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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

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On July 3, President Biden announced nominees Andrew Ferguson and Melissa Holyoak to the Federal Trade Commission, filling two Republican vacancies.

Ferguson has served as the Solicitor General of Virginia since February 2022, overseeing the state’s appellate litigation, including at the Supreme Court and federal courts of appeals. He served as counsel for Senators Lindsey Graham (R-SC), Chuck Grassley (R-IA), and most recently, Mitch McConnell (R-KY). Ferguson spent several years in private practice after clerking for Judge Karen Henderson on the U.S. Court of Appeals for the D.C. Circuit and for Justice Clarence Thomas on the US Supreme Court. Ferguson earned his undergraduate and law degrees from the University of Virginia.Continue Reading White House Announces Nominees for FTC

By: Matthew A. Rossi and Eleanor Hudson Callaway

On Friday, April 14, 2023, the Supreme Court cleared the way for respondents in Federal Trade Commission (“FTC”) and Securities and Exchange Commission (“SEC”) administrative proceedings to challenge the constitutionality of those proceedings in federal district court while the administrative process is ongoing.  Typically, as required by…

On April 13, the Federal Trade Commission (“FTC”) sent a Notice of Penalty Offenses to approximately 670 companies detailing conduct that the FTC claims violates the prohibition on unfair or deceptive trade practices set forth in Section 5 of the FTC Act.  The noticed offenses include failure to adequately substantiate claims made in marketing and advertising about products, particularly health benefit claims and claims of efficacy.  All product claims must be supported by competent and reliable evidence as of the time of the claim.  Claims of health or safety benefits, or that the product is effective in the cure, mitigation, or treatment of serious disease, must satisfy much higher evidentiary standards.Continue Reading FTC Issues New Notice of Penalty Offenses Concerning Substantiation of Product Claims