Association mining

American Bar Association Antitrust Law Section Spring Meeting

On April 7-8, 2022, the Antitrust Law Section of the American Bar Association concluded its annual spring meeting. The event featured updates and remarks from several antitrust enforcement officials, including FTC Chairman Lina Khan and Assistant U.S. Attorney General for the Antitrust Division Jonathan Kanter. In this article, we share the main takeaways from the last two days of the Spring Meeting.

The FTC and DOJ will remain focused on litigationon: Senior officials from both U.S. antitrust agencies pointed to the agencies’ comprehensive filings and noted that litigation to enforce antitrust laws will remain a top priority.

  • Three directors of the Federal Trade Commission (FTC)—Holly Vedova, director of the Competition Bureau; Samuel AA Levine, director of the Bureau of Consumer Protection; and Elizabeth Wilkins, director of the Office of Policy Planning, all emphasized that the FTC will work as one team and will not hesitate to pursue lawsuits.

  • Vedova noted the FTC’s recent success in several abandoned transactions after the FTC initiated litigation. She said the Competition Bureau’s primary focus will be litigation, where she thinks her office will be most effective. Khan echoed those sentiments while speaking on a separate panel, noting that two recently abandoned transactions were in the context of challenges to vertical transactions and that those challenges will continue to be a priority at the FTC.

  • Likewise, Kanter noted that the Department of Justice (DOJ) is not afraid to take on big cases or big business and will not be afraid to litigate. He said the DOJ is just getting started and reiterated that the DOJ has more active cases than it has had in recent years.

Agencies will be looking closely at potential M&A remedies: FTC and DOJ officials emphasized that they would continue to review the effectiveness of remedies and would only pursue strong remedies.

  • Kanter said divestiture remedies will be a rare exception and no longer the norm. He further warned merging parties to avoid engaging in “regulatory arbitrage” and try to leverage the results of investigations in one jurisdiction against another, as global cooperation between antitrust authorities is high.

  • Vedova also said the Competition Bureau has no appetite for weak or uncertain settlements, especially those involving behavioral remedies, which have proven ineffective. The FTC will require significant structural relief to resolve competition concerns regarding a transaction.

  • Nor should parties expect the FTC to engage in lengthy settlement discussions due to the unprecedented volume of merger reviews. Vedova noted that staff time is valuable and much better spent preparing for litigation rather than negotiating solutions. She further indicated that the FTC will not engage in remedial discussions unless the Hart-Scott-Rodino (HSR) clock is stopped and sync agreements are rung.

  • State attorneys general will similarly assess remedies and, if necessary, pursue additional remedies than those sought by federal antitrust authorities. For example, in a recent dialysis acquisition, the State of Utah requested the divestiture of a fourth clinic in addition to the three divestments required to settle the transaction with the FTC.

Agencies are considering changes to HSR filings: Khan and Vedova pointed out that the FTC is considering modifying the HSR pre-merger notification form to provide more relevant information upfront to better inform staff review of transactions.

  • Khan and Commissioner Rebecca Slaughter reiterated the view of other FTC and DOJ officials that the purpose of the app is to deter potentially illegal transactions. Slaughter said agencies should be more concerned with “type 2 errors” (i.e. not blocking deals that end up harming competition) than “type 1 errors” (i.e. not blocking deals that end up harming competition) than “type 1 errors” (i. i.e. to block agreements that would not end up harming competition).

  • Khan also said he wants to lengthen the current 30-day window in which U.S. agencies are required to review a notified transaction under the HSR Act, as well as a desire to increase filing fees.

  • The president pointed to the number and complexity of the transactions, which strain the agency’s resources and make it difficult to fully investigate potentially illegal mergers under the current structure. In 2021, there were over 4,000 HSR filings.

Persistent skepticism about the effectiveness of mergers and acquisitions: Commissioner Slaughter said she would like to see less focus on efficiencies in the revised merger guidelines, particularly with respect to vertical mergers. Gwendolyn Cooley, the representative of the National Association of Attorneys General, said state law enforcement assesses whether loss of employment as a result of a transaction should be considered an efficiency rather than a detriment. and noted that state attorneys general were likely to submit comments to the merger guidelines on this matter.

Other FTC Section 5 cases may be on the horizon: FTC officials believe that the case law and precedents of Section 5 of the FTC Act, which prohibits unfair and deceptive acts or practices, are sound, and the FTC will consider pursuing further actions under the Act. 5.

The FTC will aggressively pursue conduct cases and reevaluate standards: The FTC also has an active record of driving cases.

  • Khan pointed to the FTC’s litigation against “Pharma Bro” Martin Shkreli, in which a district court judge recently found Shkreli individually liable for antitrust claims and imposed unprecedented relief by barring Shkreli from participating in the industry. pharmaceutical for life. Khan stressed that the FTC will continue to push for individual accountability and industry bans, where appropriate.

  • Khan also noted that the agency is reviewing standards for other conduct issues, such as tied selling, predatory pricing and attempted monopolization. She said the case law reflects standards that are no longer relevant given the way businesses operate today and that antitrust authorities need to push the law to reflect underlying market realities, especially in the markets. digital.

The consumer welfare standard is further challenged by both sides of the aisle: Many panelists noted that theories of harm are not well understood through the prism of higher prices and lower quality. Kanter said he doesn’t believe the consumer welfare standard should be considered given widespread disagreement over how it applies. In particular, US antitrust agencies will assess the harm that may result from the conduct of a dominant firm.

The FTC seeks the power to obtain equitable relief: Khan and Levine stressed that it is imperative that Congress restore the FTC’s authority under Section 13(b) of the FTC Act to recover money from aggrieved consumers through equitable relief such as than restitution or disgorgement.

  • But even without that power, Levine said the Consumer Protection Bureau will use all available tools to help protect consumers, including initiating rulemaking and other Part 3 filings.

  • State authorities have also emphasized the importance of pursuing independent actions to obtain equitable relief given the current limits on the FTC’s enforcement power.

States will aggressively enforce antitrust laws: Law enforcement stressed that they will assess whether to pursue independent actions to protect state interests or to seek just redress.

  • State attorneys general maintain close relationships with the DOJ and FTC and cooperate closely with federal law enforcement in investigations and litigation. Several state officials said their level of cooperation with the DOJ has increased in recent years.

  • State antitrust authorities have pointed out that for mergers it is important that the parties inform the affected states of a proposed transaction and that it is counterproductive to enter into side agreements or settlements with the states without the involvement of federal antitrust enforcement, which can lead to divergent solutions.

  • There is a growing trend for states to require pre-merger notifications, particularly in the healthcare sector, in addition to federal pre-merger notifications under the HSR Act. Washington, Oregon and Nevada all have pre-merger notification laws, and New York is considering similar legislation.

© 2022 McDermott Will & EmeryNational Law Review, Volume XII, Number 102