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.
Written by Jonathan Rubin, Partner and Co-Founder of MoginRubin LLP -- I was not alone in noting the significance of the D.C. district court's decision earlier this month to hold Google liable for monopolization of the general search market and the search text advertising market in United States, et al. v. Google LLC (No. 1:20-CV-3010-APM, D.D.C.). I previously covered how the antitrust enforcement agencies successfully argued that Google's exclusive deals with smartphone manufacturers, browser developers, and wireless carriers amounted to ...
Written by Jonathan Rubin, Partner and Co-Founder of MoginRubin LLP -- This week’s decision in United States v. Google represents a significant victory for the Department of Justice’s Antitrust Division and various state attorneys general, which successfully argued that Google has exercised anticompetitive practices to maintain its dominant position in the general search market and in the market for text advertising in search (U.S., et al. v. Google LLC, No. 1:20-CV-3010-APM, D. D.C.). The court determined that Google has monopoly position in ...
Written by Jonathan Rubin, Partner and Co-Founder of MoginRubin LLP -- When federal agencies review bank mergers, the competition issues typically relate to the number and location of physical branches and the extent of any overlap in the areas served. By contrast, the proposed $35 billion Capital One-Discover merger raises different and far more subtle competitive issues. The agencies—the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Antitrust Division of the Department of Justice—will have to assess not only ...
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, ...
Written by Jonathan Rubin, Partner and Co-Founder of MoginRubin LLP The Federal Trade Commission (FTC) on April 22, 2024, filed an administrative complaint to block Tapestry, Inc.'s acquisition of Capri Holdings Limited, a deal valued at $8.5 billion. The proposed merger would combine three major fashion brands: Coach and Kate Spade from Tapestry, and Michael Kors from Capri. The FTC alleges that the deal would stifle competition in the "accessible luxury" handbag market, a term coined by Tapestry to describe high-quality leather handbags at ...
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 ...
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 ...
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 ...
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 ...
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 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. ...
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 ...
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 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 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 ...
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. ...
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, ...
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 ...
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 ...
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, 2022Premerger 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 ...
Various leaders in the federal government have made it clear that they are now applying greater scrutiny to mergers and acquisitions and are not enamored with many years of anticompetitive business deals and settlements that offer inadequate protection to competition. Statements from the Antitrust Division of the Justice Department and the antitrust enforcers at the Federal Trade Commission have been saying as much since President Biden took office. Before that, he wasn’t alone in the pack of Democratic candidates who felt the government ...
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 ...
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 ...
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, 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 ...
When 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 ...
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, 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 ...
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 ...
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, 2020At 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 ...
The 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 ...
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, 2020Driven by competitive pressure and pandemic-related losses, Uber Technologies Inc. has expressed its intention to acquire competitor Grubhub Inc. to improve its position in the digital food-delivery market, where its Uber Eats service lost ground in 2019. A group of Democratic lawmakers says this is a “troubling,” opportunistic, and anti-consumer move that U.S. antitrust law enforcers should watch closely. Photo by Kai Pilger on Unsplash Sen. Amy Klobuchar of Minnesota, former presidential candidate and senior member of the Senate Antitrust ...
[Editor's Note: An earlier version of this post inaccurately described the work of the Federal Trade Commission. The authors wish to thank Bruce Hoffman, Director of the Bureau of Competition at the FTC from August 2017 to December 2019, who kindly provided useful commentary. Changes made June 11, 2020.] In 2001, Time Magazine editor Michael Elliott asked legendary General Electric CEO Jack Welch to reflect on the termination of his dream acquisition of Honeywell International, not at the hands of U.S. antitrust agencies but by the European ...
Jonathan Rubin, Timothy Z. LaComb
May 19, 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 ...
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 ...
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, 2020Big 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 ...
Anticompetitive 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 ...
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 ...
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 ...
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 ...
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 ...
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, 2019When 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 ...
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 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, 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 ...
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 ...
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 ...
In a move that could redefine how 2.6 billion people use Facebook Messenger and Facebook’s acquired WhatsApp and Instagram apps, The New York Times reported on Jan. 25 that Facebook CEO Mark Zuckerberg plans to integrate the platforms. The announcement turned up the volume on antitrust and privacy warnings directed at the social media giant. The Times cited unnamed sources involved in the project who said the apps will continue as stand-alone services, but their “underlying technical infrastructure will be unified” so people can chat across ...
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