Articles Posted in Antitrust News

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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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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Quick Update on Algorithmic Pricing: Yardi and the “Per Se” Standard

February 24, 2025 | Bona Law PC

Author: Luis Blanquez

In simple terms algorithmic pricing takes place when competitors make use of a software platform to share competitively sensitive information, which the pricing algorithm uses to recommend prices for all users.

Algorithmic pricing has been in the antitrust spotlight over the past few years.

The FTC has Algorithmic Price-Fixing in its Antitrust Crosshairs

New Antitrust Cases and Statements of Interests About Algorithmic Collusion

The main reason? Antitrust laws apply to algorithms implementing human agreements.

How to Show the Existence of an Agreement: Direct and Circumstantial Evidence

Remember that under US antitrust law, there are two ways to show the existence of an agreement:

Through direct evidence (sometimes this is a “smoking gun”), and;
Through circumstantial evidence: Alternatively, it’s more common to show the existence of an agreement through a combination of parallel conduct and “plus factors,” i.e., a common motive to conspire, evidence that shows that the parallel acts were against the apparent individual economic self-interest of the alleged conspirators, and/or evidence of a high level of interfirm communications.

But finding an express agreement between companies to fix prices is not super common these days. So, what happens when there is no agreement involved, and the algorithm “only” facilitates tacit collusion between the companies using it? Things get much murkier. That happens, for instance, when competitors use the software platform to share sensitive commercial information.

Agreements to Exchange Information: “Per Se” or Rule of Reason?

Section 1 of the Sherman Act prohibits every contract, combination or conspiracy that restrains trade, so long as those restraints are unreasonably restrictive of competition in a relevant market. This includes both an agreement and tacit collusion.

Restraints analyzed under the “per se” rule are those that are always (or almost always) so inherently anticompetitive and damaging to the market that they warrant condemnation without further inquiry into their effects on the market or the existence of an objective competitive justification. Business practices considered per se illegal under antitrust laws include: (a) horizontal agreements to fix prices, (b) horizontal market allocation agreements, (c) bid rigging among competitors; (d) certain horizontal group boycotts by competitors; and (e) sometimes tying arrangements.

On the other hand, a contract, combination or conspiracy that unreasonably restrains trade and does not fit into the per se category is usually analyzed under the so-called rule of reason test. This test focuses on the state of competition within a well-defined relevant agreement. It requires a full-blown analysis of (i) definition of the relevant product and geographic market, (ii) market power of the defendant(s) in the relevant market, (iii) and the existence of anticompetitive effects. The court will then shift the burden to the defendant(s) to show an objective procompetitive justification. Most antitrust claims are analyzed under this test.

Depending on the type of unlawful information exchange, it might be categorized as:

“Per se”unlawful conduct, when facilitates price fixing, bid rigging, or market allocation, so plaintiffs do not need to show actual harm to competition, or;
Unlawful conduct under the rule of reason, if the exchange of information leads to some anticompetitive effect, based on factors such as the structure of the industry involved, and the nature of the information exchanged, among others.

This is an important distinction to keep in mind if you want to understand why the District Court for the Western District of Washington in Duffy v. Yardi Systems Inc. recently denied the defendants’ motion to dismiss, while stating—for the first time involving an antitrust case on algorithmic pricing—that plaintiffs’ allegations were sufficient to allege a per se unlawful antitrust conspiracy.

New Legal Standard for Algorithmic Pricing Antitrust Cases? Maybe…

We’ve seen several government and private antitrust lawsuits on algorithmic pricing during the past years, claiming that the use of a software platform to set prices constituted an anticompetitive conspiracy under the antitrust laws.

We’ve previously discussed all these cases in detail here. In a nutshell:

In 2022 plaintiffs in Realpage, Inc. Software Antitrust Litigation sued RealPage and its landlord-customers alleging that a management software tool helped them coordinate on prices by collecting non-public information on rents and vacant units. In January 2024, the Court denied the motion to dismiss––plaintiffs were able to show that RealPage’s software uses confidential competitor information through its algorithm to spit out price recommendations based on that private competitor data.

Second, it rejected claims alleging a horizontal price-fixing conspiracy (no agreement and no absolute delegation of their price-setting to RealPage) ––which would have been “per se” illegal––but concluded that those same landlords vertically conspired with RealPage.

In 2023, plaintiffs in Gibson v. MGM Resorts International and Cornish-Adebiyi v. Caesar’s Entertainment, Inc., alleged that hotels in Las Vegas and Atlantic City used a pricing algorithm to facilitate collusion, by providing hotel and casino room pricing and occupancy information. The district courts dismissed both cases, on May 8 and September 30, 2024, respectively, based on several grounds. First, plaintiffs did not show a horizontal agreement: the hotels were not using the platforms around the same time, did not agree to be bound by such price recommendations, and did not charge the same prices. And second, plaintiffs failed to show that the pricing recommendations were based on nonpublic, competitively sensitive information.
In Duffy v. Yardi Systems, Inc. plaintiffs similarly alleged that competing landlords violated Section 1 of the Sherman Act, by unlawfully agreeing “to use Yardi’s pricing algorithms to artificially inflate” multifamily rental prices. On December 4, 2024, the court denied the motion to dismiss and allowed the case to proceed into discovery. There are two important nuances to highlight here.

First, and similarly to the RealPage case, the Court sided with plaintiffs and agreed on the existence of an antitrust conspiracy. This decision was not only based on defendants’ acceptance of Yardy’s invitation to trade sensitive information, which allow them to charge increased rents, but also on defendants’ parallel conduct (while contracting with Yardi), and “plus factors,” such as the exchange of nonpublic and competitive sensitive information, which suggested defendants acting for their mutual benefit.

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Could Elon Musk Acquire TikTok Under a Joint Operating Agreement Exception to the Antitrust Laws?

January 17, 2025 | Bona Law PC

Authors: Pat Pascarella and Aaron Gott

The idea of Elon Musk purchasing TikTok might sound like a headline ripped from a speculative business column, and maybe it is. But as antitrust lawyers, we couldn’t resist. Obviously, Mr. Musk already owns X, and any such acquisition might raise antitrust concerns.

But could you head off those concerns by structuring the deal with an exception to the antitrust laws known as a Joint Operating Agreement? While JOAs were related to the newspaper industry and are largely seen as a relic of the past, their principles could provide a framework for addressing modern concerns.

A Brief History of Joint Operating Agreements

Joint Operating Agreements emerged during the 20th century as a mechanism to save failing newspapers thereby maintaining at least some level of editorial competition. By the mid-20th century, many U.S. cities had two major newspapers, but declining revenues and readership often left one teetering on the edge of closure. To prevent monopolization of the news market, Congress enacted the Newspaper Preservation Act of 1970, which allowed competing newspapers to enter into JOAs.

Under a JOA the two newspapers would be permitted to merge their business operations, so long as they agreed to maintain separate editorial teams. The goal was to preserve journalistic diversity in cities that were about to find themselves with only one surviving paper. But JOAs required approval from the Department of Justice (DOJ) and were contingent on demonstrating that one of the newspapers was “failing.”

JOA Requirements

For a JOA to be approved, the following conditions had to be met:

Failing Firm Doctrine: One of the parties had to demonstrate that it was financially unsustainable and would likely exit the market absent the agreement.
No less anticompetitive alternative: There must not be a less anticompetitive alternative to the joint operation agreement.
Preservation of Competition: The agreement had to preserve a degree of competition, particularly in areas such as content creation or editorial independence.
DOJ Oversight: The DOJ maintained the authority to review and approve any proposed JOAs, ensuring they aligned with antitrust laws.

Applying the JOA Framework to a Musk-TikTok Deal

Elon Musk’s ownership of X likely would raise antitrust concerns about the acquisition of TikTok. But a JOA (or JOA.2) could provide a creative solution to balance these concerns with broader policy objectives, such as ensuring competition with other tech giants like Meta and Alphabet while also addressing national security issues tied to TikTok’s current Chinese ownership.

A critical hurdle, however, would be demonstrating that TikTok meets the “failing firm” criterion. While TikTok is far from failing financially, isn’t “failing” simply another term for “about to involuntarily exit the market.” Same outcome, hence same justification.

But this difference could mean a crucial difference under the JOA legal framework. As explained above, there must be no less anticompetitive alternative available. When it came to the failing newspapers, there was no alternative: failing newspapers did not have buyers lining up to buy them. But popular social media platforms do.

But there’s an answer here as well. One idiosyncrasy of the TikTok situation is that the Chinese government has taken the position that the TikTok algorithm is a Chinese national security secret. So any sale of TikTok means, as a practical matter, that it is not likely to come with a functioning algorithm. This limits the potential pool of buyers to those who either have one they can adapt or who can put one together on the fly.

This likely narrows significantly the existing pool of willing buyers to those who already have social media companies, or possibly even to those people who are known to drive their teams to accomplish skunkworks-like missions on impossible timelines.

Political and Regulatory Considerations

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Antitrust Agency Publishes Revised HSR Notification Thresholds and Filing Fees For 2025

January 15, 2025 | Bona Law PC

Authors: Steven Cernak and Luis Blanquez

On January 10, 2025, the Federal Trade Commission (FTC) issued its usual annual announcement to increase the Hart-Scott-Rodino (HSR) Act thresholds. The 2025 thresholds will take effect 30 days after publication in the Federal Register, which means February 10, 2025.

HSR requires the parties to submit certain information and documents and then wait for approval before closing a transaction. The FTC and DOJ then have 30 days to determine if they will allow the merger to proceed or seek much more detail through a “second request” for information. The parties may also ask for “Early Termination” to shorten the 30-day waiting period, although for nearly two years the agencies have suspended this option.

The HSR Act notification requirements apply to transactions that satisfy the specified “size of transaction” and “size of person” thresholds. These thresholds adjust annually to reflect changes in the U.S. gross national product.

Three thresholds determine the applicability of HSR filing requirements.

First, one of the parties to the transaction must be in commerce in the United States or otherwise affect U.S. commerce.

Second, the acquiring party must be acquiring securities, non-corporate interest, or assets of the target in excess of $126.4 million––the “size of transaction” threshold. Entities need not file notifications when the value of the voting securities and assets is below this threshold.

Third, if the transaction exceeds $126.4 million but does not exceed $505.8 million–the “size of the parties” threshold–– then at least one party involved in the transaction must have annual net sales or total assets of at least $252.9 million, and the other party must have annual net sales or total assets of at least $25.3 million.

Transactions valued at more than $505.8 million are reportable regardless of the size of the parties, unless an HSR Act exemption applies.

The FTC’s notice also implemented a new filing fee structure from the new legislation. The new structure will be in place starting with filings made on or after February 10, 2025. Below are the new fee thresholds:

2025

Size of the Transaction                        Merger Fee

$126.4 million – $179.4 million             $30,000

$179.4 million – $555.5 million        $105,000

$555.5 million – $1.111 billion           $265,000

$1.111 billion – $2.222 billion                   $425,000

$2.222 billion – $5.555 billion                   $850,000

$5.555 billion or more                                  $2,390,000

As a result of the new legislation, those fees will also adjust annually, based on changes to the consumer price index.

The FTC further published revised thresholds relating to Section 8 of the Clayton Act. Section 8 prohibits interlocking directorates in which one “person” serves simultaneously as an officer or director of competing corporations, subject to certain exceptions. Now, Section 8 of the Clayton Act applies when each of the competing corporations has capital, surplus, and undivided profits aggregating more than $51,380,000 and each corporation’s competitive sales are at least $5,138,000 again with certain exceptions.

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The Third Circuit Rejects a Fraud Exception to the Noerr-Pennington Exemption from Antitrust Liability

December 17, 2024 | Bona Law PC

Author: Ruth Glaeser

The Third Circuit Court of Appeals held that Merck is exempt from antitrust claims under the Noerr-Pennington doctrine in a lawsuit accusing it of deceiving the government about the effectiveness of its mumps vaccine to prevent competition.

Background from the Third Circuit’s Opinion

Merck was the sole licensed manufacturer of mumps vaccines in the United States for over fifty-five years, until 2022. The vaccine was FDA-approved and included an FDA-approved label that outlined its shelf life, minimum-potency requirements, and effectiveness. Merck had an ongoing duty to ensure that the drug label was accurate.

In the late 1990s, the FDA expressed concern that Merck’s mumps vaccine did not provide immunity near the end of its purported 24-month shelf life. At the FDA’s suggestion, Merck overfilled the vaccine doses to try to make the doses potent through the end of the shelf-life period.

But this did not resolve the issue, and Merck did not share that information with the FDA. Merck feared that disclosing this information would lead the FDA to require a change in the vaccine’s label. And a label change was particularly problematic for Merck because it competed with GlaxoSmithKline (“GSK”), which sold a similar vaccine in Europe. Merck thought that GSK’s vaccine would soon enter the U.S. market and a label change on Merck’s vaccine would make it easier for GSK to demonstrate that its vaccine was not inferior to Merck’s.

So, to preserve its market dominance, Merck misrepresented the vaccine’s potency and effectiveness at the end of its shelf life. To support this, Merck ran a clinical trial and claimed that it could reduce the potency of the vaccine without impairing the existing drug-label claims about immunity. But the appellees in this case said the study did not reliably capture information about the drug’s immune response in the human body. Nonetheless, the FDA continued to approve Merck’s mumps vaccine label and Merck continued to make unsupported claims about the self-life and immunity of its mumps vaccine on the drug label.

GSK eventually demonstrated that its vaccine was competitive with Merck’s. And the FDA approved GSK’s application to sell its vaccine in 2022.

The Noerr-Pennington Doctrine

The Noerr-Pennington doctrine provides limited exemption from antitrust liability for actions intended to influence governmental decision-making in all three branches of government. This doctrine protects the First Amendment right to petition the government, including the courts.

It is, however, subject to a caveat—the “sham exception.” For Noerr-Pennington to apply, the challenged action must be a legitimate government petition rather than conduct intended to interfere with a competitor. Generally, the court will look to see if the anticompetitive conduct arises from the process of the government petitioning rather than the outcome. If the anticompetitive conduct arises from the process, rather than the outcome, of petitioning the government—like baseless litigation bankrupting a competitor due to legal fees—then the sham exception is more likely to apply. But if the anticompetitive conduct is merely the outcome or result of legitimate government petitioning, then the Noerr-Pennington doctrine protects the conduct.

The Court’s Analysis

The Third Circuit engaged in this process v. outcome analysis. The crux of Appellees’ antitrust injury was that Merck’s actions delayed the launch of GSK’s competing vaccine in the United States for over a decade by maintaining deceptive statements on the vaccine label. They argued that it was the misleading statements on the label that prevented GSK from entering the market because GSK was unable to match Merck’s alleged effectiveness.

But the Court explained that the allegedly false or misleading claims on the drug label were the result of Merck’s successful petition to the FDA rather than part of the process. The Court said that Merck faced a dilemma when it was approached by the FDA: Merck could either (1) reveal that its vaccine might be mislabeled, leading to potential relabeling by the FDA; or (2) persuade the FDA that overfilling the doses fixed the problem (despite not actually doing so) and the request that the label remain unchanged. Merck did the latter, and the FDA did not order Merck to change the label or take further action against Merck after learning the truth.

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Understanding Antitrust Scrutiny: Lessons from United States v. American Airlines and JetBlue

December 16, 2024 | Bona Law PC

Author: Sabri Siraj

In a landmark decision, the U.S. Court of Appeals for the First Circuit upheld a district court ruling to permanently enjoin the Northeast Alliance (NEA) between American Airlines and JetBlue Airways. This case offers key insights into the relationship between joint ventures and antitrust and the standards of review for evaluating competitive harm.

Airline Case Summary

Defendants presented NEA as a collaborative effort between American Airlines and JetBlue to streamline services, enhance route options, and compete more effectively in the Northeast region of the U.S. Specifically, the arrangement allowed the two carriers to coordinate schedules, pool revenue, and integrate operations in select markets. The airlines argued that the NEA would create efficiencies that would benefit consumers through improved services and better connectivity. But the Department of Justice (DOJ) and several state attorneys general challenged the agreement, asserting that it undermined competition, raised ticket prices, and reduced consumer choice.

The district court’s findings supported the DOJ and the States, concluding that the NEA’s anticompetitive effects far outweighed any claimed benefits. The court held that the alliance reduced output in critical markets and failed to generate meaningful procompetitive benefits that could not be achieved through less restrictive means. On appeal, American Airlines argued that the NEA deserved lenient antitrust scrutiny because it is a joint venture. The First Circuit, however, rejected that defense, emphasizing that the legality of such arrangements hinge on their substance and actual effects rather than their label.

Antitrust Issues and Decision

This case serves as a critical examination of the standards applied to joint ventures under antitrust law. Joint ventures, when properly structured, can foster innovation, enhance efficiencies, and deliver consumer benefits by pooling resources and expertise. But these benefits do not exempt joint ventures from antitrust scrutiny. The First Circuit’s ruling focused on three key principles:

First, the court emphasized the importance of substance over form. It rejected American Airlines’ argument that the NEA’s classification as a joint venture warranted less rigorous analysis. As the court noted, “One could describe price fixing as a joint venture,” highlighting that the label itself does not insulate an arrangement from scrutiny. The court’s inquiry focused instead on the practical implications of the NEA, particularly its impact on competition and consumer welfare.

Second, the court applied the rule-of-reason framework to evaluate the NEA’s competitive effects. This standard requires a detailed analysis of the agreement’s purpose, its potential procompetitive justifications, and its actual anticompetitive effects. Here, the NEA failed to demonstrate sufficient procompetitive benefits to offset its negative impact on competition. The court agreed with the district court’s finding that the alliance reduced output and increased prices in key markets, with no evidence of justifying efficiencies.

Finally, the decision reinforced longstanding antitrust principles requiring genuine economic integration in joint ventures. The court found that the NEA lacked the necessary integration of resources and operations to qualify as a legitimate joint venture. Instead, it functioned as a mechanism to coordinate behavior between two major competitors, effectively reducing competition without delivering substantial consumer benefits.

The Broader Implications of the Ruling

The First Circuit’s decision has significant implications for businesses and legal practitioners navigating antitrust issues. For companies considering joint ventures or similar collaborations, the ruling serves as a reminder that such arrangements must be carefully structured to withstand legal scrutiny. A legitimate joint venture should integrate resources and create new or improved products or services that enhance market competition. Agreements that merely coordinate behavior between or among competitors without achieving these objectives are unlikely to survive antitrust challenges.

Additionally, the case underscores that businesses should proactively address potential antitrust risks during the joint venture’s planning and formation. This includes consulting with antitrust counsel, conducting thorough market analyses, and ensuring that any restrictions are ancillary to the venture’s objectives and proportional to achieving its goals. Companies should also document the procompetitive benefits of their agreements, providing clear evidence to support their claims if challenged.

Insights for Practitioners

The NEA case highlights why antitrust attorneys tailor legal advice to the specific facts and context of each arrangement. Joint ventures remain a common strategic tool for businesses seeking to innovate or expand their market presence. But, as this case illustrates, not all joint ventures are created equal. To withstand antitrust scrutiny, an arrangement must demonstrate genuine economic integration and clear consumer benefits.

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