Alphabet-Wiz deal could face scrutiny from Biden or Trump presidencies

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Alphabet is considering acquiring cybersecurity startup Wiz for about $23 billion, Wall Street Journal reported. The significant antitrust scrutiny under the Biden administration would not be surprising if the deal goes through.

President Joe Biden’s antitrust watchdogs — Assistant Attorney General for Antitrust Jonathan Kanter and Federal Trade Commission Chairwoman Lina Khan — are no friends of Big Tech and have an aggressive enforcement agenda. Given the opportunity to review this deal, there’s no reason to think they’ll change tack.

But the likely extended review of the deal also raises the possibility that no government decision on whether to approve the deal will be made before Inauguration Day, Jan. 20. If Biden wins the election, it could face intense scrutiny. It could face challenges in court, given the size of the deal and the fact that Alphabet is a tech giant, even though the company is not a dominant player in the cloud computing industry. One aspect that could raise competition concerns is Wiz’s ability to continue its cloud computing partnerships with Google.

A more interesting question is what might happen if there were a change of administration and former President Donald Trump returned to the White House. Trump, because of his populist tendencies, has been more supportive of anti-big business policies, including antitrust enforcement. He is unlikely to spark a boom in mergers and acquisitions, even if regulators are not as aggressive as they were under Biden. Some industries are more vulnerable to scrutiny under Trump, and Big Tech is likely to come out on top.

If there was any doubt about that, Trump’s selection of Sen. J.D. Vance (R-Ohio) as his vice presidential running mate dispels that skepticism. Vance is among congressional Republicans who have praised the Biden administration’s antitrust enforcement strategy, a group known as the Khanservatives. He has also taken staunchly anti-big business stances, particularly against Big Tech.

The aggressiveness of the Trump administration’s antitrust enforcement will ultimately depend on who is nominated. Speculation about potential nominees is minimal at the moment. One possibility is staff members of some of the populist Republican senators who have supported the Biden administration’s more aggressive antitrust policies, such as Sens. Josh Hawley (R-Mo.), Marco Rubio (R-Fla.) and Vance. The choice of these nominees is likely to be one of the biggest nominating debates if Trump wins in November, as it pits old and new Republicans against each other.

That prospect of antitrust enforcement ultimately means that a change in administrations doesn’t guarantee a smooth transition to a potential Alphabet takeover. Still, the chances of a court challenge are likely to decrease under a Trump administration, as there’s likely to be a greater willingness to use conduct remedies. Khan and Kanter have largely shied away from and criticized these remedies as half-measures that don’t fully address the competition concerns in a given deal. But it’s one area of policy that’s likely to soften under a Trump administration, even with a more aggressive candidate than would have been typical for previous Republican presidents. The odds of a lawsuit aren’t going to go down to zero, given the expected backlash against Big Tech under a Trump administration. But the prospects are brighter if the deal, which remains unfinished, isn’t reviewed by Kanter or Khan.