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.
Editor's Note: This article will appear in the spring issue of the Journal on Emerging Issues in Litigation, published by Fastcase Full Court Press. Download a pre-publication copy now. Thanks to California Sports Lawyer Jeremy Evans for his valuable contributions to this article. Alston Opinion Changed Everything In NCAA v. Alston, 141 S. Ct. 2141 (2021), the Supreme Court upheld a district court and subsequent affirmation by the Ninth Circuit Court of Appeals in favor of players. The National Collegiate Athletic Association (NCAA) rules ...
Written by Jonathan Rubin, Partner and Co-Founder of MoginRubin LLP It is an application of artificial intelligence (“AI”) that many businesses, agencies, legislators, lawyers, and antitrust law enforcers around the world are only beginning to confront. It is also among the top concerns of in-house counsel across industries. Competitors are increasingly setting prices through the use of communal, AI-enhanced algorithms that analyze data that are private, public, or a mix of both. Allegations in private and public litigation describe ...
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 ...
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, ...
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 ...
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 ...
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 ...
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 ...
In 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 ...
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 ...
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 ...
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, 2021Facing 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, 2021President 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 ...
The 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 ...
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 ...
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 ...
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, 2021FTC 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 ...
Sen. 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, 2021Sen. 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 ...
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 ...
Healthcare insurance companies, like other insurers, have enjoyed an exemption from U.S. antitrust laws since March 1945 when President Roosevelt signed the McCarran-Ferguson Act, one of his last major acts before his death one month later. On Jan. 13, 2021, President Trump signed a bill repealing this immunity for health insurers. Titled the Competitive Health Insurance Reform Act of 2020 (CHIRA), the measure was passed by the House of Representatives on Sept. 21, 2020, and by the Senate on Dec. 22. The exemption remains in place for other ...
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 ...
By Jonathan Rubin The case involves questions "on the frontier edges" of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that's valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the world. It's no small matter, and Apple has scored a temporary victory in the suit, which ...
At a conference earlier this year on the Committee on Foreign Investment in the United States, or CFIUS, Assistant Treasury Secretary Thomas P. Feddo spoke with pride of the Committee’s increased funding, jurisdiction, expenditures, and more aggressive review activities. Feddo began the speech by detailing how CFIUS has implemented the 2018 Foreign Investment Risk Review Modernization Act, or FIRMMA, which expanded its jurisdiction and increased its funding. The Committee has invested in new IT infrastructure and personnel, and since May of ...
Dan Mogin, Jonathan Rubin, Jennifer M. Oliver, and Timothy Z. LaComb
October 15, 2020The sky is not falling. Opinion limited to 'at will' contracts. When a third party craters a contract, you and the other contracting party almost certainly will suffer demonstrable financial ramifications. But if your contract can, by its own terms, be terminated at-will, the California Supreme Court has now commented, any financial rewards and expenses associated with the agreement fall more into the "prospective" category. Therefore, the court determined, if a third party, a competitor for example, interferes with your at-will agreement they ...
One of U.S. Attorney General Bill Barr's team has come to his defense against allegations that he has mismanaged the Department of Justice. Assistant Attorney General for the Antitrust Division Makan Delrahim sent a letter to ranking House Judiciary Committee members on July 1, 2020, rebuking the testimony given by DOJ trial attorney John Elias a week earlier that the AG used DOJ resources for political and personal reasons. Elias testified after receiving a subpoena from House Judiciary Committee Chairman Jerrold Nadler in a hearing titled ...
California Attorney General Xavier Becerra says the COVID-19 virus has “shone a light” on the impact consolidation in the healthcare market has had on Californians’ access to “affordable, quality healthcare.” A bill that would give the AG more power to oversee healthcare industry consolidation, monitor anticompetitive conduct, and enforce corresponding laws is getting closer to becoming law. A wave of scrutiny over the healthcare, pharmaceutical, and medical device industries is taking place at the national level as well, but industry ...
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, 2020Live 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 ...
Insurance coverage works when risk is spread across a large number of policyholders. But for the insurance market to function properly losses must be somewhat predictable and experienced by only small percentage of insureds. Claims models for accidents everyone knows will happen – auto collisions and trees falling on houses – are acceptably accurate. In this relatively predictable world, that means an accident happens, a claim is filed, and, usually, the insurer pays. Photo by tam wai on Unsplash But when claims fly off the actuarial charts – ...
Living by the adage “if you can’t beat them, join them,” tobacco giant Altria Group, Inc. acquired a 35% stake in e-cigarette market leader Juul Labs, Inc. in December 2018. As part of the deal, Altria agreed to not compete with Juul in the e-cigarette market for six years and use its marketing and financial resources to help Juul further cement its dominance. Photo by Spencer Davis on Unsplash This deal was always going to face significant antitrust headwinds from regulators. Not only is the transaction an agreement by competitors to ...
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 ...
For 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 ...
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 (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 ...
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 ...
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 ...
“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, 2020The 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 ...
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 ...
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 ...
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 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 ...
Mandatory 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, 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 committee has been playing a bigger role on the global M&A stage, figuring prominently in the U.S.-China trade war and putting the breaks on some giant acquisitions. The Committee on Foreign Investment in the United States (CFIUS) is authorized to review -- and block, if necessary -- transactions involving foreign investment to determine whether they threaten national security. The committee operates pursuant to Section 721 of the Defense Production Act of 1950, authorizing the president to suspend or prohibit transactions. The ...
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 ...
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 ...
“Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy. They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.” –Sen. Elizabeth Warren, March 8, 2019 In her statement, released via the insight and commentary website Medium.com, Warren said she wants everyone to play by the rules no matter how powerful they are. She wants tech companies of the ...
Sign up to start receiving our blog posts straight to your inbox.
Check your inbox for details about your MoginRubin Blog subscription.
