Antitrust

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On November 12, 2024, the Antitrust Division of the United States Department of Justice (DOJ) published updated guidance for its Evaluation of Corporate Compliance Programs in Antitrust Investigations. First published in 2019, the DOJ has updated its guidance several times since.  The guidance is intended to educate the public and to guide prosecutors in making charging decisions and sentencing recommendations for criminal antitrust violations. Continue Reading Takeaways from the Department of Justice’s November 2024 Corporate Compliance Program Guidelines

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On November 12, 2024, the Federal Trade Commission (“FTC”) published its Final Rule and Statement of Basis and Purpose amending the Premerger Notification and Report Form filed for transactions reported under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”). 

Unless the Final Rule is delayed or rescinded by the FTC, the new…

On October 10, 2024, the Federal Trade Commission (“FTC”) released final revisions of the rules that govern filings under the Hart-Scott-Rodino (“HSR”) Antitrust Improvements Act of 1976, as amended (the “Final Rules”). The Final Rules will take effect 90 days after they are ultimately published in the Federal Register.

The FTC scaled back or…

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On April 17, 2024, the SEC’s Division of Examinations issued its latest risk alert regarding Rule 206(4)-1 of the Investment Advisers Act of 1940, known as the Marketing Rule. Following the examinations staff’s June 2023 and September 2022 risk alerts regarding areas of emphasis in examinations focused on compliance with the Marketing Rule, the latest risk alert highlighted initial observations from examinations of investment advisers’ compliance with the Marketing Rule and related rules under the Advisers Act. The risk alert focused on compliance with the Marketing Rule’s general prohibitions, Rule 206(4)-7 (the Compliance Rule), Rule 204-2 (the Books and Records Rule), and Form ADV disclosure requirements.Continue Reading SEC Staff’s Latest Marketing Rule Risk Alert Highlights Initial Observations from Examinations

On Tuesday, April 23, 2024, the Federal Trade Commission (“FTC”) voted 3-2 to adopt a Final Rule banning virtually all non-compete agreements between employers and employees.  The Final Rule will not go into effect until 120 days after its publication in the Federal Register (the “Effective Date”), and its enforcement could be further delayed or barred by court challenge or Congressional intervention. Continue Reading The FTC Adopts Final Rule Banning Employee Non-Compete Agreements

On Monday December 18, the Federal Trade Commission (“FTC”) and the Department of Justice (“DOJ”) released the final version of their Merger Guidelines (“Guidelines”), capping a nearly two-year effort to implement a policy capturing the Biden Administration’s aggressive enforcement stance in merger reviews. The Guidelines are intended to provide transparency into how the agencies evaluate whether a merger or acquisition may lessen competition in violation of the Clayton Act. After the agencies released the draft merger guidelines in July (“Draft Guidelines”), the agencies received over 3,000 public comments, many of them criticizing the Draft Guidelines for being too aggressive and departing too radically from controlling case law and practice.  The final Guidelines reflect the agencies’ consideration of the comments received.

While the final Guidelines largely maintain the same aggressive positions of the draft, they introduce more nuanced language that signals more openness to rebuttal evidence than the Draft Guidelines. The most apparent change is an across-the-board shift away from a flat prohibition on certain effects and toward a more traditional warning about the possible consequences when those effects are present. This is an important change to the draft language, which had come under fire for appearing to set forth several rules of per se illegality. For example, in Guideline 2, the draft language stated that “mergers should not eliminate substantial competition between firms,” (emphasis added), signaling the possibility that the agencies would challenge any merger between rivals even when remaining competitors would discipline any post-merger attempt to raise prices or reduce output or quality. In contrast, the final language states that “mergers can violate the law when they eliminate substantial competition between firms” (emphasis added), affirming what has always been the case.Continue Reading FTC and DOJ Publish 2023 Merger Guidelines

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On November 13, 2023, the DOJ Antitrust Division moved to dismiss its last remaining no-poach indictment.  In 2021, a Texas grand jury indicted Surgical Care Affiliates (“SCA”) and a related company for conspiring with competitors not to solicit each other’s senior-level employees.  While a motion to dismiss was pending in that case, a district court in Connecticut entered a judgment of acquittal (“JOA”) on labor market allocation charges brought against several engineering firms, ruling in United States v. Patel that, among other things, ample evidence of employees moving between the defendant companies meant that any conspiracy to restrict such movement could have had no “meaningful” effect on competition and was not illegal per se.    Continue Reading An Uncertain Future for DOJ’s No-Poach Prosecutions

On September 26, 2023 the Federal Trade Commission (FTC) and 17 states filed suit against Amazon in the Western District of Washington, alleging the tech giant uses anticompetitive practices to maintain its monopoly power in its online supermarket store and marketplace services. The FTC seeks a permanent injunction to prohibit Amazon from continuing its alleged “punitive and coercive tactics.”

The FTC alleges Amazon engages in exclusionary conduct that both hinders the ability of competitors to meaningfully compete on Amazon’s platform, and inflates online prices for consumers. Amazon owns its marketplace platform, sells its products on its platform in competition with other online sellers, and controls the fulfillment, shipping, and delivery network that sellers and customers are incentivized to use. As alleged by the FTC, Amazon (among other things) punishes companies that discount their products on other platforms by burying those sellers in its search results, coerces sellers to obtain “Prime” eligibility for their products and use Amazon’s higher-cost delivery network, biases search results to preference Amazon’s own products, and charges unreasonable fees to hundreds of thousands of third-party sellers.Continue Reading The FTC and States Sue Amazon, Alleging Anticompetitive Practices

The Antitrust Division of the U.S. Department of Justice (“DOJ”) announced on August 16 that two directors of Pinterest Inc. and Nextdoor Holdings Inc. have resigned in response to an investigation into whether the corporations shared directors in violation of Section 8 of the Clayton Act, 15 U.S.C. § 19.  Section 8 prohibits director and…

On July 19, 2023, the Federal Trade Commission (FTC) and Department of Justice (DOJ) released for comment proposed joint merger guidelines which seek to replace the agencies’ vertical merger guidelines released in 2020 and horizontal merger guidelines released in 2010.  The proposals introduce significant changes to both the ways in which the agencies define markets and competition, and the evidence and metrics they would use to assess a merger’s competitive effects.

Among the more significant proposed changes are the following:

They would materially change how relevant geographic and product markets are defined, and when to consider those markets “highly concentrated.”

Market definition:  The proposals would significantly change how product and geographic markets within which competitive effects of a merger would be defined.  Under current law, to define the boundaries of relevant product and geographic markets, the agencies apply the “hypothetical monopolist test,” in which firms or products that would prevent the merged firm from increasing price by a small but significant and non-transitory amount are considered to be within the “relevant market.”  The agencies propose to include in this calculus not only price but other “terms” such as “quality, service, capacity investment, choice of product variety or features, or innovative effort,” raising the possibility that the agencies may exclude from the market rivals who could discipline overt attempts to increase price but not more opaque reductions in service, quality, or R&D efforts, to which consumers may be much less sensitive. 

Market concentration:  The current guidelines recognize that the anticompetitive effects of a merger generally increase in more concentrated markets in which fewer significant firms compete.  The proposed guidelines would lower the standard for a “highly concentrated market” (a trigger for a presumption of a merger’s illegality) to a level that the current guidelines consider to be only a “moderately concentrated market.”  In addition, the proposals would introduce a market share-based test as a trigger for raising an “impermissible threat of undue concentration,” when the merged firm’s market share will exceed 30 percent and concentration would increase modestly.Continue Reading DOJ and FTC Propose Draft Revised Merger Guidelines