Antitrust Lawyer Blog Commentary on Current Developments

Articles Posted in FTC Antitrust Highlights

On March 18, 2021, the House Judiciary Committee’s Antitrust subcommittee had a hearing labeled “Reviving Competition, Part 3: Strengthening the Laws to Address Monopoly Power”. The hearing began with opening remarks from Representative David Cicilline (D-RI), who spoke about the limitations in current antitrust laws on the topic of market dominance, and remarks from Representative Ken Buck (R-CO) who spoke on how both political parties are willing to work together in numerous areas. The hearing encompassed six testimonies from witnesses Rebecca Kelly Slaughter, Acting Chairwoman of the Federal Trade Commission (“FTC”); Judge Diane P. Wood of the U.S. Court of Appeals for the Seventh Circuit; Phillip Weiser, Attorney General of Colorado; Dr. Mike Walker, Chief Economic Adviser for the United Kingdom Competition and Markets Authority (“CMA”); Noah Phillips, Commissioner at the FTC (Republican); and Doug Peterson, Attorney General of Nebraska.

For opening remarks, Rebecca Kelly Slaughter, the Acting Chair of the FTC, declared: “Aggressive enforcement using the FTC’s existing authority can and should be complemented by this committee’s work to sharpen antitrust laws and to impose broader market-wide restrictions that address pervasive anticompetitive conduct and conditions. I believe the FTC must push antitrust law forward through bold agency action.” Slaughter said, we must lay the groundwork for success for new theories and more aggressive enforcement.  Here, she touted the FTC’s recently announced working group to build a new approach to pharmaceutical mergers.  She suggested the FTC should consider bringing standalone Section 5 claims more frequently and called on more resources for the agency.

Slaughter conveyed her disappointment in the FTC’s decisions and actions on not suing Google back in 2013. “It’s incumbent on the FTC to bring hard cases in all areas, not just in tech, not just in platforms,” Slaughter stated. After her comments on harsher punishments for big companies that seem to weasel their ways out of antitrust laws, Slaughter called for higher tolerance for litigation risk, more specifically, declining a settlement that doesn’t entirely correct harm. She also communicated how we all must construct the basis for success in new models and more aggressive enforcement to be enacted.

Georgetown Law tech law and policy experts converged together on Friday, January 29, 2021, to discuss wide-ranged topics relating to technology, speech, and regulations in a democratic society. David Vladeck, Erin Carroll, Hillary Brill, and Anupam Chander were the representative speakers on this discussion streamed live over Facebook.

The discussion began with revisiting the tragic siege of the United States capitol that took place on January 6, 2021. Before the siege, on many different platforms (Twitter, Facebook, etc.) President Donald Trump continued to post disputes about the presidential election, specifically mentioning voter fraud. With there being no evidence to verify these disputes, Trump’s campaign for president for a second term was over. Yet it took a violent storming of our nation’s capital to make the world realize that the words on social media and the internet do, in fact, have an effect and insight riots and violence. Any different social media platforms suspended or banned Donald Trump’s account from their sites including Twitter, Facebook, and Instagram. Thus began the great deplatforming.

Why this deplatforming is legal for big tech companies like Google and Apple is because these companies are not in affiliation with the government. This means that the First Amendment is not valid if not stated in their terms of service. If the said company feels that their terms of services have been broken by an individual or feels that said individual is a threat to others, companies have the right to deplatform them. When first signing up on the platforms, every user must agree to the companies terms of services, many just seem to not read them beforehand.

On June 26, 2020, the Federal Trade Commission (“FTC”) entered into a settlement agreement that allowed Eldorado Resorts, Inc. (“Eldorado”) to acquire Caesars Entertainment Corporation (“Caesars”) for $17.3 billion.

Background

Eldorado agreed to acquire Caesars for $17.3 billion on June 24, 2019. Eldorado is a provider of casino entertainment and hospitality services, operating 23 casino gaming properties. Caesars is a similar provider, operating 53 casino gaming properties in 14 states and in 5 countries outside the United States.

On May 5, 2020, the FTC approved AbbVie Inc.’s (“AbbVie”) $63 billion acquisition of Allergan plc (“Allergan”) on the condition that the merging parties divest three minor products.  The consent agreement was approved by a 3-2 party line vote.

The FTC has a long history of scrutinizing transactions in the pharmaceutical industry, but Commissioners’ statements demonstrate that they are not on the same page with regards to the analytical approach of analyzing pharmaceutical mergers and how to remedy the competitive problems that are identified.

The three Republican Commissioners in the majority adhere to the traditional framework, which examines actual competition between existing treatments and potential competition between existing and pipeline treatments, and then tailors very narrow remedies to address those competitive overlaps.

On February 18, 2020, a group of unions, consumer groups, and public interest organizations filed a letter with the U.S. Federal Trade Commission (“FTC”) raising concerns that the divestiture of Allergan plc’s (“Allergan”) pipeline drug, brazikumab, will not succeed unless the FTC addresses AbbVie’s use of rebate walls.

Consumer Group Concerns Regarding Rebate Walls and the Proposed Divestiture

The letter expresses concerns that the proposed divestiture to AstraZeneca of Allergan’s brazikumab, a drug in development, is inadequate to address the clear anticompetitive effects of the AbbVie/Allergan merger.  The letter makes the following points:

On January, 17, 2020, smaller rivals such as PopSockets, Basecamp, Sonos, and Tile testified to the the House antitrust subcommittee about how they have been bullied by big tech giants such as Google, Apple, Facebook, and Amazon and called for swift action.

According to the New York Times, the smaller rivals, which have largely been publicly quiet until the hearing, finally stepped up to the plate and sounded off on big tech at a hearing in Boulder, Colorado.  The Congressional subcommittee heard stories of technology giants wielding their massive footprints and platforms as weapons, allegedly copying smaller competitors’ features or tweaking their algorithms in ways that stifle competition.

The pleas for regulatory relief resonated with lawmakers, led by Rep. David N. Cicilline (Democrat – Rhode Island), the chairman of the House’s antitrust subcommittee. Cicilline noted that “it has become clear these firms have tremendous power as gatekeepers to shape and control commerce online.”

The federal antitrust agencies continue their emphasis on investigating, challenging, and unwinding consummated transactions that are not reportable under the Hart Scott Rodino (“HSR”) Act.

Most recently, on November 6, 2019, the Federal Trade Commission (“FTC”) issued an Opinion and Final Order in which the Commission upheld the Administrative Law Judge’s (“ALJ”) decision that Otto Bock HealthCare North America, Inc.’s (“Otto Bock”) acquisition of FIH Group Holdings, LLC (“Freedom”) was anticompetitive and that Otto Bock must divest Freedom’s entire business with the limited exceptions granted by the ALJ.  The Commission’s order was approved by all five commissioners and continues the trend of unwinding consummated acquisitions that are deemed to be anticompetitive.

Accordingly, buyers must be aware of the risks of closing a non-reportable transaction that eliminates competition.  Here are a couple of points to keep in mind:

On September 12, 2019, a coalition of unions, consumer groups, and public interest organizations filed a letter with the U.S. Federal Trade Commission (“FTC”) opposing AbbVie Inc.’s (“AbbVie”) acquisition of Allergan plc (“Allergan”).

Coalition Opposing the Merger

The coalition includes Families USA, Public Citizen, U.S. PIRG Education Fund, Service Employees International Union, American Federation of State, County, and Municipal Employees, UNITE HERE, Consumer Action, American Federation of Teachers, Alliance for Retired Americans, American Family Voices, Doctors for America, End AIDS Now, Prescription Justice, Social Security Works, the Other 98, Treatment Action Group, and NextGen California.  It is asking the FTC to conduct a thorough investigation and to block the merger if the facts support it and a remedy cannot be devised to restore competition.  The coalition highlights the competitive problems arising from continued consolidation in the pharmaceutical industry and requests that the FTC include in its investigation ongoing anticompetitive conduct by the parties, such as the use of rebate walls, which will have an even more profound anticompetitive effect if this merger is consolidated, as well as past abuse of the patent system.

Commentators all over the spectrum have recognized antitrust is increasingly becoming a game of political football.

The notion that antitrust enforcement is motivated by politics has hung over the Trump administration since the Department of Justice’s failed attempt to block AT&T’s acquisition of CNN’s owner, Time Warner and some antitrust experts might point out that the Obama administration also influenced the DOJ’s decisions to sue or settle cases.

While politics has always played a role in setting the antitrust agenda, typically antitrust investigations and enforcement decisions are based on the facts.  Indeed, there is no credible evidence that the big tech firms have engaged in unlawful monopolization or that they have stifled innovation.  In fact, Iowa’s Attorney General Tom Miller, who is well known for his role of leading 20 states in the DOJ’s antitrust suit against Microsoft, said this past July that “[w]e are struggling with the law and the theory,” to bring a case against the big tech firms.

On August 20, 2019, it was reported that the states are set to join forces to investigate Big Tech.

On the same day, Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice (“DOJ”) said the DOJ is working with a group of more than a dozen state attorneys general as it investigates the market power of major technology companies.  Delrahim said at a tech conference that the government is studying acquisitions by major tech companies that were previously approved as part of a broad antitrust review announced in July of major tech firms with significant market power.  “Those are some of the questions that are being raised… whether those were nascent competitors that may or may not have been wise to approve,” he said.

On July 23, the DOJ said it was opening a broad investigation into whether major digital technology firms engaged in anticompetitive practices, including concerns raised about “search, social media, and some retail services online.”  The investigations appear to be focused on Alphabet Inc.’s Google, Amazon.com, Inc. and Facebook, Inc. (“Facebook”), as well as potentially Apple Inc.

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