecessor: the need to crack down on Big Tech.
Ferguson will almost certainly scrap Khan’s signature merger policy. The departing F.T.C. chair — along with Jonathan Kanter, the head of the Justice Department’s antitrust division — made a point of opposing far more mergers than many of her forebears. Not every case ended in victory, but legal experts said that her approach helped reshape aspects of U.S. competition law and slowed down the pace of M.&A.
That approach is likely to end under Ferguson, an F.T.C. commissioner who has objected to Khan’s activist strategy. (He’ll have the votes at the agency, with Trump having also picked Mark Meador to join as a commissioner, most likely giving Republicans a majority.) In a pitch for the agency leadership position seen by Punchbowl News, Ferguson, who doesn’t need Senate confirmation, said he would “reverse Lina Khan’s anti-business agenda.”
Wall Street has been eager for looser merger enforcement, hoping to profit from increased deal activity and other deregulation. “I am quite optimistic that this administration is going to run a very, very pro-growth agenda,” David Solomon, Goldman Sachs’s C.E.O., said on Tuesday at the Reuters NEXT conference. He added that deal volume in 2025 alone could exceed the 10-year average.
But Ferguson may follow Khan in cracking down on tech giants — in a different way. Under Khan, the agency sued the likes of Amazon and Meta, accusing them of abusing their dominant market share. As recently as last month, she reportedly signed off on a wide-ranging investigation into Microsoft over cloud computing, artificial intelligence and more.
Ferguson shares Khan’s skepticism of Big Tech, but more because of what he says are efforts to silence conservative views online — a view shared by Trump, Vice President-elect JD Vance and many other Republicans. (Brendan Carr, Trump’s pick to lead the Federal Communications Commission, has also signaled that this will be a key priority.)
“We will end Big Tech’s vendetta against competition and free speech,” Ferguson wrote on X last night.
HERE’S WHAT’S HAPPENING
The suspect in the UnitedHealthcare C.E.O. killing fights extradition to New York. Luigi Mangione appeared in court in Pennsylvania and could remain in custody there for weeks after he was charged in Manhattan with second-degree murder, forgery and three gun charges. An internal police report obtained by The Times said his manifesto positioned the shooting of Brian Thompson, who was laid to rest this week, as a direct challenge to the health care industry’s “alleged corruption.”
SpaceX’s valuation is said to soar to about $350 billion. A sale of about $1.25 billion worth of stock held by insiders was priced at about $185 a share, according to Bloomberg, up 65 percent from just three months ago. Businesses tied to Elon Musk have been bolstered by his close ties to President-elect Donald Trump; the valuation also reaffirms SpaceX’s status as the world’s most valuable private start-up.
A federal judge rejects the sale of Infowars to The Onion’s parent company. Judge Christopher Lopez of federal bankruptcy court in Houston said the transaction for Alex Jones’s website didn’t maximize the amount that Jones’s creditors — including families of the Sandy Hook school shooting — would receive. Those families had backed The Onion’s bid for Infowars, which would have seen the publication turned into a site mocking the kind of conspiracy theories that Jones spreads.
An 11th-hour win for tough M.&A. enforcement
The Lina Khan era of taking on more megadeals is drawing to a close. But the F.T.C. scored one more win before the end of her tenure: A federal judge and a state judge both blocked Kroger’s $24.6 billion deal to buy Albertsons, a rival grocery chain.
While the Trump administration is likely to embrace a more relaxed approach to policing M.&A., it’s unclear whether Kroger will try to strike another major takeover.
The proposed Albertsons sale was “presumptively unlawful,” Judge Adrienne Nelson of the U.S. District Court in Oregon wrote in her decision to block the deal on a preliminary basis.
The F.T.C. had argued that the deal would unfairly reduce competition in an already concentrated industry — Walmart, Kroger, Costco and Albertsons account for about half of U.S. grocery sales — and could lead to higher prices. Nelson agreed, writing that Kroger and Albertsons “engage in substantial head-to-head competition.”
Markets appear to believe that the takeover is over. The deal isn’t yet dead on the federal level, since it’s now headed to internal F.T.C. administrative proceedings to determine whether the transaction is legal. But the federal and Washington State decisions create yet more legal headaches for Kroger and Albertsons, and a decision by a Colorado state judge on a challenge to the takeover there is pending.
Shares in Kroger jumped 5 percent on Tuesday after the decisions, signaling investor belief that the company will walk away. Shares in Albertsons fell 2.3 percent.
It’s another win for the F.T.C., which in October successfully blocked the $8.5 billion sale of Capri, the owner of the Michael Kors luxury label, to Tapestry, the parent company of Coach and Kate Spade.
What comes next? A spokeswoman for Kroger, which had appeared committed to seeing the deal through, said that the company was reviewing its options. But the company’s C.E.O., Rodney McMullen, told analysts last week that if the deal were blocked, “we’ll continue to go on.”
He added that another megadeal may be off the table: “I don’t know that we would be out there trying to find what’s the next Albertsons,” he said.
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In other M.&A. news: Walgreens is said to be in talks to sell itself to Sycamore Partners, the retail- and consumer-focused private equity firm.
What to watch for in Wednesday’s inflation report
The last batch of inflation data before the final Fed meeting of the year is set to be published this morning and could provide the critical puzzle piece officials need on whether to cut interest rates next week, The Times’s Jeanna Smialek writes for DealBook.
Policymakers will make the decision at their gathering, which ends on Dec. 18. Inflation has been cooling after peaking at 9.1 percent in 2022, but progress has stalled in recent months. The Consumer Price Index will be published at 8:30 a.m. Eastern and will reveal if that stubbornness continued in November: The index overall is expected to climb 2.7 percent from a year earlier, up from 2.6 percent last month.
That’s higher than the Fed’s 2 percent inflation target, which is measured using a separate but related index. While policymakers expect that inflation will cool further, they are watching warily in case it continues to plateau.
Officials have recently eased off the economic brakes by lowering rates twice. They think borrowing costs — now at 4.6 percent — still have room to come down. Investors expect a cut next week. But with consumers spending strongly, the job market holding up, and inflation looking slightly sticky, a reduction this month is not quite guaranteed, and it is unclear how rapidly the Fed will adjust going forward.
“Growth is definitely stronger than we thought, and inflation is coming a little higher,” Jay Powell, the Fed chair, told Andrew last week at the DealBook Summit. “The good news is that we can afford to be a little more cautious as we try to find neutral.”
Here’s what to watch:
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Odds on a rate cut: Investors broadly expect the Fed to cut interest rates at this month’s meeting. But that could change depending on Wednesday’s report. If inflation is benign, a rate cut will be in the cards. If it is hot, they might lower the odds.
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2025 outlook: The big question is how much and how quickly the Fed will cut rates next year. Inflation will inform that. Fed officials will release economic projections on the path ahead after their meeting.
G.M. turns off Cruise control
Shares in General Motors are up in premarket trading on Wednesday, after the company said it would fold its Cruise robotaxi unit into its other operations.
The move underscores the challenge that G.M. — which spent billions on the division’s autonomous vehicles — faced competing against deep-pocketed tech companies including Google’s Waymo, Tesla and Amazon that started from scratch.
The robotaxi industry “is not our core business and is very expensive,” Mary Barra, the company’s C.E.O., told analysts on Tuesday. The carmaker had already spent $10 billion on Cruise, after acquiring the start-up for $1 billion in 2016, but Barra said that any payoff was too far in the future to keep pouring money into the business. (No robotaxi operation currently makes money.)
Cruise will be incorporated into the wider company, saving $1 billion a year. G.M. said that would help formerly separate teams work together on developing fully autonomous vehicles for private owners.
Cruise and G.M. have been under pressure. Cruise suspended a self-driving taxi service in San Francisco last year after one of its cars hit and severely injured a pedestrian.
Still, Tuesday’s decision didn’t sit well with Kyle Vogt, a Cruise co-founder who resigned as its C.E.O. after the San Francisco incident. “In case it was unclear before, it is clear now: GM are a bunch of dummies,” he posted on X.
G.M. itself has struggled with slowing sales at home and abroad. The carmaker said last week that it would take a $5 billion accounting hit because of struggles in its China business, which has lost market share to local rivals that accelerated production of electric and hybrid vehicles.
Cruise’s demise removes a rival to tech giants’ robotaxi projects. Waymo is still the leader in self-driving taxis, registering about 100,000 rides a week in California and Arizona.
Tesla has emphasized that robotaxis are a key focus for the future, even as analysts question when the company will actually put its cybercabs on the road. The Trump administration is said to be prioritizing looser rules for self-driving cars, a key policy goal of Elon Musk.
THE SPEED READ
Deals
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Bain raised its offer for Fuji Soft to $4.3 billion, extending a battle with KKR for control of the Japanese software company. (Bloomberg)
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Qatar’s $500 billion sovereign wealth fund plans to strike bigger deals and sees more opportunities in the United States and in sectors including artificial intelligence and health care. (FT)
Politics and policy
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President-elect Donald Trump said he would expedite regulatory approval for investors who spent at least $1 billion in the United States. (Reuters)
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The Bureau of Labor Statistics blamed old technology and insufficient funding for a series of high-profile missteps. (NYT)
Best of the rest
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What happened when Bernard Arnault of LVMH, a filmmaker and a spy met in a Paris court? (NYT)
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“How Years of Reddit Posts Have Made the Company an A.I. Darling” (WSJ)
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The post The F.T.C.’s Next, More Deal-Friendly Leader appeared first on New York Times.
