Government Enforcement

European Competition Authorities Crack Down on Violations of Merger Control Procedural Rules

Is a wind of change blowing through the European merger control enforcement landscape?

The response is yes, certainly.

Very recent cases or investigations launched by the European Commission alleging potential violations of merger control procedural rules by notifying parties have sent a clear signal to companies: you’d now better think twice before breaking the merger control procedural rules.

It is even truer when one considers that this may well be a trend throughout Europe. These cases have echoed back to recent similar cases, pending or closed, at the member state level (the Altice case in France, the CEE Holding Group limited/ Olympic International Holdings Limited case in Hungary, the AB Kauno Grudai / AB Vievio Paukstynas case in Lithuania, and a very recent bakery case in Slovakia). READ MORE

Antitrust Analysis of Joint Ventures – Ancillary Restraints

In the first post in this series, we introduced the concept of joint ventures (“JVs”), outlined why antitrust law applies to their formation and operation, identified the major antitrust issues raised by JVs, and discussed why you should care about these issues. In the second installment, we unpacked some of the major antitrust issues surrounding the threshold question of whether or not a JV is a legitimate collaboration. This third post in the series discusses ancillary restraints—what they are and how they are analyzed. READ MORE

Antitrust Issues on Collection and Use of Big Data in Japan

On June 6, 2017, a committee within Japan’s Fair Trade Commission published a report on competition policy and big data. The report is based on a concern that dominance of big data by certain major technology companies could impede competition and innovation, and addresses how Japan’s Antitrust Act (Act) could be applied in this context.

A main focus of the report is how certain cases of “collection of data” and “use of data” could trigger antitrust issues. READ MORE

German Competition Authority Still One of the Most Active Regulators in Europe

Bundeskartellamt Haus German Competition Authority Still One of the Most Active Regulators in Europe

Germany’s Federal Cartel Office (FCO) has published two documents summarizing its activities for the public: a more detailed “Activities Report” for the years 2015 and 2016 and the high-level “Annual Report 2016.” These documents confirm that the FCO continues to be a highly active operator in the area of competition law enforcement in Europe.

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Janssen Cilag S.A.S v. France: Approval of Broad and Indiscriminate Seizures by the European Court of Human Rights

European Court of Human Rights Logo Janssen Cilag S.A.S v. France: Approval of Broad and Indiscriminate Seizures by the European Court of Human Rights

On April 13, 2017 in Janssen Cilag S.A.S v. France,[1] the European Court of Human Rights (the “Court”) confirmed the validity of search and seizure operations carried out by the French Competition Authority at Janssen Cilag’s company premises. In keeping with its findings in Vinci Construction and GTM Génie Civile et Services v. France, [2] the Court considered that the broad and indiscriminate seizure by the FCA amounted to interference with the rights guaranteed by Article 8 of the European Convention of Human Rights (the “Convention”), but that the interference was while pursuing a legitimate aim and therefore “in accordance with the law.”

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FTC Sues Louisiana Appraisers for Price Fixing

Close-up Of Person Hand Filling Real Estate Appraisal Form With House Model At Desk FTC Sues Louisiana Appraisers for Price Fixing

On May 31, 2017, the FTC filed an administrative complaint alleging that the Louisiana Real Estate Appraisers Board (“Board”), a state agency controlled by real estate appraisers, violated Section 5 of the FTC Act by fixing real estate appraisal fees paid by appraisal management companies (“AMCs”). AMCs act as agents for lenders in arranging real estate appraisals and are licensed and regulated by the Board.  The FTC alleges that the Board required AMCs to pay appraisal fees that are equal to or exceed the median fees identified in survey reports commissioned and published by the Board.  This action represents the FTC’s first enforcement action against a state agency since its victory in North Carolina State Board of Dental Examiners v. FTC, 135 S.Ct. 1101 (2015).  An administrative trial is scheduled to begin on January 30, 2018.

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Antitrust Analysis of Joint Ventures: Structural Considerations

Businessman hand touching JOINT VENTURE sign with businesspeople icon network on virtual screen Antitrust Analysis of Joint Ventures Antitrust Analysis of Joint Ventures – Structural Considerations

In the first post in this series, we introduced the concept of joint ventures (“JVs”), outlined why antitrust law applies to their formation and operation, identified the major antitrust issues raised by JVs, and discussed why you should care about these issues. In this installment, we will unpack some of the major antitrust issues surrounding the threshold question of whether or not a JV is a legitimate collaboration.  In particular, we will first try to separate the analyses of, on the one hand, JV formation, and on the other, JV operation and structure.  Then we will consider whether a JV (i) constitutes a “naked” agreement between or among competitors which is per se unlawful, (ii) presents no significant antitrust issue because there is only a single, integrated entity performing the JV functions, or (iii) involves restraints within the scope of a legitimate collaboration that are virtually per se lawful.

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China’s NDRC Seeks Comments on Draft Guidelines for Price-Related Behavior of Industry Associations

Flag map of People's Republic of China China’s NDRC Seeks Comments on Draft Guidelines for Price-Related Behavior of Industry Associations

On March 24, 2017, the PRC National Development and Reform Commission (“NDRC”) issued draft Guidelines for Price-Related Behavior of Industry Associations (“Guidelines”). The Guidelines encourage industry associations in the People’s Republic of China to engage in price-related behavior that benefits industry development, market competition and consumers’ legal interests; outline the legal risks that may be involved in various price-related behavior by industry associations; and provide guidance for industry associations to assess whether price-related behavior poses legal risk. The NDRC is accepting public comments until April 24, 2017.

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Makan Delrahim Likely to Follow Conservative Path at DOJ Antitrust Division

Headshot of Delrahim Makan in front of the U.S. Captiol Makan Delrahim Likely to Follow Conservative Path as Chief of DOJ Antitrust Division

Last week, President Trump nominated Makan Delrahim to serve as the Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice. Mr. Delrahim, who is currently serving as White House Deputy Counsel, is a former lobbyist and veteran of the George W. Bush Justice Department.  He served as Deputy Assistant Attorney General for International from 2003–2005.  Mr. Delrahim had a good working relationship with the career staff who he will now rely upon to advance the Trump Administration’s antitrust enforcement agenda and priorities.

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New Anonymous Whistle-Blower Tool Launched By The European Commission

Businessman in black suit hiding face behind sign whistle blower New Anonymous Whistle-Blower Tool Launched By The European Commission

On March 16, 2017, the European Commission (“EC”) introduced a new tool to make it easier for individuals to alert the EC about competition law violations, mainly secret cartels, while maintaining the anonymity of the whistle-blowers.

The EC presented the objectives of the new tool (I) and how it works (II); this tool, which is not new in Europe, leaves several questions unanswered (III).

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Fine in Phosphates Cartel Case Confirms Need to Carefully Evaluate European Commission Settlement Proposals

Businessman's hands exchanging euro on blue background, closeup shot Fine in Phosphates Cartel Case Confirms Need to Carefully Evaluate European Commission Settlement Proposals

On January 12, 2017, the Court of Justice of the European Union (“CJEU”) dismissed Roullier group’s appeal and thereby confirmed a fine of €59,850,000 imposed by the European Commission (“EC”) in the phosphates cartel case.[1] This blog post summarizes the decision and discusses the CJEU’s reasoning, which provides valuable guidance to a firm in a cartel investigation that is evaluating a settlement proposal from the EC. In particular, the firm must weigh the fact that, pursuant to the CJEU’s decision, the EC may ultimately impose fines greater than those it proposed in a rejected settlement offer, even if it determines that the firm’s cartel participation was significantly less than it thought at the time of settlement discussions.

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DOJ and FTC Stand Their Ground on Comity Policy Despite Second Circuit’s Decision in Vitamin C Case

International Flags on poles DOJ and FTC Stand Their Ground on Comity Policy Despite 2d Circuit’s Decision in Vitamin C Case

Last September, we discussed the U.S. Court of Appeals for the Second Circuit’s opinion in In re Vitamin C Antitrust Litigation vacating a $147 million judgment against Chinese vitamin C manufacturers based on the doctrine of international comity.  That case stemmed from allegations that the defendants illegally fixed the price and output levels of vitamin C that they exported to the United States.  In reversing the district court’s decision to deny the defendants’ motion to dismiss, the Second Circuit held that the district court should have deferred to the Chinese government’s explanation that Chinese law compelled the defendants to coordinate the price and output of vitamin C.

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Antitrust Analysis of Joint Ventures: An Introduction

Businessman hand touching JOINT VENTURE sign with businesspeople icon network on virtual screen Antitrust Analysis of Joint Ventures Antitrust Analysis of Joint Ventures – Structural Considerations

Joint ventures (“JVs”) can require navigation of a potential minefield of antitrust issues, which we’ll explore in a series of six blog posts beginning with this introductory post. Not all of the law in this area is entirely settled, and there remain ongoing debates about some aspects of the antitrust treatment of JVs.  Indeed, arriving at a coherent and unified view of JV law is like putting together a jigsaw puzzle with missing and damaged pieces.

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U.S. DOJ and FTC Issue Updated Antitrust/IP Guidelines and International Enforcement and Cooperation Guidelines

On January 13, 2017, the U.S. Department of Justice and the Federal Trade Commission issued their updated Antitrust Guidelines for the Licensing of Intellectual Property, first issued in 1995, which explains how the two agencies evaluate licensing and related activities involving patents, copyrights, trade secrets and know-how. Although the agencies have issued a variety of reports since 1995 regarding antitrust and IP issues, this is the first comprehensive update of the Guidelines.  The final updated Guidelines do not differ significantly from the proposed Guidelines released in August 2016, which we analyzed in this blog post.

Also on January 13, 2017, the DOJ and FTC issued their revised Antitrust Guidelines for International Enforcement and Cooperation, first issued in 1995 as the Antitrust Enforcement Guidelines for International Operations. These Guidelines explain the agencies’ current approaches to international enforcement policy and their related investigative tools and cooperation with foreign enforcement agencies.  The revised Guidelines differ from the 1995 Guidelines by adding a chapter on international cooperation, updating the discussion of the application of U.S. antitrust law to conduct involving foreign commerce (e.g., the Foreign Trade Antitrust Improvement Act, foreign sovereign immunity, foreign sovereign compulsion, etc.), and providing examples of issues that commonly arise.

A Six-Month Update of China’s Fair Competition Review System

A Six-Month Retrospective of China's Fair Competition Review system established by the June 2016 China State Council Opinion to protect against the potential abuse of administrative power by Chinese gonvernment agencies that could result in anti-competitive effects. Picture of Xinhuamen, the Gate of New China, in Beijing., the formal entrance to the Zhongnanhai government compound including China's State Council.

In June 2016, China’s State Council issued its Opinions of the State Council on Establishing a Fair Competition Review System During the Development of Market-oriented Review System (“Opinions”).[1]  The fair competition review system (“FCRS”) that the Opinions contemplate is designed to protect against the potential abuse of administrative power by Chinese government agencies that could result in anti-competitive effects.  In other words, the FCRS is supposed to constrain government activities from unduly influencing market competition, consistent with the prohibition that China’s Anti-Monopoly Law places on such conduct.[2]

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Phone Roaming Charges for Periodic Travel in the European Union To End

The European Union commitments contained in the Telecoms Single Market Regulation of 2015 to end roaming charges for periodic travel in the EU requires the EC to adopt rules by December 15, 2016. Image of a man in the park checking roaming status on the smartphone screen.

The development of a digital single market is a key objective for the European Union. As Jean-Claude Juncker, President of the European Commission (“EC”) said in September, “We need to be connected. Our economy needs it.[1] Although this economic policy objective was initiated when the EC published its communication on the Digital Single Market Strategy[2] for Europe in 2015, the various proposals it contains need to be formally adopted and implemented in the EU. This process is now underway.

The EU’s commitments contained in the Telecoms Single Market Regulation[3] of 2015 to end roaming charges for periodic travel in the EU required the EC to adopt rules by 15 December 2016.  A transition period—starting from 30 April 2016 to 15 June 2017—has been established to make the abolition of roaming charges sustainable throughout the EU without an increase in domestic prices.  On December 8, the EC sent an implementing draft on the end of the roaming charges to the representatives of Member States (via the Communications Committee (“COCOM”)). They voted on the text on December 12, and the EC will adopt these new rules regarding the retail market[4] in the coming days. READ MORE

DOJ Attorney Outlines Considerations in Evaluating Vertical Mergers

DOJ Attorney Outlines Considerations in Evaluating Vertical Mergers Wordcloud Illustration of Merger Acquisition

On November 17, 2016, Jon Sallet, DOJ’s Deputy Assistant Attorney General for litigation, presented a speech at the American Bar Association Antitrust Section’s Fall Forum in which he outlined his views regarding the DOJ’s approach to vertical mergers and other transactions that raise the potential for vertical restraints on competition.  After recapping some of the history regarding the DOJ’s treatment of vertical restraints, Mr. Sallet commented on issues such as merger-related efficiencies, competitive effects, input foreclosure and raising rivals costs, innovation effects, the exchange of competitively sensitive information that could harm interbrand competition, and potential anticompetitive effects in transactions that do not involve a combination of vertically related assets.  Finally, he noted that if the DOJ has concerns regarding anticompetitive effects, it might feel that conduct remedies are insufficient and may require structural remedies or even try to block the transaction.  Any company considering a vertical merger or a transaction that may raise the potential for vertical restraints on competition will benefit from reviewing Mr. Sallet’s speech.  The speech is available here.

 

DOJ and FTC Set Possible Criminal Liability Trap for HR Professionals

DOJ FTC October 20, 2016 release Antitrust Guidance for Human Resource Professionals application of antitrust laws to employee hiring and compensation criminal liabilty trap for HR professionals

In an October surprise, the DOJ and FTC (collectively, the “Agencies”) released guidance for HR professionals on the application of the antitrust laws to employee hiring and compensation.  The Agencies’ October 20, 2016 release, Antitrust Guidance for Human Resource Professionals, announced that “naked” agreements among employers not to poach each other’s employees and to fix wages and other terms of employment are per se illegal.  Critically, for the first time, the Agencies warn that such agreements could result in criminal prosecution against individual HR professionals, other company executives, as well as the company.  This Guidance, coupled with repeated requests to approach the Agencies to report such agreements, signals a significant shift in enforcement focus for the Agencies, including a further move to individual prosecutions, particularly when taken together with last year’s DOJ Yates Memorandum calling for more emphasis on individual executive liability.

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China’s and Japan’s Antitrust Enforcement Agencies Warm Up To Each Other

Chinese and Japanese crossed flags increased communication, cooperation and coordination among Chinese and Japanese antitrust enforcement agencies

Although China and Japan have very different histories regarding their antitrust laws, antitrust enforcement officials from the two countries have recently taken steps to open a formal dialogue. This is a welcome development for Chinese and Japanese companies, as well as for foreign companies that do business in China and Japan, and it continues the trend of increased communication, cooperation and coordination among national enforcement agencies. There remains an open question, however, as to how convergence among Asian antitrust enforcement agencies will affect possible convergence with agencies in the United States, the European Union and the rest of the world.

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FTC and DOJ Antitrust Division Request Comments on Proposed Revisions to Antitrust Guidelines for Licensing IP

After several turbulent years of litigation and policy wrangling, many have asked whether the federal antitrust agencies should rewrite their two-decade old Antitrust Guidelines for the Licensing of Intellectual Property (“Guidelines”).  Should they provide clearer guidance regarding thorny questions about licensing standard essential patents (SEPs), patent assertion entities (PAEs), reverse payment settlements, or other matters that have prompted new guidelines from other enforcers around the world?  On August 12, the Federal Trade Commission and US Department of Justice’s Antitrust Division responded with modest updates to the Guidelines, likely setting themselves up for considerable commentary in the weeks to come.

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