On September 3, 2020, the DOJ’s Antitrust Division released its Merger Remedies Manual. The manual provides important guidance on what DOJ considers to be adequate solutions to addressing competitive issues in M&A deals challenged by DOJ. Several key points are identified below. Continue Reading
The European Commission Adopts White Paper on Foreign Subsidies – A Trend Towards Protectionism on a Global Level?
Posted in EU Competition and RegulatoryAs State aid measures granted by EU Member States continue to surge in the aftermath of the COVID-19 outbreak and ongoing pandemic, the European Commission (“Commission”) has turned to subsidies coming from non-EU countries.
On 17 June, the Commission announced that it had adopted a consultative White Paper which sets out proposed new legal tools to deal with the distortive effects caused by foreign subsidies in the European Single Market. With this, it opened a public consultation seeking input from stakeholders on the proposals set out in the White Paper. The public consultation will be open until 23 September 2020.
With the benefit of some distance since the issuance of this White Paper, we assess the proposal and the responses to it. Continue Reading
U.S. Courts Annual Review: Supreme Court
Posted in Private Civil Antitrust Litigation* Reprinted with permission from Global Competition Review. The full version of GCR’s US Courts Annual Review, published in July 2020, is available here.
The United States Supreme Court’s single antitrust case of the 2019 term, Apple, Inc v. Pepper upheld the long-standing and often criticized direct purchaser rule in the realm of sales through iPhone apps and other online sales platforms. The direct purchaser rule, established through the Supreme Court’s decisions in Hanover Shoe v. United Shoe Machinery Co and Illinois Brick Co v. Illinois limited standing to “the overcharged direct purchaser, and not others in the chain of manufacture or distribution.” In Apple v. Pepper, the Court grappled with these concepts in the virtual retail space where the class plaintiffs alleged that Apple’s 30 percent fee on sales of iPhone applications through its App Store represents a monopoly overcharge that should be recoverable by purchasers of the apps. The Court considered whether the developers of iPhone applications, rather than the consumers were more directly harmed by Apple’s alleged monopoly. Continue Reading
SEC and DOJ Adopt Memorandum of Understanding to Formalize Interagency Cooperation in the Securities Industry
On June 22, 2020, Assistant Attorney General Makan Delrahim, head of the Antitrust Division at the Department of Justice, and Jay Clayton, Chairman of the Securities and Exchange Commission, signed a Memorandum of Understanding (“MOU”) concerning “Cooperation with Respect to Promoting Competitive Conditions in the Securities Industry.” Continue Reading
Maybe the FTC Can’t Take That to the Bank: The Supreme Court’s Decision in Liu v. SEC and Its Implications for the FTC’s Ability to Seek Equitable Monetary Relief
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.
