Based on Biden's antitrust agenda
Big deals are waiting on the tarmac as Wall Street and the business community anticipate how the presidential election will change antitrust enforcement.
President Biden has taken an aggressive approach to overseeing deals that some have called overkill and others have praised as a necessary return to checks on big business power. Dealmakers say they are holding back some deals in the hope of a softer approach in the next government.
Doha Mekki is on the ground and is implementing the strategy. She has worked at the Justice Department under three administrations: as a trial attorney during the Obama presidency, in the front office during the Trump presidency, and now as chief assistant to the 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 has been appealed). In such a case, how do you weigh the risk of a company going bankrupt because it is too weak on its own against the risk of a more consolidated sector?
There is an entire antitrust doctrine that specifically deals with companies that are not financially viable. And it's worth noting — and the court certainly noted this — that the company didn't make that argument. What Spirit, I think, 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 pass that on to shareholders.
I'm probably contractually obligated to say that you should always be honest.
Several companies, including JPMorgan Chase, has left the Climate Action 100+ this week, partly due to antitrust concerns. Some supervisors abroad, green initiatives have protected from antitrust enforcement. Should the United States do the same?
We have a first antitrust law that is 130 years old, and a Clayton Act that is about 110 years old, and nowhere in that statute are we allowed to take into account non-economic considerations. And that's a good thing, because as an agency we are not really set up to make those judgments.
Would a deal that promises a more diverse board or management be viewed more favorably?
It is quite clear to us that we are not able to take these kinds of considerations into account. To the extent that there is any suspicion that the agencies are elevating or scrutinizing these types of deals less closely, it is actually the opposite. In fact, it is the companies that put forward these social values that they want to promote through their deals. And we often say, “Thanks, but no thanks. We cannot consider that.”
If President Biden is re-elected, what will be top of the agenda?
This year it will be business as usual. We have studies that we are very excited about. We have potential enforcement actions that we're very excited about.
How do you assess the success of the past four years?
We have once again addressed the actual law as written by Congress and interpreted by the Supreme Court and the appellate courts. We have had concerns that the law has effectively become disintermediate due to policy goals and preferences that cannot actually be justified by the textual reading of the statutes and case law.
Is the fact that there are fewer offers a sign of success?
Overall, I'd be curious to see how much of this is antitrust enforcement versus the macro environment.
Anecdotally, the number of antitrust hair deals has also fallen – and that's good for everyone. And it has also allowed us to pursue a tougher line of action, which is a very important part of the agency's mission.
You've also suffered some high-profile losses. Will that change your willingness to litigate?
It is important How we are losing. I know of no time when we have completely lost the law, even in cases like UnitedHealth Group-Change, where we had not previously pursued a competitively sensitive information theory of harm. The theory still stood, right? We tend to lose how convincing we are with our facts.
We take that feedback to heart and internalize it and try to provide better arguments in the future. I think you see it at Penguin Random House-Simon and Schuster, where we dug into stories about how mergers hurt and threaten to hurt authors whose ideas are published. You see it in JetBlue-Spirit.
We prefer to win – without a doubt. But those hard lessons really made us better, and we will continue to be better storytellers because that is our duty to the audience. –Lauren Hirsch
IN CASE YOU MISSED IT
Nvidia has surpassed Alphabet and Amazon, making it the third-largest U.S. publicly traded company a market capitalization of approximately $1.8 trillion. Its shares are up nearly 50 percent this year, adding roughly $560 billion to its market value since Jan. 2, as investors bet it will reap huge profits from building the chips that power artificial intelligence services.
Elon Musk continued his flight from Delaware. The billionaire moved the formation of privately held SpaceX to Texas after a Delaware judge voided his nearly $56 billion payday at Tesla. It remains unclear whether Tesla itself will be able to make the same journey.
OpenAI has unveiled a new video tool called Sora, which generates high-quality videos from text prompts. Investors are eager to continue pouring money into generative AI companies. On Friday, The New York Times reported that OpenAI had struck a deal with Thrive Capital that values the company at $80 billion or more, nearly tripling its valuation in less than 10 months.
Why you're still talking about that Dunkin' ad
A week after the Super Bowl, the marketing industry is still raving about the ad Dunkin' ran during the game and its many spinoffs. (In case you've been living under a rock, Ben Affleck tries to impress Jennifer Lopez with a cringe-worthy song and the help of his sidekicks, Matt Damon and Tom Brady.)
Dunkin' has peppered the internet with bonus material, such as footage of Affleck failing to catch a pass from Brady (Dunkin' told DealBook there was no script for it) and a partnership with the social media influencer Charli D'Amelio. The brand is selling pink and orange tracksuits, inspired by the one Affleck wore, and has released the full-length song 'Don't Dunk Away at My Heart'. All told, the campaign has amassed more than 12 million YouTube views.
“We believe this widespread buzz highlights the ad's ability to not only capture but also retain audience attention,” Jill Nelson, Dunkin's chief marketing officer, told DealBook in an email , adding that the company sold more donuts on Valentine's Day than any other day this year. another day in its history.
The campaign shows how marketing around the big game has changed.
“There is enormous 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 place campaigns on other channels such as social media, in-store promotions and other advertising.
It's easier to start selling a branded Dunkin' tracksuit when there are already millions in the Ben-Jennifer conspiracy. “You have a large group of people who understand Phase A of the campaign,” Rucker said.
Talent increasingly plays a role in the game. Artists Equity, the production company Affleck and Damon founded, handled virtually every aspect of the campaign. (Affleck and Getty Cardinal, founder of RedBird Capital, spoke at DealBook's 2022 conference just after they announced the company.) When Artists Equity started, the actors said they planned to give talent a share of the profits.
The concept behind the Dunkin' ad was initially pitched as part of a commercial to be shown during the Grammys. Dunkin' liked the idea so much “it inspired us to turn the story into two separate chapters and create a Super Bowl ad,” Nelson said. (In the Grammy ad, Affleck reveals his ambition to become a pop star.)
“Some of the most compelling content didn't even make it into the final commercials because we reserved it for social media,” Nelson added.
Four Things We Learned from “SuperCommunicators”
What makes some people so masterful at giving feedback, solving problems, or communicating strategy? In “Supercommunicators,” out Tuesday, Charles Duhigg answers that question, building on decades of research.
“Supercommunicators are not born with special skills, 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 “profound questions that tap into values, beliefs, judgments, or experiences,” Duhigg writes. (Think “what's the best thing about 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 got it right, a technique called looping.
The purpose of conflict conversations is to understand, not to win. It helps to show understanding through 'looping'; recognize areas of agreement; and talk in details rather than in sweeping statements.
Effective online discourse requires a new approach. Into the discourse letters and telephone conversations have evolved. “We have developed norms and almost unconscious behaviors – the soft sound in our voice when we answer the phone; the signature in a letter that indicates our affection for the reader – which makes communication easier,” writes Duhigg.
He is hopeful that online communication will develop similar norms, such as being extra 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 recognizing that discomfort is expected, and okay.
Quiz: Startups wanted
The partners of Y Combinator, the startup accelerator that spawned Airbnb, Dropbox and DoorDash, have released their latest “application for start-ups”, a wish list of the types of companies they would like to invest in.
Which of these startup categories did that? not make the list?
You will find the answer at the bottom of this newsletter.
Sarah Kessler reporting contributed.
Thank you for reading! We'll see you Monday.
We would like your feedback. Send your ideas and suggestions by email to dealbook@nytimes.com.
Quiz answer: B.