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Department of Justice is the enforcement authority for United States. Read their profile.
Federal Trade Commission is the enforcement authority for United States. Read their profile
Overview of agencies
The Antitrust Division of the US Department of Justice (DOJ) and Federal Trade Commission (FTC) have overlapping jurisdiction to investigate mergers and business practices that may have adverse effects on competition. While their enforcement powers are similar, certain important differences exist. Both investigate mergers under the merger control provisions of the Clayton Act and can bring enforcement actions to block proposed transactions or unwind consummated transactions. Both also enforce price fixing, monopolisation, and attempted monopolisation under the Sherman Act. The FTC, however, has an additional tool – section 5 of the Federal Trade Commission Act, which declares illegal unfair or deceptive trade practices. The FTC lacks criminal enforcement powers, however, and all criminal prosecutions are handled by the DOJ.
The DOJ and FTC have allocated responsibility between themselves for different sectors of the economy, with the DOJ focusing on industries such as chemicals, manufacturing, telecoms, banking and transportation, and the FTC focusing on industries such as healthcare, pharmaceuticals, food and retail. However, they share responsibility for investigations pertaining to certain industries and allocate specific investigations in these industries. For example, both agencies are investigating Big Tech firms, with the FTC having an active litigation against Meta (formerly Facebook) and the DOJ having an active litigation against Google.
In addition to the DOJ and FTC, certain other federal agencies such as the Federal Communications Commission (FCC), the Federal Energy Regulatory Commission, the Department of Transportation, the Department of Defense, the Comptroller of the Currency and the Federal Reserve Board have varying roles in merger reviews related to their sectoral focus, ranging from providing advice to the DOJ or FTC to approving transactions or parts of transactions.
Individual states also have their own competition statutes. While states usually work in tandem with the federal agencies, state attorneys general may decide to take actions alone or as part of a coalition of states. Companies also may face antitrust litigation brought by private parties, sometimes as a class action (especially in price fixing cases).
Historically, the DOJ, FTC and states have acted in concert with one another where they have overlapping responsibilities. However, that historical harmony had fractured to some degree in recent years. An example is the group of states that worked together to challenge the T-Mobile/Sprint merger after the DOJ and FCC had cleared it with remedies. As another example, states have sued Google and separately Amazon independent of the federal agencies. Certain states have viewed federal enforcement as being too lax, or having the wrong focus, but with the current leadership at the DOJ and FTC taking a more aggressive stance, closer alignment between actions taken by states and the federal agencies may be returning.
Recent developments
Concerns have been expressed about a lack of competition across numerous industries in the United States. The FTC and DOJ have become substantially more active in this environment. Recent antitrust developments stemming from ramped-up federal agency actions, state actions and ongoing private litigation include:
- enforcement re-imagined – antitrust enforcement as it has been practised over the past 40 years is being challenged as having been insufficient to address competition and concentration issues in the modern economy;
- revisions to FTC practices – under new leadership, the FTC is reviewing or has changed long-standing practices in areas ranging from its analytical framework to its operational policies and procedures;
- focus on labour issues – the federal agencies have stepped up their work related to competition in labour markets, including the analysis of the potential impacts of mergers on workers as well as criminal prosecutions of individuals relating to the alleged use of wage fixing and “no-poach” agreements;
- aggressive stance on merger enforcement – both the FTC and DOJ have looked to expand the types of mergers challenged in court or requiring remedy, including those involving nascent competitors, potential competition and vertical mergers;
- Big Tech investigations and litigations – the federal agencies and/or states have active litigations with Google, Meta and Amazon proceeding, with additional investigations ongoing and a potential for additional litigations; and
- government litigation losses – the federal agencies have lost several cases in court over the last several years, including losses in labour, price fixing and merger cases in 2022.
Enforcement re-imagined
Fundamental questions about the role of antitrust in the economy are shaping competition policy and the application of that policy. During the past 40 years, antitrust cases have been evaluated using the consumer welfare standard based on a rigorous analysis evaluating impacts of conduct on competition and consumers. However, concerns about concentration and corporate power have underpinned a growing neo-Brandeisian view that seeks to change the role of antitrust. Tensions between the established analytical approach to antitrust analysis and a more expansive approach are expected to continue to unfold in the coming months and years within the competition agencies, in courts, and in legislation, especially given the potential for new legislation focused on Big Tech.
Capturing and promoting this atmosphere of change, President Biden issued an Executive Order on 9 July 2021, calling for a “whole-of-government” effort to promote competition in the American economy. The Executive Order indicates that a fair, open and competitive marketplace is the cornerstone of the American economy and that competitive marketplaces support prosperity, the reinvestment in enterprises, the ability to experiment and innovate and the availability of more choices and lower prices for consumers. The Executive Order expresses concerns that excessive market concentration threatens economic liberties and the welfare of workers, farmers, small businesses, start-ups and consumers.
The Executive Order states that as industries have consolidated over the past several decades, competition has weakened, economic problems have emerged and federal government inaction has contributed to these problems. The Executive Order cites to problems including non-compete agreements that restrict worker ability to switch jobs, occupational licensing requirements that limit worker mobility between states, dominant internet platforms that exclude market entrants, hospital consolidation that has resulted in higher prices and fewer choices, and telecommunication and financial services provider consolidation resulting in services being too expensive for consumers, among other concerns. In specifically addressing internet platforms, the Executive Order states:
[I]t is also the policy of my Administration to enforce the antitrust laws to meet the challenges posed by new industries and technologies, including the rise of the dominant Internet platforms, especially as they stem from serial mergers, the acquisition of nascent competitors, the aggregation of data, unfair competition in attention markets, the surveillance of users, and the presence of network effects.
The Executive Order contends that a “whole-of-government” approach is necessary to deal with overconcentration, monopolisation, and unfair competition in the overall economy. In addition to the DOJ and FTC, the Executive Order cites to the enforcement and rulemaking powers of numerous agencies and government departments to promote competition. It calls on the DOJ and FTC to review the agencies’ horizontal and vertical merger guidelines and their Antitrust Guidance for Human Resource Professionals, the DOJ and bank regulators to “revitalise” bank merger oversight, and the FTC to consider various rulemakings to curtail the use of “unfair” non-compete clauses that limit worker mobility, data collection practices that damage competition or consumer privacy, restrictions that limit third-party repair of items, agreements that limit the entry of generic drugs, unfair types of competition in major internet marketplaces, occupational licensing restrictions, and tying in real estate brokerage, among others. It also calls on the Department of Agriculture to consider numerous areas to improve competition for agricultural products, the Federal Communications Commission to consider re-imposing “net neutrality” rules and avoid excessive concentration resulting from future spectrum auctions, and the Department of Health and Human Services to take various actions to increase competition from biosimilar drugs, among other requirements for these and other agencies and departments.
On the heels of this Executive Order, various legislative proposals in Congress related to antitrust issues have been proposed, especially related to technology companies and the digital economy. These include the American Innovation and Choice Online Act that would prevent “dominant” online platforms from giving preferences to their own products on their own platforms, the proposed Open App Markets Act that would prohibit owners of app stores with more than 50 million US users from requiring the use of in-app payment systems controlled by the app store owner or requiring favourable pricing terms on their app store versus another app store, the proposed Platform Competition and Opportunities Act that would shift the burden of proof by requiring a “dominant” platform to demonstrate that its acquisition of a smaller rival or potential rival would not harm competition, and the proposed Ending Platform Monopolies Act that could force gatekeepers to divest lines of business where they can favour their own services to the disadvantage of rivals. These and other legislative proposals including those in some states, together with the Biden Administration’s push for more aggressive antitrust action on multiple fronts, indicate a potential for substantial evolution in US antitrust enforcement and jurisprudence over the next few years.
Revisions to FTC practices
Numerous changes have unfolded in personnel, policy, and procedure at the FTC over the course of 2021 and 2022. These changes are substantial and signal an increasingly aggressive stance by the FTC, in line with President Biden’s Executive Order.
In February 2021, with the support of the DOJ, the FTC announced that it would temporarily suspend granting early termination for merger filings. Mergers meeting certain thresholds must be reported, and the parties to a transaction cannot consummate their merger until the expiry of a waiting period that usually lasts 30 days but can be extended if there is an in-depth investigation. Transactions that raise no concerns historically have been granted early termination, allowing transactions to close before the expiry of the 30-day waiting period. Two of the five FTC Commissioners had objected to the suspension of granting early termination at the time of the decision. Though granting early termination was “temporarily” suspended, as of this writing the suspension has lasted over twenty months and might not be reversed under the current FTC leadership.
In March 2021, President Biden nominated Lina Khan to serve as a Commissioner of the FTC. Prior to her nomination, Ms Kahn was a Columbia University law professor who has been critical of Big Tech starting when she was a law school student. She was approved by the Senate and sworn in on 15 June 2021, and immediately following the Senate’s approval, President Biden designated Ms Khan as chair of the agency. Previously, Chair Khan served as counsel to the House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law, where she assisted with the House’s investigation into the digital economy.
Several modifications to FTC procedure were implemented shortly after Ms Kahn became Chair. On 21 July 2021, the FTC repealed a 1995 policy statement disfavouring the use of prior approval requirements for future, related transactions as part of FTC orders resolving merger cases. Under the 1995 policy, the FTC did not require parties to seek prior approval of certain future acquisitions but instead relied on its standard procedures to scrutinise subsequent transactions. With the repeal, the FTC signalled that future orders resolving merger cases may include requirements that parties notify the FTC about related transactions for up to 10 years, even for small transactions.
Also in July 2021, the FTC rescinded a 2015 policy statement on the use of section 5 of the FTC Act. The 2015 Statement of Enforcement Principles addressed using section 5 on a stand-alone basis, including describing the FTC’s goal of promoting consumer welfare, using a rule of reason analysis framework, and disfavouring the use of section 5 on its own if the Sherman or Clayton Acts are sufficient to address the competitive harm or practice.
No alternative statement providing guidance on how the FTC would enforce section 5 going forward was provided. Instead, Chair Khan issued a statement regarding the rescission that was joined by two of the other four Commissioners, which states:
The Commission’s inability, after a century of commanding this statutory authority, to deliver clear Section 5 principles suggests that the time is right for the Commission to rethink its approach and to recommit to its mandate to police unfair methods of competition even if they are outside the ambit of the Sherman or Clayton Acts. The task will require careful and serious work, but it is one that our enabling statute expected and required.
The lack of guidance has heightened the degree of uncertainty in the business community regarding future FTC enforcement. Further, stating that a “rethink” is required indicates that the business community is not likely to gain clarity on how the FTC will enforce section 5 for some time. Future guidance may come from the section 5 cases brought by the FTC rather than through a policy statement.
In July 2021, the FTC updated its Rule of Practice to change the way it issues rules, and it earlier established a Rulemaking Group in its office of the General Counsel to assist with rulemaking. The FTC has rulemaking authority, but this authority has been little used for many years, especially in the competition area. Recently, however, Commissioners have expressed increasing interest in using rulemaking power in areas related to data privacy, non-compete provisions in employment contracts, and other areas. How the FTC will choose to use its rulemaking authority going forward is an additional area of uncertainty facing the business community.
In September 2021, the FTC rescinded the Vertical Merger Guidelines. In June 2020, the DOJ and FTC had released joint Vertical Merger Guidelines, the first joint statement from the two agencies on how they analyse vertical mergers. This represented the first major policy guidance on vertical mergers since the DOJ 1984 Merger Guideline’s discussion of non-horizontal mergers. The FTC’s statement rescinding the guidelines contains striking language which shows a break with prior practice. The statement reads, in part, that the former guidelines “include unsound economic theories that are unsupported by the law or market realities” and that the withdrawal is in “order to prevent industry or judicial reliance on a flawed approach”. There now is no official FTC guidance on how it evaluates vertical mergers. As of this writing (one year after the FTC withdrew its support for the Vertical Merger Guidelines), the Vertical Merger Guidelines remain in effect at the DOJ. Though with the pending revision of the Horizontal Merger Guidelines (see discussion below), the FTC and DOJ could issue guidelines covering all mergers, horizontal and vertical both.
In July 2022, in a 3-2 party-line vote, the FTC eliminated the requirement that staff seek Commission approval for compulsory process regarding potentially collusive conduct, merger and deceptive practice investigations. A statement by the majority explained:
As has been the case with enforcement efforts by our Bureau of Consumer Protection for decades, we believe that these resolutions will not substantially change the multiple layers of checks and balances that are critical to the Commission’s oversight of investigations…Not individually authorizing compulsory process in each matter simply removes an unnecessary and time-consuming barrier to staff’s pursuit of an investigation.
However, the two commissioners in the minority issued a pointed dissent, singling out the claim that the change in procedure “will not substantially change the multiple layers of checks and balances”. The dissent objects that:
This assertion is baffling, as these broad resolutions eliminate the only layer of Commission oversight concerning the use of compulsory process in the vast majority of the agency’s competition-related investigations. The justifications for these actions rang hollow at the time [they were initiated in July 2021], and still do now. As before, the majority emphasizes the need for expeditious investigations, yet again it fails to produce a shred of evidence that the Commission’s longstanding process causes material delays.
This dissent highlights that making procedural modifications at the FTC continues to be disputed among the commissioners.
Finally, we note that the FTC has become more active in pursuing investigations and has signalled that it is exploring non-traditional ways of enforcing antitrust law. For example, in an August 2021 letter to the White House, Chair Khan stated that she would “ask that we identify additional legal theories to challenge retail fuel station mergers where dominant players are buying up family-run businesses”. In another example, in June 2022, the FTC opened a sweeping investigation into the business practices of Pharmacy Benefit Managers (PBMs), especially the use of rebates by PBMs, and expressed concern about increased vertical integration in the industry. Such an investigation is more aligned with industry studies pursued in other countries but have been less common in the US. A greater reliance on broader investigations is consistent with Chair Khan’s testimony before a congressional subcommittee that the FTC was “targeting root causes of competitive harm” by “[i]nvesting in horizon-scanning work” to “tackle problems at their incipiency”.
Overall, the FTC is pursuing the most substantive changes in its approach in many decades, which is likely to lead to many more competition investigations, and possibly to more challenges, and potentially even competition-related rulemakings. The change in posture is underpinned by neo-Brandeisian views held by agency leadership pointing to an expanded role for antitrust enforcement. As a result, we may see a different set of cases and theories of harm being pursued than antitrust practitioners have observed over the past 40 years. However, the FTC does not operate in a vacuum, and its actions going forward will be influenced by events and actions taken in other branches of the government, such as judicial decisions, and by potential new legislation.
We note that this potential expansion in competition enforcement by the FTC comes following a judicial narrowing of the tools available to it. In recent years, the FTC increasingly had sought monetary relief such as restitution and disgorgement of ill-gotten gains against defendants in both competition and consumer protection cases. It achieved $723.2 million in monetary relief in 49 cases during fiscal year 2019, and $796.9 million from 63 cases during fiscal year 2020. However, on 22 April 2021, the Supreme Court ruled unanimously in AMG Capital Management, LLC that the FTC does not have the authority under section 13(b) of the FTC Act to seek monetary relief such as restitution or disgorgement, and instead is limited to seeking permanent injunction. Though the FTC can still seek monetary penalties under sections 5 and 19 of the FTC Act in certain circumstances, this ruling reduced the FTC’s overall ability to seek monetary penalties.
Focus on labour markets
The DOJ and FTC are more highly focused now on competition issues in labour markets than at any time in their histories. In October 2016, the DOJ and FTC released a policy statement and guidance on antitrust issues in labour markets. This statement emphasises that wage-fixing and agreements not to compete for employees are illegal in most instances. Though these matters had been dealt with as civil antitrust violations previously, the DOJ stated that it intended to prosecute criminally individuals and companies that engage in naked wage-fixing or enter into no-poaching agreements. The DOJ has followed up on this intention and has pursued several criminal cases involving labour markets. The first criminal labour-related cases were filed in late 2020 and early 2021. At the time of this writing, the DOJ has brought six criminal cases involving labour markets.
The DOJ’s first two criminal labour cases that went to trial resulted in acquittals from juries on back-to-back days in April 2022. In the alleged wage-fixing matter US v Jindal, the DOJ charged a former owner of a therapist staffing company and his former clinical director with participating in a conspiracy to lower rates paid to physical therapists and physical therapist assistants providing in-home care in the Dallas-Fort Worth metropolitan area and elsewhere in northern Texas. The jury acquitted both defendants on the wage fixing charges on 14 April 2022, though the owner was convicted of obstructing an FTC investigation.
In the second case, the DOJ charged DaVita and its former CEO with agreeing with Surgical Care Affiliates and another company not to solicit each other’s senior-level employees., The US v DaVita trial resulted in a full acquittal on 15 April 2022.
The DOJ’s Jindal and DaVita cases both survived motions to dismiss, demonstrating that labour markets are subject to antitrust laws and that individuals and companies can be charged criminally for collusive conduct in these markets. The decision in DaVita, however, indicates that no-poach agreements might not be treated as strict per se violations, but instead require showing that the purpose of any such agreement was to allocate a market., At the time of this writing, with several cases proceeding, the DOJ is still seeking its first conviction in a labour market matter at trial or through a plea deal.
In addition to criminal prosecutions and civil litigation in this area, merger investigations at both the FTC and DOJ now routinely consider whether mergers under investigation will likely have competitive effects in labour markets. In addition, in September 2022, the FTC released a Policy Statement on Enforcement Related to Gig Work which describes that for “businesses that run online platforms” or “gig companies”, concentration can occur due to network effects, which is a specific concern for the FTC:
Gig companies in concentrated markets may be more likely to have and exert market power over gig workers or engage in anticompetitive unilateral or coordinated conduct. Such conduct may eliminate or further weaken competition among existing gig companies for workers’ services or prevent new gig companies from getting off the ground or being able to enter the market. The resulting loss in competition may enable gig companies to suppress wages below competitive rates, reduce job quality, or impose onerous terms on gig workers. In the absence of robust competition among gig companies, unfair and deceptive practices by one platform can proliferate across the labor market, creating a race to the bottom that participants in the gig economy, and especially gig workers, have little ability to avoid.
The FTC also reached a Memorandum of Understanding with the National Labor Relations Board (NLRB) to improve interagency collaboration “[t]o better root out practices that harm workers in the ‘gig economy’ and other labor markets.”
Aggressive stance on merger enforcement
The DOJ and FTC are planning to revise the Horizontal Merger Guidelines (HMGs), last updated in 2010. According to the FTC:
Recent evidence indicates that many industries across the economy are becoming more concentrated and less competitive – imperiling choice and economic gains for consumers, workers, entrepreneurs, and small businesses…To address mounting concerns, the agencies are soliciting public input on ways to modernize federal merger guidelines to better detect and prevent illegal, anticompetitive deals in today’s modern markets.
The agencies received more than 1,900 comments from this public solicitation. Given the expressed concerns about lax merger enforcement from both FTC Chair Khan and DOJ Assistant Attorney General Jonathan Kanter, a major revision of the HMGs is anticipated.
Even before the current agencies’ leadership, the DOJ and FTC had shown an increased willingness to embrace certain theories of harm not typically pursued in earlier merger cases. For example, in 2017 the DOJ pursued a rare challenge to a vertical merger in seeking to block the merger between AT&T and Time Warner – though a district court ultimately declined to enjoin the merger. In April 2020, the FTC filed an administrative complaint regarding a partial ownership stake that Altria Group took in Juul Labs, with the allegation that Altria took an ownership position in exchange for not competing with Juul Labs in selling e-cigarettes. An FTC administrative law judge’s (ALJ) initial decision dismissed the FTC’s antitrust charges. The FTC Complaint Counsel is appealing the ALJ decision to the full Commission.
Also, in March 2021, the FTC filed an administrative complaint to stop a vertical acquisition involving Illumina’s proposed purchase of Grail. Illumina is a DNA sequencing provider, and Grail is a developer of multi-cancer early detection (MCED) tests. According to the FTC, Illumina’s next-generation sequencing (NGS) platforms “are an essential input for the development and commercialization of MCED tests”. The FTC further claimed that “[a]s the only supplier of a critical input, Illumina already possesses the ability to foreclose or disadvantage Grail’s MCED rivals,” and if Illumina acquired Grail, it would “gain the incentive to foreclose or disadvantage firms that pose a significant competitive threat to Grail”. In September 2022, an ALJ ruled against the FTC, stating:
Illumina’s status as the only viable supplier of a necessary input for MCED test development existed before the Acquisition, and therefore, Illumina’s asserted abilities to raise prices, withhold supply, or decrease the quality of products or services, also existed before the Acquisition. The evidence fails to prove these abilities are a function of the Acquisition, or have changed as a result of the Acquisition.
FTC staff are appealing the ALJ’s decision to the FTC. Finally, on the vertical merger front, the DOJ challenged the proposed acquisition by UnitedHealth of Change Healthcare, primarily based on a vertical theory of harm. The DOJ lost this challenge at trial, a challenge which is discussed in more detail below.
The agencies also have been paying closer attention and showing a willingness to challenge so-called “killer acquisitions,” in which an incumbent firm purchases a small but growing competitor that is perceived to be a future threat, otherwise known as a nascent competitor. The term “killer acquisition” appears to have originated from a paper studying mergers and subsequent product development (or lack thereof) in the pharmaceutical industry. Two transactions abandoned early in 2021 were challenged by the agencies based on nascent competitor theories., Also, the FTC’s challenge of Meta’s past acquisitions of WhatsApp and Instagram fit this general framework, though applied to consummated mergers. Nascent competitor theories are expected to continue to be a point of emphasis at the agencies and may be emphasised in the updated HMGs.
The FTC has also challenged a case in which the theory of potential competition figures prominently. In July 2022, the FTC filed suit against Meta seeking to block its proposed acquisition of Within, a software company that develops apps for virtual reality (VR) devices. In its complaint, the FTC identified two relevant product markets – the “VR Dedicated Fitness App market” and the “VR Fitness App market”. The FTC claims that the proposed acquisition would result in anticompetitive effects in both markets. According to the FTC, in the alleged VR Dedicated Fitness App market:
The Acquisition would cause anticompetitive effects by eliminating potential competition from Meta in the relevant market for VR dedicated fitness apps. These include eliminating any probability that Meta would enter the market through alternative means absent the Acquisition, as well as eliminating the likely and actual beneficial influence on existing competition that results from Meta’s current position, poised on the edge of the market. … It is reasonably probable that Meta would have entered the VR Dedicated Fitness App market through alternative means absent this acquisition.
In the alleged VR Fitness App market, which is broader, the FTC claims the merger likely would eliminate “both present and future competition” and that effects would take the form of “reduced innovation, quality, and choice” as well as “higher prices” and less competition competing for the “most talented app developers”.
As another point of emphasis, the FTC has focused recently on what have been referred to as “roll-up strategies of private equity firms, particularly when they buy up small firms in already concentrated markets”. For example, in June 2022, the FTC announced it had reached a consent agreement regarding private equity group JAB’s proposed acquisition of SAGE Veterinary Partners, which operated a network of veterinary clinics and veterinary specialty hospitals. JAB had previously acquired two other veterinary specialty hospital networks. Chair Khan stated:
[S]erial acquisitions or “buy-and-buy” tactics can be used by private equity firms and other corporations to roll up sectors, enabling them to accrue market power and reduce incentives to compete, potentially leading to increased prices and degraded quality.
In addition to requiring divestitures in selected geographies and requiring JAB to seek prior FTC approval before purchasing veterinary clinics in particular geographies for the next 10 years, the FTC required JAB to seek prior approval before attempting “to acquire a specialty or emergency veterinary clinic within 25 miles of a JAB clinic anywhere in the United States that JAB owns now or in the future”. Chair Khan touted this as a “first of its kind” Commission order”. However, even as a “first of its kind” order, it nevertheless is focused on identifying potential horizontal overlaps that may arise from future roll-up tactics and not on the effects of private equity ownership.
Even so, Chair Khan has expressed concern about the competitive implications of the private equity business model, stating:
Antitrust enforcers must be attentive to how private equity firms’ business models may in some instances distort incentives in ways that strip productive capacity, degrade the quality of goods and services, and hinder competition….[F]irms that seek to strip and flip assets over a relatively short period of time are focused on increasing margins over the short-term, which can incentivize unfair or deceptive practices and the hollowing out of productive capacity.
The statement further points to particular concerns with private equity ownership in the healthcare industry citing as an example that “private equity ownership of elder care facilities is correlated with increased deaths at those nursing homes, potentially owing to cost-cutting measures like staffing reductions.” However, singling out private equity transactions has drawn substantial criticism, including from current FTC commissioners in the minority.
The DOJ has also taken a relatively aggressive stance in merger challenges by introducing innovations in its litigation approach. For example, it filed a lawsuit in June 2022 to prevent Booz Allen Hamilton Hold Corporation from acquiring EverWatch Corp. Both companies provide modeling and simulation services to the National Security Agency (NSA), and this case was focused on one particular contract with the NSA. This case is interesting because along with bringing a Clayton Act claim as is typical in merger challenges, the DOJ also alleged that the merger agreement itself is a violation of section 1 of the Sherman Act as a restraint of trade. Specifically, the DOJ alleges:
The merger agreement has sharply reduced incentives for the Defendants to compete vigorously for [the NSA contract] and therefore constitutes an unreasonable restraint of trade….
The preliminary injunction hearing was held in September 2022. The judge has yet to issue a decision as at the time of writing.
While the FTC (and DOJ) has taken a more aggressive stance generally, this position has not led to an increase in the number of mergers challenged by the FTC relative to prior years. The FTC brought 15 challenges in fiscal year 2021 and 19 challenges in fiscal year 2022 compared with 28 in 2020. Whether the more aggressive enforcement stance translates into larger numbers of challenges going forward will be watched closely.
Big Tech litigations and investigations
As described above, broad concerns have been expressed regarding increasing concentration, margins, and lack of entry across a range of technology-related industries, and whether antitrust enforcement has been sufficiently assertive in these industries. Such criticism has focused on Big Tech. The FTC and DOJ have become markedly more proactive in this sector.
The agencies have divided up responsibilities for the four firms receiving the most scrutiny, with the DOJ investigating Google and Apple, and the FTC investigating Facebook and Amazon. The FTC created a Technology Enforcement Division in 2019, which has improved its ability to investigate technology-related issues and signalled its focus on assessing potentially anticompetitive behaviour at Big Tech firms. In addition, state attorneys general are conducting their own investigations into the competitive implications of Big Tech business practices. These investigations have led to a flurry of cases.
Following a DOJ investigation of Google related to both general search and search advertising that lasted more than a year, the DOJ (and 11 states) filed suit against Google in October 2020 alleging that agreements that specify Google as the default search engine on mobile devices and computers collectively are exclusionary, and thus anticompetitive. Three separate cases have since been brought by groups of states against Google. The first state-led suit (Texas et al v Google) was filed by 14 states and Puerto Rico on 16 December 2020, alleging anticompetitive conduct regarding display advertising on third-party websites. The following day, 35 states, Puerto Rico, Guam, and the District of Columbia (DC) filed a case (Colorado et al v Google) alleging monopoly maintenance regarding search and search advertising. Finally, on 7 July 2021, 36 states and DC filed a case (Utah et al v Google) focusing on Google Play Store and Google Play Billing, alleging harm to competition in the Android app distribution ecosystem and in-app purchases.
The FTC brought a monopoly maintenance case in 2020 against Meta seeking the divestitures of assets and businesses, including Instagram and WhatsApp. This case resulted from an investigation involving the FTC and 46 states, DC and Guam. The FTC’s lawsuit against Meta alleges that its prior acquisitions, including Instagram and WhatsApp, harmed competition by removing nascent competitors from the market that otherwise could have challenged Meta’s position. The FTC also alleges more broadly that Meta “enforc[ed] a series of anticompetitive conditional dealing policies that pulled the rug out from under firms perceived as competitive threats”.
The attorneys general of California and, separately, Washington DC have filed suits against Amazon for its pricing policies, which allegedly prevent merchants from selling products at lower prices at other online retail locations, including their own websites. The DC suit was dismissed in March 2022 as not satisfying the plausibility standard and a motion for reconsideration leave to file an amended complaint was denied on 1 August 2022. The dismissal and subsequent denials by the DC superior court have been appealed. The California lawsuit regarding Amazon’s pricing practices was filed in September 2022.
Given the confirmation of Big Tech critics Lina Khan as the chair of the FTC, and Jonathan Kanter as Assistant Attorney General for the DOJ’s Antitrust Division, the federal competition agencies are anticipated to continue pressing on multiple fronts against Big Tech. In addition, states have demonstrated a willingness to strike out on their own in recent years, especially in cases involving Big Tech, where the spotlight is brightest. Big Tech can expect intense federal and state antitrust scrutiny over the next several years.
Even as the DOJ, FTC, and state attorneys general pursue ongoing (or future) cases against Big Tech firms, among others, the agencies have experienced recent losses in court, especially in dynamic industries (described more below). Few, if any, industries are more dynamic than Big Tech. Any competition litigation against Big Tech companies will likely be difficult and complex, as was the DOJ’s case against Microsoft more than 20 years ago.
The September 2021 district court decision following a bench trial in Epic Games, Inc v Apple Inc. might provide something of a preview into the challenges that the agencies face in Big Tech litigation. This case challenged the legality of the 30 percent commission Apple charges developers for app sales (including sales that occur within apps, in “in-game” sales), specifically with regard to Epic’s blockbuster video game Fortnite. The Court found that, while Apple is not a “monopolist in the submarket for mobile gaming transactions”, its “conduct in enforcing anti-steering restrictions is anticompetitive”. So, Apple “won” the case, at least mostly. At the time of this writing, Epic has appealed the ruling and the DOJ has filed an amicus brief in favour of Epic’s position. The ruling regarding anti-steering restrictions suggests that future decisions in Big Tech cases, especially as the agencies seek to expand the application of antitrust law, might involve outcomes with losses and partial wins rather than outright victories for the agencies.
Government litigation losses
Some agency challenges end up in court, where decisions are guided by law and precedent. A DOJ or FTC merger challenge litigation that uses a novel theory must still pass muster under existing jurisprudence. In the absence of changes in legislation, litigations that depart from law and precedent may result in agency losses in court.
The DOJ, FTC, and state Attorneys General have lost several antitrust litigations during the past few years – even losing cases built around standard, commonly used antitrust theories. As described above, in 2022 the DOJ lost its first two criminal cases that went to trial involving labour issues – cases related to wage-fixing and no-poach agreements. In addition, the DOJ was unsuccessful three times in a row in a case involving alleged price fixing in the broiler chicken industry. The first and second trials ended in mistrials with hung juries in December 2021 and April 2022, respectively. After the second trial, the district court judge summoned DOJ Assistant Attorney General Johnathan Kanter to his courtroom and sharply questioned the wisdom of the DOJ proceeding to trial a third time, saying that the DOJ may be placing “hope over experience”. The DOJ proceeded to trial a third time against just five individuals (instead of the ten in its first two trials) but lost outright in the third trial.
In 2018, the Supreme Court ruled against certain states in American Express, a case in which the Court found that anti-steering rules utilised by American Express to prevent merchants from directing consumers to alternative credit cards do not violate antitrust law. That decision has important implications for the analysis of cases involving multi-sided platforms.
The experiences of the agencies in merger litigations further demonstrate the importance of judicial review. Merger litigation has occurred in the United States more frequently since about 2015, though merger litigation is still relatively rare. The vast majority of proposed mergers are not investigated, and those subject to investigation overwhelmingly are resolved without a trial. Despite greater frequency and heightened focus on litigation by the DOJ, FTC and states, government plaintiffs registered three losses in court in the first few months of 2020. The FTC lost its challenge in Evonik/PeroxyChem (providers of hydrogen peroxide), a group of states lost their challenge to T-Mobile/Sprint, and the DOJ lost its challenge to Farelogix/Sabre Corporation. We have already discussed the FTC loses in Altria Group/Juul Labs and Grail/Illumina, both in 2022.
Also, on 19 September 2022, the DOJ along with the states of New York and Minnesota lost their challenge to the proposed acquisition by UnitedHealth, a “vertically integrated healthcare enterprise”, of Change Healthcare, a “technology company that provides data solutions aimed at improving clinical decision-making and simplifying payment processes.” The government proposed three theories of harm – one horizontal theory related to first-pass claims editing and two vertical theories involving raising-rivals’ costs and market foreclosure. The horizontal theory was pursued despite that the merging parties had already proposed a divestiture of Change Healthcare’s overlapping solutions. The Court found that the competition in the post-divestiture market “will match, and perhaps even exceed, its current levels”. In rejecting the vertical theories the Court emphasised that the governments’ theories suffered from “serious flaws” and failed to prove its claims that the merged entity would misuse data or that rival payers would innovate less.
Just a few days later, on 23 September 2022, after a four day trial that took place in April 2022, a district court judge handed the DOJ a loss in its challenge of a merger between Sugar Corporation and Imperial Sugar Company, the first merger challenge brought by the DOJ under the leadership of Assistant AG Jonathan Kanter. The geographic market appears to have played a sizable role in the decision, with the DOJ arguing that the market was limited to the south-eastern US and the merging parties arguing that the market would be nationwide due to regulatory oversight by the US Department of Agriculture.
One might ordinarily think that losses in court would temper the government’s more recent aggressive posture. However, Chair Khan has described that, “one challenge that we’re confronting here in the US, especially as we mount litigation in the context of digital markets, is pushing the law to evolve.” Perhaps capturing the likely approach of the agencies going forward, following a string of court losses by the DOJ, Assistant AG Jonathan Kanter reportedly encouraged staff to listen to I Won’t Back Down by Tom Petty and to “dance like nobody’s watching”. So, in the short run at least, the government is unlikely to be fazed by litigation setbacks, and is likely to continue to “push the law to evolve”.
Notes
One substantive disagreement between the FTC and DOJ related to the FTC’s Qualcomm litigation, in which one of the federal agencies (the DOJ) opposed the other federal agency’s case in court.
“Executive Order on Promoting Competition in the American Economy,” The White House, 9 July 2021, available at https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/.
For a description of the proposed legislation, see House Judiciary Committee Chairman Nadler’s Statement for the Markup of H.R. 3816, the American Innovation and Choice Online Act, 24 June 2021, available at https://judiciary.house.gov/news/documentsingle.aspx?DocumentID=4620.
For a description of the proposed legislation, see S.2710 – Open App Markets Act, 17 February 2022, available at https://www.congress.gov/bill/117th-congress/senate-bill/2710.
For a description of the proposed legislation, see House Judiciary Committee Chairman Nadler’s Statement for the Markup of H.R. 3826, the Platform Competition and Opportunity Act of 2021, 23 June 2021, available at https://judiciary.house.gov/news/documentsingle.aspx?DocumentID=4619.
For a description of the proposed legislation, see House Antitrust Subcommittee Vice Chair Jayapal’s Statement on the Ending Platform Monopolies Act (H.R. 3825), 24 June 2021, available at https://jayapal.house.gov/2021/06/24/big-tech-legislation-passes-judiciary-committee/.
Additional proposed legislation include The Merger Filing Fee Modernization Act, The State Antitrust Enforcement Venue Act, and The Foreign Merger Subsidies Disclosure Act. See Assistance Attorney General Jonathan Kanter of the Antitrust Division Testifies Before the Senate Judiciary Committee Hearing on Competition Policy, Antitrust, and Consumer Rights, 20 September 2022, available at https://www.justice.gov/opa/speech/assistant-attorney-general-jonathan-kanter-antitrust-division-testifies-senate-judiciary.
See, for example, Bribach, Winston, “State Case You Need to Know: Analyzing New York’s 21st Century Antitrust Act,” ABA Antitrust Newsletter, 22 June 2022 available at https://www.americanbar.org/groups/antitrust_law/resources/newsletters/state-case-new-yorks-21st-century-antitrust-act/.
“FTC, DOJ Temporarily Suspend Discretionary Practice of Early Termination,” Federal Trade Commission, 4 February 2021, available at https://www.ftc.gov/news-events/press-releases/2021/02/ftc-doj-temporarily-suspend-discretionary-practice-early.
See, “Statement of Commissioners Noah Joshua Phillips and Christine S. Wilson, Regarding the Commission’s Indefinite Suspension of Early Termination,” Federal Trade Commission, 4 February 2021, available at https://www.ftc.gov/system/files/documents/public_statements/1587047/phillipswilsonetstatement.pdf.
“Return of Early Termination of the HSR Waiting Period Not on the FTC’s Agenda, According to Commissioner Phillips,” The National Law Review, XII (262), 10 March 2022, available at https://www.natlawreview.com/article/return-early-termination-hsr-waiting-period-not-ftc-s-agenda-according-to.
“Lina M. Khan Sworn in as Chair of the FTC,” Federal Trade Commission, 15 June 2021, available at https://www.ftc.gov/news-events/press-releases/2021/06/lina-m-khan-sworn-chair-ftc.
Khan, Lina M. (2017), “Amazon’s Antitrust Paradox,” The Yale Law Journal, 126 (3): 710-805.
“FTC Rescinds 1995 Policy Statement that Limited the Agency’s Ability to Deter Problematic Mergers,” Federal Trade Commission, 21 July 2021, available at https://www.ftc.gov/news-events/press-releases/2021/07/ftc-rescinds-1995-policy-statement-limited-agencys-ability-deter.
“FTC Rescinds 2015 Policy that Limited Its Enforcement Ability Under the FTC Act,” Federal Trade Commission, 1 July 2021, available at https://www.ftc.gov/news-events/press-releases/2021/07/ftc-rescinds-2015-policy-limited-its-enforcement-ability-under.
Statement of Chair Lina M Khan Joined by Commissioner Rohit Chopra and Commissioner Rebecca Kelly Slaughter on the Withdrawal of the Statement of Enforcement Principles Regarding “Unfair Methods of Competition” Under Section 5 of the FTC Act, Federal Trade Commission, 1 July 2021, available at https://www.ftc.gov/system/files/documents/public_statements/1591498/final_statement_of_chair_khan_joined_by_rc_and_rks_on_section_5_0.pdf.
“FTC Votes to Update Rulemaking Procedures, Sets Stage for Stronger Deterrence of Corporate Misconduct,” Federal Trade Commission, 1 July 2021, available at https://www.ftc.gov/news-events/press-releases/2021/07/ftc-votes-update-rulemaking-procedures-sets-stage-stronger.
“Federal Trade Commission Withdraws Vertical Merger Guidelines and Commentary,” Federal Trade Commission, 15 September 2021, available at https://www.ftc.gov/news-events/press-releases/2021/09/federal-trade-commission-withdraws-vertical-merger-guidelines.
“Federal Trade Commission Withdraws Vertical Merger Guidelines and Commentary,” Federal Trade Commission, 15 September 2021, available at https://www.ftc.gov/news-events/press-releases/2021/09/federal-trade-commission-withdraws-vertical-merger-guidelines.
“Justice Department Issues Statement on the Vertical Merger Guidelines” Department of Justice, 15 September 2021, available at https://www.justice.gov/opa/pr/justice-department-issues-statement-vertical-merger-guidelines.
Federal Trade Commission Authorizes Three New Compulsory Process Resolutions for Investigations, FTC Press Release, 26 August 2022, available at https://www.ftc.gov/news-events/news/press-releases/2022/08/federal-trade-commission-authorizes-three-new-compulsory-process-resolutions-investigations.
Statement of Commissioner Alvaro M. Bedoya, Jointed by Chair Lina M. Khan and Commissioner Rebecca Kelly Slaughter Regarding Omnibus Resolutions Approved by the Federal Trade Commission, 17 August 2022, available at https://www.ftc.gov/system/files/ftc_gov/pdf/Majority%20Omnibus%20Res.%20Statement.pdf.
The FTC has adopted 15 omnibus resolutions authorizing compulsory process in July 2021, September 2021 and July 2022. “The 15 omnibus resolutions authorize compulsory process in investigations of possible illegality stemming from (1) any merger subject to federal premerger notification requirements, including those under the HSR Act, (2) any suspected monopolization, attempt to monopolize, or conspiracy to monopolize, (3) any consummated merger or acquisition by an entity with a current enterprise value over $5 billion, (4) any simultaneous service as an officer or director of, or a contemporaneous financial stake in, two or more competing entities, (5) any suspected abuse of intellectual property; (6) prohibited conduct targeting workers or small-business operators; (7) prohibited conduct by any person or entity subject to an FTC administrative order; or prohibited conduct related to (8) any healthcare market, (9) any market with participants that provide technology platform services, (10) any algorithm or biometrics, (11) any marketing of goods and services on the Internet, manipulation of user interfaces, or use of email, metatags, computer code, or programs, (12) any good or service marketed, in whole or in part, to children under 18 years of age, (13) any good or service marketed, in whole or in part, to members or veterans of the U.S. Armed Forces and States’ National Guards, (14) any diagnosis, treatment, or government benefits for COVID-19, or (15) any repair restriction.” Dissenting Statement of Commissioners Noah Joshua Phillips and Christine S. Wilson Regarding the Issuance of Two Omnibus Compulsory Process Resolutions, 1 July 2022, footnote 5, available at https://www.ftc.gov/system/files/ftc_gov/pdf/Dissenting%20omnibus%20resolution%20statement.pdf.
[23] Federal Trade Commission and Justice Department Seek to Strengthen Enforcement Against Illegal Mergers, FTC Press Release, 18 January 2022 (emphasis in original), available at https://www.ftc.gov/news-events/news/press-releases/2022/01/federal-trade-commission-justice-department-seek-strengthen-enforcement-against-illegal-mergers.
Dissenting Statement of Commissioners Noah Joshua Phillips and Christine S. Wilson Regarding the Issuance of Two Omnibus Compulsory Process Resolutions, 1 July 2022, available at https://www.ftc.gov/system/files/ftc_gov/pdf/Dissenting%20omnibus%20resolution%20statement.pdf.
Letter to The Honorable Brian Deese, Direct, National Economic Council, 25 August 2021, available at https://www.whitehouse.gov/wp-content/uploads/2021/08/Letter-to-Director-Deese-National-Economic-Council.pdf.
FTC Launches Inquiry Into Prescription Drug Middlemen Industry, FTC Press Release, 7 June 2022, available at https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-launches-inquiry-prescription-drug-middlemen-industry.
Prepared Statement of the Federal Trade Commission Before the United States Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights “Oversight of the Enforcement of the Antitrust Laws” 20 September 2022, p. 2, available at https://www.ftc.gov/system/files/ftc_gov/pdf/P210100SenateAntitrustTestimony09202022.pdf.
Federal Trade Commission, Congressional Budget Justification, Fiscal Year 2021, 10 February 2020, p. 5, available at https://www.ftc.gov/system/files/documents/reports/fy-2021-congressional-budget-justification/fy_2021_cbj_final.pdf.
Federal Trade Commission, Congressional Budget Justification, Fiscal Year 2022, 28 May 2021, p. 7, available at https://www.ftc.gov/system/files/documents/reports/fy-2022-congressional-budget-justification/fy22cbj.pdf.
AMG Capital Management, LLC, et al. v Federal Trade Commission, Supreme Court of the United States, No. 19-508, 593 U.S. __, 141 S. Ct. 1341, Slip Opinion, 22 April 2021,available at http://www.supremecourt.gov/opinions/20pdf/19-508_l6gn.pdf.
Specifically, the FTC must hold an administrative hearing and subsequently issue a cease-and-desist order. The section 5 process must be brought within three years of the alleged violation and monetary relief must be sought within one year of the cease-and-desist order. In addition, monetary relief would only apply when a “reasonable man would have known under the circumstances” that the illegal conduct was “dishonest or fraudulent”. AMG Capital Management, LLC, et al. v Federal Trade Commission, Supreme Court of the United States, No. 19-508, 593 U.S. __, 141 S. Ct. 1341, Slip Opinion, 22 April 2021, citing 15 U.S.C. §57b(a)(2).
The FTC’s procedures have been challenged in a case to be heard by the Supreme Court in November 2022. (See, In the Matter of Axon Enterprises, Inc., and Safariland, LLC, Before the Federal Trade Commission, Complaint, Public, 3 January 2020, available at available at https://www.ftc.gov/system/files/documents/cases/d09389_administrative_part_iii_-_public_redacted.pdf).
The case involves Axon’s challenge to the FTC’s use of administrative proceedings. The Supreme Court in Axon potentially could restrict the types of and/or manner of proceedings that the FTC could use in enforcement.
“Antitrust Guidance for Human Resource Professionals,” Department of Justice and Federal Trade Commission, October 2016, available at https://www.justice.gov/atr/file/903511/download.
An exception is a joint venture, where the parties need to agree on certain restrictions to facilitate the formation and operation of the JV.
Assistance Attorney General Jonathan Kanter of the Antitrust Division Testifies Before the Senate Judiciary Committee Hearing on Competition Policy, Antitrust, and Consumer Rights, 20 September 2022, available at https://www.justice.gov/opa/speech/assistant-attorney-general-jonathan-kanter-antitrust-division-testifies-senate-judiciary.
United States of America v Neeraj Jindal, U.S. District Court for the Eastern District of Texas, No. 4:20cr00358, Indictment, 9 December 2020, available at https://www.justice.gov/opa/press-release/file/1373911/download.
United States of America v Neeraj Jindal, U.S. District Court for the Eastern District of Texas, No. 4:20cr00358, Verdict of the Jury, 14 April 2022.
See “Former Health Care Staffing Executive Convicted of Obstructing FTC Investigation into Wage-Fixing Allegations,” 14 April 2022, available at https://www.justice.gov/opa/pr/former-health-care-staffing-executive-convicted-obstructing-ftc-investigation-wage-fixing.
United States of America v. DaVita Inc. and Kent Thiry, District Court for the District Court of Colorado, No. 21cr00229-RBJ, Indictment, 14 July 2021, available at https://www.justice.gov/opa/press-release/file/1412606/download.
Separately, a grand jury indicted Surgical Care Affiliates in January 2021. United States of America v Surgical Care Affiliates, LLC and SCAI Holdings, LLC, U.S. District Court for the Northern District of Texas, No. 3:21cr011, Superseding Indictment, 8 July 2021 (supersedes Indictment filed 5 January 2021), available at https://www.justice.gov/atr/case-document/file/1411111/download.
In DaVita, the Court found, “[A]t trial, the government will not merely need to show that the defendants entered into the non-solicitation agreement and what the terms of the agreement were. It will have to prove beyond a reasonable doubt that defendants entered into an agreement with the purpose of allocating the market for senior executives (Count 1) and other employees (Counts 2 and 3)” (United States of America v. DaVita Inc. and Kent Thiry, District Court for the District Court of Colorado, No. 21cr00229-RBJ, Indictment, 28 January 2022, Order Denying Defendants Motion to Dismiss.) Koeing, Bryan, “DaVita Acquittal Sets High Bar for DOJ No-Poach Cases,” 2 June 2022, Law360, available at https://www.law360.com/articles/1497544/davita-acquittal-sets-high-bar-for-doj-no-poach-cases
Given the current focus on labour market issues at the agencies, Aya Healthcare Services, Inc v AMN Healthcare, Inc (9 F.4th 1102, 1105 (9th Cir. 2021)) is another recent notable case where the courts’ decisions indicate that contractual restrictions do not invoke per se treatment under antitrust law. The case involved private litigation between two healthcare staffing agencies that place travel nurses on temporary assignments. Aya Healthcare had contracted with AMN Healthcare to provide staffing when AMN Healthcare had insufficient staff to meet customer needs, and its contract included a restriction preventing Aya Healthcare from soliciting AMN Healthcare employees. Aya Healthcare challenged this restriction, and the DOJ participated as an amicus, arguing that the restriction was a naked restraint that was a per se violation. Both the District and Ninth Circuit courts disagreed, finding the restriction an ancillary restraint subject to a rule of reason analysis.
FTC Policy Statement on Enforcement Related to Gig Work, 15 September 2022, available at https://www.ftc.gov/system/files/ftc_gov/pdf/Matter%20No.%20P227600%20Gig%20Policy%20Statement.pdf. See also, FTC Press Release, “Policy Statement on Enforcement Related to Gig Work,” 15 September 2022, available at https://www.ftc.gov/legal-library/browse/policy-statement-enforcement-related-gig-work.
Memorandum of Understanding between the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) Regarding Information Sharing, Cross-Agency Training, and Outreach in Areas of Common Regulatory Interest, 19 July 2022, available at https://www.ftc.gov/system/files/ftc_gov/pdf/ftcnlrb%20mou%2071922.pdf.
Federal Trade Commission and Justice Department Seek to Strengthen Enforcement Against Illegal Mergers, FTC Press Release, 18 January 2022, available at https://www.ftc.gov/news-events/news/press-releases/2022/01/federal-trade-commission-justice-department-seek-strengthen-enforcement-against-illegal-mergers.
Request for Information on Merger Enforcement, Created by the Federal Trade Commission, Regulations.gov, available at https://www.regulations.gov/docket/FTC-2022-0003/comments.
United States of America v. AT&T Inc. et al, District Court for the District of Columbia, No. 1:17-cv-02511, Complaint, 20 November 2017, available at https://www.justice.gov/atr/case-document/file/1012916/download.
United States of America v. AT&T Inc. et al, District Court for the District of Columbia, No. 1:17-cv-02511-RJL, Memorandum Opinion, 12 June 2018.
Federal Trade Commission – Atria Group/JUUL Labs, In the Matter of, available at https://www.ftc.gov/enforcement/cases-proceedings/191-0075/altria-groupjuul-labs-matter.
In the Matter of Altria Group, Inc., and Juul Labs, Inc., Before the Federal Trade Commission, Initial Decision, Public Version, 23 February 2022, available at https://www.ftc.gov/system/files/ftc_gov/pdf/d09393altriainitialdecisionpublic.pdf.
In the Matter of Altria Group, Inc., and Juul Labs, Inc., Before the Federal Trade Commission, Complaint Counsel’s Notice of Appeal, Public Version, 16 February 2022, available at https://www.ftc.gov/system/files/ftc_gov/pdf/d09393ccnoticeappeal.pdf.
In the Matter of Illumina, Inc., and GRAIL, Inc., Before the Federal Trade Commission, Complaint, Redacted-Public Version, 13 March 2021, p. 3, available at https://www.ftc.gov/system/files/documents/cases/redacted_administrative_part_3_complaint_redacted.pdf.
In the Matter of Illumina, Inc., and GRAIL, Inc., Before the Federal Trade Commission, Complaint, Redacted-Public Version, 13 March 2021, pp. 5-6, available at https://www.ftc.gov/system/files/documents/cases/redacted_administrative_part_3_complaint_redacted.pdf.
In the Matter of Illumina, Inc., and GRAIL, Inc., Before the Federal Trade Commission, Initial Decision, Public Version, 9 September 2022, p. 172, available at https://www.ftc.gov/system/files/ftc_gov/pdf/D09401InitialDecisionPublic.pdf.
In the Matter of Illumina, Inc., and GRAIL, Inc., Before the Federal Trade Commission, Complaint Counsel’s Notice of Appeal, 2 September 2022, available at https://www.ftc.gov/system/files/ftc_gov/pdf/D09401CCNoticeofAppeal.pdf.
United States of America, et al., v. UnitedHealth Group Incorporated and Change Healthcare, Inc., CA No: 1:22-cv-0481 (CJN), Memorandum Opinion, 19 September 2022, pp. 1 and 6-7.
See Cunningham, Colleen, Florian Ederer, and Song Ma (2021), “Killer Acquisitions,” Journal of Political Economy, 129 (3): 649-702.
“Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block,” Department of Justice, 12 January 2021, available at https://www.justice.gov/opa/pr/visa-and-plaid-abandon-merger-after-antitrust-division-s-suit-block.
“Statement of Ian Conner, Director of the FTC’s Bureau of Competition, Regarding the Announcement that The Procter & Gamble Company has Abandoned Its Proposed Acquisition of Billie, Inc.,” Federal Trade Commission, 5 January 2021, available at https://www.ftc.gov/news-events/press-releases/2021/01/statement-ian-conner-director-ftcs-bureau-competition-regarding.
See Federal Trade Commission and Justice Department Seek to Strengthen Enforcement Against Illegal Mergers, FTC Press Release, 18 January 2022, available at https://www.ftc.gov/news-events/news/press-releases/2022/01/federal-trade-commission-justice-department-seek-strengthen-enforcement-against-illegal-mergers. “The agencies seek input on potential updates to the guidelines’ discussion of potential and nascent competitors, which may be key sources of innovation and competition.”
Federal Trade Commission v. Meta Platforms, Inc., et al., U.S. District Court for the Northern District of California, Complaint for a Temporary Restraining Order and Preliminary Injunction Pursuant to Section 13(B) of the Federal Trade Commission Act (redacted), pp. 12-16, available at https://www.ftc.gov/system/files/ftc_gov/pdf/221%200040%20Meta%20Within%20TRO%20Complaint.pdf.
Federal Trade Commission v. Meta Platforms, Inc., et al., U.S. District Court for the Northern District of California, Complaint for a Temporary Restraining Order and Preliminary Injunction Pursuant to Section 13(B) of the Federal Trade Commission Act (redacted), p. 18, available at https://www.ftc.gov/system/files/ftc_gov/pdf/221%200040%20Meta%20Within%20TRO%20Complaint.pdf.
Federal Trade Commission v. Meta Platforms, Inc., et al., U.S. District Court for the Northern District of California, Complaint for a Temporary Restraining Order and Preliminary Injunction Pursuant to Section 13(B) of the Federal Trade Commission Act (redacted), p. 6, available at https://www.ftc.gov/system/files/ftc_gov/pdf/221%200040%20Meta%20Within%20TRO%20Complaint.pdf.
Prepared Statement of the Federal Trade Commission Before the United States Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights “Oversight of the Enforcement of the Antitrust Laws,” 20 September 2022, p. 7, available at https://www.ftc.gov/system/files/ftc_gov/pdf/P210100SenateAntitrustTestimony09202022.pdf.
Statement of Chair Lina M. Khan Joined by Commissioner Rebecca Kelly Slaughter and Commissioner Alvaro M. Bedoya in the Matter of JAB Consumer Fund/SAGE Veterinary Partners Commission File No. 2110140, 13 June 2022, p. 2, available at https://www.ftc.gov/system/files/ftc_gov/pdf/2022.06.13%20-%20Statement%20of%20Chair%20Lina%20M.%20Khan%20Regarding%20NVA-Sage%20-%20new.pdf.
Statement of Chair Lina M. Khan Joined by Commissioner Rebecca Kelly Slaughter and Commissioner Alvaro M. Bedoya in the Matter of JAB Consumer Fund/SAGE Veterinary Partners, Commission File No. 2110140, 13 June 2022, p. 3, available at https://www.ftc.gov/system/files/ftc_gov/pdf/2022.06.13%20-%20Statement%20of%20Chair%20Lina%20M.%20Khan%20Regarding%20NVA-Sage%20-%20new.pdf.
Statement of Chair Lina M. Khan Joined by Commissioner Rebecca Kelly Slaughter and Commissioner Alvaro M. Bedoya in the Matter of JAB Consumer Fund/SAGE Veterinary Partners Commission File No. 2110140, 13 June 2022, p. 2, available at https://www.ftc.gov/system/files/ftc_gov/pdf/2022.06.13%20-%20Statement%20of%20Chair%20Lina%20M.%20Khan%20Regarding%20NVA-Sage%20-%20new.pdf (emphasis in original). See also, In the Matter of JAB Consumer Partners SCA SICAR, National Veterinary Associates, Inc., and SAGE Veterinary Partners, LLC, Before the Federal Trade Commission, Docket No. C-4766, Decision and Order, 2 August 2022, available at https://www.ftc.gov/system/files/ftc_gov/pdf/2110140C4766NVASAGEOrder.pdf.
Statement of Chair Lina M. Khan Joined by Commissioner Rebecca Kelly Slaughter and Commissioner Alvaro M. Bedoya in the Matter of JAB Consumer Fund/SAGE Veterinary Partners Commission File No. 2110140, 13 June 2022, p. 3, available at https://www.ftc.gov/system/files/ftc_gov/pdf/2022.06.13%20-%20Statement%20of%20Chair%20Lina%20M.%20Khan%20Regarding%20NVA-Sage%20-%20new.pdf.
Statement of Chair Lina M. Khan Joined by Commissioner Rebecca Kelly Slaughter and Commissioner Alvaro M. Bedoya in the Matter of JAB Consumer Fund/SAGE Veterinary Partners Commission File No. 2110140, 13 June 2022, p. 3, available at https://www.ftc.gov/system/files/ftc_gov/pdf/2022.06.13%20-%20Statement%20of%20Chair%20Lina%20M.%20Khan%20Regarding%20NVA-Sage%20-%20new.pdf.
Delrahim, Makan, “Antitrust Attacks on Private Equity Hurt Consumers – Regulators Ignore Research Showing Their Investments Promote Competition and Increase Productivity,” Wall Street Journal, 31 July 2022, available at https://www.wsj.com/articles/antitrust-attacks-on-private-equity-hurt-consumers-lina-khan-ftc-recession-competition-management-expertise-capital-11659271442.
“[A]lthough the Commission majority called for additional remediation due to JAB being a private equity firm, the Complaint did not indicate any reason why this fact about JAB makes this or any other private equity transaction more likely to raise competition concerns.” Dissenting Statement of Commissioners Noah Joshua Phillips and Christine S. Wilson, Federal Trade Commission, Before the Subcommittee on Competition Policy, Antitrust, and Consumer Rights of the U.S. Senate Committee on the Judiciary, 20 September 2022, footnote 14, available at https://www.ftc.gov/system/files/ftc_gov/pdf/Phillips%20Wilson%20dissent%20oversight%20hearing%20FINAL%209.16.22%20%28002%29.pdf.
United States of America v. Booz Allen Hamilton Holding Corporation, et al., U.S. District Court for the District of Maryland, No. 1:22-cv-01603-CCB, Complaint, Redacted Version, 29 June 2022, p. 2, available at https://www.justice.gov/atr/case-document/file/1518956/download.
United States of America v. Booz Allen Hamilton Holding Corporation, et al., U.S. District Court for the District of Maryland, No. 1:22-cv-01603-CCB, Complaint, Redacted Version, 29 June 2022, p. 19, available at https://www.justice.gov/atr/case-document/file/1518956/download.
Koenig, Bryan, “Booz Must Give NSA Its Best, EverWatch Merger Judge Told,” Law360, 16 September 2022, available at https://www.law360.com/articles/1531070/booz-must-give-nsa-its-best-everwatch-merger-judge-told.
“[W]e cannot agree on the testimony submitted, which represents a dramatic departure from predecessor testimony in several material ways. For example, the testimony paints the FTC’s merger enforcement program as once moribund but now revitalized. The data tell a different story. Today, the agency is challenging fewer mergers and entering into fewer consents than during the prior Administration. In fiscal year 2020, the FTC brought 28 merger enforcement actions. In fiscal year 2021, that number dropped by nearly half, and a majority of those 15 challenges were filed before the Biden Administration came into office. Fiscal year 2022 witnessed only a slight uptick, bringing 19 challenges with just two weeks of the fiscal year remaining. This total falls short of the 2020 total and does not exceed the number of enforcement actions brought in any prior fiscal year going back to 2015. These data are even more striking when considering that the number of merger filings in 2021 and in 2022 was significantly higher than in any of those prior years.” Dissenting Statement of Commissioners Noah Joshua Phillips and Christine S. Wilson, Federal Trade Commission, Before the Subcommittee on Competition Policy, Antitrust, and Consumer Rights of the U.S. Senate Committee on the Judiciary, 20 September 2022, pp. 2-3, available at https://www.ftc.gov/system/files/ftc_gov/pdf/Phillips%20Wilson%20dissent%20oversight%20hearing%20FINAL%209.16.22%20%28002%29.pdf. We note that this dissenting statement indicates a significant amount of disagreement among the FTC commissioners regarding the overall approach taken by the FTC for its antitrust enforcement program. While there can always be disagreements on matters of opinion, in our experience, this dissenting statement indicates a high level of acrimony at the FTC, which is consistent with the dissenting opinions released regarding recent procedural matters taken by the FTC as detailed above.
Though the DOJ and FTC can challenge monopolistic practices, the FTC has a broader toolkit available to it given that it can take action using section 5 of the Federal Trade Commission Act (FTC Act) (15 U.S.C. § 45), which prohibits unfair methods of competition.
Federal Trade Commission, Inside the Bureau of Competition – FTC Technology Enforcement Division, available at https://www.ftc.gov/about-ftc/bureaus-offices/bureau-competition/inside-bureau-competition/technology-enforcement-division.
The FTC had previously investigated Google’s business practices regarding search and related topics but declined to take action. See “Statement of the Federal Trade Commission Regarding Google’s Search Practices,” In the Matter of Google Inc., FTC File Number 111-0163, 3 January 2013, available at https://www.ftc.gov/sites/default/files/documents/public_statements/statement-commission-regarding-googles-search-practices/130103brillgooglesearchstmt.pdf.
“Justice Department Sues Monopolist Google for Violating Antitrust Laws: Department Files Complaint Against Google to Restore Competition in Search and Advertising Markets,” Department of Justice, 20 October 2020, available at https://www.justice.gov/opa/pr/justice-department-sues-monopolist-google-violating-antitrust-laws.
The State of Texas, et al. v. Google LLC, U.S. District Court for the Eastern District of Texas Sherman Division, No. 4:20-cv-00957, Complaint, 16 December 2020, available at https://www.naag.org/wp-content/uploads/2021/07/TX-et-al.-v.-Google-complaint.pdf. See also The State of Texas, et al. v. Google LLC, U.S. District Court for the Eastern District of Texas Sherman Division, No. 4:20-cv-00957-SDJ, Amended Complaint, 15 March 2021, available at https://www.texasattorneygeneral.gov/sites/default/files/images/admin/2021/Press/Redacted%20Amended%20Complaint%20FILED%20(002).pdf.
The State of Colorado, et al. v. Google LLC, U.S. District Court for the District of Columbia, No. 1:20-cv-03715, Complaint, 17 December 2020, available at https://ag.ny.gov/sites/default/files/redacted_complaint_-_colorado_et_al._v._google.pdf.
The State of Utah, et al. v. Google LLC, U.S. District Court for the Northern District of California San Francisco Division, No. 3:21-cv-05227, Complaint, 7 July 2020, available at https://ag.ny.gov/sites/default/files/utah_v_google.1.complaint_redacted.pdf.
The FTC’s initial complaint had been dismissed for failing to plead sufficient facts to establish the elements of a Section 2 of the Sherman Act claim, including an allegation of market power. See Federal Trade Commission v. Facebook Inc., U.S. District Court for the District of Columbia, No. 1:20-cv-03590-JEB, Memorandum Opinion, 28 June 2021, available at https://www.ftc.gov/system/files/documents/cases/073_2021.06.28_mtd_order_memo.pdf. However, the Court provided leave for the FTC to file an amended complaint, which the FTC filed after a 3-2 vote. See Federal Trade Commission v. Facebook Inc., 1:20-cv-03590-JEB, U.S. District Court for the District of Columbia, First Amended Complaint for Injunctive and Other Equitable Relief, 19 August 2021, available at https://www.ftc.gov/system/files/documents/cases/ecf_75-1_ftc_v_facebook_public_redacted_fac.pdf.
The FTC’s Press Release describes its case against Facebook and the participation of states in the investigation. See, “FTC Sues Facebook for Illegal Monopolization,” Federal Trade Commission, 9 December 2020, available at https://www.ftc.gov/news-events/press-releases/2020/12/ftc-sues-facebook-illegal-monopolization The states are not co-plaintiffs with the FTC in this litigation. Instead, 46 states, DC and the territory of Guam filed a parallel litigation against Facebook. See The State of New York, et al. v. Facebook, Inc., U.S. District Court for the District of Columbia, No. 1:20-cv-03589, Complaint, 9 December 2020, available at https://ag.ny.gov/sites/default/files/state_of_new_york_et_al._v._facebook_inc._-_filed_public_complaint_12.11.2020.pdf. The District Court dismissed the states’ Complaint, finding that the states had waited too long to challenge Facebook’s acquisitions of Instagram and WhatsApp. The states appealed the dismissal of their suit, an appeal that is pending at the time of this writing.
Federal Trade Commission v. Facebook Inc., U.S. District Court for the District of Columbia, No. 1:20-cv-03590-JEB, First Amended Complaint for Injunctive and Other Equitable Relief, 19 August 2021, paragraph 8, available at https://www.ftc.gov/system/files/documents/cases/ecf_75-1_ftc_v_facebook_public_redacted_fac.pdf.
District of Columbia v. Amazon.com, Inc., Superior Court of the District of Columbia Civil Division, CA 001775 B, Order, 1 August 2022, available at https://eaccess.dccourts.gov/eaccess/search.page.3.4?x=OrYvBfyt0WaGHnBZ-zYD8jUEjEw0xxGZ3n4boy*hy9zxYOkw2-J*4vesb9jONQ*90V-Nkfc0v*5n9kk*nGtnHPPOc9CN8At0DRm*GJr5nSnUbxJ7U87Maw*DjzKH58LSwizBg66lFwO6XfyVbl*pCe-G3f62CewCt1wHLHENZxQ.
District of Columbia v. Amazon.com, Inc., Superior Court of the District of Columbia Civil Division, CA 001775 B, Notice of Appeal, 25 August 2022, available at https://eaccess.dccourts.gov/eaccess/search.page.3.4?x=OrYvBfyt0WaGHnBZ-zYD8jUEjEw0xxGZ3n4boy*hy9zxYOkw2-J*4vesb9jONQ*90V-Nkfc0v*5n9kk*nGtnHPPOc9CN8At0DRm*GJr5nSnUbxJ7U87Ma0cUim9LaS*sqQ4xcJ7FyASKSIjZVE0muA1Wj*Shy*c-vxFx460USyI.
The People of the State of California v. Amazon.com, Superior Court of the State of California County of San Francisco, 14 September 2022, available at https://oag.ca.gov/system/files/attachments/press-docs/2022-09-14%20California%20v.%20Amazon%20Complaint-redacted.pdf.
U.S. Department of Justice, U.S. v. Microsoft: Court's Findings of Fact, available at https://www.justice.gov/atr/us-v-microsoft-courts-findings-fact#findings.
Epic Games Inc., v. Apple Inc., U.S. District Court for the Northern District of California, No. 4:20-cv-05640-YGR, Rule 52 Order After Trial on the Merits, 10 September 2021, available at https://cand.uscourts.gov/wp-content/uploads/cases-of-interest/epic-games-v-apple/Epic-v.-Apple-20-cv-05640-YGR-Dkt-812-Order.pdf.
Lovejoy, Ben, “DOJ antitrust lawyers ask for 10 minutes to speak in Epic’s favor at upcoming appeal,” 9to5Mac, 19 September 2022. See also Sisco, Josh, “Apple faces growing likelihood of DOJ antitrust suit,” Politico, 26 August 2022, available at https://www.politico.com/news/2022/08/26/justice-department-antitrust-apple-00053939.
Koenig, Bryan, “2 Mistrials, 1 Acquittal & A DOJ Listening Problem,” Law360, 8 July 2022, available at https://www.law360.com/articles/1509878/2-mistrials-1-acquittal-a-doj-listening-problem.
Perlman, Matthew, “DOJ Told to Think Over 3rd Price-Fixing Trial,” Law360, 15 April 2022, available at https://www.law360.com/articles/1484588.
Salvatore, Cara, “5 Chicken Execs Acquitted in Denver Antitrust Trial,” Law360, 7 July 2022, available at https://www.law360.com/articles/1509643/5-chicken-execs-acquitted-in-denver-antitrust-trial.
The Court described the two-sided platform developed by American Express as a “transaction” platform competing to sell credit card transactions. Any analysis of only one side of this platform would be incomplete due to bi-directional “indirect network effects.” See Ohio v. American Express Co., 138 S. Ct. 2274 (2018).
Federal Trade Commission v. Rag-Stiftung et al., U.S. District Court for the District of Columbia, No. 19-2337, Memorandum Opinion, 24 January 2020.
State of New York, et al. v. Deutsche Telekom AG, et al., U.S. District Court for the Southern District of New York, No. 19 Civ. 5434 (VM), Decision and Order, 11 February 2020.
United States of America v. Sabre Corp. et al., U.S. District Court for the District of Delaware, No. 19-1548-LPS, Opinion, Redacted Public Version, 8 April 2020.
United States of America, et al., v. UnitedHealth Group Incorporated and Change Healthcare, Inc., CA No: 1:22-cv-0481 (CJN), Memorandum Opinion, 19 September 2022, pp. 1 and 6-7.
United States of America, et al., v. UnitedHealth Group Incorporated and Change Healthcare, Inc., CA No: 1:22-cv-0481 (CJN), Memorandum Opinion, 19 September 2022, p. 31.
United States of America, et al., v. UnitedHealth Group Incorporated and Change Healthcare, Inc., CA No: 1:22-cv-0481 (CJN), Memorandum Opinion, 19 September 2022, p. 53.
United States of America v. United State Sugar Corporation, et al., CA No: 21-1644 (MN), Judgment, 23 September 2022.
Perlman, Matthew, “Delaware Court Refuses to Block Sugar Deal,” Law360, 23 September 2022, available at https://www.law360.com/competition/articles/1533555.
Spring 2022 Enforcers Summit, 4 April 2022, p. 14, available at https://www.justice.gov/atr/page/file/1494606/download.
Koenig, Bryan, “Enforcer’ Antitrust Overhaul Just Getting Started,” Law360, 31 August 2022, available at https://www.law360.com/articles/1526376.