Kamala Harris has a murky antitrust record. Wall Street sees an opportunity

Wall Street dealmakers said they believe Vice President Kamala Harris, if she were to win the November presidential election against Donald Trump, is a clean slate on antitrust regulation and a prime opportunity to loosen the Biden antitrust regime.

“This ‘big is bad’ hostility [from Biden] will fall by the wayside” in a potential Harris administration, according to White & Case partner George Paul, who advised an attempted merger between Kroger and Albertsons. “I don’t think Harris will go that far. I think she’s going to take a step back.”

Wall Street’s hope for more lax regulation under Harris, the de facto Democratic presidential nominee, might suggest a broader view that her stances on corporate regulation are still malleable.

Just over a week into her presidential campaign and just under 100 days until the election, the Harris campaign is constructing an economic platform at warp speed, working to flesh out her position on key policy issues.

So far, Harris has stayed silent on antitrust enforcement, a cornerstone of the Biden administration’s big-business crackdown.

“The White House did not look to her to provide support on the competition policy agenda, so maybe she was doing things in the background, but it’s not really visible to the naked eye,” Bill Kovacic, former Federal Trade Commission chair, said in an interview. “So I think she has some freedom to maneuver.”

As far as the campaign trail goes, Harris will likely stick to Biden’s economic script of corporate antagonism. But what happens with tangible policy if she takes the White House is an open question.

In the meantime, M&A dealmakers are trying to fill in the blanks.

The Harris campaign did not respond to a request for comment on the vice president’s antitrust position.

Harris’ record as California’s attorney general might provide some insight into her antitrust philosophy, according to experts.

Bill Baer, an antitrust policy advisor on Biden’s presidential transition team in 2021, served as the Department of Justice’s antitrust chief while Harris occupied the attorney general role. As antitrust chief, Baer occasionally crossed paths with Harris’ office on anti-monopoly cases.

“She and I did not have any personal interaction, so we did not discuss stuff, but her antitrust team was talented, experienced and really quite effective,” Baer said in an interview with CNBC. “As best I can tell, she was quite supportive of a vigorous antitrust enforcement at the state level.”

Harris’ AG office took several regulatory actions to break up corporate power, particularly in the health-care sector. In 2016, her office joined a federal lawsuit to block a health insurance merger between Anthem and Cigna. That same year, her team also sued against a pharmaceutical pricing practice that she argued was inflating the cost of opioid addiction treatments.

Her California roots also bring up questions of ties to Silicon Valley, leaving corporate America wondering whether a Harris White House might give business leaders more room at the table.

“When tech CEOs come up to Capitol Hill and testify and get grilled, they’ll have an ability to drive down Pennsylvania Avenue and go to the White House and meet the president,” Paul of White & Case said.

“I think that will give them a lot of comfort,” Paul added. “And I also think it means that we move back to a more moderate policy on these kinds of issues.”

Last week, two Democratic megadonors, IAC Chair Barry Diller and LinkedIn co-founder Reid Hoffman, called on Harris to pledge to replace FTC Chair Lina Khan, one of the central faces of the Biden administration’s expansion of antitrust enforcement.

Presidents do not have the power to fire heads of independent agencies such as the FTC. And though Khan’s term is up in September, she will remain in her post by default unless the sitting president appoints someone new and gets Senate approval.

Diller and Hoffman’s demand, while potentially far-fetched under a Harris administration, can be taken as a sign that corporate America is optimistic about its ability to shape the vice president.

FTC spokesperson Douglas Farrar told CNBC that the agency is not thinking about the election as it executes its agenda and feels supported by both Biden and Harris.

The future of Harris’ antitrust policy will ultimately emerge out of a precarious political calculus.

Though Biden often polled poorly on the economy, his public battle against big corporations occasionally scored him points with voters.

Biden’s antitrust regime also kept the progressive wing of Capitol Hill happy, including allies such as Sen. Elizabeth Warren, D-Mass., and Sen. Bernie Sanders, D-Vt. who helped the president push through his legislative agenda.

“It’s not obvious to me exactly what [Harris’] relationship is with the Sanders-Warren faction in the Senate and their counterparts elsewhere in the Congress, but that that perspective was enormously important in the Biden program,” Kovacic said. “A big question going ahead is whether Harris feels any commitment or obligation to continue that approach.”

The political play leaves some in Washington with the hope that Harris would stay the course of Biden’s strategy, even as the vice president herself leaves the question unanswered.

“There’s some question marks just based on the parts of the agenda that she hasn’t moved into,” Elizabeth Wilkins, former chief of staff to Khan, told CNBC. “I also think there’s other parts of Vice President Harris’s record protecting families and small businesses that I think are squarely within the antitrust agenda.”