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The Federal Trade Commission has recently proposed major changes to the Hart-Scott Rodino (“HSR”) notification rules that would: 1) significantly change stock aggregation rules for funds with a common manager and 2) change the exemption which applies for acquisitions up to 10% of an issuer.
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On December 10, 2020, the Antitrust Division of the US Department of Justice (DOJ) indicted an individual employer owner, for the first time, for agreeing with a competing owner to reduce the wages that their workers were being paid. Moreover, on January 5, 2021, the DOJ indicted a corporation for conspiring with two competing employers to allocate a medical employment market by agreeing not to solicit each other’s senior employees.
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The Hart-Scott-Rodino (HSR) Antitrust Improvements Act 1976 (as amended) is the pre-merger notification statute for the United States. It requires parties contemplating certain types of transaction involving the acquisition of assets, non-corporate interests (eg, limited liability company membership or partnership interests) or voting securities to file a notification form describing the transaction with the Federal Trade Commission (FTC) and the US Department of Justice and to wait a prescribed waiting period before consummating the transaction.
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For the first time in history, a private party has successfully challenged an acquisition and obtained an order requiring a divestiture of a company that had been acquired years before the case was filed. In a highly anticipated decision, a court of appeals has affirmed that order.
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A recent influx of proposed federal and state legislation seeks to strengthen and modernize the antitrust laws and expand antitrust enforcement. The political momentum behind these attempts reflects noisy bipartisan support for legislators to do something about the ever-growing economic power and political influence of Google, Facebook, Amazon and other so-called “tech giants.”
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It may be tempting to draw conclusions from the Federal Trade Commission’s (FTC’s) recent decision to abandon its antitrust case against Qualcomm, but companies should not construe that decision as an indication that the FTC will cease pursuing similar cases. Once President Biden’s anticipated nominees to the FTC are seated, the FTC may be even more likely to challenge similar conduct, despite the Ninth Circuit Court of Appeal’s undisturbed ruling in Qualcomm’s favor.
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The District of Columbia District Court recently issued the first judicial interpretation of 49 US Code Section 10706(a)(3)(B)(ii), which sets out an evidentiary exemption relating to certain agreements among railroads. On its face, the decision’s reach appears limited. However, the opinion provides insight into the judicial interpretation of antitrust exemptions and practical reminders for rail and other industries that have legitimate, and sometimes legally protected, communications with competitors.
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More than four decades after the Federal Trade Commission (FTC) began filing consumer protection actions in federal court for retroactive monetary relief without first completing an administrative proceeding, and more than two decades after it began using this same approach in antitrust cases, the Supreme Court has finally weighed in on the practice, unanimously declaring that it has never been authorized by law.
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On March 30, 2021, the Federal Trade Commission (FTC) filed an administrative complaint challenging the acquisition of Grail, an emerging producer of early detection tests for multiple cancer types, by Illumina, a producer of next-generation DNA sequencing (NGS) platforms which are used by Grail’s (and potentially others’) tests. Simultaneously, the FTC filed an action in a US district court seeking a preliminary injunction, prohibiting the merger until the administrative process could be completed. The preliminary injunction action was recently dismissed with court approval because the FTC asserted that the injunction was not necessary to ensure that the transaction could not close before its administrative proceeding was completed.
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Prior to stepping down as California’s attorney general to assume his new role as Joe Biden’s secretary of health and human services, Xavier Becerra consolidated all aspects of healthcare enforcement under a new Healthcare Rights and Access Section. Antitrust enforcement in healthcare will now be under the auspices of this new section.
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There has been a plethora of articles about the Supreme Court’s 21 June 2021 decision upholding a decision that the restrictions imposed by the National Collegiate Athletic Association (NCAA) on education-related compensation to student athletes violate the antitrust laws. Many have opined that the decision signals the death knell of the NCAA; others portend a wave of lawsuits by athletes against the NCAA and US universities. But for those not focused on such matters, the decision is important for the antitrust treatment of joint ventures and to general business decision-making.
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Big tech has become a major target for new antitrust proposals. On June 11 2021, the chairman of the Antitrust Subcommittee of the House Judiciary Committee, Representative David Cicilline (Democrat – Rhode Island) made good on his promise to introduce a series of bills aimed at modernizing the antitrust laws to address concerns raised by the actions of companies such as Facebook, Amazon, Apple and Google.
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The Biden Administration has sent strong signals of its desire to ramp up aggressiveness in merger enforcement, but a recent flood of filings has caused the Federal Trade Commission (FTC) to announce a couple of changes to its usual merger review process even before it could truly implement any such increased enforcement. While the changes to the merger review process are more modifications of form than substance, they seem partially aimed at emphasizing the agency’s need for additional funding and staff. They may also be an attempt to gain more time to contemplate and implement new policies to invigorate merger enforcement and perhaps realign merger law towards a more progressive view.
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At a time when the Federal Trade Commission (FTC) states that it is overwhelmed with merger review matters, its very existence is being attacked in two distinct ways. In one challenge, a party to an FTC administrative proceeding attacked the Commission’s structure on the basis that it was unconstitutional and deprives respondents of due process because the commissioners sit as “judge and jury”. In the other not completely unrelated approach, Amazon and Facebook are each respectively arguing that Chairperson Lina Khan is required to recuse herself from matters involving either company because she had prejudged the matters before her based on her academic writings and other public statements.
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