Articles Posted in Antitrust News

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Author:  Steven J. Cernak

On October 6, 2020, the Antitrust Subcommittee of the U.S. House Judiciary Committee issued its long-anticipated Majority Report of its Investigation of Competition in Digital Markets.  As expected, the Report detailed its findings from its investigation of Google, Apple, Facebook, and Amazon along with recommendations for actions for Congress to consider regarding those firms.

In addition, the Report included recommendations for some general legislative changes to the antitrust laws.  Included in those recommendations were proposals for Congress to overrule several classic antitrust opinions.  Because this blog has summarized several classic antitrust cases over the years (see here and here, for example), we thought we would summarize some of the opinions that now might be on the chopping block.  This post concerns two classic Supreme Court opinions on refusal to deal or essential facility monopolization claims, Trinko and linkLine.

House Report on Refusal to Deal and Essential Facilities

The Report’s recommendations for general changes in the antitrust laws included several aimed at increasing enforcement of Sherman Act Section 2’s prohibition of monopolization.  In particular, the Report recommended that:

Congress consider revitalizing the “essential facilities” doctrine, or the legal requirement that dominant firms provide access to their infrastructural services or facilities on a nondiscriminatory basis.  To clarify the law, Congress should consider overriding judicial decisions that have treated unfavorably essential facilities- and refusal to deal-based theories of harm.  (Report, pp. 396-7)

The two judicial opinions listed were Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004) and Pacific Bell Telephone Co. v. linkLine Communications, Inc., 555 U.S. 438 (2009).

Trinko

Justice Scalia wrote the Court’s opinion dismissing the plaintiff’s refusal to deal claim.  There were no dissents although Justice Stevens, joined by Justices Souter and Thomas, wrote separately to concur in the result but would have dismissed based on lack of standing.

Since the Supreme Court’s 1919 U.S. v. Colgate (250 U.S. 300) decision, courts have found that “in the absence of any purpose to create or maintain a monopoly,” the antitrust laws allow any actor, including a monopolist, “freely to exercise his own independent discretion as to parties with whom he will deal.”  Trinko narrowly interpreted the Court’s earlier exceptions to the rule that even a monopolist can choose its own trading partners.

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Author: Jarod Bona

Competitors battle in the marketplace and sometimes battle in the courts. Bona Law is an antitrust and competition boutique law firm, but most people think of the “competition” part of that description as redundant to the antitrust label. That is not a surprise because outside of the United States, most people refer to antitrust law as competition law.

But I view it differently: Antitrust Law is the literal collection of state and federal antitrust laws, including those involving restraints of trade, monopolies, mergers, criminal antitrust, and others. But Competition Law incorporates a wide range of business torts and statutes that make up the practical reality of competitor and marketplace court battles. These include, for example, the Lanham Act, patent laws, unfair competition statutes, tortious interference and others.

Indeed, you will notice that many antitrust complaints also include one or more additional non-antitrust claims. The players in these disputes can sometimes include consumers, for a class action lawsuit. But, for our purposes, we will primarily discuss business players within competition, either competitors or entities up and down the vertical chain of distribution of products or services. So, a court battle could match up two competitors, or perhaps a wholesale distributor and a retailer, for example.

Our job, as antitrust and competition attorneys, is to help clients solve legal problems involving any type of competition issue.

To that end, let me tell you about an important new competition decision. On August 3, 2020, the California Supreme Court issued its decision in Ixchel Pharma, LLC v. Biogen, Inc. that made law for certain tortious interference claims and for California Business and Professions Code section 16600 (which is mostly associated with prohibitions on certain non-compete agreements in California).

Tortious Interference

Tortious interference divides into two different claims: (1) tortious interference with contract and (2) tortious interference with prospective economic relationship (no contract, but maybe one was on the horizon).

For more detail, we describe the elements of tortious interference in California here.

The law (and California Supreme Court) consider tortious interference with contract as a bigger deal than the other kind of tortious interference—they don’t like the idea of breaking up existing contracts. So, in its wisdom, it requires an additional element for tortious interference that doesn’t involve a contract (the prospective-economic-relationship kind): The act of interference must be independently wrongful in some way. Interference by itself is not sufficient—there must be something else wrong with the interference act besides the interference.

But what does it mean for an act to be independently wrongful?

According to the California Supreme Court, “an act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (p. 9, quoting Korea Supply Co. v. Lockheed Martin Corp, 29 Cal.4th 1134, 1159 (2003)).

A plaintiff need not plead an “independently wrongful act” for a tortious interference with contract, except—for the holding in this new California Supreme Court case (Ixchel).

You can read the decision for the facts, but the question in dispute is whether a plaintiff asserting a claim for tortious interference with contract has to plead an independently wrongful act, if the contract is an at-will contract. An at-will contract is one that either side can terminate at any time, for any or no reason.

The California Supreme Court—in deciding the issue for the first time—acknowledged that a “number of states have adopted” the independent wrongfulness requirement for tortious interference with at-will contracts. (14). And they ultimately agreed with these states.

An at-will contractual relationship is one that has no assurance of future economic relations—because either side may terminate it for any or no reason. That is, neither party has a “legal claim to the continuation of the relationship.” (17). And even though the parties to such a deal may expect it to continue, from the perspective of third parties, “there is no legal basis in either case to expect the continuity of the relationship or to make decisions in reliance on the relationship.” (17).

Just as importantly, the California Supreme Court expressed worry that allowing claims for tortious interference of at-will contracts without an independent wrongfulness requirement would chill legitimate business competition (also a common concern of judges interpreting antitrust laws). The Court didn’t want to create a cause of action for typical aggressive competition.

As a result, the Court held that “to state a claim for interference with an at-will contract by a third party, the plaintiff must allege that the defendant engaged in an independently wrongful act.” (18).

California Business and Professions Code Section 16600

Section 16600: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

This is the famous California law that invalidates most non-compete agreements. Indeed, oftentimes, the most difficult question with these cases is whether California or some other law applies.

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Author: Steven Cernak

The U.S. House Antitrust Subcommittee of the Judiciary Committee’s recent hearings into “big tech” and antitrust were “must see TV” for antitrust attorneys.

Over the five hours of testimony, many interesting questions were asked of the leaders of Apple, Google, Facebook, and Amazon; unfortunately, the format often left little time for answers.  Because so many of our clients—manufacturers, retailers, and others—are active in the online retail space, we thought we would focus on Amazon and Jeff Bezos’s statement and answers.

These hearing are not the only antitrust scrutiny that Amazon is receiving.  The FTC and the states of California and Washington appear to be investigating the company and its actions.  Given all the publicly available information, what did the hearings teach us about the kinds of antitrust claims that might be made against Amazon in any antitrust suit?

Competing with Private Label Goods

Several of the questions involved allegations that Amazon had somehow “stolen” or misused data from some of its manufacturers or third-party sellers to determine which products it would begin to produce as private label goods.  Many of these questions grew out of a long Wall Street Journal report in April.  Bezos explained that Amazon’s policy is not to use data of an individual seller to make such decisions, although the company continued to investigate possible violations.  Also, Bezos clarified that aggregate data, which he defined as data relating to at least two sellers, could be used by Amazon under its policy.

As commentators have pointed out, retailers deciding to sell private label goods along with, or instead of, branded goods is not inherently an antitrust violation; in fact, many retailers like Kroger’s and Costco obtain significant revenue from the practice.  Bezos himself pointed out that Amazon’s policy limiting its use of data from the other sellers was “voluntary” and not required by any current law.  One of the questions at the hearings hinted at an allegation that Amazon might be in a different position than other retailers, either because of its size or greater access to seller data; unfortunately, inadequate time was given for a response.  Any antitrust actions here would need to be able to take on all private label goods sold by large retailers or explain why Amazon’s actions are uniquely anti-competitive.

Predatory Pricing

At least two sets of questions focused on potential “predatory pricing” by Amazon, that is, pricing products so low that competitors are forced out of the market.  The first set involved allegations from many years ago that Amazon had drastically lowered prices on diapers to weaken Diapers.com, later renamed Quidsi before Amazon purchased it.  In response to questioning, Bezos claimed to be unfamiliar with the details of pricing of one product nearly ten years ago.  In the second set, Bezos was asked if Amazon ever priced Echo or Ring or other in-home assistants below cost.  He claimed that the price of those products usually was above cost, although sometimes their prices might be below cost during periodic promotions.

As readers of this blog know, current law makes predatory pricing illegal only if a monopolist’s prices are very low, usually defined as below variable costs, and there is a chance that the monopolist can later raise prices to recoup its losses.  Certainly, not enough time was spent on the topic during the hearings to address those details in these Amazon examples.  Also, other commentators have already disputed the implications from the Quidsi story, describing it as another example of a retailer using a pro-competitive “loss leader” strategy to build customer loyalty to the store.  (In fact, it appears that Quidsi was trying to follow that exact strategy itself.)  While the questions did not directly lead to evidence of a violation under today’s law, it is possible that these hearings will lead to legislation to alter antitrust law’s current view of such aggressive pricing.

“Bullying” Competitors and Suppliers

Finally, Bezos was asked several times in several ways about Amazon’s treatment of its “partners,” both the manufacturers and third-party retailers who sell to consumers on its marketplace as well as manufacturers who sell directly to Amazon.  Many of the questions included quotes from anonymous third parties who felt a need to be on Amazon:  “have to work with them,” “we’re stuck,” “nowhere else to go.”

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Author: Jarod Bona

As an antitrust lawyer, I find it interesting to see the inner workings of different types of markets—how people and companies buy and sell things. And the entertainment industry is one of the more fascinating ones.

The entertainment industry includes an interesting mix of concentrated players at various levels of production and distribution, often vertically integrated. Streaming services like Netflix have brought on changes that the coronavirus pandemic will likely accelerate.

Indeed, the federal government is even ending the old Paramount Antitrust Consent Decree, which governed the motion-picture industry for decades. You can read about that from our attorney, Steven Madoff, who was a top-level lawyer for Paramount for years, and an expert (literally) in the entertainment and media industry.

If the entertainment market or Hollywood itself interests you, there is a federal antitrust case in the Central District of California that you should follow: William Morris Endeavor Entertainment, LLC. v. Writers Guild of America, West, Inc.

This is a lawsuit by the major Hollywood agencies against the Writers’ unions, along with a counterclaim by the Writers’ union against the agencies. Labor unions, of course, create some unique antitrust issues, which you can read about here.

On April 27, 2020, the Court granted in part and denied in part a motion to dismiss by the agencies.

What I found interesting about this case, among other items, is that it attacks a practice developed by Michael Ovitz and his Creative Artists Agency firm called “packaging.”

Before I dig into packaging, I have to recommend that you read Michael Ovitz’s autobiography: Who is Michael Ovitz? In his book, he is open about his successes and excesses. If you are building a professional services firm, like I am, you will particularly appreciate riding along as Michael Ovitz builds a talent agency that changes the way business is done in Hollywood. You hear some “inside baseball” about Hollywood and learn how to build a business from scratch, all at once. Indeed, you learn how to change an industry. Seriously, it’s a good read.

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Back to “Packaging.” Instead of letting the studios take the lead in building movie or television projects and hiring the writers, actors, and directors that the agencies represented, the agencies would create their own project proposals for the studios. Not surprisingly, in doing so, they would “package” together a group of people, in different roles and positions, that they represent.

As part of the cost of this packaging service, the talent agencies would receive a fee from the studio. Before packaging, talent agencies were compensated by commissions as a percentage of their clients’ compensation.

The writer unions asserted that these packaging services harmed both writers and the guilds themselves and created conflict of interests for the agencies between their writer-clients and the production studios.

The complaint also alleged that the talent agencies price-fix the fees for these packages and exchange competitive sensitive information with each other about their packaging fee practices.

I won’t get into all the details here—my purpose is merely to whet your appetite to follow the case—but the writer guilds took certain actions that the talent agencies didn’t like, who then took their own actions, and eventually they all sued each other, leaving a California federal judge to sort it out.

As I mentioned above, the Court issued a motion to dismiss ruling, which allowed some claims, while dismissing others. I am not going to go into the details, but I will point out one interesting aspect of the ruling: The Court dismissed the federal antitrust price-fixing claims for lack of standing because the injured parties didn’t participate in the market that was competitively harmed. But the Court allowed a price-fixing claim under the same facts to go forward under the California antitrust statute—the Cartwright Act—because this statute doesn’t have the more restrictive definition of antitrust standing that the federal antitrust laws have.

For antitrust attorneys, this is particularly interesting because in most cases in which a plaintiff includes both federal and state antitrust claims, they rise and fall together. Here, the California antitrust claims (under the Cartwright Act) survived while the federal ones fell.

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Author: Jarod Bona

Antitrust law evolves in such a way that opinions from federal appellate courts are always interesting in how they affect the doctrine. But there are a select few judges who earn even closer attention when they write an antitrust opinion. Judge Diane P. Wood of the United States Court of Appeals for the Seventh Circuit is one of those judges.

Update: Judge Amy Coney Barrett is also part of the Seventh Circuit panel for this decision, along with Judge Michael Stephen Kanne.

In Marion Healthcare, LLC v. Becton Dickinson & Company, the Seventh Circuit, through Judge Wood’s opinion, effectively articulates the co-conspiracy exception to the Illinois Brick rule. The opinion is significant not because it marks a departure in the prevailing law, but because it explains it so well. This is an example of an opinion that courts and attorneys will likely cite in the future when this issue comes up.

So I thought it would be helpful to tell you about it.

Indirect Purchasers and Illinois Brick

You might need a little bit of background first. The indirect-purchaser rule—derived from a Supreme Court decision known as Illinois Brick—prohibits indirect-purchaser plaintiffs from using for damages under federal antitrust law. This typically arises in a class action, but the doctrine isn’t limited to class cases.

We discuss the indirect-purchaser rule in more detail in a two-part article:

  1. Indirect Purchaser Lawsuits, Illinois Brick and Apple v. Pepper (Part 1): This article describes the background and basics of the indirect-purchaser prohibition.
  2. Apple v. Pepper, Indirect Purchaser Antitrust Class Actions, and the Future of Illinois Brick (Part 2): This article describes the Supreme Court’s recent Apple v. Pepper decision and what it means for the future of Illinois Brick and the indirect-purchaser rule.

If you haven’t already read those two articles, go read them and come back. We will wait for you.

Marion Healthcare, LLC v. Becton Dickinson & Company

Healthcare markets are complicated, distorted, and a little bit confusing. The government plays a major role, which distorts markets. In addition, there are so many layers of entities that participate in every aspect of healthcare that the markets aren’t always easy to unpack. And, of course, insurance companies pay much of the costs, but the decisions on spending are a combination of patients, insurance companies, doctors, governments and healthcare facilities, among others.

In this case, plaintiffs are healthcare companies that purchased medical devises from Becton Dickson & Company. But they don’t purchase them directly from Becton. Instead, they and other purchases rely on a GPO to negotiate prices with Becton (and other manufacturers). Once the GPO and manufacturer reach an agreement, the company that needs the supplies can accept or reject it. If they accept it, they actually purchase the product through a distributor (pursuant to the GPO-negotiated contract), who then enters contracts with both the purchaser (the healthcare provider) and the supplier (in this case, Becton).

You might anticipate at this point that figuring out whether the plaintiff is a direct purchaser could get confusing.

In this case, plaintiffs alleged that Becton (the supplier), the GPOs (that negotiated the deal), and the distributors were all part of the conspiracy, engaging in a variety of anticompetitive conduct, including exclusive dealing.

The district court dismissed the case, holding that the conspiracy rule (more on that below) didn’t apply because the case didn’t involve simple vertical price-fixing.

The Seventh Circuit held that the district court erred.

The Co-Conspirator Exception to Illinois Brick

For the Court to apply Illinois Brick, it must determine which entity is the seller and which entity is the direct purchaser. As you might recall, the Supreme Court grappled with this in Apple v. Pepper.

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Authors: Steven Cernak and Jarod Bona

In big antitrust news, the Federal Trade Commission and Department of Justice Antitrust Division released a draft of an update to the 1984 Vertical Merger Guidelines (VMG) on January 10, 2020.  Only three of the five FTC commissioners voted to release the draft with Democratic Commissioners Rebecca Kelly Slaughter and Rohit Chopra abstaining but issuing separate statements. The agency will accept public comments on the draft through February 11, 2020.

These vertical merger guidelines make extensive references to the Horizontal Merger Guidelines, most recently issued in 2010 (HMG). Like the HMG, the VMG are guidelines only, not law, and are meant to provide the merging parties some understanding of the analysis the reviewing agency will use. Because nearly all merger reviews begin and end with these agencies, however, the HMG have become both influential and persuasive for courts. The VMG rely on the HMG for much of the analysis and so, at nine pages, are much shorter and seem to break little new ground besides updating the outdated 1984 version.

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Author: Luis Blanquez

The Eleventh Circuit recently rejected the City of LaGrange’s attempt to assert state-action immunity from antitrust liability in Diverse Power, Inc. v. City of Lagrange, 2019 U.S. App. LEXIS 24772 (11th Cir. Ga., Aug. 20, 2019).

And here is why.

In a nutshell, the City of LaGrange provided water services to both its residents and to users outside the city limits, and natural gas to customers both inside and outside the city.

In 2004, the city enacted an ordinance targeting customers outside the city limits. Under the new law, water would be provided for new construction––to users outside the city––only if the builder installed at least: (i) one natural gas furnace, (ii) one natural gas water heater, and (iii) at least one additional natural gas outlet sufficient for potential future use for a clothes dryer, range, grill, pool heater or outdoor lighting fixture.

Diverse Power, a company that provides electrical power that competes with LaGrange’s natural gas service, suffered competitive harm from this ordinance that tied water service to installation of gas (as opposed to electric) appliances. In response, they brought an action under the Sherman and Clayton Antitrust Acts challenging the city’s policy as an unlawful tying arrangement.

LaGrange moved to dismiss the complaint on several bases, including immunity under the state-action doctrine. The District Court denied LaGrange’s motion and held that LaGrange was not entitled to state-action immunity. Diverse Power, Inc. v. City of LaGrange, 2018 U.S. Dist. LEXIS 226681 (N.D. Ga., Feb. 21, 2018).

On appeal, the Eleventh Circuit also rejected the City’s claim of immunity and held that tying an unrelated service in a different market to the provision of water service fell outside the statutes’ grant of immunity.

If you don’t know what an antitrust tying claim is, you can read our article on tying arrangements.

At first sight, this seems to be a straightforward state-action immunity case. And in fact, it is. But there are two interesting facts worth mentioning here. First, Judge Tjoflat from the Eleventh Circuit revisited the U.S. Supreme Court landmark case FTC v. Phoebe Putney Health Sys., Inc., 568 U.S. 216, (2013). And second, Judge Tjoflat is the same judge who wrote the original Phoebe Putney Opinion FTC v. Phoebe Putney Health System, Inc., 663 F.3d 1369 (11th Cir. 2011) that the Supreme Court quashed.

Let’s jump into the legal analysis included in the Eleventh Circuit Opinion.

The Court starts by referencing Parker v. Brown, 317 U.S. 341, 62 S. Ct. 307 (1943), and how it held that the Sherman Act shouldn’t be read to bar states from engaging in anticompetitive conduct “as an act of government.” But because political subdivisions—like the City of LaGrange— “are not themselves sovereign[,] they do not receive all the federal deference of the States that create them.”

Instead, political subdivisions enjoy state-action immunity when they undertake activities “pursuant to a ‘clearly articulated and affirmatively expressed’ state policy to displace competition.” This is commonly known as the clear-articulation requirement—the first step in the two-step Midcal test (the second step is active supervision).

The Court then explains that unlike clear-statement requirements in other domains of law, the clear-articulation requirement has traditionally been satisfied by articulations that are admittedly less than clear. The US Supreme Court has, the Court explained, “rejected the contention that [the clear-articulation] requirement can be met only if the delegating statute explicitly permits the displacement of competition.” City of Columbia v. Omni Outdoor Advert., Inc., 499 U.S. 365, 372, 111 S. Ct. 1344, 1350 (1991). Instead, according to these older precedents, state-action immunity applied when a municipality’s anticompetitive conduct is the “foreseeable result” of state legislation. Town of Hallie v. City of Eau Claire, 471 U.S. 34, 42, 105 S. Ct. 1713, 1718 (1985).

The Court then turns to City of Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365, 111 S. Ct. 1344 (1991) to illustrate that, even though the state zoning statute under which the city promulgated the zoning restrictions had nothing to do with the suppression of competition, the Supreme Court held that the city’s actions were immune from federal antitrust liability.

In both cases, immunity from federal antitrust liability was based on similarly broad state statutes that were facially unrelated to the suppression of competition. And as the Eleventh Circuit acknowledges now, it was against this legal backdrop that the Supreme Court decided the Phoebe Putney case.

In Phoebe Putney, two Georgia laws—a provision of the state constitution and a concurrently enacted statute—gave municipally created hospital authorities 27 enumerated powers, including “the power ‘[t]o acquire by purchase, lease, or otherwise and to operate projects [i.e., hospitals and other public health facilities].’”

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Author: Jarod Bona

You might hear from an antitrust attorney that it is important to have a strong antitrust compliance policy. And you may think to yourself, yes, I suppose it is. Then you go about your over-packed day, periodically seeing from other professionals that whatever their specialty is, you need to call them right away to have them help you too.

And that isn’t a surprise because each professional, each specialist in something, and, really, each person with any experience of any sort sees life through their own unique lens. We wrote about this in the context of trade associations.

The truth is we are all bombarded with marketing and emails and social media posts and problems in our lives and our world that are “urgent” or “important.”

So when I tell you that your company should have a strong antitrust compliance policy, no matter what its size, you may appreciate that advice, but recognize that (1) I see life through the lens of antitrust and competition law (among other lenses); and (2) Bona Law prepares antitrust compliance policies, so I am biased. And both of those are true. Whenever you evaluate what anyone says, you should do so understanding their perspective, as bias isn’t necessarily conscious or even negative—it often just is part of perspective and experience.

This is a long introduction to tell you that when it comes to antitrust compliance policies, you don’t just have to listen to me or the many other attorneys that advocate for them:

The Antitrust Division of the Department of Justice has now reversed its position and will give companies with robust compliance programs credit when considering charges.

The purpose of the policy change, of course, is to encourage companies to adopt and (just as importantly) follow strong antitrust compliance programs. If that occurs, the amount of criminal antitrust conduct should decrease. Of course, there may be an inverse relationship between the companies that would enact and follow an antitrust compliance program and those that would criminally violate the antitrust laws. But, still, it will probably help overall. And it should help to keep otherwise law-abiding companies from getting pulled into, for example, an industry-wide price-fixing cartel. If that happens, they will likely experience what we like to call an antitrust blizzard.

In a speech at New York University School of Law, Makan Delrahim said that in evaluating a policy for charging decisions, DOJ prosecutors would consider whether the program is well-designed, if the company applies it in good faith, and if the program actually works. So, as you can see, this is one of those policies that will evolve as they try it on a case-by-case basis.

The Department of Justice also released details on how it would evaluate antitrust compliance policies: US Department of Justice Antitrust Division: Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations.

We will write more about the specifics of a strong corporate compliance program in future articles.

In the meantime, you can read an article by Luis Blanquez about antitrust compliance policies in the US and Europe.

As you might know, the DOJ already has a leniency program, which you can learn more about here. DOJ will sometimes grant leniency to companies and people that report antitrust cartel activity and then cooperate with the DOJ investigation. DOJ antitrust attorneys, experts in competition themselves, incorporated some competition into their leniency program.

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Author: Luis Blanquez

The U.S. Department of Justice recently published that the International Competition Network (“ICN”) has approved the Framework on Competition Agency Procedures (“CAP”), for antitrust enforcement agencies around the world to promote fundamental due process principles in competition law investigations and enforcement. This is an opt-in framework, based on the U.S. Antitrust Division’s initial Multilateral Framework on Procedures proposed at the last Council of Foreign Relations in June 2018. On May 1, 2019, the CAP will be open for signature to all competition agencies around the world, including ICN member and non-member agencies. It will come into effect on May 15, 2019, at the up-coming 2019 ICN annual conference in Cartagena, Colombia.

You can read our earlier article about the general ICN guiding principles for procedural fairness previously developed to build up the CAP.

For those of you that may be unfamiliar with the International Competition Network, it is a group that allows antitrust and competition officials from around the world to coordinate and share best practices (which is somewhat ironic). They hold conferences and produce a substantial amount of substantive material that is quite good. Non-governmental members can also participate. Indeed, several years ago, Jarod Bona co-authored a chapter about exclusive dealing for the Unilateral Conduct Workbook.

Competition Agency Procedures Participation

Participants in the CAP will include all competition agencies entrusted with the enforcement of competition laws, whether or not they are ICN members. Participants will join the CAP by submitting a registration form to the co-chairs.

Agencies entrusted with the enforcement of competition laws around the world that do not meet the definition of participant will also be able to participate in the CAP by submitting a special side letter declaring adherence to the principles and participation in the cooperation and review processes. An important question is whether China will participate.

The CAP will be co-chaired by three participants (“Co-chairs”) confirmed by consensus of the participants for three-year terms.

Principles on Due Process and Procedural Fairness

The CAP outlines a list of fundamental principles on due process in antitrust enforcement procedures.

First, with regard to non-discrimination, each participant will ensure that its investigations and enforcement policies afford persons of another jurisdiction treatment no less favorable than persons of its jurisdiction in like circumstances.

Transparency and predictability are also part of the fundamental principles, making sure all competition laws and regulations applicable to investigations and enforcement proceedings are publicly available. Each participant is also encouraged to have publicly available guidance, clarifying or explaining its investigations and enforcement proceedings.

During the investigative process, participants will also: (i) provide proper notice to any person subject to an investigation, including the legal basis and conduct for such investigation, (ii) provide reasonable opportunities for meaningful and timely engagement, and (iii) focus any investigative requests on information they deem relevant to the competition issues under review as part of the investigation.

Other principles outlined in the CAP are as follows: timely resolution of proceedings–taking into account the nature and complexity of the case; confidentiality protections; avoidance of conflict of interests; opportunity for an adequate defense, including the opportunity to be heard and to present, respond to, and challenge evidence; representation by legal counsel and privilege; written enforcement decisions including the findings of fact and conclusions of law on which they are based, together with any remedies or sanctions; and the availability for independent review of enforcement decisions by an adjudicative body (court, tribunal or appellate body).

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Author: Aaron Gott

My morning routine usually begins with reading the news to keep up on current events. As an antitrust lawyer, I often find myself thinking about how stories that were deemed newsworthy for other reasons fail to recognize their often most troubling aspects: the antitrust concerns.

Last week, for example, the news was abuzz with Uber and Lyft drivers going “on strike” to protest their compensation from the companies. The drivers “banded together” in an effort to pressure the companies. Most might see this as a sort of unionization of the gig economy. But I saw it as an antitrust problem: ride referral drivers are independent contractors, so they are not, under well-established federal law, entitled to the union labor exemption from the antitrust laws. They are horizontal competitors who are agreeing to restrain trade. That sort of conduct is called a group boycott, and under these circumstances, it might be per se illegal under Section 1 of the Sherman Act.

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