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.
In its 56-page Feb. 13 report, the GAO listed three issues that should be considered: Which agency or agencies should oversee Internet privacy. What authorities an agency or agencies should have to oversee Internet privacy, including notice-and-comment rulemaking authority and first-time violation civil penalty authority. How to balance consumers’ need for Internet privacy with industry’s ability to provide services and innovate. The Federal Trade Commission, the lead agency when it comes to Internet privacy, has not issued privacy regulations ...
On October 7, 2020, the European Commission accepted commitments offered by Broadcom Inc., ending its investigation into the chipmaker. Although a step in the right direction, the commitments address only a subset of Broadcom’s anticompetitive conduct in just a few discrete chip markets. Stated differently, the commitments do not alter the anticompetitive status quo in most product markets in which Broadcom operates. This is particularly true for companies operating in the U.S. because the commitments offer fewer protections outside of the ...
Dan Mogin, Timothy LaComb, Steven Benzand Jayme Weber
November 11, 2020Suit says company improperly uses market power to achieve exclusivity. The U.S. Department of Justice and 11 states have sued Google LLC in federal court in Washington, D.C. for unlawfully maintaining its position as “monopoly gatekeeper for the internet” by blocking competitors in Internet search and search advertising markets. “For many years, Google has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising -- the cornerstone of ...
Why and how your organization's purchasing, legal, and finance professionals can form a formidable defense against profit-killing price-fixing, bid-rigging, monopoly and other anticompetitive schemes that could be costing your company millions. The chief executive started her day like any other. Hot coffee and a scan through the day’s business news. Then came a sinking feeling. A question popped into her head that she could not answer. More questions followed. She had just read an article about how several suppliers in the food industry had ...
At the end of the beloved 1939 film The Wizard of Oz, Dorothy famously says to her Auntie Em, "There's no place like home!" It's one of the best known quotes from one of the happiest of happy endings to ever come to movie theaters. But there was much more going on behind the scenes than just Munchkinland. The year before the film was released movie studios and the government clashed when the government enjoined certain of the studios' most lucrative distribution and licensing practices. Alleging a breach of antitrust law, the government ...
Altria must show it was failing in the e-cig business for deal to survive. Altria Group, Inc. and JUUL Labs, Inc. fired back at the FTC’s April complaint alleging Altria’s acquisition of 35% of JUUL and the corresponding agreements violated the Sherman Antitrust Act and the Clayton Act. The Commission argued the deal unlawfully reduced competition and consolidated the e-cigarette market, and would allow the companies to split the resulting monopoly profits. In their answers, the companies argued the FTC’s conclusions were clouded by a ...
When should 'marketplace platforms' be treated as markets controlled by operators? It poses a new brand of antitrust problem: private parties controlling platforms that work like marketplaces. This week, Epic Games, maker of mobile app juggernaut "Fortnite," filed suit in federal court against Apple, and then Google, for banning the app from their stores. "Epic Games has defied the App Store Monopoly," the company announced via social media. "In retaliation, Apple is blocking Fortnite from a billion devices." Epic drew fire from the platforms ...
The Antitrust Division of the U.S. Department of Justice is taking a close look at the announced $7.1 billion acquisition of market disruptor Credit Karma by Intuit Inc. According to an internal Intuit memo obtained by ProPublica, the DOJ is looking at “the influence that Intuit’s purchase of Credit Karma will have on consumer tax preparation platforms and [the] software market.” And, for the reasons discussed below, there is a good chance the DOJ will ultimately conclude the merger violates the Clayton Act and file suit to challenge it. Photo ...
On May 5, 2020, U.S. Judge Nina Gershon of New York granted certification to a class of end-payor plaintiffs (EPPs) who purchased the successful dry-eye treatment Restasis, created and manufactured by Allergan, Inc. in In re: Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litigation, 1:18-md-02819-NG-LB (E.D.N.Y 2018). The certified class includes individuals with and without health insurance, and third-party payors like union benefit funds that pay or provide reimbursement for drug costs for people they insure. The EPPs alleged that ...
On Feb. 24, 2020, the Seventh Circuit U.S. Court of Appeals revived refusal-to-deal and tying claims brought against Comcast Corp. by Viamedia Inc. The case drew significant attention from antitrust practitioners given its potential impact on the viability of refusal-to-deal claims brought under Section 2 of the Sherman Act, which has long been the source of debate among antitrust practitioners. Comcast recently said it will ask the Supreme Court to review the Seventh Circuit’s decision. Photo by Cupcake Media on Unsplash Background Cable ...
Jonathan Rubin, Timothy Z. LaComb
June 16, 2020Antitrust law doesn't take a back seat to bankruptcy. While bankruptcy is no one's idea of a dream, the beauty of the U.S. Bankruptcy Code is that it makes a business failure less of a nightmare for debtors and creditors alike. Litigation is stayed. Debts are put on hold. Assets of the estate may be purchased -- once certain conditions are met -- "free and clear."But, like anything, especially when it comes to law, details are a tricky thing. That applies especially to the nuanced practice of antitrust law. Are court-ordered asset sales under ...
Live Nation Threatens Anyone Who Doesn’t Play Along, Plaintiffs Allege Concert-goers tired of paying “supracompetitive fees” on ticket purchases from Ticketmaster LLC filed a class action against the company and its parent, promoter Live Nation Entertainment, Inc., in U.S. District Court for the Central District of California on April 28 for abusing its more than 70% share of the primary ticketing market (i.e. where tickets are initially sold) for major concerts. The merged companies are also aggressively deploying anticompetitive tactics in ...
In an interview with Politico’s Leah Nylen and Betsy Woodruff Swan, Rep. David Cicilline (D-R.I.) explained that he wants the next coronavirus relief package to include a moratorium on mergers while the U.S. economy struggles to face the pandemic. According to the report, the Rhode Island Congressman’s proposal would allow deals “only if a company is already in a bankruptcy or is otherwise about to fail.” Any other deals would be on hold at least until the national pandemic declaration is lifted. Photo by Jakob Owens on Unsplash In prepared ...
Reuters has reported that Gray Television Inc. has withdrawn its $8.5 billion offer to buy Tegna Inc. due to the potential impact of the COVID-19 outbreak on regional TV stations like those operated by Tegna. The news agency also reported that Volkswagen’s CFO cited the “curveball” the outbreak has thrown at its liquidity in stating that, while the automaker remains interested in buying U.S. truck-maker Navistar, it must first “conserve cash as it shuts down plants and throttles back production.” The New York Times, meanwhile, has reported ...
On March 10, 2020, the U.K.’s Competition and Markets Authority gave Cengage and McGraw-Hill an ultimatum – provide remedies that cure the competition problems caused by the merger or face a Phase II inquiry. Then, on March 24, 2020, the CMA rejected the merging parties’ proposed remedies and said it will proceed to a Phase II investigation. The CMA is required to complete the Phase II probe and issue a decision on the proposed merger by Sept. 7, 2020. The CMA joins several other nations that have raised concerns about the merger, including ...
On March 10th, the U.K. Competition and Markets Authority (CMA) gave Cengage Learning and McGraw-Hill an ultimatum: address competition concerns or face a Phase II review. After finishing its Phase I investigation, the CMA concluded the proposed merger “gives rise to a realistic prospect of a [substantial lessening of competition] as a result of horizontal unilateral effects in relation to the supply of [higher education] titles for 51 [higher education] courses in the U.K.” The CMA believes the loss of competition could lead to higher prices ...
Timothy Z. LaComb, Jennifer M. Oliver
March 24, 2020For believers in free markets it is important that they operate free of “shenanigans,” Food & Drug Administration (FDA) Commissioner Stephen Hahn said during a joint workshop with the Federal Trade Commission (FTC) on March 9, 2020. The event set in motion the agencies’ joint effort to address the difficulties in biosimilar uptake – a market rife with anticompetitive practices - and to restrict dissemination of false and misleading information on biosimilar efficacy or safety. “Shenanigans” and “whack-a-mole” became catch phrases during ...
Live Nation Entertainment, Inc., owner of some of the world’s biggest music venues, events and festivals, is currently operating under what the Department of Justice’s Antitrust Division calls “the most significant enforcement action” of an existing antitrust consent decree in its history, one that has secured stricter and longer lasting terms designed to rein in the event conglomerate’s anticompetitive behavior. Photo by Yvette de Wit on Unsplash The DOJ action began more than a decade ago after the company acquired Ticketmaster ...
Big Tech mergers make big headlines, but there is much more to a deal than how much money changes hands. More important questions need to be answered, such as how much future innovation might be lost, how much healthy competition will be eliminated, and what volumes of consumer data will suddenly be controlled by one or only a handful of companies. Some lower-cost acquisitions fly under the radar of antitrust law enforcement agencies. But should they? Criticized for ignoring “killer acquisitions” and going too easy on Big Tech – approving more ...
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 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 ...
The Federal Trade Commission (FTC) announced on Jan. 28, 2020, that the “size-of transaction threshold” for reporting proposed mergers and acquisitions for 2020 under Section 7A of the Clayton Act will adjust from $90 million to $94 million (see page 2). The FTC revises these figures each year based on changes in the nation’s gross national product. The 2020 thresholds under Section 8 of the Clayton Act that trigger prohibitions on certain interlocking memberships on corporate boards of directors are $38,204,000 for Section 8(a)(l ) and ...
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 ...
The 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 ...
“If that procedure sounds unfair, that’s because it is.” That’s how Axon Enterprise, Inc. describes the inner workings of the Federal Trade Commission, calling it a “constitutional anomaly” that has the near absolute power, free of political accountability, to both prosecute and pass final judgment on the appropriateness of corporate mergers and acquisitions. Axon designs and manufactures non-lethal police equipment, such as body cameras and digital evidence management systems. In 2018 it acquired Vievu LLC, which Axon says was a failing ...
Jonathan Rubin, Jennifer M. Oliver
January 13, 2020Charles 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 ...
Copy equipment giant HP Inc. turned down the much smaller Xerox Holdings Corp.’s acquisition overtures twice in one week as the exchange of statements between corporate leadership grows increasingly hostile. From an anticompetition perspective, the case raises the interesting question of how the “failing firm” defense could come into play. A deal would bring together the world’s second largest copier company, HP, a company whose leadership position was once so strong that its very brand name, derived from the word “xerographic” in 1938, became ...
DNA sequencing giant Illumina, Inc.’s proposed $1.2 billion acquisition of Pacific Biosciences of California Inc. has drawn opposition in the U.K. and the attention of the U.S. Federal Trade Commission (FTC). The invaluable systems these and other companies provide are used to study genetics in order to develop crucial medicines and medical treatments. The serious headwinds greeting this merger make it clear that the life sciences industry has matured to the point where antitrust considerations are significant. The evolving technological ...
Moderator & Speaker: Daniel J. Mogin | Managing Partner, MoginRubin LLP Speakers: Jennifer M. Oliver, CIPP/US | Partner, MoginRubin LLP Thomas N. Dahdouh | Director, Western Region, Federal Trade Commission Franklin M. Rubinstein | Partner, Wilson Sonsini Goodrich & Rosati Randi W. Singer, CIPP/US, CIPT | Partner, Weil, Gotshal & Manges Contributor: Dina Srinivasan | Independent Researcher & Author of The Antitrust Case Against Facebook Dina was unable to present but we thank her for her content contributions. Highly publicized ...
Now it’s the direct purchasers of one of the nation’s most delicious and protein-rich commodities -- beef. The purchasers claim in a new class action complaint that the country’s largest meatpackers conspired to reduce the capacity of their slaughter and packing plants in order to pay less on one end of the supply chain so they could raise prices on the other. Some of the Big Beef defendants are also defendants in on-going price fixing and supply manipulation cases pending against Big Chicken and Big Pork. Perhaps Big Meat views supply ...
California Governor Gavin Newsom has signed several amendments to the California Consumer Privacy Act of 2018. Issues range from the timing of employer disclosure requirements to data gathered and used in consumer identity verification, vehicle recalls and warranties, consumer credit checks, and business due diligence work. You can read MoginRubin Partner Jennifer M. Oliver's take on the changes in her Oct. 10 post, titled CCPA Changes Sent to Governor’s Desk as January Effective Date Draws Closer and Compliance Costs Loom Large. Going into ...
California Gov. Gavin Newsom has signed AB 824, known as the “Pay-for-Delay" bill, blocking pharmaceutical companies from paying generic drug makers to not develop and bring lower-cost medicines to market. The law makes these so-called “reverse payment” settlements of patent disputes – which the Federal Trade Commission says cost consumers $3.5 billion a year – “presumptively anticompetitive.” The new law provides that an agreement resolving a patent infringement claim is anticompetitive if the generic drug or biosimilar drug makers receive ...
Jennifer M. Oliver, Timothy Z. LaComb
October 17, 2019Several amendments to the California Consumer Privacy Act of 2018 are headed to Gov. Gavin Newsom’s desk. Issues range from the timing of employer disclosure requirements to data gathered and used in consumer identity verification, vehicle recalls and warranties, consumer credit checks, and business due diligence work. One bill, which attempted to address the non-discriminatory provisions of the CCPA and its potential impact on sellers’ popular customer rewards programs, didn’t make it out of the Senate. Going into effect in January and still ...
September 30, 2019, was a big day for college athletics. Alongside Lakers’ star LeBron James (who ironically skipped college), California Governor Gavin Newsom signed the Fair Pay to Play Act (FPTPA), which permits collegiate athletes in California to profit from the use of their names, images and likenesses (NILs) beginning in 2023. The governor said “colleges and universities reap billions from these student athletes’ sacrifices and success but block them from earning a single dollar. That’s a bankrupt model — one that puts institutions ...
Timothy Z. LaComb, Jennifer M. Oliver
October 05, 2019Here 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 ...
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