On July 9, 2020, the U.S. Supreme Court granted petitions for certiorari in FTC v. Credit Bureau Center and AMG Capital Management, LLC v. FTC, cases that question the Federal Trade Commission’s authority to demand equitable monetary relief such as restitution and disgorgement under Section 13(b) of the FTC Act, which permits courts to issue “injunction[s]” without express reference to equitable monetary relief. The Court’s decision in these cases will have sweeping ramifications for the FTC, which has referred to its efforts to obtain disgorgement under Section 13(b) of the FTC Act as “a cornerstone of the FTC’s enforcement program for more than 30 years.”[1] Continue Reading
High Risk of Second Requests in the Cannabis Industry
The cannabis industry faced heightened antitrust scrutiny from the Department of Justice (DOJ) in 2019. There were public reports regarding several “Second Requests” seeking information about potential cannabis transactions. Second Requests are a part of expensive and time-consuming antitrust investigations typically issued in the approximately 2 percent of transactions that present significant anticompetitive concerns. To have several Second Requests within a short period of time in the same industry, particularly in an emerging industry such as cannabis, appeared unusual to many observers. Recent events have shed light on some possible reasons for DOJ’s heightened focus. Continue Reading
Amnesty and Its Punishments: ACPERA and the Future of U.S. Antitrust Cartel Enforcement
Posted in Cartel Investigations and LitigationThere is a tension at the heart of modern U.S. cartel enforcement. On one hand is the engine that has been driving most criminal and civil cartel enforcement since the mid-1990s — the Department of Justice’s corporate leniency or “amnesty” program. The modern leniency program offers a relatively simple bargain to the first intrepid cartelist who walks through DOJ’s door: complete criminal amnesty in exchange for complete cooperation. But, on the other hand, the simplicity of this bargain has historically been complicated by the significant countervailing likelihood of private “follow-on” lawsuits threatening some of the most severe penalties found anywhere in the U.S. legal system, including joint and several liability, treble damages, and the automatic recovery of attorneys’ fees and costs. By providing the government with the robust cooperation necessary to achieve criminal amnesty, a cartelist was also often ensuring private plaintiffs would have the evidence they needed to successfully obtain these civil penalties, which, at least for corporate defendants, can be more financially painful than anything the criminal process can provide. The result is that the cost-benefit analysis of invoking the DOJ’s amnesty program has not always been as straightforward as it appears or was likely intended. Continue Reading
DOJ and FTC Issue Joint Statement Regarding COVID-19 and Antitrust Violations
Posted in CoronavirusThe Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) recently issued a joint statement (the “COVID-19 Statement”) regarding what constitutes lawful “procompetitive collaborations” between companies to address certain needs for consumers and businesses during the coronavirus pandemic. It also detailed what constitutes unlawful anticompetitive behavior related to essential and frontline workers and other vulnerable employees. The DOJ and FTC used this opportunity to send a clear warning to companies who may seek to take advantage of the current pandemic by entering into agreements to restrain competition and employee mobility or lower wages. Separately, for those companies who are actively working to assist essential workers, businesses and the country as a whole, the COVID-19 Statement provides guidance on engaging in lawful “procompetitive collaboration” to benefit essential workers and the economy amidst the coronavirus pandemic. Continue Reading
DOJ Issues First Business Review Letter Approving Competitor Collaboration In Response To COVID-19
Posted in CoronavirusOn April 4, 2020, the Department of Justice issued a business review letter allowing collaboration among five distributors of personal-protective equipment (“PPE”), oxygen, and medications. This is the first business review letter issued under the expedited review procedure for streamlining pandemic-related public health efforts issued jointly by the Federal Trade Commission and DOJ on March 24, 2020 (as previously reported here and here). The DOJ turned the request for review around in only five days, but offered few new insights into how the agencies might weigh public-health considerations against potential competitive harms. Continue Reading
Speeding Up and Slowing Down Antitrust Reviews – How the Federal Antitrust Agencies Are Responding to the COVID-19 Crisis
Posted in Coronavirus, Healthcare / AntitrustMake no mistake, the antitrust laws remain in full effect. The leadership of the Antitrust Division of the Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) have made clear that these enforcers “stand ready to pursue civil violations of the antitrust laws, which include agreements between individuals and business to restrain competition through increased prices, lower wages, decreased output, or reduced quality as well as efforts by monopolists to use their market power to engage in exclusionary conduct.” The DOJ also promised to vigorously monitor and prosecute any criminal violations of the antitrust laws, “which typically involve agreements or conspiracies between individuals or businesses to fix prices or wages, rig bids, or allocate markets.” In fact, the DOJ has drafted proposed legislation to allow more time for its criminal cases by tolling the statute of limitations for criminal antitrust violations for no less than 180 days and until 60 days after termination of the national emergency declared by the President on March 13, 2020.
COVID-19 is Not a “Get Out of Jail Free Card” from EU Competition Law
Posted in Coronavirus, EU Competition and RegulatoryThe COVID-19 pandemic has triggered worldwide pandemonium and is disrupting business throughout all sectors. It is undeniably a major shock for the global economy. While the need for a coordinated response has been recognised at the highest levels in the EU, this does not mean that the application of competition law is suspended during the crisis. Continue Reading
U.S. Antitrust Agencies to Streamline Review for COVID-19 Collaborations (UPDATED)
This post has been updated as of March 24, 2020.
On Monday, March 23, it was reported that the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) were preparing to announce a streamlined procedure through which companies seeking to collaborate on a response to the coronavirus pandemic may obtain an expedited review and approval of their contemplated venture. (https://www.bloomberg.com/news/articles/2020-03-23/u-s-to-speed-antitrust-reviews-for-firms-teaming-up-on-virus). Specifically, the DOJ and FTC are expected to jointly commit to processing and completing reviews of coronavirus-targeted collaborations in one week or less. The agencies may roll out the details as early as Monday. Continue Reading
COVID-19 Outbreak and Adjusted EU State Aid Control
Posted in Coronavirus, EU Competition and RegulatoryThe unique EU State aid control law requires, in principle, prior notification by Member States and approval by the Commission of all State aid. During a time of crisis, like the COVID-19 pandemic, EU law allows for a flexible approach for approving urgent State aid. In this post, we discuss the current state of play in the EU and offer some general items to consider for undertakings receiving State aid during this extraordinary time. Continue Reading
Arizona District Court Tentatively Dismisses Axon v. FTC
On March 10, 2020, the United States District Court for the District of Arizona issued a tentative ruling denying Axon Enterprise’s motion for preliminary injunction and dismissing its complaint against the Federal Trade Commission, due to lack of subject matter jurisdiction.
