Our nation is entering the most turbulent and uncertain era of antitrust law. President Biden issued a lengthy Executive Order for all government agencies to promote competition policy; Congress is considering multiple antitrust bills; the federal antitrust agencies have new activist leadership; and state AGs are banding together to file antitrust enforcement actions against the nation's largest companies. In these unprecedented times, companies should carefully consider the competitive impact of their business strategies on all stakeholders to minimize antitrust risk. In these two videos, Jenner & Block Antitrust Co-Chairs Lee Van Voorhis and Doug Litvack highlight some of the risk areas and offer insights on their implications.
FTC Second Requests – Changes Afoot with Lee Van Voorhis
The FTC recently released a statement on changes being made to the process of complying with Second Requests, the massive requests for data and documents used in merger investigations. These changes, and the aggressive attitude they reflect, will make the merger review process significantly longer and more costly for companies. In particular, the new factors they plan to look at such as employment, investment, environment, and others are explicitly additive to the existing burden of complying with a Second Request. Moreover, it is wholly unclear how the agencies will treat such factors. While it can be assumed that a negative effect on employment is likely to be viewed negatively in this Administration, there is no guidance on what amount of labor force reductions—until now viewed as positive merger efficiencies—will have an impact, nor is there guidance on the magnitude of that impact. And these factors have never been considered in any cases, so there is no guidance there either. Thus, there will surely be much discussion between defendants and the agencies on this topic. Clients will be well advised to build extra time for merger review into their merger agreements.
Monopolization Claims – More Cases Coming with Douglas Litvack
Monopolization claims are tough cases to win under current US law because they require proof of substantial market power and an exclusionary act that harms competition. Historically, the government has been cautious about bringing these types of claims. Not anymore. The Biden administration has appointed new leadership at the federal antitrust agencies who believe the government should bring more monopolization claims and may use litigation losses to gain support for new antitrust bills. Unsurprisingly, this administration is pursuing several monopolization cases against the nation's most successful businesses with more cases expected to follow. And state AGs have followed course, pooling resources to pursue their own monopolization claims. President Biden's Executive Order on promoting competition identifies technology and healthcare as industries where a few players have substantial market power. Companies operating in these industries—or the others identified in Executive Order—should carefully consider the antitrust implications of any business activity that may disadvantage rivals to minimize the chance of being dragged into this administration's antitrust movement.
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