Client Alert

European Crackdown on Violations of Merger Control Procedural Rules Continues

Last year on this Blog we wrote about the uptick in enforcement action by European competition authorities against violations of merger control procedure (see here).

Yesterday, the UK Competition and Markets Authority (“CMA”) indicated that this trend is set to continue, issuing a fine of £100,000 for a breach of an Interim Order imposed on Electro Rent in its acquisition of Microlease. This is the first time the CMA has fined a company for such a procedural breach.

On the face of it, the fine seems harsh given that the relevant action – serving notice of termination of a lease without the CMA’s prior consent – was discussed with the appointed Monitoring Trustee prior to coming into effect.[1] Indeed, the European Court of Justice (“ECJ”) recently confirmed that parties may take certain actions without violating the standstill obligation imposed under the EU Merger Regulation – including terminating agreements – where such actions do not contribute to the implementation of a transaction.[2] In doing so, the ECJ’s ruling confirmed the commonly held view that merging parties are permitted to take certain steps allowing them to prepare for implementation of a transaction without violating merger control procedural rules.

Given the developing case law on standstill obligations, companies involved in M&A will need to revisit pre-completion protocols, noting that the EU approach seems to be diverging from the CMA’s somewhat more rigid approach to merger control. READ MORE

Out of Sync? : DOJ’s Policy Reversal Towards SEPs Lacks Legal Support

Jay Jurata and Emily Luken co-authored an article for Global Competition Review about the troubling policy shift by the DOJ’s Antitrust Division regarding the application of competition law to the assertion of standard-essential patents.

Please click here to read the full article.

Stock Compensation May Trigger HSR Filing

The requirements of the Hart-Scott-Rodino (“HSR”) Act and Rules are well known to companies that engage in significant M&A transactions. But less well known is their applicability to acquisitions of stock by individuals as part of compensation practices. Especially where relatively young and successful companies are involved, HSR obligations may unexpectedly arise where equity compensation is given to founders, board members, executives, and other employees (whom we will group together and call “Insiders”). Companies and individuals potentially caught in the HSR process for this reason should ensure they are aware of the trigger rules, as a failure to file can result in significant fines.
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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 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

Quo Vadis FTC: What Does the Commission’s Complaint Against Endo Pharmaceuticals and Others Say About the Future of Post-Actavis Hatch-Waxman Litigation and Reverse Payment Settlements?

This alert, the title of which is adapted from a March 30, 2016 FTC Staff Attorney blog post[1], considers the FTC’s first lawsuit challenging a so-called “no-AG” agreement.  No-AG agreements are components of Hatch-Waxman patent infringement litigation settlements in which the brand manufacturer agrees, expressly or through exclusive licenses, not to launch an “Authorized Generic” for a period of time after the generic manufacturer’s entry.  The FTC’s complaint attacks two such settlements that Endo Pharmaceuticals Inc. and the Japan-based patent holder for one of the relevant patents reached with generic manufacturers Watson Laboratories (and Watson’s current owner, Allergan plc) and Impax Laboratories, to settle Hatch-Waxman litigation involving Endo’s two most important products—the pain relievers Opana ER® and Lidoderm®.[2]  The FTC’s complaint, and its simultaneous settlement with the Japanese patent holder and its U.S. subsidiary (collectively, “Teikoku”), are less a window into the FTC’s thinking, which at this point is hardly unpredictable, than they are into its litigation strategy and what drug manufacturers need to consider regarding potential FTC and private actions as they continue to wrestle with the many issues that remain unresolved post-Actavis[3].

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1st Circ. Charts Conservative Post-Actavis Course In Loestrin

Members of Orrick’s Life Sciences practice with experience addressing pharmaceutical industry antitrust and IP issues recently published an article analyzing the recent decision of the U.S. Court of Appeals for the Federal Circuit in In re Loestrin, No. 14-2071 (1st Cir. Feb. 22, 2016).  In that decision—only the second appellate decision applying the Supreme Court’s seminal 2013 decision in FTC v. Actavis , the First Circuit addresses a few of the antitrust issues surrounding so-called “reverse-payment” settlements of patent infringement litigation between branded and generic drug manufacturers.  To read the published article, please click here.