Big deals await on the tarmac 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 excessive and others have hailed as a necessary return to the control of power exercised by big business. Negotiators say they are holding back some deals in the hope of a more lenient approach in the next administration.
Doha Mekki is on the ground and executing the strategy. She worked at the Justice Department under three administrations: as a solicitor under the Obama presidency, in the front office under the Trump presidency, and now as principal deputy assistant attorney general under Jonathan Canter.
In a recent interview at the annual Penn Carey Law Antitrust Association symposium, DealBook spoke with Mekki about the department’s big wins and losses and what could be in store if Biden takes another four years. This interview has been edited and condensed for clarity.
You drove the lawsuit that successfully blocked JetBlue’s acquisition of Spirit Airlines (the decision is under appeal). In such a case, how do you weigh the risk of a company failing because it is too weak on its own against the risk of a more consolidated industry?
Exists an entire antitrust doctrine dealing specifically with companies that are not financially viable. And it should be noted—and the court certainly noted—that the company did not make that argument. In fact, what Spirit, I think, projected for a long time to its shareholders 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 signal that to shareholders.
I’m probably contractually bound to say that you should always be honest.
Several companies, including JPMorgan Chase, withdrew from the Climate Action 100+ this week, citing antitrust concerns among other reasons. Some regulatory authorities abroad have protected green initiatives from antitrust enforcement. Should the United States do the same?
We have a 130-year-old First Antitrust Act and a Clayton Act that is about 110 years old, and nowhere in that statute are we allowed to consider non-economic considerations. And that’s a good thing, because we as an organism aren’t really built to make those judgments.
Would a deal promising a more diverse board or management be viewed more favorably?
We are quite clear that we do not have the capacity to take such considerations into account. To the extent that agencies are suspected of increasing or scrutinizing these deals less, the opposite is actually true. In fact, companies that project these social values intend to promote through their agreements. And we often say: “Thanks, but no thanks. We can’t think about that.”
If President Biden is re-elected, what will be at the top of the agenda?
This year it will be business as usual. We have surveys that we are very excited about. We have potential enforcement actions that we are very excited about.
How evaluate the success of the last four years?
We dealt anew with the actual law as written by Congress and interpreted by the Supreme Court and the courts of appeals. We have had concerns that the law has indeed been mediated by policy goals and preferences that really cannot be justified by reading the text of statutes and case law.
It is the fact that they exist fewer offers sign of success?
Overall, I’d be curious how much of this is antitrust enforcement versus the macro environment.
Anecdotally, the number of antitrust hair deals is also down — and that’s good for everyone. And it also allows us to pursue a heavier behavioral commitment, which is a really important part of the organization’s mission.
You’ve also had some high-profile losses. Will this change your willingness to litigate?
Is important how we lose I am not aware of a time when we have completely lost the law, even in cases like UnitedHealth Group-Change, where we have not previously pursued a competitively sensitive information harm theory. The theory stood, right? We tend to lose track of how persuasive we are about our facts.
We take this feedback and internalize it and try to make better arguments in the future. I think you see that at Penguin Random House-Simon and Schuster, where we lean into stories about how mergers hurt authors and threaten to hurt whose ideas get published. You see it on JetBlue-Spirit.
We prefer to win – no doubt about it. But these hard lessons have really made us better, and we will continue to be better storytellers because that is our obligation to the audience. — Lauren Hirsch
IN CASE YOU MISSED IT
Nvidia beats Alphabet and Amazon making it the third largest publicly traded 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 reap huge profits from making the chips that power artificial intelligence services.
Elon Musk continued his flight from Delaware. The billionaire moved his private SpaceX foundation to Texas after a Delaware judge voided his nearly $56 billion payment to Tesla. It remains unclear whether Tesla itself will be able to make the same journey.
OpenAI unveiled a new video tool called Sora, that creates high-quality videos from text messages. Investors remain eager to pour money into AI companies. On Friday, the New York Times reported that OpenAI had completed a deal with Thrive Capital that values it at $80 billion or more, nearly tripling its valuation in less than 10 months.
Why are you still talking about the Dunkin’ commercial?
A week after the Super Bowl, the marketing industry is still reeling from the ad Dunkin’ ran during the game and the many spin offs. (In case you’ve been living under a rock: Ben Affleck tries to impress Jennifer Lopez with a cringe-y song and the help of his sidekicks Matt Damon and Tom Brady.)
Dunkin’ has filled the Internet with bonus content, including footage of Affleck failing to catch a pass from Brady (Dunkin’ told DealBook it was unscripted) and a collaboration with social media influencer Charli D’Amelio . The brand is selling pink and orange tracksuits inspired by those worn by Affleck and released the full song “Don’t Dunk Away at My Heart.” In total, the campaign has garnered more than 12 million views on YouTube.
“We believe this widespread buzz underscores advertising’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 this year on Valentine’s Day than anyone else. another day in his history.
The campaign shows how marketing around the big game has changed.
“There’s tremendous 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 slot hovering around $7 million, brands are looking to other channels such as social media, in-store promotions and other advertising.
It’s easier to start selling a Dunkin’ branded tracksuit if there are already millions in the Ben-Jennifer lot. “You have a large base of people who understand the ‘Phase A’ of the campaign,” Rucker said.
Talent has more and more skin in the game. Artists Equity, the production company founded by Affleck and Damon, handled nearly every aspect of the campaign. (Affleck and Gerry Cardinale, the founder of RedBird Capital, spoke at the 2022 DealBook conference after announcing the company.) When Artists Equity started, actors said they intended to give talent a share of the profits.
The idea behind the Dunkin’ ad was originally pitched as part of an ad to air during the Grammys. Dunkin’ liked the idea so much “it inspired us to turn the narrative into two separate chapters and do a Super Bowl ad,” Nelson said. (In the Grammys ad, Affleck reveals his ambition to become a pop star.)
“Some of the most exciting content didn’t even make it into the final ads because we kept it for social media,” added Nelson.
Four Things We Learned From ‘Supercommunicators’
What makes some masters at giving feedback, solving problems, or communicating strategy? In “Supercommunicators,” out Tuesday, Charles Duhigg answers that question, drawing on decades of research.
“Overcommunicators aren’t born with special abilities — but they’ve put more thought into how conversations go,” 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, judgment or experiences,” Duhigg writes. (Think “what’s the best part of your job?” instead of “where do you work?”).
You can also show your understanding by asking questions, summarizing what you’ve heard and asking if you got it right, a technique called ‘looping’.
The goal of conflict talks is understanding, not victory. Helps demonstrate understanding through “looping”. recognizes points of agreement; and speaks in concrete rather than sweeping statements.
Effective online discussion requires a new approach. The reason at letters and phone conversations has evolved. “We have developed norms and almost unconscious behaviors – the light in our voice when we answer a phone. the signature on a letter that signals our sympathy for the reader—that facilitate communication,” Duhigg writes.
He hopes that online communication will develop similar rules, such as being extra polite and avoiding sarcasm and criticism.
Difficult conversations need structure. Duhigg suggests establishing guidelines. share your goals for the discussion and ask others to share theirs. and acknowledging discomfort is expected, and OK.
Quiz: Startups Wanted
Partners at Y Combinator, the start-up accelerator that incubated Airbnb, Dropbox and DoorDash, have released their latest “request for startups,” a wish list of the kind of companies they’d like to invest in.
Which of these startup classes did not do i make the list
Find the answer at the bottom of this newsletter.
Sarah Kessler contributed to the report.
Thanks for reading! I’ll see you on Monday.
We’d love your feedback. Send your thoughts and suggestions to dealbook@nytimes.com.
Quiz Answer: B.
