The MoginRubin blog offers informative analysis and insightful commentary on timely issues related to competition and antitrust actions, mergers, acquisitions and associated regulatory and legislative activity.
Continuing to make good on President Biden’s pledge to root out and challenge anticompetitive mergers, the Antitrust Division of the Justice Department and the Federal Trade Commission have asked the public to join the hunt. On May 23, the agencies publicly asked companies for information they may have on any serial acquisitions and “roll-up strategies” being undertaken across the U.S. economy. These would be smaller “stealth acquisitions” consummated under the radar in critical industry sectors that can, although gradually, harm competition, ...
The Federal Trade Commission (“FTC”) and 17 state attorneys general on September 26th filed their long-awaited antitrust complaint against Amazon.com in federal district court in the Western District of Washington. The complaint (a redacted version of which is available here) is a foreseeable ambition of FTC Chair Lina M. Khan, who as a Yale law school student authored an influential law review article titled, “Amazon’s Antitrust Paradox.” The article itemized conduct Ms. Khan characterized as “anticompetitive,” which, when committed by a ...
The Federal Trade Commission and attorneys general from six states – California, Illinois, Minnesota, New York, Washington, and Wisconsin – joined in heralding news of an agreement that gives the green light to drug giant Amgen Inc.’s nearly $29 billion acquisition of Horizon Therapeutics plc. However, the conditions of the settlement do little to safeguard competition in the vitally important pharmaceutical industry. The government enforcers challenged the deal on the grounds that it would give Amgen considerable leverage to use its brawny ...
The Tenth Circuit U.S. Circuit Court of Appeals has revived a 2019 antitrust lawsuit against Berkshire Hathaway’s Johns Manville (JM) by rival calcium silicate producer, Chase Manufacturing, also known as Thermal Pipe Shields (TPS). The court determined that, in light of the evidence, TPS raised a triable issue of fact and the district judge erred in granting summary judgment for JM (Chase Manufacturing Inc. v. Johns Manville Corp., 10th Cir., No. 22-1164). At issue is whether Johns Manville, a unit of billionaire Warren Buffett’s Berkshire ...
Amazon Inc. investors have delivered company leadership a suit for exposing the corporation to a “massive financial hit” caused by news of alleged antitrust violations and an unnecessarily rapid expansion that later had to be scaled back. The suit, filed in federal court in Delaware, names Jeff Bezos and 19 other current and former board members and executives. This shareholder derivative action accuses leadership of lying about the company’s practices in two major areas: its private-label business selling products alongside third-party ...
Following its ten-month investigation, the United States Department of Justice appears on the verge of filing an antitrust suit against Live Nation, parent of Ticketmaster, for abusing its power in the ticketing and live music markets. According to Politico, which cites three sources familiar with the matter, the DOJ could file suit as soon as this fall and, as part of its relief, will ask the court to unwind the 2010 merger of Live Nation (the event promoter) and Ticketmaster (the ticket seller). If brought, the DOJ’s suit would be met with ...
Scrutiny of companies’ environmental, social, and governance (ESG) policies increasingly affects how companies do business, even firms with no clear idea of what they should be doing. Although ESG initiatives promise both benefits and risks, optimizing the benefits and minimizing the risks can be enormously challenging for management. Increasingly, management is advised to pursue solutions that involve collaboration with stakeholders—industry participants, investors, consumers, personnel, and advocates. The Academy for Sustainable Innovation, ...
U.S. Judge Leo T. Sorokin has permanently enjoined American Airlines and JetBlue from continuing their Northeast Alliance (“NEA”), in which the judge said the pair act as one company, replacing “full-throated competition” with “broad coordination” of business in and out of Boston and New York. That coordination includes trading information on which routes to fly, which company will fly them, and the seating capacity needed to accommodate passengers. After presiding over several weeks of trial involving mountains of evidence, the judge ...
Senator Tammy Baldwin (D-WI) and 10 consumer advocacy groups, including the American Economic Liberties Project, Public Citizen, and the Open Markets Institute, are calling on Lina Khan’s Federal Trade Commission to investigate the 2018 Energizer Inc. merger with Spectrum Brands Holdings, Inc., the successor to long-time battery brand Rayovac®. The groups are hoping to take advantage of more aggressive merger enforcement under current leadership and commitment by federal agencies to look back at consummated mergers that have proved to be ...
Photo by Pietro Mattia via Unsplash. What entity gets oversight of the health and safety of thoroughbred racehorses? With seven horse deaths in the lead up to this year's Kentucky Derby, most agree the horse racing industry must do better. While fatal injuries have dropped from 2 per 1,000 starts in 2009, to 1.25 per 1,000 starts in 2022, doping scandals and life-ending injuries remain prevalent year after year. Just look the record and recent suspension of controversial trainer Bob Baffert. This bombastic horseman is one of the winningest of ...
In a deal announced on May 9, Tempur Sealy International, Inc., the world’s largest mattress manufacturer, has agreed to acquire Houston-based Mattress Firm Group, Inc., the largest U.S. brick-and-mortar bedding retailer, with more than 2,300 locations and a robust e-commerce platform. The companies hope to finalize the $4 billion deal in the second half of 2024. Following pre-merger notification of the deal last October, the FTC is reportedly taking a deep dive into the mattress industry to assess whether the transaction is likely to harm ...
On April 24, 2023, a three-judge panel from the Ninth Circuit largely affirmed a district court’s judgment following a bench trial that Epic Games, Inc., failed to prove its antitrust claims against Apple, Inc., challenging its rules: Restricting app distribution on iOS devices to Apple’s App Store. Requiring in-app purchases on iOS to use Apple’s in-app payment processor. Limiting the ability of app developers to communicate the availability of alternative payment options to iOS device users. Despite finding several legal errors in the ...
On April 26, 2023, the U.K.’s Competition and Markets Authority (“CMA”) announced its decision to block Microsoft’s purchase of global gaming leader, Activision, “over concerns the deal would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for U.K. gamers over the years to come.” The next day, Activision CEO, Bobby Kotick, very publicly criticized “regulators”—in particular, the CMA and FTC Chair, Lina Khan—for making decisions based on “ideology” rather than what’s best for the economy. ...
The Biden administration continues its campaign against wage suppression as a source of harm to workers, competitive markets, and the economy. In its latest move, the Department of Justice is supporting players in professional e-sports leagues with a suit to stop Overwatch and Call of Duty developer, Activision Blizzard, Inc., from capping player compensation. Unlike salary restrictions in traditional sports leagues, those implemented by Activision were not produced through collective bargaining and, therefore, are not exempt from antitrust ...
On April 12, 2023, the European Commission informed Broadcom Inc. of its preliminary view that its proposed acquisition of VMware Inc. may harm competition in the market for certain hardware components that interoperate with VMware’s virtualization software. This adds to the growing list of challenges Broadcom must quash to close its acquisition. The EC opened an in-depth investigation in December 2022. The EC determined that Broadcom was the leading supplier of certain hardware components, including FC HBAs and storage adapters, that require ...
The Federal Trade Commission recently filed an amicus brief in support of a generic drug maker’s antitrust case involving Apokyn®, a drug developed to treat late stages of Parkinson’s disease. The plaintiffs allege the makers and distributors of Apokyn have unlawfully maintained their monopoly by delaying FDA approval and then market entry of generic alternatives, which harms competition and consumers. According to the FTC, this case “may have significant implications for patients who rely on apomorphine to treat debilitating symptoms of ...
In a unanimous bipartisan decision, the Federal Trade Commission released an opinion Monday (April 3, 2023) finding Illumina’s $8 billion acquisition of cancer-screening test maker, GRAIL, is likely substantially to lessen competition in the market for the research, development, and commercialization of multi-cancer early detection (“MCED”) tests. With that conclusion, the Commission overturned the decision reached last September by the FTC’s own Administrative Law Judge (“ALJ”), D. Michael Chappell, that FTC Complaint Counsel had failed to ...
Dan Mogin, Tim LaComb, and Jonathan Rubin
April 05, 2023Photo by Alexandru Tugui on Unsplash Roughly five months after announcing the largest merger in retail grocer history, Kroger and Albertsons are facing new opposition from twenty-six grocery customers seeking to terminate the merger and a substantive letter to the FTC from the American Antitrust Institute (“AAI”) explaining its concerns with the merger. These new challenges are in addition to an ongoing review by the FTC and public opposition from lawmakers and consumer groups. The question now is whether any of this will prevent the merger ...
Photo by Super Straho on Unsplash For the second time in a year, Amazon lost its bid to toss an antitrust action brought by online consumers challenging Amazon’s rules preventing third-party sellers from offering lower prices on rival platforms. While U.S. District Judge Richard A. Jones dismissed the state and federal per se claims, he refused to throw out the majority of federal antitrust claims. Amazon Allegedly Increases Prices on Non-Amazon Platforms According to the plaintiffs, Amazon requires third-party sellers to agree to not offer ...
Photo by Blake Wisz on Unsplash The Second Circuit affirmed a district court’s approval of a $5.6 billion settlement in a Sherman Act antitrust case brought on behalf of 12 million merchants against Visa U.S.A. Inc., MasterCard International Inc., and a phalanx of financial institutions. The merchants maintained that the card companies and banks adopted payment card rules that allowed Visa and MasterCard to charge supracompetitive interchange fees on each transaction. In re Payment Card Interchange Fee and Merchant Discount Antitrust ...
Photo by Taylor Vick on Unsplash Following its Phase 1 investigation, the UK Competition and Markets Authority (CMA) determined Broadcom Inc.’s acquisition of VMware, Inc., could substantially lessen competition in several server hardware markets and, therefore, warranted an in-depth Phase 2 investigation. This comes on the heels of news that the Federal Trade Commission's (FTC) investigation of the merger remained ongoing and that the European Commission (EC) would also conduct in an in-depth investigation of the transaction. Based on these ...
Photo by National Cancer Institute on Unsplash U.S. Judge Karen Spencer Martson of the Eastern District of Pennsylvania approved on March 15, 2023, a $25 million settlement of a class action lawsuit against Johnson & Johnson for allegedly blocking biosimilar products that compete with high-priced Remicade®, J&J’s immunosuppressive drug. Remicade® (infliximab), originally approved to treat patients with Crohn’s disease, was later approved for ailments including ulcerative colitis, psoriatic arthritis, and rheumatoid arthritis. The ...
Photo of cervical cancer cells by National Cancer Institute on Unsplash Pfizer Inc. announced on March 13 plans to acquire cancer drug maker Seagen Inc., an American-based biotech company, for $43 billion. All but one of Seagen’s drugs are biologics, which are often made using biotechnology and derive from living organisms or their cells. The price tags on all of these drugs exceed $100,000 per year. Pfizer’s CEO was quoted as saying President Biden’s $2,000 cap on out-of-pocket expenses for seniors – a generally unpopular move in the drug ...
Beverage aisle at Pennsylvania Costco March 2023. Photo by Jane Hagy. The Federal Trade Commission has reportedly launched an investigation to explore price discrimination in the soft-drink industry, apparently as part of FTC Chair Lina Khan’s effort to reinvigorate use of the Robinson-Patman Act. The Act, a 1936 amendment to Section 2 of the Clayton Act, strengthened the Clayton Act’s limitations on price discrimination. In the 1960’s, the government brought 518 Robinson-Patman cases against one form or another of price discrimination, but ...
Photo by Nathan Rogers on Unsplash On March 7, 2023, the Second Circuit U.S. Court of Appeals revived an antitrust lawsuit brought by Relevant Sports LLC (“Relevant”), a soccer promoter, against FIFA and the United States Soccer Federation (the “USSF”). In doing so, the Second Circuit reaffirmed longstanding antitrust law that a rule enacted by an association that governs member conduct is concerted activity subject to Section 1 of the Sherman Act. Background FIFA is the international governing body for soccer. It is a membership-based ...
Image: March 7, 2023, screen capture of Ticketmaster notices re Taylor Swift tickets. Live music fans have been dealt another setback in their war on ticket prices. The Ninth Circuit U.S. Court of Appeals has upheld a mandatory arbitration provision between fans of pop icon Taylor Swift and Live Nation Entertainment and its subsidiary, Ticketmaster, LLC, dismissing their proposed class action. Swifties, as her fans are known, had filed suit against the concert giant for allegedly using its market power to charge supra-competitive fees for ...
Photo by Maxim Hopman on Unsplash The FTC has decided to abandon its challenge to Meta Platforms Inc.’s acquisition of virtual reality (VR) exercise app developer, Within Unlimited, Inc., after U.S. District Judge Edward J. Davila from the Northern District of California rejected the Federal Trade Commission’s bid for a preliminary injunction blocking the deal. A setback for the Biden administration’s campaign to get tougher on anticompetitive mergers, the judge found that entry by acquiring Within was Meta’s only option because – despite its ...
Photo by Marquise Kamanke on Unsplash What's Happening On January 23, 2023, the U.S. Federal Trade Commission (“FTC”) announced the Hart-Scott-Rodino (“HSR”) premerger notification thresholds would increase by 10.3%. These changes will go into effect Feb. 27 and apply to transactions closing after that date. The minimum threshold for HSR merger reporting is now $111.4 million, up from $101 million in 2022. Just a few days prior, on Jan. 20, 2023, the FTC announced thresholds for Section 8 would increase as well and that this change was ...
Photo by Owen Lystrup on Unsplash Christmas 2022 was bedlam for thousands of travelers as Southwest Airlines cancelled 16,700 flights amid severe winter storms that separated passengers from their families, their luggage, and their money. The Wall Street Journal reported that the carrier’s route configuration and the failure of its crew scheduling software caused the fumbled response. Massachusetts Senator Elizabeth Warren reacted in a holiday tweet that the debacle was an example of how airline mergers have been a disaster for consumers. ...
Photo by Israel Adnrade on Unsplash The Federal Trade Commission has proposed a rule that would ban most non-compete clauses in employment contracts, calling it “a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.” The agency estimates that the rule could increase wages by nearly $300 billion per year and expand career opportunities for 30 million workers. Chair Lina M. Khan said non-compete clauses “block workers from freely switching jobs, depriving ...
Photo by CardMapr.nl on Unsplash Mastercard has entered into a consent order with the Federal Trade Commission following the Commission’s investigation into the payment network’s refusal to provide token conversion services to competing debit networks for online and in-app eWallet transactions. The Durbin Amendment to the 2010 Dodd-Frank Act sought to inject competition into the debit network market by requiring issuers to enable debit cards for at least two unaffiliated debit networks. Numerous “regional” debit networks compete with ...
If anyone knows the workings of Washington’s antitrust machinery, it’s Microsoft’s president, Brad Smith, who served as the company’s general counsel during the late 1990s, when the Justice Department sued Microsoft in one of the most famous monopolization cases in modern times. So, it is hardly surprising that Smith has been trying to “fix it first” in the past few months, making deals and announcing commitments designed to make Microsoft’s $ 68.7 billion acquisition of Activision Blizzard more palatable to antitrust regulators. Microsoft, ...
RealPage, Inc., a real estate software and data analytics company, is facing class action litigation and a federal investigation over whether it is facilitating a data-driven rental property cartel with landlords and property managers, driving up the prices renters pay each month. RealPage Class Action Filed in Federal Court in San Diego A federal antitrust class action complaint has been filed against the company and several of its property management clients in federal court in San Diego on behalf of renters who claim they paid inflated ...
The year is 1979. Inflation and lines at the gas pumps caused by a revolution in Iran have stunned Americans. Driven to action, the International Association of Machinists (IAM) files suit in the Central District of California against OPEC and its 14 member countries for participating in a cartel that controls the worldwide price of oil. None of the defendants made any kind of appearance before the court. Nonetheless, the union lost, and its case was dismissed. Under the Constitution, federal courts are courts of limited jurisdiction. A ...
The road back from the COVID-19 pandemic hasn’t been easy for Harley-Davidson. Although the company shipped more than 194,000 motorcycles globally last year, it failed to meet its growth targets. Now the firm is facing legal troubles, too. This past August, plaintiffs filed “right-to-repair” class action lawsuits against the firm in Wisconsin and California. Then, on November 3, plaintiffs filed yet another federal class action lawsuit against Harley-Davidson in Chicago. The Chicago lawsuit alleges the company used its warranty to force Harley ...
CFIUS has issued its first set of guidelines regarding the types of investment activity that could trigger penalties under the agency’s expanded authority over foreign investments. The guidelines were issued on Oct. 20 following President Biden’s Sept. 15 Executive Order 14083 outlining priorities for assessing national security threats. The Committee on Foreign Investments in the U.S. (“CFIUS”), an interagency committee overseen by the Department of the Treasury, is tasked with evaluating the potential risks and impacts of foreign ...
Alphabet, Inc., Google’s parent company, has won an early victory in the Google Maps antitrust litigation filed in the Northern District of California. U.S. Judge Jeffery S. White dismissed the complaint without prejudice on Nov. 1, 2022, ruling that the plaintiffs failed to adequately allege their illegal tying claim. The antitrust case, which brought as a class action, was filed by Big Dream Media, Getify Solutions, Inc. and Sprinter Supplier, LLC on behalf of themselves and all other companies engaged in digital advertising, app ...
Since the mid-1990s, credit reporting in the U.S., which has its roots in the records of consumer accounts held by local merchants and small-town credit bureaus, has been a tight oligopoly of three consumer data repositories, Equifax, Experian, and TransUnion. These firms collect account data from banks and businesses that furnish credit to consumers. The data is then sold as a credit report to other credit furnishers, typically packaged with one or more credit scores. The control of consumer data is what differentiates the three credit data ...
What was promised in 2010 to deliver a robust pro-consumer ticketing and live events industry has created exactly the opposite 12 years later. That is the message from a collection of pro-competition advocacy groups that are encouraging consumers to pressure the Department of Justice to investigate and break up Live Nation Entertainment, Inc. – the company formed by the merger of Live Nation and Ticketmaster. “Live Nation-Ticketmaster owns more than 70 percent of the primary ticketing and live event venues market. They’ve routinely abused this ...
Finding the deal would substantially lessen competition in the U.S. market for publishing rights for potential top-selling books, U.S. District Judge Florence Y. Pan granted the Department of Justice Antitrust Division’s move to block Penguin Random House’s (PRH) proposed $2.2 billion acquisition of Simon & Schuster (S&S). The ruling followed a 13-day bench trial in August. The government filed suit a year ago on Nov. 2, 2021 to block the world’s largest publisher, PRH, from acquiring a rival to create a “publishing behemoth” that ...
Federal lawmakers troubled by The Kroger Co.’s impending acquisition of one of its chief competitors, The Albertson Cos., for $25 billion, will hold a hearing on the impact of the deal on the competitive landscape and consumers next month. Members of the U.S. Senate Judiciary Committee’s antitrust panel who recently announced the move are not the only skeptics, however. Senators Richard Blumenthal (D-CT) and Cory Booker (D-NJ) joined Sen. Amy Klobuchar (D-MN), who chairs the antitrust panel, in sharing trepidations about the deal. The trio did ...
Three poultry processors and a consulting firm that circulated wage information among them have entered a consent decree with the Department of Justice to end a “long-running conspiracy to exchange information about wages and benefits for poultry processing plant workers and collaborate with their competitors on compensation decisions,” a violation of the Sherman Antitrust Act. The poultry companies -- Cargill Inc. and Cargill Meat Solutions Corp., Sanderson Farms Inc., and Wayne Farms LLC – agreed to pay nearly $85 million. In addition to the ...
AbbVie Inc., which owns the patent on the global blockbuster drug, Humira, has again defeated a pair of claims by welfare-health plans that the company violated Sections 1 and 2 of the Sherman Antitrust Act. On Aug. 1 the Seventh Circuit U.S. Court of Appeals affirmed a district court’s dismissal of the antitrust suit against the drug maker (Mayor and City Council of Baltimore, et al. v. AbbVie Inc., et al., No. 20-2402, 7th Cir.). Appearing on the World Health Organization’s list of “essential drugs,” Humira is used to treat various forms of ...
The Justice Department’s Antitrust Division is investigating the PGA Tour for potentially anticompetitive conduct, the Wall Street Journal was first to report. Specifically, the DOJ is investigating conduct related to the PGA Tour’s suspension of all members who compete on the rival LIV Golf Tour – a new series of eight invitational tournaments largely funded by Saudi Arabia’s Public Investment Fund. This wealthy backer has lured several top golfers away from the PGA Tour through guaranteed compensation packages for players (opposed to ...
A group of AT&T and Verizon wireless subscribers have filed a proposed class action arguing that the T-Mobile / Sprint merger – despite all of their emphatic assurances to the contrary – is harming consumers and should be unwound. The suit was filed on June 17 in federal court in Chicago against Deutsche Telekom AG, T-Mobile U.S., Inc., and former Sprint Corp. owner SoftBank Group Corp. of Japan. The consumers allege the merger paved the way for anticompetitive conduct in violation of Section 7 of the Clayton Act and Section 1 of the ...
To use the cellular telephone networks, automobile manufacturers install telematic control units containing a baseboard processor that relies on 2G, 3G, and 4G cellular telephony technology patented by Nokia, Conversant, Optis, and Sharp. This technology was adopted as the industry standard by various voluntary Standards Development Organizations (“SDOs”) on the condition that each of the patentees commit to licensing the technology on fair, reasonable, and non-discriminatory (“FRAND”) terms. Requiring such an ex ante FRAND commitment is a ...
Patent law and antitrust law both promote innovation, albeit in very different ways. Patent law creates incentives by granting inventors the right to exclude. Antitrust law protects the process of competition so that new inventions can enter and compete in the market. Nonetheless, there is long-standing tension between patent law, which enables in some circumstances the establishment of a monopoly, and antitrust, which prohibits monopolization. The courts have long assured us that the two bodies of law are complementary. In the patent misuse ...
The Ninth Circuit Court of Appeals has, yet again, held that data scraping public websites is not unlawful. hiQ Labs, Inc. v. LinkedIn Corp., decided on April 18, affirms the court’s previous decision that plaintiffs may not rely on the Computer Fraud and Abuse Act (“CFAA”) to enjoin third parties from scraping data from their websites. Data scraping refers to the extraction of data from websites, whether public facing or not. Because that practice is not per se illegal, parties must rely on statutes like the CFAA to protect that data. That is ...
The U.S. Court of Appeals for the Fifth Circuit recently slammed the courthouse door on the plaintiff in Continental Automotive Systems v. Avanci, LLC (5th Cir., Feb. 28, 2022), a manufacturer of telematic control units (“TCUs”) that provide cellular communications to automobiles. The court held that Continental lacked Article III standing to sue patentees, Nokia, Conversant, Optis, Sharp, and their licensing agent, Avanci, for monopolization for refusing to license standard-essential patents (“SEPs”) under fair, reasonable, and ...
In early February, Frontier Airlines and Spirit Airlines announced a $6.6 billion merger that gives Frontier a 51.5% controlling interest in a combined airline that will become the fifth largest carrier in the country and the largest ultra-low-cost carrier (ULCC). Spirit shareholders will receive 1.9126 shares of Frontier plus $2.13 in cash for each Spirit share, which has an implied value of $22.54 as of May 4. The deal does not sit well with lawmakers, special interest groups, or antitrust commentators, several of whom have written to the ...
Timothy Z. LaComb, Jonathan Rubin
May 05, 2022Antitrust law enforcers at the Department of Justice and Federal Trade Commission remain dedicated to increasing competition in several rapidly consolidating industries, including healthcare and labor markets. Despite two losses handed to them by juries in Texas and Colorado in favor of defendant executives, they vowed to continue their accountability crackdown. They also remain committed to exploring ways to combat the harmful effects of over-concentration on patients, workers, and the markets themselves – this includes a renewed focus on ...
Broadcom and the Federal Trade Commission just settled an antitrust probe in November 2021. Yet, roughly five months later, Broadcom is again in the FTC’s crosshairs. According to people familiar with the situation and a document viewed by The Information -- a well-respected source for important, deeply reported stories about the technology industry -- Broadcom is using supply-chain issues to justify forcing customers to adopt exclusive agreements. Just five months ago Broadcom agreed to stop forcing exclusive agreements on customers as part ...
There was reason for optimism in August 2021, when the Ninth Circuit Court of Appeals granted rehearing en banc of a 2-1 decision that would have made it more difficult for antitrust claimants to secure class certification. The three-judge panel in Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 993 F.3d 774 (9th Cir. 2021) had determined that Federal Rule of Civil Procedure 23(b)(3) required a district court to find that no more than a de minimis number of class members are uninjured before a class may be certified. Having ...
It’s a case that challenges the limits of the “freedom of design” usually enjoyed by companies accused of product design changes alleged to harm competition. Ordinarily, a design change is not the kind of conduct that runs afoul of the antitrust laws, but on March 21, U.S. Judge Jeffrey S. White from the Northern District of California denied Apple Inc.’s motion to dismiss an antitrust case brought against it by AliveCor Inc. The suit alleges that Apple unlawfully maintained its monopoly in the market for heart rate analysis apps by updating ...
Premerger reporting is now required for companies working on transactions that will have an estimated value of $101 million or more at the anticipated time of closing. The Federal Trade Commission moved the reporting threshold up by $9 million from $92 million effective Feb. 23, 2022. The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) requires companies to provide the FTC and Department of Justice advance notice of transactions exceeding the specified value. The figure is adjusted annually to stay in line with the country’s gross ...
Jennifer M. Oliver, Timothy Z. LaComb
April 01, 2022In 1990, the Department of Defense could turn to 13 companies to produce tactical missiles, eight to make fixed-wing aircraft, and another eight to build ships. Now there are only three missile and three aircraft makers, and only two surface ship builders. There were eight satellite manufacturers in 1990; today there are only four. Tanks and other tracked vehicles are now made by a single company. Such market consolidation is potentially harmful for the usual reasons, such as less innovation, higher prices, and a lower level of customer ...
Intentionally or not, the federal government may have landed on an issue that can bring the Right and Left together: the price of beer, wine, and spirits. The Department of Justice and Federal Trade Commission are following up on concerns and recommendations shared last month by the Treasury Department that the industry is too concentrated. Treasury’s report says beer drinkers alone may be paying as much as $487 million more a year than they should. Prices for wine could be overpriced by 18% and spirits by more than 30%, Treasury says, and ...
“Second time lucky?” That is how U.S. Judge James E. Boasberg began his opinion allowing the Federal Trade Commission’s antitrust suit against Meta Platforms, Inc. (formerly, Facebook) to proceed, saying the government “stumbled out of the starting blocks” but has rectified in its amended complaint against Meta the deficiencies he found in its initial complaint. In June 2021, Judge Boasberg, who presides in U.S. District Court for the District of Columbia, dismissed the FTC’s first complaint because the Commission had “failed to plausibly ...
Companies seeking insurance coverage for losses from cyberattacks received good news this month. The New Jersey Superior Court for Union County found that Merck & Co., Inc.’s claim for coverage under their $1.75 billion insurance policy with ACE American Insurance Company (now The Chubb Corporation) is not barred by the policy’s war exclusion clause. Merck successfully asserted their expectation that the exclusion only bars claims resulting from “traditional forms of warfare.” This case sends a strong signal from the judiciary to carriers: ...
The Seventh Circuit U.S. Court of Appeals has certified a question to the Illinois Supreme Court over the accrual of claims under the Illinois Biometric Information Privacy Act (BIPA). The question, posed by the court in Cothron v. White Castle Systems, Inc., reads: “Do section 15(b) and 15(d) claims accrue each time a private entity scans a person’s biometric identifier and each time a private entity transmits such a scan to a third party, respectively, or only upon the first scan and first transmission?” The case was brought by an employee ...
HBLC · Ninth Circuit Opinion In Telescope Case By J Rubin And T LaComb 12 - 13 - 2021 The Ninth Circuit Court of Appeals this month upheld judgment in favor of Optronic Technologies, Inc., finding there was sufficient evidence that Chinese telescope manufacturer, Ningbo Sunny Electronic (“Sunny”), conspired with a competitor in the U.S. consumer telescope market to allocate customers, fix prices, and monopolize the telescope market in violation of federal antitrust laws (Optronic Technologies, Inc., v. Ningbo Sunny Electronic Co., Ltd., No. ...
Jonathan Rubin, Timothy Z. LaComb
December 13, 2021The UK’s Competition and Markets Authority (CMA) has ordered the company formerly known as Facebook to unwind its acquisition of Giphy, Inc. due to potential harms in the markets for social media and digital display advertising. Facebook completed the $400 million acquisition of Giphy on May15, 2020 but has held the businesses separate since June 9, 2020, under CMA orders. Giphy proclaims itself to be the largest curator of quick-looping silent video clips, or GIFs. The company draws more than a billion searches each month in the UK, traffic ...
Prior approval is once again standard practice. The Federal Trade Commission has resuscitated its long-dormant policy of routinely restricting anticompetitive mergers, putting “industry on notice” that it will once again require aggressive acquirers to obtain prior approval “before closing any future transaction affecting each relevant market for which a violation was alleged, for a minimum of 10 years.” “Restoring the long-standing prior approval policy forces acquisitive firms to think twice before going on a buying binge because the FTC can ...
The Federal Trade Commission has approved a final order settling charges that chip giant Broadcom Inc. illegally monopolized markets for semiconductor components used to deliver television and broadband internet services through exclusive dealing and other tactics. While the FTC’s settlement with Broadcom is a net positive for certain rivals and customers, it fails to protect others and leaves all parties uncompensated. In its June 2021 complaint, the government said Broadcom is a monopolist in the sale of three types of chips used in the core ...
Despite agreeing on almost nothing, Democrats and Republicans have found a common cause: the anticompetitive tactics of dominant digital platforms. Legislators have lined up to say the aggressive conduct undertaken by the platforms damages everything from free markets to free speech, from small businesses to innovative new players, from workers to consumers, and from national security to democracy itself. In addition to defending themselves on the legislative front, the platforms – Amazon, Apple, Facebook, Google – face challenges on the ...
Saying the deal would create a “publishing behemoth,” the Antitrust Division of the U.S. Department of Justice filed an antitrust lawsuit on Nov. 2 to block the world’s largest publisher, Penguin Random House (PRH), from acquiring rival Simon & Schuster (S&S). A combined company would be able to “exert outsized influence” over which books are published and how much authors are paid for their work, the suit alleges. The publishing industry is already highly concentrated, largely controlled by the “Big Five” publishers. PRH (which owns ...
Download the PDF Marking the first cannabis industry antitrust case to reach trial, a California jury on Sept. 23, 2021, returned a $5 million verdict to the Richmond Compassionate Care Collective (RCCC). Under the state’s Cartwright Act, the damages will be trebled to $15 million, plus attorney fees. Judge Edward G. Weil presided over the trial. Independently owned dispensary RCCC sued the owners of Richmond Patients’ Group (RPG) for conspiring to prevent RCCC from opening a new shop, citing evidence that RPG blocked access to the limited ...
In a recently published paper, a pair of academics propose that the application of artificial intelligence can offer a potent weapon against antitrust behavior in the Big Tech sector. This is the very industry that has advanced this technology, noted one of those academics, Giovana Massarotto, a Center for Technology, Innovation and Competition academic fellow at the University of Pennsylvania Carey Law School and an adjunct professor at the University of Iowa. She underscored this fact in an article for Bloomberg Law, in which she maintains ...
Since February 2020, staff members at the Federal Trade Commission have been studying past acquisitions by Google, Amazon, Apple, Facebook, and Microsoft – several years’ worth of deals that did not require reporting to antitrust authorities because the deal sizes fell below regulatory requirements. FTC Chair Lina M. Khan says the study reveals “the extent to which these firms have devoted tremendous resources to acquiring start-ups, patent portfolios, and entire teams of technologists—and how they were able to do so largely outside of our ...
Jonathan Rubin, Jennifer M. Oliver
September 21, 2021Apple, Inc. has been enjoying a tremendous advantage in the highly lucrative gaming-app market. This is thanks to the immense popularity of Apple devices running the iOS platform and restrictions imposed by Apple barring merchants from steering iOS users to non-Apple payment options. Nor has Apple allowed merchants to communicate directly with users about alternatives to Apple’s App Store for game-related purchases. But U.S. Judge Yvonne Gonzalez Rogers’ decision on Friday (Sept. 10, 2021) has taken much of the edge off that advantage, ruling ...
Facing what it calls a “tidal wave” of merger filings, the Federal Trade Commission has warned companies that Hart-Scott-Rodino Act reviews will now take longer than usual and that transactions could be challenged well after statutory deadlines regardless of when a deal was initially investigated. The FTC cites a surge in merger filings and limited resources for the delays. In a statement posted Aug. 3, 2021, Acting Director of the FTC Bureau of Competition, Holly Vedova, reiterated that the HSR Act requires companies to provide the agency and ...
Jonathan Rubin, Jennifer Oliver
August 11, 2021Delivering some good news for advocates of competitive markets, the Ninth Circuit U.S. Court of Appeals has vacated a 2-1 decision that would have made it more difficult for antitrust claimants to secure class certification. Yesterday (Aug. 3, 2021) the court decided to rehear the matter en banc, issuing a brief order in the case of Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 993 F.3d 774 (9th Cir. 2021). As we wrote previously, we are witnessing rapid market concentration and the emergence of dominant players in important ...
President Biden’s July 9, 2021, Executive Order on Promoting Competition in the American Economy reflects a movement toward greater enforcement of antitrust and competition laws following decades of a more lax approach. During that time we have seen increased market concentration in key industries and the rise of the “Big Four” technology companies: Amazon, Apple, Facebook, and Google. Perhaps most alarming to some businesses is the order’s apparent proposal to restrict the use of non-compete clauses in employment contracts. But this is not as ...
A quick recap of recent antitrust-related developments in semiconductors, real estate, college sports, insurance brokerage, digital advertising, agriculture, health data privacy, retail, automotive manufacturing, and defense contracting, plus a change that all but guarantees more antitrust enforcement activity from the FTC. Broadcom’s Three-Chip Monopoly Draws FTC Charges, Consent Decree FTC has charged leading chipmaker Broadcom with illegally monopolizing markets via exclusive dealing for semiconductor components necessary to deliver ...
As predicted by some, the Federal Trade Commission issued a complaint charging Broadcom Inc. with illegally monopolizing several markets for semiconductor chips used to deliver television and broadband internet services. The Commission simultaneously issued a proposed consent order that, if approved, would settle the FTC’s charges against Broadcom and allegedly restore competition in the impacted markets. But this is likely just the beginning of Broadcom’s antitrust issues in the U.S. because the FTC’s complaint provides an effective roadmap ...
Dan Mogin, Timothy Z. LaComb, and Steven Benz*
July 06, 2021The Supreme Court’s unanimous ruling in favor of student-athletes in their antitrust dispute with the National Collegiate Athletic Association (NCAA) over education-related benefits is certainly a boon for the players. But it may be Justice Brett Kavanaugh’s concurring opinion that will prove more significant. Instead of restricting his analysis to education-related benefits, Justice Kavanaugh said he wrote his concurrence specifically to underscore his belief that the NCAA’s remaining compensation rules (e.g., restrictions on salaries and the ...
JUNE 21, 2021 -- The National Collegiate Athletic Association (NCAA) doesn’t get a free pass when it comes to antitrust law, the Supreme Court held today in a unanimous decision written by Justice Neil Gorsuch. The justice said lower courts correctly applied antitrust scrutiny to the NCAA’s “amateur” requirement which denies athletes compensation they would command in a competitive market. In a concurring opinion, Justice Brett Kavanaugh said the NCAA is not above the law. He noted the adverse impact of the organization’s restrictions ...
With today’s five-bill package, members of the U.S. House of Representatives continue their pressure on Amazon, Apple, Facebook, and Google for what the legislators believe are anticompetitive practices by unregulated monopolies with too much power. That sentiment is shared by some antitrust enforcement agencies and private parties who have brought litigation against the giants of ecommerce, entertainment, social media, digital advertising, and internet search. The House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law, ...
Saying big technology companies have reached dangerous levels of monopoly power, a New York State senator was optimistic that his proposed a solution would become law and make the state the toughest on anti-competitive conduct in the nation. But his hopes were dashed yesterday, June 10, the last day of the legislative session, when the state Assembly rejected the measure. Jacob Kaye, who has been following New York's reform effort closely, said “it's going back to the drawing board.” Kaye, Managing Editor of the Queens Daily Eagle newspaper, ...
A two-page bipartisan bill introduced in the House of Representatives on May 21, 2021, would give state attorneys general more control over where their antitrust cases are litigated, ending the ability of defendants to move certain types of cases to jurisdictions they prefer. Rep. Ken Buck (R-Colo.) introduced H.R. 3460, the State Antitrust Enforcement Venue Act of 2021, with Representatives David Cicilline (D-R.I.), Dan Bishop (R-N.C.), Burgess Owens (R-Utah), and Joseph D. Neguse (D-Colo.) co-sponsoring. Antitrust enforcement actions filed ...
It is a common refrain by people familiar with Amazon’s merchant relationships: Amazon is great if you are a consumer, but if you’re a merchant on the platform, or a competitor, it is powerful bully who doesn’t hesitate to wield is dominance at your expense. Attorney General for the District of Columbia Karl A. Racine obviously agrees with the second part of that statement. On May 25, 2021, he sued Amazon over a litany of allege anti-competitive practices that violate the D.C. Antitrust Act, causing harm to consumers and third-party sellers ...
As we witness increased market concentration and dominant players in many important industries, antitrust law and its enforcement are under attack as weak and ineffectual. Many in Congress want to strengthen antitrust law and make it more relevant to today’s business environment, including the increasing number of clear or near monopolies. So now is an awkward time for judicial decisions making it more difficult for antitrust claimants to secure class certification. The Ninth Circuit U.S. Court of Appeals has done just that in Olean Wholesale ...
The U.S. Supreme Court unanimously decided that the Federal Trade Commission (FTC) may not simultaneously seek injunctive relief for deceptive business practices and equitable monetary relief -- such as restitution or disgorgement -- from scammers and antitrust law violators. The Federal Trade Commission Act simply does not authorize this approach, the court held. The acting chair of the FTC and others immediately condemned the ruling, saying the court took away the Commission’s best weapon against scammers and unscrupulous businesses. But the ...
A three-judge panel of the Ninth Circuit U.S. Court of Appeals – on its own initiative – has invited attorneys in an antitrust class action to argue whether the full court should reexamine the panel’s own ruling, one that could make class certification more difficult to obtain in antitrust class actions. Interestingly, the parties had not requested en banc review. According to the order entered April 28, 2021 in Olean Wholesale Grocery Cooperative Inc. v. Bumble Bee Foods LLC (Case No. 19-56514, Dkt. No. 101, 9th Cir., April 28, 2021), “a ...
Citing “more than enough evidence," the U.S. Court of Appeals for the Fifth Circuit has upheld the Federal Trade Commission’s determination that Impax Laboratories, LLC engaged in an illegal pay-for-delay settlement to block consumers’ access to a lower-cost generic version of Endo Pharmaceuticals Inc.’s Opana ER, an extended-release opioid pain reliever. Entering into what is known as a “reverse payment” arrangement, Impax had agreed to accept funds from Endo to stay out of the market for two-and-a-half years. Judge Gregg Costa wrote in the ...
Both Democrats and Republicans see antitrust law as a critical issue that deserves much attention. They both wish to rein in the giants of technology, ecommerce, social media, and internet search through significant legislative change and increased enforcement. But the impetus for proposed changes and enforcement actions, as expressed by the politicians themselves, is very different from one party to the next, and very different from what we have seen in the past. Sen. Amy Klobuchar (D-MN), the lead Democrat on the Judiciary Subcommittee on ...
Democratic and Republican leaders of the Senate Foreign Relations Committee on April 8, 2021 proposed the Strategic Competition Action Act of 2021 (S.B. 687), advancing a more hardline effort to put a check on China’s steady rise as global economic and militaristic powerhouse of the authoritarian variety. A separate measure is winding its way through the Senate to bolster the U.S. semiconductor industry, also an effort to improve America’s competitive position vis-à-vis China. Sponsored by Democratic Chairman Sen. Bob Menendez and ranking ...
Dan Mogin, Jonathan Rubin, and Jennifer Oliver
April 14, 2021When it comes to companies offering workplace collaboration software platforms such as Microsoft Teams and Slack there is little in the way of collaboration. The wave of technology solutions that enable groups to collaborate efficiently and creatively despite being dispersed around the planet, or forced by a pandemic into quarantine, is big business. Organizations are beginning to use them in market-facing applications, too, so the prospects are exciting and the race for market share is on. Grandview Research put the 2019 global market at $9.5 ...
Dan Mogin, Jonathan Rubin, and Jennifer Oliver
April 01, 2021The number of players in the rapidly consolidating $140 billion global eyewear market just dropped by one as the biggest player grew bigger. The European Commission has approved eyewear juggernaut EssilorLuxottica’s $8.5 billion acquisition of GrandVision under the condition that stores in Belgium, Italy, and the Netherlands are divested. Without that action the EC said the merged company would be able to use its position as the leading frames wholesaler to choke off supply to its competitors. EssilorLuxottica, maker of 70 well-known brands ...
FTC Commissioner Noah Phillips and George Washington Law School Competition Law Director William E. Kovacic, who once chaired the agency, appeared on a webinar today (March 16, 2021) hosted by the Information Technology and Innovation Foundation (ITIF). Aurelien Portuese, ITIF’s Director of Antitrust and Innovation Policy, asked the speakers what we might expect from the Biden administration in terms of antitrust law, reform, and enforcement. “[Litigation] can also result in losses and legal rulings that don’t favor the agencies.” Commissioner ...
The European Commission has opened a formal antitrust investigation to assess whether the pharmaceutical company Teva Pharmaceutical Industries Ltd. has illegally delayed the market entry and uptake of medicines that compete with Copaxone, its blockbuster multiple sclerosis drug. The EC will investigate whether Teva has abused a dominant market position in breach of EU antitrust rules. Teva is headquartered in Israel and operates from several subsidiaries in the European Economic Area. EC launched surprise inspections of Teva subsidiaries in ...
Salesforce.com, Inc. and Slack Technologies Inc. have received requests for additional information from the Department of Justice Antitrust Division relating to their $27.7 billion merger, according to Salesforce’s Form 8-K filed with the Securities & Exchange Commission on Feb. 16, 2021 and reported by Reuters. Salesforce, a popular cloud-based customer relationship software provider, announced its plan on Dec. 1, 2020 to acquire Slack, a leading business communication and collaboration platform that offers topical chat rooms and direct ...
Dan Mogin, Jonathan Rubin, and Jennifer Oliver
February 26, 2021Following a unanimous vote, the Federal Trade Commission lowered by $2 million the size of mergers and acquisitions that require the parties to report the deals to the Commission, meaning more deals will be subject to Hart-Scott-Rodino (HSR) reporting rules. “For 2021, the size-of-transaction threshold for reporting proposed mergers and acquisitions under Section 7A of the Clayton Act will adjust from $94 million to $92 million. Also, the 2021 thresholds under Section 8 of the Act that trigger prohibitions on certain interlocking memberships ...
Calling the case a “poster child for divestiture,” the Fourth Circuit Court of Appeals affirmed the divestiture of a company in the door manufacturing industry in response to a private merger challenge. The plaintiffs claimed that the deal harmed and even eliminated suppliers and competitors and secured the defendant’s position in a resulting duopoly (Steves and Sons, Inc. v. JELD-WEN, Inc., 4th Cir., No. 19-1397). Steves and Sons, Inc. and JELD-WEN, Inc. (JW) sell molded doors. Made by fitting a composite skin over a wood frame, these doors ...
Dan Mogin, Jonathan Rubin, and Jennifer Oliver
February 20, 2021Sen. Amy Klobuchar (D-MN), whose presidential campaign was run in part on the need to bolster antitrust enforcement and resources, has weighed in with a revised bill that has a chance to advance now that her party has the White House, a modest majority in the House, and a razor-thin advantage in the Senate. Introduced on Feb. 4, 2021, the Competition and Antitrust Law Enforcement Reform Act would expose more mergers and acquisitions to scrutiny, and shift the burden to companies to establish their deals are not anti-competitive, rather than ...
Dan Mogin, Jonathan Rubin, Jennifer Oliver
February 18, 2021A decision by the Federal Trade Commission to challenge a proposed transaction as unlawful under antitrust laws, and setting the matter for a hearing before an FTC Administrative Law Judge (ALJ) spells the end of the road for the case, if the parties are unwilling or unable to submit to an extended administrative proceeding. The 2015 proposed merger between Comcast and Time Warner Cable, for example, was abandoned shortly after the Commission referred the deal to an ALJ. The procedure, based on the same Article II Constitutional authority as ...
Agency review of business deals submitted to the federal government will now take at least the permissible full 30 days while the Federal Trade Commission and Antitrust Division of the Department of Justice examine the review process. The agencies say the review and suspension are necessary in light of the confluence of three significant circumstances: 1) an “unprecedented volume” of filings required by the pre-merger notification program of the Hart-Scott-Rodino Act (HSR); 2) the transition to the Biden administration; and 3) challenges posed ...
Sen. Amy Klobuchar (D-MN) -- a leading voice in the call for antitrust law reform -- is preparing fresh legislation designed to block acquisitions of "maverick" or "disruptor" companies whose products and services are frequently better for consumers than those of the dominant companies that are acquiring them. In addition to giving more tools to antitrust enforcers, the former presidential candidate will also seek to increase funds for their efforts. Sen. Klobuchar’s bill would prohibit “exclusionary conduct” that presents an “appreciable risk ...
Facebook believes Apple abused its power in the smartphone market by forcing app developers to follow App Store rules that Apple itself doesn’t follow for Apple mobile applications, according to sources speaking to TheInformation.com. In its report on the story, the New York Times wrote: “Tensions between Apple and Facebook have been growing for months, rooted in how the companies are diametrically opposed on how they make money. Apple, which has made privacy a key tenet, prefers that consumers pay for their internet experience, leaving less ...
A biometric information privacy protection bill introduced in the New York Assembly this month is pending in that body’s Consumer Affairs and Protection Committee as of Jan. 21, 2021. Introduced by 17 Democrats and seven Republicans, the bill would require private entities storing biometric identifiers or biometric information to develop written policies establishing a retention schedule and guidelines for permanently destroying the data “when the initial purpose for collecting or obtaining such identifiers or information has been satisfied or ...
On Dec. 8, 2020, the Federal Trade Commission filed a complaint challenging the merger of The Procter & Gamble Company and Billie, Inc. According to the FTC, “the proposed acquisition would allow P&G, the market-leading supplier of both women’s and men’s wet shave razors, to buy Billie, a newer but expanding maker of women’s razors, and thereby eliminate growing competition that benefits consumers.” While many questions remain, particularly given that a public version of the complaint has not been released, the FTC’s decision to ...
This is especially true in antitrust, where industries and markets undergo constant change brought about by innovation and changing consumer behavior. Confronted with ever evolving commercial circumstances, the courts face a constant struggle to keep up. With the filing of the antitrust cases against the Facebook “monopoly” by the Federal Trade Commission and 47 state attorneys general, U.S. antitrust faces one of its most significant tests since the case of U.S. v. Microsoft, now 20 years old. In the intervening decades, the Internet has ...
Jonathan Rubin, Jennifer M. Oliver
December 10, 2020Facebook’s acquisitions of one-time rivals Instagram in 2012 and WhatsApp in 2014 drew a great deal of criticism from pro-competition experts. And now, just when the government was poised to revisit those deals with a fresh round of litigation, the transition to a new presidential administration has stalled the suit. State and federal investigators had been preparing to bring antitrust charges against Facebook that would challenge the social platform company’s acquisitions, alleging the deals helped create an anti-competitive powerhouse that ...
That’s practically what has happened in the U.K. where the Competition and Markets Authority (CMA) has increased oversight of ad-driven digital platforms, namely Facebook and Google, by establishing a dedicated Digital Markets Unit (DMU). While it was created to enforce new laws to govern any platform that dominates their respective market, when the new unit starts operating in April 2021 Facebook and Google will get its full attention. The CMA says the intention of the unit is to “give consumers more choice and control over their data, help ...
News of a data breach at Dickey’s Barbeque broke in October 2020, revealing that the payment card information of three million customers’ had been stolen and was being sold on the digital black market. MoginRubin filed a class action complaint in federal court on behalf of consumers on Nov. 9, 2020, saying the popular restaurant chain failed to maintain reasonable controls and systems to protect the personal identifying information they collect from customers. Dickey’s only learned of the hack from third-parties 16 months after the hack began. ...
In late May 2020 by online stationery and crafts company Minted disclosed that it had suffered a breach that compromised millions of consumers’ private information — including passwords. Consumers may find indications on their credit reports that their data is being sold illegally via the online black market, commonly called The Dark Web. MoginRubin filed a class action complaint in federal court on behalf of affected consumers on June 11, 2020, alleging violations of the California Consumer Privacy Act. Because Minted failed to take ...
MoginRubin LLP, Jennifer Oliver
December 02, 2020Anticompetitive conduct and misleading advertising practices in the burgeoning biosimilars market – where nearly identical versions of bioilogics are made by different companies – have captured the attention of federal regulators. The U.S. Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) have announced their joint commitment to promoting competition and pursuing biologic product makers that make false statements. The agencies seek to improve patient access to biologics and to curb the prices consumers are charged for ...
Morgan Stanley’s proposed $13 billion all-stock acquisition of the popular E*TRADE online discount brokerage made big headlines last week. While no major antitrust problems are immediately apparent, the deal is part of a trend of consolidation in the financial services industry triggered by disruptions to profits like zero commission trading. The deal now heads for shareholder and regulatory review. According to the New York Times, this is the biggest acquisition in the financial sector since the 2008 meltdown, and signals Morgan Stanley’s ...
The U.S. Treasury Department’s final regulations, giving it more power to scrutinize any national security risks that may arise from deals between U.S. and foreign companies, are scheduled to go into effect this week, Feb. 13, 2020. The regs implement the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) and provide the interagency Committee on Foreign Investment in the United States (CFIUS) broader authority over certain investments and real estate transactions. Critics say the regs will change cross-border M&A deal-making ...
The Federal Trade Commission (FTC) voted unanimously to challenge Edgewell Personal Care Co.’s proposed $1.37 billion acquisition of Harry’s, Inc. The complaint alleges that, for many years the two biggest razor companies operated as a “comfortable duopoly” made increasingly profitable by annual price increases that were “not driven by changes in costs or demand.” But this dynamic changed in recent years thanks to digital, direct-to-consumer upstarts like Harry’s and Dollar Shave Club. According to the FTC, losing Harry’s as an independent ...
The Federal Trade Commission and the New York Attorney General have sued Vyera Pharmaceuticals and two of its executives for antitrust law violations, saying the company illegally blocked generic drug makers from replicating its life-saving off-patent drug Daraprim, which has been on the market for 60 years. “This is just one example of the considerable hurdles companies face in trying to develop and market biosimilars,” said MoginRubin Senior Counsel Joy M. Sidhwa. When it acquired the drug in 2015, Vyera infamously hiked the price of ...
Two of the three dominant college textbook publishers – McGraw-Hill Education, Inc. and Cengage Learning Holdings II, Inc. – have agreed to merge. The U.S. Department of Justice is reviewing the merger. The DOJ is expected to approve the deal with minimal divestiture and the negative ramifications will be significant. The transaction will create a duopoly in the college textbook publishing market, as the post-merger entity and Pearson will control more than 85% of the market. These behemoths plan to use their vast catalogs to pivot to ...
Imagine purchasing a lamp that only uses light bulbs designed specifically to fit that lamp. No other bulb will do. Or a flashlight that requires triangular batteries? What if you bought a car whose wheels were secured with seven lug nuts rather than the standard five? Product makers would find it much more costly to design and manufacture parts for non-standard products, and they would pass those costs along to you, the consumer. These are simple illustrations of where we would be without industrial standards, and particularly ...
Jonathan Rubin, Jennifer M. Oliver
January 28, 2020The Department of Justice (DOJ) and Federal Trade Commission (FTC) have released for public comment their joint draft guidelines which courts may also use in evaluating any anticompetitive effects of vertical mergers and acquisitions, such as when a product manufacturer buys a company that supplies that manufacturer as well as its competitors. The comment period ends Feb. 11, 2020. The Vertical Merger Guidelines (VMGs) are meant to accompany and address issues not covered in the 2010 Horizontal Merger Guidelines (HMGs) regarding mergers of ...
Charles Schwab Corp. has announced it will acquire TD Ameritrade Holding Corp. for $26 billion in stock. But the merger should receive significant attention from the Antitrust Division of the U.S. Department of Justice and potentially affected private parties given the significant antitrust issues it raises. Registered Investment Advisor (RIA) Custodial Market Both Schwab and Ameritrade are well known for their brokerage services, but both also serve as RIA custodians for money managed by independent advisors registered with the U.S. ...
The Federal Trade Commission (FTC) is challenging Illumina Inc.'s $1.2 billion acquisition of Pacific Biosciences of California Inc. (PacBio), calling it an unlawful attempt by Illumina to maintain its monopoly over the U.S. market for next generation DNA sequencing (NGS). In their case, antitrust enforcers in the U.K. say the effects would be global; that the acquisition would increase prices and dampen competition and innovation. The U.K. action sparked a lengthy response from the companies which argue that the deal is good for the industry ...
Claiming Comcast Corp. is using its significant buying power and ambitious nationwide acquisition strategy to dominate the lucrative regional sports network industry, Altitude Sports & Entertainment has sued the cable colossus in a Colorado federal court for Sherman Act and Colorado Antitrust Act violations. Altitude alleges Comcast is deploying “predatory” negotiation tactics to drive it out of business and then raise consumer prices once competition is eliminated. With so much buying muscle in the Rocky Mountain region, Comcast is a ...
You have to give Google credit. It’s no quitter. Despite pressure in the United States and Europe that might tell other companies to take a breath, Google took another in a series of steps to collect and leverage individuals’ healthcare data. In a deal valued at $2.1 billion, the company has entered into a definitive agreement to acquire Fitbit, Inc., the maker of popular health-tracking device wearables. This deal is yet another one that challenges the conventional analysis of what might constitute an anticompetitive merger in the context of ...
After a 25-year business relationship, Anheuser-Busch InBev Worldwide, Inc. (ABI) has agreed to acquire the Craft Brew Alliance (CBA). ABI currently owns about 30% of the outstanding shares of CBA and has agreed to purchase the remaining 70% for $16.50 per share, equal to roughly $321 million. The merger is subject to both review by the Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act and by the Antitrust Division of the U.S. Department of Justice pursuant to the consent decree that allowed ABI to acquire ...
Reuters broke the story that the Treasury Department’s Committee on Foreign Investment in the United States (CFIUS) is conducting a national security review of the owners of TikTok, a social media video-sharing platform that claims a young but formidable U.S. audience of 26.5 million users. CFIUS is engaged in the context of TikTok owner ByteDance Technology Co.’s $1 billion acquisition of U.S. social media app Musical.ly two years ago, a deal ByteDance did not present to the agency for review. Meanwhile, U.S. legislators are concerned about ...
Two of the three dominant college textbook publishers – McGraw-Hill Education, Inc. and Cengage Learning Holdings II, Inc – have agreed to merge, creating a virtual duopoly in the college textbook market and setting the stage for a potential antitrust fight with the Antitrust Division of the U.S. Department of Justice. McGraw-Hill and Cengage claim the new company will generate global growth, improve margins, and produce efficiencies that will lead to more affordable education materials for students. But several student and consumer groups ...
In a September 13, 2019 letter, seventeen consumer advocacy groups and unions (led by Public Citizen Inc.) sent a clear message to the Federal Trade Commission: investigate and, if necessary, terminate AbbVie Inc.’s acquisition of Allergan PLC or risk restricting consumers’ access to lower-priced pharmaceuticals, limiting innovation, and reducing competition. These groups explained their “hope” was that this investigation would be part “of a reinvigorated broader look at pharmaceutical drug mergers.” AbbVie announced in June that it would ...
Dan Mogin, Jennifer M. Oliver, Timothy Z. LaComb
September 18, 2019U.S. Judge Janis L. Sammartino in California’s Southern District certified a price fixing class action against “Big Tuna” this summer following a Daubert review of experts, keeping with Ninth Circuit precedent and focusing on the rigorousness of the review of expert reliability, but not the admissibility of evidence. This is just one in a growing line of cases that address the propriety of a Daubert review at the class certification stage, a country-wide discussion following the cryptic message handed down from the Supreme Court in Wal-Mart ...
While Facebook is under assault from multiple agencies and branches of government in the U.S. and Europe, it received a little good news from Germany, at least for now. The Higher Regional Court in Düsseldorf on Aug. 26 suspended a German cartel office ruling that barred the company from using data it scrapes from the web and, unless users consent, data from its Instagram and WhatsApp platforms. The Federal Cartel Office (FCO) – or the Bundeskartellamt in German – had said Facebook uses its restrictive user agreement to dominate the German ...
Google says cookies are good. They are critical to generating advertising revenue and they help the company improve its product from functionality and privacy perspectives. Competing search engines do more to give users control over how these tiny tracking files monitor them. In April Google said it would move in that direction. It has since come out strongly against their complete elimination, however, arguing that it would be bad for privacy. Without cookies, Google says, more risky tracking methods will proliferate. This increasingly heated ...
When a company with a new idea shakes up an industry and delights consumers, it is tempting for established players to devour them. But is that in the best interests of the consumer? Sometimes the answer is yes, other times no. In the case of the air travel booking industry the Antitrust Division of the Department of Justice says hell no. The DOJ has sued to stop Texas-based Sabre Corp., the $3.9 billion operator of the largest global distribution systems (GDS) booking services provider in the U.S., from acquiring Farelogix, Inc., a $42 ...
People old enough to remember record players (or people who have rediscovered them) know what it was like when the needle skipped across the album because someone bumped the player, or if nearby dancing on wobbly floorboards became too spirited. The same thing would happen to the disk drive in your computer with even the slightest movement – in other words, all the time – if it weren’t for high-precision suspension assemblies (HDDAs). These are the parts that hold the magnetic data heads close to the spinning storage disks needed to record and ...
By Dan Mogin and Timothy Z. LaComb CBS Corp. is buying Viacom in an all-stock transaction that values Viacom at its current stock market capitalization of around $12 billion. This is the second time around for these media giants. The first came in September 1999 and lasted for five years. Viacom was originally created in the 1970s after the Justice Department forced CBS to sell its syndication unit, so the companies have been on-again/off-again for decades. The market value of CBS Corp. is about $18 billion. The combined company, ViacomCBS ...
The U.S. Department of Justice Antitrust Division has inserted itself into a case that questions whether the Anti-Malware Testing Standards Organization, Inc. (AMTSO) and some of its members are creating standards in a manner that violates antitrust laws. AMTSO says it is exempt from such per se claims by the Standards Development Organization Act of 2004 (SDOA). Symantec Corp., an AMTSO member, says the more flexible “rule of reason” applies – that it must be proven that standards actually undermine competition, which the recommended ...
Jonathan Rubin, Timothy Z. LaComb
August 07, 2019The federal government and five state attorneys general reached a proposed settlement with T-Mobile and Sprint on July 26, ending their opposition to the merger – at least for now. The Department of Justice lawsuit challenging the merger was filed in U.S. District Court for the District of Columbia simultaneously with a settlement agreement and a proposed final judgment resolving the case. That’s one hurdle cleared. A 60-day public comment period will follow, with opposition anticipated. The Federal Communications Commission will need to sign ...
Jonathan Rubin, Timothy Z. LaComb
July 29, 2019The Department of Justice Antitrust Division and the Federal Trade Commission are making good on their promises to scrutinize the world’s leading technology platform providers – Amazon, Apple, Facebook and Alphabet’s Google – as the cries from competitors for what they consider to be unchecked market dominance and anticompetitive practices grow in number and volume. Retailers blame Amazon and Google for an information bottleneck, the collection of third-party sales data, and the spread of counterfeit products. Independent developers say Apple ...
Ubiquitous modem chips allow our smart devices to communicate with each other over cellular networks using industry standards like 4G LTE. A small group of companies (and nations) are racing for global leadership in 5G, considered by many to be the second coming of mobile connectivity and experience. 5G promises not just faster phones, but smarter cars and homes, augmented and virtual reality, and better national defense systems. 5G is creeping into U.S. consumer markets now. Qualcomm Inc., Intel Corp., Taiwan’s MediaTek Inc., and China’s ...
For a group of organizations whose very existence is based on fair world-class competition, the competitive spirit of professional sports leagues has drawn its share of challenges over the years, not for their sportsmanship in their arenas, but in their corporate board rooms. Professional basketball, football and hockey leagues have faced challenges over whether they restrained trade by combining their power to control television broadcasts, merchandizing, and web media rights. The leagues have prevailed, withstanding court scrutiny over ...
Jennifer M. Oliver, Timothy Z. LaComb
July 16, 2019Mandatory arbitration clauses in California just became a lot less mandatory. The Ninth Circuit U.S. Court of Appeals handed consumers in three unrelated cases a victory on June 28, saying they may proceed with litigation of their claims against an appliance rent-to-own company, a cellular phone service, and an internet-cable company despite the existence of mandatory arbitration clauses in their contracts. The decision is being hailed by consumer and employee rights advocates who say the proliferation of mandatory arbitration clauses has been ...
Jennifer M. Oliver, Timothy Z. LaComb
July 09, 2019AbbVie Inc. is acquiring Dublin-based Allergan PLC for approximately $63 billion in cash and stocks, the companies announced to today. This will give the new company a dominant position in the eye-treatment and beauty drug industry, which includes the widely used Botox neurotoxin. In 2017, Botox generated nearly $3.2 billion U.S. dollars in revenue worldwide. At least one prediction says sales are expected to hit $4.57 billion by 2424. The companies explained their strategic rationale this way: New growth platforms and leadership positions to ...
According to a recent Wall Street Journal report millions of business listings on Google Maps are fake, thanks to businesses seeking to drive call volume by posting made-up store and office locations. Google is reportedly overrun by false business addresses and names but is doing little to resolve the issue, since it also profits from the practice, according to the Wall Street Journal. The ability for aggrieved consumers to pursue the thousands of disparate businesses engaging in this behavior is nil. Adding insult to injury, Google also ...
The meat packing industry is coming under increasing pressure in the form of separate antitrust lawsuits filed this year by consumers and cattle ranchers. Both groups allege anticompetitive conspiracies that unfairly enriched the meat packers at their expense, including successful efforts to lower livestock prices on one end of the supply chain and artificially increasing the price of beef on the other. Consumers Sue in Minnesota Federal Court Four of the defendants in the consumer case of Peterson v. Agri Stats, Inc., et al., filed April 26, ...
Maine -- Governor Janet Mills signed the state’s tough new consumer privacy act into law June 6, requiring internet providers to obtain a consumer’s express consent before using, selling or distributing their personal information. Hailed by some as the strictest privacy law in the U.S., technology and communications companies, including Verizon and AT&T, testified that it may be in violation of Federal Communications Commission regulations, the First Amendment, and the Interstate Commerce Clause. LD 946, which takes effect July 1, 2020, ...
Jennifer M. Oliver, Nicole Ambrosetti
June 14, 2019The newly proposed New York Privacy Act, S5642, would give consumers substantial control over the use of their personal data, such as the right to demand review, corrections and/or deletions of their private information, and the authority to bring civil actions against companies. The tech industry immediately called the proposed law “unworkable.” Proposed by state Senator Kevin Thomas, the bill would require companies to “disclose their methods of de-identifying personal information, to place special safeguards around data sharing and to allow ...
Jennifer M. Oliver, Nicole Ambrosetti
June 07, 2019The line of politicians, regulators, and legislators in the U.S. and abroad expressing serious concerns about the market power held by big technology companies seems to grow longer by the day. This week, U.S. House of Representatives Antitrust Subcommittee Chairman David N. Cicilline (D-RI) announced a bipartisan investigation, saying the "market power in digital markets presents a whole new set of dangers" for the U.S., both politically and economically. "After four decades of weak antitrust enforcement and judicial hostility to antitrust ...
The Wall Street Journal reported on May 31 that the U.S. Justice Department is “gearing up” for an antitrust investigation of Google, “a move that could present a major new layer of regulatory scrutiny for the search giant.” WSJ reporters Brent Kendall and John D. McKinnon quoted unnamed sources as telling them that DOJ’s Antitrust Division has been “laying the groundwork for the probe” in recent weeks. That groundwork includes the agreement between the Federal Trade Commission and the DOJ that the DOJ would take the lead. In related news, The ...
Qualcomm Inc. has asked U.S. Judge Lucy H. Koh of the Northern District of California to stay, pending appeal to the Ninth Circuit U.S. Court of Appeals, her decision that the company's modem chip licensing practices violate the Sherman Act and constitute unfair competition practices under the Federal Trade Commission Act. Qualcomm calls the decision “irreparably flawed” and the FTC case's case “lacking any plausible theory of competitive harm.” FTC Bureau of Competition Director Bruce Hoffman hailed the decision as "an important win for ...
The Appropriations Committee of the California Senate on May 17 halted efforts to add to the California Consumer Protection Act (CCPA) a private right of action that would have allowed individuals to sue businesses directly for violations of the law's privacy-related rights. The expansion was proposed via SB 561 which was supported by the state's Attorney General's office and privacy rights groups, and opposed by business groups. The CCPA still allows individual consumers to sue for certain types of data breaches, but leaves enforcement of ...
The U.S. Department of Justice Criminal Division has issued guidance to assist prosecutors in assessing corporate compliance programs during criminal investigations. Saying “each company’s risk profile and solutions to reduce its risks warrant particularized evaluation,” the DOJ says it does not apply a “rigid formula” when assessing program effectiveness. However, the DOJ says prosecutors tasked with pressing charges must answer whether a program was “well designed” and “applied earnestly and in good faith.” Ultimately they must answer ...
Companies will want to know of the often similar but frequently very different requirements created by the California Consumer Privacy Protection Act of 2018 (CCPA) and the European Union’s Global Data Protection Regulation (GDPR). Two things are certain: first, if you didn’t know, the data privacy protection landscape is changing rapidly – probably too fast for many companies covered by these laws – and, second, failure to comply with their provisions will result in significant financial liability. The GDPR went live a year ago on May 25, ...
Swedish music streaming company Spotify Technology SA’s antitrust complaint against Apple Inc. in Europe is another example of a dispute arising when a company is both the provider of a platform and a participant in that platform. Spotify says Apple uses its wildly popular App Store to undercut competitors to the Apple Music steaming service. Apple says the Swedish company simply wants to avoid the fees associated with selling services via the tremendous store it took years to build. Apple Music recently surpassed Spotify in the U.S. market, ...
With the uptick in global private equity add-on acquisition activity comes the usual M&A-related risks, but getting out in front of any potential antitrust challenges is one of the most critical steps investors must take. The management consulting firm Bain & Company recently analyzed the incidence of the so-called “buy-and-build” approach, which it defines as “an explicit strategy for building value by using a well-positioned platform company to make at least four sequential add-on acquisitions of smaller companies.” This is a popular ...
On Friday, April 12, 2019, Senator Edward J. Markey (D-MA) introduced the Privacy Bill of Rights Act "in the wake of a series of revelations about myriad companies sharing consumers’ personal information without their consent, as well as unauthorized breaches of the data of hundreds of millions of consumers," a statement issued by the senator's office reads. The law would establish rules for both online and offline companies and ban the use of personal information for harmful, discriminatory purposes, such as housing and employment ...
Here are the puzzle pieces. Antitrust’s current consumer welfare standard enshrines short-term price and output effects and protecting competition – but not competitors. A consumer welfare standard that emasculates the antitrust laws in the name of protecting consumers and competition – but which does neither – is an absurdity, inconsistency, or oddity. You can’t have competition without competitors. The public and some politicians have lost faith in antitrust’s ability to promote competition or protect consumers. This antitrust paradox has ...
This is an excerpt of a thorough discussion of the issue captured in a 14-page article. Download the PDF. No one wants their most valuable assets taken. For businesses, those assets often include employees, customers, and trade secrets. But employers who try to protect these assets are on notice: anticompetitive agreements related to employment are subject to scrutiny and may result in fines or even criminal charges. In October 2016, the DOJ and FTC took the extraordinary step of issuing guidelines putting HR professionals on notice that ...
The global cannabis market is on track to triple in size in the next three years, expecting to hit $32 billion, with two-thirds of that coming from the U.S. market. It is a highly regulated and inherently regional and local business: dispensaries must have a highly-sought after government-issued license and product cannot be purchased online so customers must travel to local dispensaries to buy. With these conditions in place it should come as a surprise to no one that licensed dispensaries are attempting to prevent competitors from entering ...
SACRAMENTO -- April 10, 2019 -- The California Senate Standing Committee on Judiciary yesterday voted 5-3 in support of SB 561 which would expand the private right of action under the California Consumer Protection Act (CCPA) beyond damages for data breaches. The bill would also remove the 30-day cure period for Attorney General enforcement actions and remove the AG’s obligation to provide compliance opinions. The bill now moves to the Senate Standing Committee on Appropriations. The hearing on SB 561 lasted for several hours yesterday during ...
The landmark California Consumer Privacy Act of 2018 granted consumers new rights to protect themselves with respect to the collection and use of their private personal information. They will soon have more transparency in the collection and use for a variety of data types. Social Security Numbers and drivers’ licenses and passports are off limits. Data about what people buy, what they search, where they go, and where they work all fall within the scope of the law. Nor may businesses profile consumers based on private information and may not ...
Employers and business owners who wish to protect themselves when employees leave for new positions -- taking with them valuable knowledge that competitors would love -- need to be careful how they go about building their defenses because doing it wrong can mean both civil and criminal charges against corporations and individuals. Critical questions need to be answered in employment agreements and business deals. Is the employer – such as a franchisor – trying to stop intramural poaching within its own system, effectively causing vertical ...
Mississippi Attorney General Jim Hood told CNBC on Monday, March 18, that he is developing his antitrust case against Google similar to the one brought against Microsoft in the 1990s. According to CNBC, he also intends to address the privacy policies of Google parent company, Alphabet. If it seems like everyone everywhere is pursuing Google and other tech giants, it’s because they are. Hood is just one of the state attorneys general going after tech companies, and the EU Commission has hit Google with three fines in three years totaling $9.4 ...
The European Commission has fined Google $1.69 billion for breaching EU antitrust rules. “Google has abused its market dominance by imposing a number of restrictive clauses in contracts with third-party websites which prevented Google's rivals from placing their search adverts on these websites,” according to today’s press release from the EU Commission. Commissioner Margrethe Vestager, in charge of competition policy, said the fine was for Google’s “illegal misuse of its dominant position in the market for the brokering of online search ...
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