Antitrust Lawyer Blog Commentary on Current Developments

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Epic Games, creator of the popular multi-platform game Fortnite, has filed a complaint in federal district court seeking injunctive relief after Apple booted the game from its App Store.[1]  The event was kicked off when Epic Games introduced the ability to pay for in-app purchases directly through Epic Games, rather than through Apple’s in-app payment processing.  Apple requires that any in-app purchases for apps available in Apple’s App Store must be processed by Apple and that Apple collects a 30% commission on such sales.

Apple’s 30% commission has attracted criticism from app developers claiming that the commission is unfair and a product of anticompetitive practices.  Developers must create apps for a particular operating system (“OS”), and in the case of iPhones and iPads, that includes the iPhone OS (“iOS”).  Apps developed for the iOS must be specifically programmed and, as such, cannot be used for Android OS, Windows OS, or even Mac OS.  Once the app is developed for the iOS, the app is solely distributed through Apple’s App Store, where apps compete against each other for consumer selection.

Epic Games described in their complaint that there are two markets in which Apple has engaged in anticompetitive conduct.  The first is in the app-distribution market, where Apple’s App Store is the only method by which developers can sell their products to consumers.  Second, Apple has engaged in anticompetitive conduct in the in-app payment processing market by not allowing other methods of payment processing.

This week, a United States District Court approved the Department of Justice’s move to terminate the consent decrees (known as the Paramount Decrees) entered into by the government and major movie production and distribution companies nearly 70 years ago.

In 1938, the Department of Justice brought an antitrust action against several companies involved in the production and distribution of motion pictures—including Paramount, after which the decrees are named—alleging that their conduct of led to monopoly power in the distribution market for first-run motion pictures and conspiracies to fix licensing practices, including admission prices, run categories, and “clearances” for substantially all theaters located in the United States.

The consent decrees aimed at preventing film producers and distributors from using their positions to engage in anticompetitive conduct such as granting exclusive licenses based on geography or by tying multiple films into one theatrical license.  The DOJ announced their decision terminate the ParamountDecrees in November 2019.

Beginning in March 2018, President Trump issued proclamations imposing duties on steel and aluminum imports into the United States.  In response, one company filed a complaint last week alleging that the administration of these duties is unconstitutional.  Thyssenkrupp Materials, NA, Inc. and several of its related operating divisions, filed a complaint with the Court of International Trade (CIT) last week seeking to challenge the Section 232 duties.

The complaint alleges improper administration of the exclusion request process.  The Presidential Proclamations imposing the Section 232 tariffs on steel and aluminum imports indicated that the Department of Commerce be permitted to “exclude from any adopted import restrictions” certain steel and aluminum “articles.”   However, the final rules promulgated by the Commerce Department approve exclusions only to the “individual or organization that submitted the request” and that “[o]ther individuals or organizations that wish to submit an exclusion request for steel or aluminum product that has already been the subject of an approved exclusion request may request an exclusion under this supplement.”

As a result, the complaint alleges that the Commerce Department has unfairly and arbitrarily granted exclusions of steel and aluminum products to some requesters, yet the same products imported by a different party may have to pay the duties on items subject to Section 232.   Thyssenkrupp lists 27 non-exhaustive subheadings under which it has imported since the Section 232 duties went into effect.  While Thyssenkrupp paid duties on these imports, the complaint alleges that other companies had the benefit of having their products under the same subheadings excluded from the duties.

On March 31, 2020, a group of U.S. Mattress producers filed an antidumping (“AD”) and countervailing duty (“CVD”) petition against mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, and Vietnam.  During the preliminary investigation, the International Trade Commission (the “Commission”) is tasked with evaluating the competitive effects of the imports to determine whether the imports cause material injury to the domestic market.  Upon its finding, the Commission may make a preliminary decision to impose duties until it makes a final determination.

The Department of Justice (“DOJ”) filed a Statement of Interest in the matter requesting that the Commission take into account the effects of COVID-19 on the domestic market and whether the imposition of duties on mattress imports are in the best interests of U.S. consumers.  In particular, the DOJ cited to the increase in demand for mattresses in light of the COVID-19 pandemic, and that such demand “will continue to increase significantly during the pandemic as communities around the country expand hospital capacity.”

Given the backdrop of the global pandemic, and the fact that “demand may outpace domestic supply”, DOJ wants to ensure that the imposition of dumping margins, ranging from 48% to more than 1000%, do not increase mattress prices nor affect the supply of mattresses needed around the country.

Employers and Human Resource personnel need a crash course in the antitrust laws and an understanding of the antitrust risks of entering into no-poach agreements.

What is a no-poach agreement? 

A no-poach agreement is essentially an agreement between two companies not to compete for each other’s employees, such as by not soliciting or hiring them. No-poach agreements, or agreements not to approach other companies’ employees to hire, are generally considered illegal under the antitrust laws.  When companies make agreements not to compete for each other’s employees, they are restraining commerce because they are not allowing working people to freely change jobs to potentially make more money or move to another location if they wish to. It is illegal for companies or other entities to make these agreements, but it happens more often than you would think – just like the case with Seaman v. Duke University.

On August 2, 2019, the FTC authorized an enforcement action to challenge Evonik Industries AG’s (“Evonik”) proposed $625 million acquisition of PeroxyChem Holding Company (“PeroxyChem”).


The FTC is alleging the merger of the chemical companies would substantially reduce competition in the Pacific Northwest and the Southern and Central United States for the production and sale of hydrogen peroxide, a commodity chemical used for oxidation, disinfection, and bleaching.

On June 20, 2019 the Office of the United States Trade Representative (“USTR”) announced an exclusion process for tariffs imposed on September 2018 (“List 3”) pursuant to the U.S. Section 301 action against China. This announcement was followed by a notice published in the Federal Register. Through this exclusion process, parties will be able to request that USTR exclude specific products from the twenty-five percent tariff currently scheduled to apply to List 3 products under the Harmonized Schedule. While exclusion rounds for Lists 1 and 2 are closed, the exclusion process for List 3 products will begin on June 30, 2019 and will be administered through an electronic portal available at (portal will open on June 30, 2019). Copies of the exclusion forms are currently available online so interested parties can begin reviewing the necessary forms.

Background on Section 301 Tariffs

A Section 301 investigation, conducted by USTR, revealed that numerous unreasonable or discriminatory Chinese laws and practices relating to technology transfer, intellectual property, and innovation are adversely affecting U.S. businesses. The investigation found that:

On May 30, 2019 President Trump announced via Twitter that the United States (U.S.) will impose tariffs on Mexican imports to prompt Mexico to significantly reduce immigration to the U.S.  President Trump will impose these additional tariffs in the context of rapidly increasing immigration from Mexico to the U.S. over the past months.

In declaring these new tariffs, President Trump relied on powers that Congress delegated to the president under the International Emergency Economic Powers Act (IEEPA) of 1977.   Congress enacted this statute to provide the president with the necessary authority to restrict transactions between U.S. persons and foreign entities located outside the U.S. that pose threats to U.S. national security interests.  Therefore, the president typically invokes IEEPA in sanctions matters (e.g. the Iranian, Syrian, and North Korean sanctions programs) and export control matters (e.g. regulations regarding transferring control of sensitive technology and information from a U.S. person to a foreign person).

The absence of language in IEEPA referring to “tariffs” or “immigration” combined with the stark contrast between this current invocation and past invocations of IEEPA have lead some scholars to believe that the use of this statute for imposing additional tariffs on Mexican imports may be illegal.  Members of President Trump’s own political party have expressed similar beliefs. For instance, Chuck Grassley, a Republican senator on the U.S. Finance Committee, has publically supported this view by saying that President Trump has exceeded his authority.

President Trump announced an agreement to remove the tariffs imposed on steel and aluminum imports from Canada and Mexico as part of the renegotiated North American Free Trade Agreement (“NAFTA”).  The current tariffs included a 25 percent rate on steel imports and 10 percent on aluminum imports. In response to the United States’ steel and aluminum tariffs, Mexico and Canada launched their own retaliatory tariffs on a wide range of products, including pork, whiskey, and orange juice.

The Trump Administration imposed the tariffs under Section 232 of the Trade Expansion Act of 1962, which allows the President to impose restrictions on certain imports if the Department of Commerce finds that such imports “threaten or impair national security.” Section 232 gives the Executive wide latitude to make such determinations, and such decisions need not receive Congressional approval.  Indeed, such broad authority caused Congress to debate the merits of Section 232 determinations, and a recent bill was introduced in the Senate to remove the national security determinations from the Department of Commerce to the Department of Defense. Such efforts have stalled.

According to a statement from the United States Trade Representative, the countries will focus on monitoring and enforcement mechanisms to prevent surges of imports of steel and aluminum.  A joint statement from the US and Canada indicated that both countries will strive to prevent transshipment from third countries, such as China, and otherwise prevent the importation of products that are unfairly subsidized or sold at dumped prices.

Last week, the Trump Administration raised tariffs to 25% on $200 billion worth of goods that previously were subject to 10% tariffs.  The increased rate in tariffs were brought on as a result of accusations that the Chinese delegation to the trade negotiations back-tracked on previous agreements, and the increase was meant to ratchet up pressure on China to make a deal.

This week, China retaliated by raising tariffs on $60 billion of U.S. goods.  The goods targeted already were subject to some tariffs.  Now 5,140 tariff lines will be subject to an increased rate, including 2,493 cotton, machinery and grain products that are going to be subject to a 25% tariff from a previous 10% tariff rate; and 1,078 products, including aircraft parts, optical instruments and certain types of furniture that will be subject to a 20% tariff rate from a previous 10% tariff rate; and 974 products, including corn flour and wine, will have a 10% tariff rate – up from 5%.

In response to the retaliatory tariffs from China, President Trump tweeted: “. . . China should not retaliate-will only get worse!”  The proposed rates will take effect on June 1.

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