The Antitrust Attorney Blog

Algorithmic Pricing: New DAI Case, First Appellate Decision, and the Greystar Settlement. The show Goes On! (Part 1)

September 15, 2025 | Bona Law PC

Summer is over and everyone is back at the office. If you’ve been enjoying some days off, you’ve probably missed what happened recently in the algorithmic-pricing space in the US. And, as always, we had a very busy summer here.

First, there is a new case from the Northern District of California that confirms the importance of not only the nature of the information shared with the software provider, but also whether such information is later incorporated into any final pricing recommendations.
Second, we have the first opinion from a Court of Appeals—in this case the Ninth Circuit in the Gibson v. Cendyn Group case—analyzing an antitrust claim involving algorithmic pricing.
And third, the DOJ Antitrust Division announced its recent settlement with Greystar Management Services to resolve the DOJ’s claims about the use by Greystar of RealPage’s software.

As I said, everyone has been working hard around here during the past months!

This first article explains the Dai v. SAS Inst. Inc new case. Also, if you need some background on the current cases before diving into the new developments, we’ve written several articles on algorithmic pricing:

Dai v. SAS Inst. Inc., No. 24-CV-02537-JSW (N.D. Cal. July 18, 2025)

In this new case, plaintiffs sued software provider IDeaS, Inc. (“IDeaS”), and a group of hotel operators including Wyndham Hotels & Resorts, Inc., Hilton Domestic Operating Company Inc., Four Seasons Hotels Limited, Omni Hotels Management Corporation, and Hyatt Corporation, for conspiring to fix hotel room prices (“Hotel Operators”).

Here are the allegations:

IDeaS is the dominant provider of revenue management and profit optimization software and services for Hotel Operators.

According to the complaint, Hotel Operators agreed to provide IDeaS with non-public, competitively sensitive price and occupancy information in real time, including the price paid by consumers for each room, the quantity of rooms available by room type, whether or not any consumers attempted to book a room that was no longer available, and room rates not visible to the public.

IDeaS would then plug all the information into its algorithm, generating supra-competitive pricing recommendations for each of them.

And the last—but certainly not least—piece of the puzzle: each defendant would implement IDeaS’s supracompetitive pricing, because they know all their horizontal competitors are doing the same thing.

Plaintiffs did not rely on direct evidence but rather alleged the inference of a horizontal agreement by the group of Hotel Operators using IDeaS’s software. They argued parallel conduct—when Hotel Operators began to use IDeaS’s software and to charge allegedly supra-competitive rates based on IDeaS’s recommendations—together with (i) an invitation to collude as well as the motive and the opportunity to do so; (ii) high barriers to enter the relevant market; (iii) inelastic demand for hotel rooms; and (iv) sharing of confidential information against self-interest; all as plus factors to show antitrust conspiracy.

Would this be enough to show the existence of an antitrust conspiracy? Not quite, according to the Northern District of California.

Remember, Sherman Act Section 1 antitrust cases require: (1) a contract, combination, or conspiracy among at least two different entities; (2) an intent to restrain trade; and (3) injury to competition. See here and here.

On July 18, 2025, the District Court for the Northern District of California dismissed the complaint on several grounds. What is particularly helpful for future litigants in this Opinion is the comparison the Court makes with past recent cases.

The Court in California held here that plaintiffs did not sufficiently allege parallel conduct for several reasons.

First, the Opinion compares the current case to In re RealPage, Inc., Rental Software Antitrust Litig., 709 F. Supp. 3d 478 (M.D. Tenn. 2023), where a critical level of RealPage’s software adoption explaining how defendants changed their strategy and increased prices—despite not acting simultaneously—was enough to show parallel conduct.

Then, and in contrast, it mentions Gibson v. MGM Resorts Int’l, No. 2:23-cv 00140-MMD-DJA, (D. Nev. Oct. 24, 2023), where a court dismissed the complaint for lack of parallel conduct. In that case, plaintiffs neither include information about when the defendants began to use the software and which systems they used, nor alleged facts about the rate at which the defendants accepted the software recommendations. Plaintiffs did include general allegations of the acceptance rate for the price recommendations, but that was not sufficient to make the existence of an agreement plausible according to Twombly requirements.

Last, the Northern District of California states that plaintiffs did not provide enough facts in this case to explain when the Hotel Operators began to outsource their pricing decisions to IDeaS; when they started to change their strategy and increased prices; or when and how they started to adopt IDeaS’s pricing recommendations to their room prices.

In other words, according to the Court, plaintiffs did not have to show that each defendant acted at the exact same moment in time or acceptance rate. But plaintiffs did have to plead additional facts to render the allegations of parallel conduct plausible, which as explained below, they didn’t do.

Indeed, the Court reasoned that plaintiffs did not allege enough plus factors:

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Seventh Circuit Benches University of Wisconsin Athlete After Antitrust Claim Against NCAA Falls Short

September 15, 2025 | Bona Law PC

Author: Ruth Glaeser

The Seventh Circuit Court of Appeals reversed an injunction that would have allowed University of Wisconsin–Madison football player Nyzier Fourqurean to play a fifth season, ruling that his antitrust allegations failed to clearly define the relevant market.

Background from the Seventh Circuit’s Opinion

UW-Madison footballer Nyzier Fourqurean alleged that the National Collegiate Athletic Association (“NCAA”) violated the Sherman Act by restricting student-athletes to four seasons of intercollegiate competition per sport, a policy commonly referred to as “The Five-Year Rule.” The Five-Year-Rule restricts an athlete’s participation to four years of college-level play. For example, once a student enrolls full-time in college, they have five calendar years to complete their four seasons of athletic eligibility in a given sport. The clock starts the day they first enroll full-time, not when they first compete. While there are exceptions, this rule is meant to balance athletics with academics, and to ensure college sports don’t become prolonged semi-professional careers.

Here, the district court reasoned that the NCAA Division I Football Bowl Subdivision (FBS) is the relevant market. Because the Five-Year Rule excluded Fourqurean from this market, the court determined it likely had anticompetitive effects. On that basis, the district court granted Fourqurean’s injunction, temporarily blocking the NCAA from enforcing the rule, and concluding that he was likely to succeed on the merits of his Sherman Act claim.

The Sherman Act is a federal antitrust law that limits and penalizes anticompetitive conduct. It has often been used to challenge NCAA rules limiting what college athletes can receive and how they remain eligible to compete. Courts have reached varying conclusions on these challenges. But the Supreme Court’s decision in Alston v. NCAA held that certain NCAA restrictions on education-related benefits violated antitrust law. That ruling opened the door to broader reforms in athlete compensation. For instance, a recent settlement now allows schools to share roughly $20 million in name, image, and likeness (NIL) revenue with student-athletes during the 2025–26 season.

Bolstered by the Alston decision, student-athletes have now challenged not just the bylaws regulating compensation, but also those concerning eligibility, including the limits of the Five-Year-Rule.

Seeking to profit from the new revenue-sharing opportunities, Fourqurean sought to challenge the Five-Year Rule for another year of playing eligibility under Section 1 of the Sherman Act, alleging that the rule was an illegal restraint of trade because it prevented student-athletes, like Fourqurean, from competing in NCAA Division I football and preventing them from maximizing economic opportunities from NIL income.

The Court’s Analysis

The Seventh Circuit reversed the district court’s injunction, finding that Fourqurean was unlikely to win on his antitrust claim because he had not clearly defined the relevant market. An injunction served as a temporary pause on the NCAA rule to prevent unfair harm to the athlete while the case proceeded. To obtain this pause, Fourqurean needed to show he was likely to succeed on the merits of his case.

Antitrust claims under the Sherman Act are typically evaluated using one of three approaches: the per se rule, the quick-look doctrine or the rule of reason. In this case, both parties agreed that the rule of reason applies. This standard requires a court to examine whether a rule actually harms competition, whether it serves a legitimate purpose, and whether any benefits outweigh its anticompetitive effects.

To show harm, Fourqurean needed to prove that the rule was likely to prevent at least one significant competitor of the NCAA from competing in the relevant market and provide evidence of the NCAA’s market share. But the only evidence he offered was that he personally was excluded from college football. He also relied on cases where the market definition wasn’t disputed, unlike here. In antitrust law, a relevant market helps define who competes with whom and where. Its two components are (1) the Product Market: the set of products or services that are reasonably interchangeable; and (2) the Geographic Market: the area where the competition takes place. Together, these components define the “playing field” of competition, and help business and enforcers assess market power, competition, and potential consumer harm.

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More Views on Antitrust and Dynamic Competition

August 21, 2025 | Bona Law PC

Author: Steven Cernak

This blog has discussed dynamic competition several times recently, such as here and here. Very roughly, the idea is that innovation is the big driver of wealth creation and happens in a longer, more complex way than captured by neo-classical economics and some antitrust precedent. As previewed in our post about some of the highlights of the recent ABA Antitrust Section Spring Meeting, the Section’s Antitrust Law Journal recently published the first part of a symposium on dynamic competition. Below, I briefly summarize the articles, outline some key common concepts, and discuss what I learned from my involvement in some of the matters discussed.

Article Summaries

Aurelien Portuese, the Founding Director of the George Washington University Competition & Innovation Lab, edits and kicks off the symposium with a primer on dynamic competition. Portuese argues that competition should be viewed more like a dynamic, evolutionary process and less like the neo-classical search for an optimal equilibrium at any point in time. Antitrust law should safeguard innovation incentives and focus more on economic capabilities, not firms and markets. Such an argument is a “double-edged sword” that could help defendants or plaintiffs. Defendants could point to dynamic efficiencies and potential competition, which, quoting economist Joseph Schumpeter, “disciplines before it attacks.” Plaintiffs could use the same arguments to have antitrust prevent “unnatural selection of competition by market power,” such as through the acquisition of a potential competitor. Portuese sees dynamic competition as a more accurate assessment of real-world competition than static neo-classical economics but much more difficult to administer today.

David Teece, part of the management team at the Dynamic Competition Initiative, in addition to numerous other appointments, reminds readers that he has been extolling the importance of dynamic competition since at least his work with Thomas Jorde more than thirty years ago. Static competition analysis can be important but dynamic competition, driven by entrepreneurs fighting for future markets and not just competing in current markets, is where society gets the bigger gain. In evaluating competition, market analysts must not ignore supply side changes and must evaluate firm capabilities and the uncertainty that firms, sometimes even “monopolists,” face. Teece argues that we still do not understand how innovation occurs but insists that we should pay more attention to managerial science, not just industrial organization economics, and firm level evidence of company documents, executive narratives, and analyst reports.

The remaining articles in this part of the symposium are by leading scholars and practitioners without the same close ties to dynamic competition but who, nonetheless, find the concepts worth studying. Herb Hovenkamp provides his usual exhaustive survey of the statutory, theoretical, and case law uses of potential competition, especially the extensive treatment in several cases from approximately 1964-1974. Jorge Padilla, Douglas Ginsburg, and Koren Wong-Ervin take the advice of Teece and others and study the R&D expenditures of several large firms with large market shares where there might be competition for the market and find higher R&D expenditures than any monopolist living the “quiet life.”

Finally, Richard Gilbert and Douglas Melamed provide a “progress report” on antitrust for innovation, agreeing with the other authors that innovation can have an outsized impact on the economic welfare that antitrust law is designed to protect. Gilbert and Melamed survey the views of economists and antitrust law on the relationship between innovation and market power and find, with some notable exceptions like Schumpeter, that it was negative decades ago before moving to “complex.” They then illustrate that evolution through such antitrust matters as the Smog Decree, the General Motors/Toyota joint venture NUMMI, the National Cooperative Research Act, the 1995 Antitrust/IP Guidelines, and the abandoned Allison Transmission/ZF merger, which gave the antitrust community an illustration of an “innovation market.”

Key Common Concepts

Several themes run through the articles that are different than the usual antitrust analysis. For example, the Teece and Melamed/Gilbert articles, in particular, emphasize the need to examine the capabilities of competitors to better predict future competitive actions. As Gilbert sees the specific facts of the Allison/ZF, the capability to compete in the innovation market for automatic transmissions required current participation in the market for production of such transmissions. That might not always be true, as the rise of Amazon Web Services from an online bookstore makes clear, for example. So, the assessment of capabilities might require a search different than those with which most antitrust practitioners are familiar.

Second, Portuese explicitly and others implicitly explain that these theories could be used to expand or contract antitrust enforcement. If a merger can be challenged because it eliminates potential competition, then intellectual consistency requires that a different merger might not be challenged because the disciplining force of potential competition will remain. Either side of that story could be difficult to explain to a judge or in a social media post.

Finally, the underlying assumption of all the articles in this symposium is that more work is needed on the theories of competition and the information necessary for enforcers and courts to evaluate market actions. How does innovation occur – is it merely serendipity or does the presence of some elements at least make it more likely? When is such a dynamic competition analysis useful? If, as some of the authors assert, information now gathered by antitrust, like current market shares, is less important, what information should we be evaluating? And where might we get it?

Involvement in Dynamic Competition Matters

Some of the examples of matters involving dynamic competition concepts sparked vivid memories for me. For example, the Smog Decree and NCRA nicely illustrate the evolution of antitrust analysis of joint research efforts among competitors described by Melamed/Gilbert.

The Smog Decree was entered in 1969, twenty years before I joined General Motors full time. That decree effectively ended antitrust litigation alleging GM, Ford, and Chrysler had colluded to suppress certain emission-reduction equipment. Among other terms, the decree prevented joint R&D by the companies until it was modified in the mid 1980’s. Even after the decree was modified, I encountered several GM executives wary of doing any sort of joint research with the cross-town competitors (just another example that antitrust enforcement can affect the culture of a company).

More GM executives, however, caught the spirit of the 1984 National Cooperative Research Act that, as Melamed/Gilbert detailed, provided partial antitrust protection for certain joint research projects (production JVs were added several years later). At least among some auto industry executives, the goal was to mimic the success of joint efforts by Japanese competitors, often orchestrated by the Japanese government. As a result, I helped negotiate and administer many joint R&D efforts among the three competitors, eventually grouped under USCAR, with several still going strong. I cannot prove that the USCAR efforts improved innovation in any way but I am confident that they created no new antitrust issues. These joint efforts nicely illustrate that the NCRA’s loosening of antitrust restrictions made sense.

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DOJ’s Recent Statement of Interest: An Example of America First Antitrust

July 27, 2025 | Bona Law PC

Author: Steven Cernak

On July 11, the Department of Justice Antitrust Division filed a Statement of Interest in a private lawsuit alleging anticompetitive collusion among defendants like The Washington Post and with non-defendants like X to suppress certain views on COVID and U.S. politics. DOJ’s move generated unpleasant surprise among some in the antitrust community and beyond; but the move seems consistent with numerous statements by the Administration and its supporters, including the America First Antitrust principles recently outlined by Division head Gail Slater.

Summary of Case and Defendants’ Motion to Dismiss

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DOJ Antitrust Division 2025: The Cop is Still on the Beat

July 7, 2025 | Bona Law PC

Authors: Jack Prindle and Steve Cernak

Note: Jack Prindle is a student at the University of Virginia School of Law joining Bona Law for the summer.

The DOJ’s Antitrust Division would like to remind everyone that it will not be going anywhere. Despite expectations in some quarters of laxness surrounding the old-made-new administration, antitrust cases and investigations are carrying on unabated. One particular trend has reappeared alongside President Trump in 2025: price fixing, bid rigging, and similar crimes will be severely punished.

The core mission of the Antitrust Division has not changed with the new administration. Bad actors interfering with free-market competition can still expect to be investigated and prosecuted. Take, for example, the recent incarceration of an asphalt paving executive guilty of bid rigging in Michigan. Because he pleaded guilty in 2023, it would be tempting to chalk this up as a hangover from a more prosecution-happy administration. But he was sentenced in May and it does not appear that the DOJ or the judge went easy on him. Similarly, several of his coconspirators pleaded guilty in January of 2024, which makes it clear that the Antitrust Division has not missed a step. When it comes to these types of antitrust violations, there is no difference in enforcement between the previous Democratic administration and this Republican one.

There are some changes in form, though. The Trump administration views antitrust enforcement as consistent with its broader policy goals and so has used the broad range of tools and responsibilities available to the Antitrust Division. The perpetrators of a bid-rigging scheme in Idaho found out about this shift the hard way.

On the surface, this case mirrors the case in Michigan. Here, the conspiracy decided who would win Forest Service firefighting contracts before the bidding process. But in challenging this conspiracy, the DOJ went further this time. Besides bid rigging, these defendants were charged with conspiracy to monopolize and wire fraud. The broader charges allowed the government to pursue greater sentences for convicted individuals. They also sent a clear signal that any market participant considering anticompetitive behavior should expect a heavy punishment. DOJ Assistant Attorney General Abigail Slater and FBI Assistant Director Jose A. Perez both emphasized that these cases were sending a message to deter future anticompetitive schemes elsewhere.

The Antitrust Division has expanded its purview even further to encompass wire fraud and money laundering, even without a traditional antitrust violation. In 2019, the Antitrust Division announced the formation of the Procurement Collusion Strike Force to investigate and prosecute anticompetitive behaviors involving government contracts or the use of federal funds. While this initiative works on clear antitrust cases, like the Idaho Forest Service contracts case described above, it also coordinates with other departments to pursue cases that are less directly antitrust related. The Naval Criminal Investigative Service (NCIS), Coast Guard Investigative Service, and Department of Defense Office of Inspector General Defense Criminal Investigative Service led the way on the fuel fraud scheme linked at the start of this paragraph, for example. The breadth of the assignments given to the Antitrust Division highlight its role as a messenger of wider administration goals.

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The Latest Death of Antitrust’s Robinson-Patman Act?

May 28, 2025 | Bona Law PC

Author: Steven Cernak

Last week, the FTC voluntarily dismissed its Robinson-Patman Act case against Pepsi that it filed in January. The dismissal and the Commissioner statements accompanying it hinted that the FTC’s determination to revive Robinson-Patman will not be as strong in the Trump Administration.

Short and Recent History of the Case

This blog has detailed the basics of Robinson-Patman and the efforts of the Biden Administration FTC to revive its enforcement several times including here, here, and here. Rumors hinted that the FTC was conducting a large investigation of soft drink sales to major retailers, like Walmart and Costco. So, it was somewhat surprising when the first major Robinson-Patman action by an FTC in decades was the December 2024 case against Southern Glazer’s Wine & Spirits, LLC. The Commission vote to file the complaint was 3-2, with the two Republican Commissioners dissenting because the complaint was likely to fail on cost justification grounds and because the Commission should use its limited resources on actions more clearly anticompetitive.

In the last days of the Biden Administration, the same divided FTC filed this action against Pepsi. Here, the Republican dissents were even more heated. First, the dissents claimed that the Commission leadership forced staff to file a flawed complaint merely to obtain one more headline before Trump appointees took charge. Second, the complaint alleged violations of Robinson-Patman’s Sections 2(d) and (e), which prohibit some discrimination in promotional allowances and do not require proof of harm to competition. According to the dissents, the allegations, if anything, read more like discriminatory price differences under Section 2(a), which does require proof of harm to competition. Because the complaint and the statements discussing the allegations in detail contained so many redactions to hide confidential information of the parties involved, it was difficult to evaluate these disagreements.

Dismissal

Last week, the current Commission — now composed only of three Republican appointees — dismissed the complaint and issued two statements. Those statements echoed the earlier dissents: Of course, the Commission must enforce the Robinson-Patman Act; however, the cases it chooses to bring must have some chance of success and this deeply flawed complaint, brought solely for political reasons, was a poor use of limited resources because it was likely to fail.

Death of Robinson-Patman, Again?

So, does this dismissal mean that the much-discussed Robinson-Patman revival has died in its infancy? Not so fast, my friend. That FTC case against Southern Glazer’s survived a motion to dismiss in April. Also, all the Republican commissioners vowed to enforce Robinson-Patman Act with the right case. Such enforcement would seem consistent with the desire of those same commissioners to bring actions that will help the common man and woman.

Also, as our prior posts have discussed repeatedly, private enforcement of Robinson-Patman has never completely died out; in fact, this firm helped file a complaint that included such claims and also recently survived a motion to dismiss.

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Antitrust in Labor Markets

May 27, 2025 | Bona Law PC

Authors: Ruth Glaeser and Steven Cernak

In her first major speech since taking the helm of the Justice Department’s Antitrust Division, Assistant Attorney General Gail Slater spotlighted a growing concern: the power imbalance in America’s labor markets. Speaking in late April, Slater emphasized that antitrust laws are not solely designed to protect consumers from monopolistic practices, but are also a critical tool for protecting workers, promoting wage growth, and ensuring fair working conditions through competitive labor markets.

Despite being historically overshadowed by consumer-facing antitrust actions, labor markets have always been integral to antitrust protection. Workers, like consumers, are deeply affected by competition—or the lack thereof. When companies conspire to fix wages or agree not to hire one another’s employees, workers are deprived of fair market opportunities. Antitrust law is fundamentally about maintaining competitive markets, including labor markets.

The DOJ’s Wins and Losses

In response to increasing concern over anti-competitive labor practices, attention to competition in labor markets re-emerged around 2016, when the DOJ and FTC released their Antitrust Guidance for Human Resource (HR) Professionals. Further, the agencies publicly announced they would begin criminally prosecuting certain no-poach and wage-fixing agreements between and among employers.

DOJ achieved a notable milestone in April 2025 when it secured its first-ever guilty verdict in a criminal labor-market antitrust case. In United States v. Eduardo Lopez, a federal jury convicted a former executive of a home healthcare staffing agency for conspiring with others to suppress wages paid to healthcare workers in the Las Vegas area. This verdict represents a landmark victory for the DOJ.

But this singular success comes after several setbacks, signaling that the legal framework around antitrust enforcement in labor markets remains contested.

For example, in United States v. Jindal, the DOJ’s first-ever wage-fixing criminal prosecution, a former healthcare staffing company owner and the company’s ex-clinical director were accused of conspiring with a competitor to lower wages for physical therapists and their assistants. Despite the gravity of the allegations, both defendants were acquitted of all charges.

United States v. Davita, Inc. involved the DOJ’s first no-poach agreement prosecution. In that case, Davita Inc. and its former CEO were charged with conspiring with other companies to restrict competition in the market for dialysis-center employees by implementing “no-poach” agreements, which allegedly prohibited companies from hiring each other’s employees. Both Davita and its CEO were acquitted on all charges.

In United States v. Manahe, four business managers of home health agencies faced charges for conspiring to form no-poach agreements and fix wages for home health aides. The defense successfully argued that the agreements had pro-competitive justifications and did not constitute “naked” restraints on trade, which are per se illegal under antitrust law. The defendants were ultimately acquitted, further complicating the DOJ’s efforts to define and enforce labor-based antitrust violations.

These mixed outcomes reveal the complexity of proving criminal liability in labor market antitrust cases.

Updated FTC and DOJ Antitrust Guides

In January 2025, the two agencies updated and replaced the earlier 2016 Guidelines. The 2025 update expanded their scope and emphasized that antitrust law applies to all business activities, not just to those directly affecting consumers. This shift further validated the idea that workers must be considered stakeholders in competitive markets who deserve the protection of the antitrust laws.

HR And Worker Responsibilities Under Antitrust Law

Both HR professionals and workers play a vital role in protecting themselves and the companies they work for from criminal antitrust violations. The 2025 Guidelines from the DOJ identify several types of activities and agreements that may constitute antitrust violations, including:

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From Imago Dei to DQ: Comments on the First Major Speech by Gail Slater as DOJ’s Top Antitrust Attorney

May 12, 2025 | Bona Law PC

Author: Steven Cernak

Late last month, Department of Justice Assistant Attorney General Gail Slater gave her first major policy address, entitled “The Conservative Roots of America First Antitrust Enforcement.” The thoughtful speech describes an antitrust perspective different from those of any recent Administrations, though consistent with other Trump Administration policies. Antitrust practitioners should prepare for at least subtle changes in the enforcement we have seen recently and for generations.

Location of Speech No Accident

Slater gave the speech at Notre Dame Law School in South Bend, Indiana (technically, Notre Dame IN). While Slater’s Principal Deputy, Roger Alford, taught at Notre Dame, she provided an additional rationale for the location:

We all know the story of the decline in manufacturing in this state. Indiana was at the heart of the United States’ thriving manufacturing industry for much of the 20th century.

But then in the 1960s and ’70s the factories started shutting down. The Studebaker factory closed here in South Bend in 1963, and other Indiana cities experienced similar population declines as manufacturing moved overseas. It took decades for cities such as South Bend to recover, and some have still not recovered. (footnote omitted)

Now, for years I have called for federal antitrust enforcers to get out their Beltway seats. And as a native Midwesterner practicing here for over 35 years, I heartily applaud the choice of Indiana. While I am a Wolverine and not a Golden Domer, my wife is a South Bend native; we were married at St. Joseph parish; and our sons have certainly seen Touchdown Jesus and prayed at the Grotto. So, I especially liked the South Bend choice.

But while I understand the gist of Slater’s point in the quote above, I will quibble enough with the details to push back on the simplistic story that some readers might mistakenly take from it.

Although the 1963 Studebaker plant closure and loss of 7000 jobs certainly was devastating for the company and the city, it was neither the beginning nor the end of problems for either. While Studebaker was “first by far with a post-war car,” the company’s employment had already peaked at 22,000 shortly after World War II and its poor finances forced a merger with Packard in 1954. By 1963, Bendix was actually South Bend’s largest employer and, two years later, the city had “truly come back” from the Studebaker hit as its unemployment rate was one-third of the 1963 rate. Unfortunately, the economic recovery was uneven, leaving behind many minorities, and not destined to last. The city suffered another blow in 1979 when the downtown Sears store closed and moved to University Park Mall in suburban Mishiwaka. So, the Studebaker plant closing was only part of a long-term process.

Any implication that the Studebaker plant closed because “manufacturing moved overseas” probably is about a decade off. In 1963, the percentage of imported cars sold in the US was just over 5%. Instead, Studebaker’s decline after 1950 has been blamed on quality issues, higher costs (especially for labor), and an inability to compete with the lower costs and prices of General Motors, Ford, and Chrysler, especially after the Big 3 started making compact cars in the early 1960’s.

So, did the Big 3 or at least GM abuse its “dominance” or otherwise violate the antitrust laws and kill off Studebaker, Packard, Nash-Kelvinator, and Hudson? Various federal entities certainly investigated several times, including in Congressional hearings in 1955 and 1958. At the latter, George Romney, head of American Motors, the result of the merger of Nash-Kelvinator and Hudson, called for GM, Ford, and the United Auto Workers to be broken up into several smaller competitors and unions.[1] I would argue that the independents failed because of an inability to compete with the Big 3, an ability foreign manufacturers like Toyota, Nissan, and Honda developed a few years later — the share of imports rose to about 15% in 1970 then to over 25% a decade later. (Readers should note that I was an in-house antitrust lawyer at GM from 1989-2012 and learned from many of my predecessors, like Tom Leary.)

Anyone using Slater’s speech to tell a simplistic story of automobile manufacturing and sales should travel about thirty minutes east from South Bend on the toll road and visit Elkhart, IN. Since the end of World War II, about 80% of the recreational vehicles sold in the US each year have been made in and around Elkhart, with most of them produced by a small handful of companies. Why the difference compared to automobiles? Perhaps a uniquely American product sold in volumes too small and erratic to attract foreign competition or mass production techniques? The explanation for Elkhart’s success might be just as complicated as that for South Bend’s troubles.

But while I quibble with Slater’s selection of anecdote, I agree with what I think is her more general argument: The demise of the independent automakers and rise of import automakers did not equally affect consumers, workers, and communities like South Bend (or my Detroit). Slater does acknowledge that “change is inevitable in a dynamic and innovative economy” but also points out, correctly in my view, that “economists call this creative destruction and shrug it off as merely market forces at play.”

Those of us who have praised the free market for the benefits it has brought consumers and society must acknowledge that markets also create winners and losers and often take a long time to adjust. While downtown South Bend is much nicer than it was when I first visited more than forty years ago, it is painful that the main remnant of Studebaker is a museum (although I highly recommend it). Still, I am not yet convinced that these stories show that antitrust law, as compared to other policies, has a large role to play beyond ensuring that the free market really is free.

Three Principles – Some Familiar, Some New to Many Practitioners

Slater described three principles of America First antitrust. I will cover them in the reverse order of their presentation but, perhaps, in decreasing order of familiarity to many practitioners.

First, “Antitrust law enforcement should support deregulation by enabling free market competition that prevents the need for government regulation of consolidated power.” In other words, Slater plans to have “a preference for litigation over regulation,” using the scalpel of litigation “to make targeted, incisive cuts to remove the cancer of collusion and monopoly abuse.” The principle is most clearly demonstrated in the Division’s recently announced task force designed to root out anticompetitive regulations as part of the Administration’s broader deregulation efforts.

This principle seems to be a clear break with the Biden Administration’s efforts at greater regulation, especially through the FTC. Besides the task force’s efforts and more litigation, it could play out in the form of a greater appetite for structural versus behavioral remedies in any problematic mergers. On the other hand, some of the Division’s proposed remedies in the Google search engine market lawsuit, such as forced sharing of data, rules on conduct to prevent self-preferencing, and the required appointment of an officer and a committee to assist in ongoing monitoring, do sound regulatory.

Second, “Antitrust law enforcement should adhere to the rule of law and respect binding precedent and the original meaning of the statutory text.” Slater’s promises to “respect originalism,” maintain a “faithful humility to law’s limits,” and “enforce the laws passed by Congress, not the laws [she wishes] Congress had passed” certainly do sound like a “truly conservative approach to antitrust law.” That conservative approach’s view of precedent and original meaning, however, might not please some businesspeople who call themselves conservative.

Slater believes that new economic theories “do not render older precedent a dead letter” and while “there will be important debates about the weight we should place on older versus newer precedent,” it “is the Supreme Court’s prerogative” to change its interpretations. That attitude can help explain this Administration’s acceptance of the Biden Administration’s Merger Guidelines with its reference to many old cases. Practically, that means that any practitioner must be prepared to explain why old, inconvenient precedent like, for example, Philadelphia National Bank’s structural presumption, should not govern Slater’s merger enforcement with arguments better than a treatise’s assertion that today’s Supreme Court probably would come out differently.

Because the Sherman Act was meant to “codify the [English and American] common law and state antitrust laws,” Slater asserts, terms like “restraint of trade” and “monopolize” “must be understood with respect to the common law that they emerged from.” Many others have spent more time exploring the common law and Sherman Act drafting history than have I; however, my understanding from reviewing works by Werden and Hawk is that the meaning of “monopolize” — and even “monopoly” beyond one established by the government — is unclear or complicated. Still, practitioners might need to bone up on what Senator Sherman, or Senators Hoar and Edmonds, meant back in 1890.

Finally, “Antitrust respects the moral agency of individuals by protecting their individual liberty from the tyranny of monopoly.” Here, we get some principles that might sound odd to antitrust practitioners but provide another good reason the speech was made at Notre Dame.

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Antitrust Law and Dynamic Competition

May 2, 2025 | Bona Law PC

Author: Nicolas Petit

This is a guest post from noted antitrust and competition law scholar Nicolas Petit. Petit is a Professor of Competition Law in the Department of Law at the European University Institute. He is also the co-founder of the Dynamic Competition Initiative with the University of California – Berkeley. Longtime blog readers will remember that I have reviewed Petit’s work before, both here and here. As I discussed in another recent post, Petit joined me on April 3 in Washington, D.C. at the ABA Antitrust Spring Meeting for the Chair’s Showcase Panel “Have We Been Doing It All Wrong” to discuss dynamic competition and related topics. Petit graciously agreed to share this lightly edited version of his opening remarks from that panel with readers of The Antitrust Attorney Blog. Enjoy! – Steve Cernak

I’m the only non-American on this panel, and as it happens, I’m French. As former President Bush once said, the trouble with the French is that they don’t have a word for “entrepreneur.” This should make me the least qualified today to talk about innovation. Now, while President Bush was incorrect, his joke highlights an important truth: understanding the entrepreneur is crucial for fostering innovation.

Today, I want to discuss how antitrust law can better support innovation. A common term used by antitrust people like me who care about innovation is “dynamic competition”, or competition through technological change.

My main point is this: antitrust law needs smart glasses to effectively support dynamic competition. The goal of the “dynamic competition” view is to supply them. We want to enhance antitrust law’s ability to identify restraints of competition that effectively harm dynamic competition, and those that do not.

The dynamic competition view makes three assumptions:

First, technological change is a vector of competition that can be better seen by antitrust law. Second, perceiving the augmented reality of dynamic competition through technological change can be done at reasonable cost. Third, an agenda of augmentation of the reality of antitrust is more acceptable than the jump in virtual reality proposed by Neobrandeisians or the weird world of Trumpian antitrust.

I want to elaborate on the first point. In some industries, technology is a vector of invisible competitive pressure that may complement, and perhaps dominate, product rivalry. In 1946, Joseph Schumpeter had an interesting line about “the businessman [who] feels himself to be in a competitive situation even if he is alone in his field”. He warned against government experts who, failing to see any product rivalry with other firms conclude that “his competitive sorrows is all make believe”.

Today, the Schumpeter aphorism resonates vividly. The R&D investments of the Magnificent 7 represent effort levels consistent with cutthroat competition. Yet, agency and court cases give them short shrift, reaching one finding of unlawful monopolization in core platform segments after the other.

It is challenging for antitrust to deal with the coexistence of large R&D budgets and monopoly shares. The puzzle is the following: Is dynamic competition seen in R&D expenditure conditional on the maintenance of some base of monopoly power in a bottleneck market? Or is dynamic competition the outcome of collapsing monopoly power in that market?

These “correlations” between static and dynamic competition, as Richard Gilbert calls them, can be positive or negative depending on the industry.^[1] Different innovation-minded policies may be required depending on how the correlations work.^[2] If an industry works on a negative correlation between static and dynamic competition, antitrust forbearance will be the optimal policy to protect innovation. A generalization of that negative correlation was used by the Supreme Court in Trinko to exonerate nearly every refusal to deal from Section 2 liability.^[3] Now, contrast this with an industry where a positive correlation exists between static and dynamic competition. In that scenario, strong antitrust enforcement can support dynamic competition through the commodification of aging firms’ monopoly rents.^[4] This may be the implicit, perhaps unconscious, logic underpinning the liability theories in United States v. Google and FTC v. Facebook.

Antitrust law’s selection of one correlation model or the other cannot be made abstractly. A concrete evaluation of (i) whether the industry has dynamic competition potential, and (ii) whether it is monopoly power, or static competition, that supports it, is needed. And note that if an industry has no dynamic competition potential – in clear, technological change is slow, because of a fixed production possibility frontier – then traditional antitrust enforcement should make markets work well.

A related way to look at this is to ask whether antitrust law should adopt a holistic lens on competition. Let us consider for a minute that innovation, technology, or R&D activity are forms of “broad spectrum competition”, “hypercompetition”, or “superimposed competition”.^[5] Now, today’s partial equilibrium logic prevents a twin evaluation of that competitive layer and of rivalry within a relevant market. We do not examine what I have called the “moligopoly” dimension in the picture. The point is this: a business organization is a whole. It is not one thing when it competes with a field of peer firms in the technological environment, and an entirely other thing when it competes with rivals in the product space.

Now, to be fair, antitrust law has attempted to adopt a broader lens. The US Guidelines for the licensing of IP refer to R&D markets. The EU market definition notice of 2024 takes note of “structural market transitions”.^[6] The EU horizontal merger guidelines contain an explicit reference to dynamic competition. In merger cases, agencies have experimented with new concepts. AMAT/TEL or Nielsen/Arbitron focused on future R&D or prospective product markets. Dow/Dupont introduced a focus on innovation “spaces” in R&D pipeline industries. Booking/eTraveli used ecosystem language to justify prohibition.

But talking about dynamic competition does not mean seeing dynamic competition. A proposition like “Google competes with Amazon” will generally attract laughter on planet antitrust. The idea that OpenAI had Chinese competitors – and perhaps some European ones – was delusion until the DeepSeek release. And a conventional application of merger tools led the UK CMA and CAT to hold that GIPHY had the ability and incentives to outcompete Facebook.

The issue, in my view, is there is no well-articulated economic and legal framework for dynamic competition, innovation, or technological change, and related analytical tools. In practice, innovation-related concepts pop up randomly in cases, sometimes to support antitrust or merger prohibitions, less frequently to credit pro-competitive justifications.^[7]

A more thoughtful framework for dynamic competition requires deepening antitrust law engagement with four high-level issues. The first one is ‘out-of-market’ competition. In some industries, market power is not just constrained by direct entry threats within the relevant market. Indirect entry that moves surplus to adjacent or lateral markets is equally as important.

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Big Thoughts at the Antitrust Big Spring Meeting Week

April 11, 2025 | Bona Law PC

Author: Steven Cernak

Years ago when I was working in-house at General Motors, one of my bosses asked just what it was that I did at all those ABA Antitrust Section meetings I attended: “Seems like you just go to nice places and think big thoughts.” He did not mean it as a compliment.

This year, as Chair of the Antitrust Section, I had an idiosyncratic perspective on the Section’s big Spring Meeting last week. I did not get to go to as many panels as I would have liked; however, I did get the chance to moderate two premier panels and interact extensively with numerous foreign enforcers and practitioners. While there were plenty of great panels on the nuts and bolts of antitrust and consumer protection law, I think the key takeaways of the week for practitioners were some of the “big thoughts” – despite what my old boss would say.

Dynamic Complexity

I organized and moderated a panel under the title “Have We Been Doing It All Wrong?” with panelists Nicolas Petit, Neil Chilson, Diana Moss, and Koren Wong-Ervin. Here was the premise: If antitrust law is supposed to protect competition and the competitive process for the good of some group, whether consumers, workers, citizens, or others, shouldn’t we have a good idea of how that competitive process works? And do we?

Antitrust law generally uses the neo-classical economics that so many of us learn in Econ 101 — supply, demand, prices adjust to create market equilibrium, inputs go in a black box that creates outputs. The panel discussed alternative views of competition, one being dynamic competition. Broadly speaking and in my own words, this view sees innovation as the driver of wealth creation and that innovation happens in a longer term, more complex way than captured by neo-classical economics and some antitrust precedent.

A related concept discussed by the panel was complexity economics. Another concept resistant to a simple definition, I describe it as viewing the economy less like a black box and more like an ecosystem, constantly evolving, dynamic, not necessarily ever in equilibrium, and where the participants are always adjusting their actions based on the outcomes that they create. We also discussed emergent order, thinking more like a gardener or park ranger, and even a taste of Austrian economics with some references to Hayek’s Pretence of Knowledge speech. The panelists tried to explain how these concepts, which might be unfamiliar to many antitrust practitioners, might be applied to real cases.

The panel was meant to bring to the audience’s attention a conversation that I and others have been having for years and that will continue. Loyal readers of these posts will remember my reviews of books by Petit and Chilson and other posts on complexity. The conversation continued the next day with a panel sponsored by the Dynamic Competition Initiative and BRG on dynamic competition and innovation. And Section members will get an entire issue of the Antitrust Law Journal devoted to articles going “Beyond Dynamic Competition” later this month.

Here are my summaries of three key takeaways for practitioners. First, Petit made the point that not all industries or companies or the actions they take are examples of dynamic competition; therefore, one research task could be to determine when these concepts make sense to apply. Second, some of the commenters at the DCI panel suggested a need to better understand how innovation occurs in that black box called a company, which might require antitrust folks to study more managerial economics from B-School economists than we have in the past. Finally, I think all the panelists made the point, at least implicitly, that application of any or all of these concepts might lead to more or less antitrust enforcement. All good reasons why antitrust practitioners, enforcers, and policy makers should become more familiar with these big thoughts.

Principles Discussed Globally

As Chair, I had the opportunity to have some informal conversations with many non-US practitioners and enforcers. I also moderated the Enforcers’ Roundtable with the head of the National Association of Attorneys General Multistate Antitrust Task Force and the top enforcers for the EU, Germany, and Brazil. Unfortunately – for the Section but also the antitrust community and them – the top enforcers at the FTC and DOJ chose not to participate in the Section’s Spring Meeting. The attendance and participation of others at the two US agencies also was drastically reduced.

I put the remarks of the non-US attendees in two categories. First, some noted the unfortunate irony of prior US enforcers preaching the need for other countries to apply principles, especially economic ones, in competition law enforcement when the current US enforcers seem to be backing away from any, or at least those same, principles. Personally, as discussed below, I do think the US enforcers will continue to take a principled approach to enforcement, although the principles might be subtly different; however, I think the US enforcers missed a great chance to explain themselves to a large, global audience. Tough to change first impressions.

Second, non-US attendees, as always, appreciated the numerous opportunities to interact with US-based colleagues, collaborators, and current or potential clients. They would have preferred to also interact with US enforcers. Their absence raised concerns that US enforcers might pull back on other formal and informal methods of cooperation, such as the International Competition Network or ICN. The presence of Mario Monti, longtime Italian and EU politician and competition enforcer and considered an ICN founder, at the Spring Meeting only highlighted the drastic changes felt by those outside the US.

Perhaps EU EVP Teresa Ribera captured both categories best with this statement (taken from an unofficial summary) at the Enforcers’ Roundtable: “Ensuring functioning markets, protecting consumers, and fighting abuse — while respecting the rule of law — takes trust and cooperation. Regionally. Globally. We’re in this together.” I think the global cooperation will continue but this year was the first time in many years when that assumption was questioned.

Hillbilly Antitrust

One of the benefits of being in DC during Spring Meeting week after an election is the chance to hear some initial thoughts from new enforcers on their priorities. Sadly (for many, as explained above), new DOJ AAG Gail Slater chose a different, smaller event last week to make some initial remarks. While some suggested the term “MAGA Antitrust” to describe the policy outlook for the new Trump Administration, Slater said she preferred “hillbilly antitrust.”

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