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Blog Post | May 17, 2021

Revolver Spotlight: Howard Shelanski

Anti-MonopolyBigLawFTCOIRARevolving DoorTech
Revolver Spotlight: Howard Shelanski

Howard Shelanski, a partner at BigLaw giant Davis Polk who served as administrator of the Office of Information and Regulatory Affairs (OIRA) under President Obama, has been rumored for a top job in the Biden Administration since serving on the Biden Campaign’s tech advisory group in 2020. Whether he returns to the position he once held, is tapped for a powerful DOJ role overseeing antitrust, or (like his predecessor Cass Sunstein) receives a new advisory role somewhere in the executive branch, Shelanski’s record as an apologist for corporate monopolies and roadblock to critical public health and safety regulations makes him a threat in any potential administration job. And given President Biden’s extremely promising recent appointments of anti-monopolists Lina Khan and Tim Wu, empowering a Big Tech lawyer like Shelanski would be a massive step in the wrong direction. 

Here’s a rundown of some of the most alarming parts of Shelanski’s record:

Shelanski represents tech giant Facebook in the Federal Trade Commission’s ongoing antitrust investigation of the company, and is broadly dismissive of the current anti-monopoly movement against Big Tech.

  • Shelanski has provided advice and legal counsel to Facebook in the FTC’s ongoing investigation of the company for “engaging in a systematic strategy to eliminate threats to its monopoly.” The current FTC investigation cites Facebook’s acquisition of one-time rival Instagram as evidence of its anticompetitive conduct, an acquisition which Shelanski likely oversaw while serving as chief economist at the FTC in 2012. 
  • Despite advising a top tech monopoly in the middle of a heated antitrust investigation, Shelanski served on the Biden campaign’s tech policy committee and antitrust policy group alongside current Facebook executives Anant Raut and Matt Perault.
  • In a 2019 interview with Financial Review, Shelanski argued that Facebook and Google shouldn’t be treated as publishers and argued that proposals to classify them as such would be “overreaching”. In the same interview, Shelanski dismissed calls to break up Facebook (as regulators had done to AT&T in the 1980s) as “incredibly complex and impractical” and boasted that Instagram’s success “may also not have occurred unless Facebook had taken control of the company.” 
  • Shelanski has downplayed criticism of leveraging his government experience to benefit Facebook, openly joking that he “hasn’t been paid enough money to change [his] mind” on antitrust. 
  • Shelanski has been broadly dismissive of the “neo-Brandeisian” movement to break up large corporate monopolies popularized by FTC nominee Lina Khan, characterizing the current antitrust populist movement as “generally viewing ‘big’ as inherently ‘bad’” and dismissing calls to break up large companies and ban anti-competitive acquisitions as “fringe views”. 

Shelanski is an Antitrust and Competition Partner at corporate law firm Davis Polk, where he has advised giant corporations on anticompetitive mergers and acquisitions.

  • At Davis Polk, Shelanski has leveraged his government experience to help big corporations navigate regulatory barriers to acquire competitors and consolidate their market share. His clients have included health insurance giant Aetna (in its 2017 acquisition by CVS), Swiss drugmaker Roche (in its 2019 purchase of gene therapy specialist Spark), financial services company Charles Schwab (in its $26 billion acquisition of TD Ameritrade, which further consolidated the brokerage industry), and price-reporting agency IHS Markit (in its $1.8 billion acquisition of FinTech company Ipreo from private equity owners). 
  • Shelanski advised Big Ag giant Dean Foods on its 2020 acquisition by Dairy Farmers of America (DFA), a merger that was fiercely opposed by family farmers over concerns that it would make it easier for DFA to sustain its long-standing price-fixing and anti-competitive practices (both Dean and DFA settled class action lawsuits in 2011 and 2013 over breaking antitrust laws governing milk suppliers). University of Wisconsin-Madison antitrust dexpert Peter Carstensen has also argued that the Dean-DFA merger could have negative impacts for consumers, noting that if DFA owns the largest single buyer of fluid milk, “[it] could raise prices to consumers both through [its] own fluid milk operation, and by raising prices to other buyers.”  
  • Shelanski advised aspiring music industry monopolist Tencent, a Chinese company, on its minority stakes investments in Spotify and Universal Music Group, the latter of which could make it “the most powerful company in the music business.” As Tim Ingahm of Rolling Stone observed, Tencent’s tactic of acquiring minority stakes in powerful U.S. and European music-related companies is part of a long-term strategy to “own the international music business in China” without raising scrutiny from antitrust regulators and watchdogs. 
  • Shelanski advised Brazilian cosmetics company Natura & Co on its 2019 acquisition of Avon Products, a merger that made Natura the fourth largest pure-play beauty company in the world. 

As OIRA Administrator, Shelanski prevented crucial health and safety regulations from taking effect and was deferential to corporate interests.

  • Shelanski was tapped in 2013 to succeed regulatory skeptic Cass Sunstein as Administrator of the Office of Information and Regulatory Affairs (OIRA) in the Obama administration. Like his predecessor, Shelanski leveraged his power as regulatory czar to block or delay crucial health and safety regulations from taking effect, urging executive branch agencies to withdraw proposed regulations so it would appear that OIRA’s regulatory backlog was being cleared (a move that Center for Progressive Reform’s James Goodwin called an “accounting trick”). 
  • Shelanski was an enthusiastic supporter of deregulation as part of the Obama administration’s Executive Order 13563 “lookback” program, which aimed to “eliminate unnecessary regulations”. Goodwin has criticized Shelanski for inordinately focusing on deregulation, noting that “lookback” efforts like Obama’s also gave agencies the power to expand life-saving regulatory authority (the 2013 West, Texas fertilizer plant explosion, for example, might well have been prevented by expansionary lookback). 
  • Shelanski has defended his tenure at OIRA, which saw the agency’s centralized review process for proposed regulations continue to be dominated by corporate lobbyists, by arguing that OIRA maintained an “open door” neutrality policy and was willing to meet with any stakeholder to discuss proposed regulations. Democratic Representatives Gerry Connolly and Matt Cartwright criticized Shelanski’s argument in a 2015 Congressional hearing, noting that, in practice, corporations had “vastly superior resources” at their disposal to request and attend OIRA meetings compared to “John Q. Public, [who] has to show up to 9-to-5 jobs and cannot be expected to attend regular meetings at OIRA during its normal operating hours.”
  • As Administrator, Shelanski failed to meet OIRA’s public transparency expectations. When pressed by both Democrats and Republicans to publicly release more regulatory review documents in accordance with executive guidelines, Shelanski was evasive and dubiously cited a “deliberative process exception” for staff-level communications. He was similarly blasted by members of Congress for repeatedly failing to meet publication deadlines for OIRA’s semi-annual regulatory agendas. 
  • Shelanski and other top OMB officials quietly met with tobacco industry lobbyists in closed-door meetings in 2015 to discuss a proposed ban on flavored e-cigarette fluids. The FDA’s eventual decision to not ban flavored e-cig products was later cited by groups like Public Citizen and Campaign for Tobacco-Free Kids as a major contributing factor to both the growth in youth tobacco addiction and a string of vaping-related deaths in 2019. 

Shelanski is an ardent believer in cost-benefit analysis, a regulatory analysis framework that has been criticized for its discriminatory effects and undue privileging of corporate power

  • Shelanski is a strong adherent of cost-benefit analysis, a supposedly-objective approach to assessing the worth of regulatory actions. CPR’s James Goodwin has frequently criticized cost-benefit analysis for being methodologically reductive, privileging corporate profits over broader goals of public health and safety, and being used by conservatives to advance and entrench structural racism. Wake Forest Law School professor  Sidney Shapiro, similarly, has pointed out that cost-benefit analysis systematically overestimates costs and underestimates benefits of regulations, serving in practice as a tool of big corporations intent on advancing a deregulatory agenda. 
  • Both during and after his stint at OIRA, Shelanski spoke highly of cost-benefit analysis. In his first public address after being confirmed as OIRA Administrator, Shelanski praised cost-benefit analysis as “an essential tool of regulatory policy” and noted that ‘if I did not believe it, I would not be OIRA administrator.” In a 2018 Senate hearing, Shelanski called cost-benefit analysis “one of the signature achievements of the U.S. regulatory system over the past 40 years.” 
  • Shelanski has framed regulatory policy as a strict dichotomy between cost-benefit analysis and unscientific guessing, stating that it is “far better” to do the former rather than “just to guess or to remain in the dark about possible regulatory effects.” CPR’s James Goodwin has blasted this dichotomy as misleading, noting that “rejecting cost-benefit analysis doesn’t mean turning a blind eye to the effects of regulations […] to the contrary, it means paying careful attention to the specific instructions that Congress provided to agencies in the statutes that it adopted.” 

IMAGE: “Symposium with Howard Shelanski, OIRA Administrator – March 31, 2014” is licensed under CC BY-NC-SA 2.0

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