/ 2 min read / Reed Smith Client Alerts

Investigations and enforcement trends: Top takeaways for 2025

Authors

Cindy Schmitt Minniti, Natasha Tardif, Rosanne Kay, Kate Seikaly, Edward B. Schwartz, Thomas H. Suddath, Jr., Gerard M. Stegmaier, Isabelle Rahman, Michael J. Lowell, Kaela Dahan, Catherine R. Castaldo, Justin W. Angotti

We recently gathered a group of regulatory attorneys from across Reed Smith to provide a rundown of the key trends to watch for in 2025. If you missed the webinar, you can access the recording on demand.

Please see a short summary of our top takeaways below and look out for an invite to the next installment of this quarterly series – we hope you can join us!

Labor and employment priorities

  • Keep an eye on employment agencies, such as the EEOC and the DOL, for scrutiny and walk backs of employee-friendly guidance implemented by the Biden administration, paying particular attention to workplace harassment prevention efforts and classification of independent contractors.
  • Monitor the NLRB, which could substantially alter its union- and worker-friendly approach during President Trump’s second term, including the potential of undoing the McLaren Macomb decision, which held that broad confidentiality and non-disparagement clauses in severance agreements violate federal labor law.
  • Stay tuned for potential updates to immigration rules and refocus on Form I-9 compliance, as President Trump’s campaign and transition statements forecast business immigration as a focal point.

Tariff investigations and enforcement risks

  • No new tariffs (yet): Despite threatening to impose day-one tariffs, President Trump instead issued an America First Trade Policy memorandum on Monday (January 20), directing his administration to assess various trade-related levers that could be used to implement his new trade policy. Reports from the various secretaries are due in April. Since his inauguration, however, President Trump has also told reporters that he is likely to impose 25% tariffs on Canadian- and Mexican-origin goods, as well as an additional 10% tariff on Chinese-origin goods, starting February 1.
  • Action could be immediate or involve notice and comment: Depending on which levers the administration chooses to pull, the implementation path will look different. Traditional statutory authorities like Section 301 and Section 232 typically involve a notice and comment period before remedies like tariffs are imposed. Alternatively, President Trump could declare a national emergency under the International Emergency Economic Powers Act (IEEPA) and then impose tariffs in response to that emergency. Although IEEPA has never been used to impose tariffs, district courts are unlikely to enjoin this type of executive order since IEEPA grants the president broad authority to act in the interest of national security.
  • Increased enforcement risks: Given that President Trump views tariffs as a way to offset budget shortfalls, importers should expect increased scrutiny from U.S. Customs and Border Protection, particularly on country of origin and valuation, as well as the scope of any antidumping or countervailing duty orders, which are determined by the text of the order rather than a particular classification under the Harmonized Tariff Schedule of the United States. Companies may also see an uptick in DOJ civil enforcement or third-party whistleblower actions under the False Claims Act, which further increases the risks of non-compliance.

Crypto enforcement

  • The Trump administration has signaled a more favorable and less aggressive approach to crypto regulation and innovation, appointing a “crypto czar” and nominating a pro-crypto SEC chair.
  • While the SEC has traditionally been the main regulatory enforcer against crypto, we may see it relinquish some jurisdiction to the CFTC.
  • Banking regulators are likely to lower barriers to engagement with crypto for financial institutions.
  • If regulatory enforcement eases, there may be a surge in civil litigation involving crypto, as investors, consumers and competitors seek to assert their rights and interests in the crypto space.

FCPA investigations and enforcement in Trump 2.0

  • Anticipate robust enforcement of FCPA as in Trump 1.0.
  • An increase in individual accountability is likely.
  • Companies should focus on anti-corruption compliance, training and especially relationships with third parties.

A view from the UK: The “failure to prevent fraud” offence and strengthening of controls

  • The UK has created two new criminal offences, both of which have extraterritorial effect: the senior manager offence (SMO) and the failure to prevent fraud (FTPF) offence. The FTPF offence will come into force on September 1, 2025.
  • The SMO holds companies liable for financial crimes (such as fraud, money laundering, bribery, false accounting and certain tax offences) committed by their senior managers. This is a strict liability offence with no statutory defence.
  • The FTPF offence holds large organisations and their subsidiaries liable where an associated person commits fraud for the benefit of the organisation and there are no reasonable fraud prevention procedures in place.
  • The UK government has issued guidance on the FTPF offence and on the reasonable fraud prevention procedures organisations should put in place. It has urged organisations to conduct risk assessments, update policies and procedures, provide training and monitor compliance.

Competition and regulatory investigation and enforcement trends in the EU

  • 2024 served as a year of clarification, with the European Court of Justice (ECJ) narrowing the EU Commission’s merger control authority to exclude non-notifiable mergers. Additionally, it provided insights into the application of the Foreign Subsidies Regulation (FSR), marked the first use of national competition authorities’ (NCAs) “call-in” powers for merger control, and demonstrated how the EU Commission evaluates such mergers. The year also saw the continued designation of gatekeepers under the Digital Markets Act and the application of new antitrust theories of harm by the EU Commission, notably in the abuse of dominance sphere.
  • 2025 is expected to be a year of continued robust enforcement under the new EU Commission, with a strong, focused approach to the implementation of merger and antitrust policies. These policies will be updated to address evolving priorities, such as innovation, resilience and sustainability. The EU Commission is likely to maintain its proactive stance in safeguarding market competition, ensuring that foreign investments and foreign subsidies are rigorously assessed, while striking a balance to ensure the continuing appeal of the EU market.

U.S. antitrust and consumer protection enforcement priorities under a second Trump administration

  • The Trump administration will approach antitrust enforcement with less skepticism about large companies and a more restrained approach to enforcement than we saw in the last administration.
  • It will very likely reject the innovative theories of competitive harm pursued by the last administration and revert to primary reliance on the consumer welfare standard and long-standing antitrust economic analysis in analyzing the competitive effects of proposed mergers and conduct.
  • As a result, most merging parties and companies that are the subject of conduct investigations can expect robust, evidence-based enforcement that is easier for companies to navigate than many companies experienced under the Biden administration.
  • There likely won’t be more or less enforcement for consumer protection, privacy and data security in the new administration. Enforcement will be different through both priorities and process/procedure.

Data privacy and cyber enforcement

  • Privacy and data security are not identified as top policy priorities for the new administration, but national security and industrial policy are critical priorities. And these areas have substantial overlap and impact on privacy and data security which means international developments may be likely to have a greater impact on administration policy, or administration policy in these areas may have international implications.
  • Changes in FTC priorities and enforcement – potentially less empowerment against speech, AI and privacy initiatives.
  • Increases in agency-led cyber enforcement – uptick evidenced by agency cyber guidance, DOJ whistleblowers and critical infrastructure cyber regulations.
  • Increase in state legislation on privacy, cyber and AI.

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