This is the inaugural edition of The Antitruster newsletter. On a bi-weekly basis, WilmerHale's antitrust and competition attorneys will share significant developments in antitrust enforcement in the US and abroad. Read our other recent publications.

 

 

Merger Enforcement

 

  • FTC Announces Merger Prior Approval Policy Statement. On October 25, the FTC announced it will “routinely require merging parties subject to a Commission order to obtain prior approval from the FTC before closing any future transaction affecting each relevant market for which a violation was alleged" for “at least 10 years.” According to the policy statement, the FTC may impose even broader preapproval provisions and potentially outside of the consent decree context. The FTC also intends to require all buyers to receive prior approval before selling assets purchased in a divestiture under a consent decree for at least 10 years. It is not yet clear whether the DOJ will adopt a similar policy. For a more detailed analysis of this new policy, please see our recent client alert.

  • DOJ Sues to Challenge Penguin Random House/Simon & Schuster Merger. On November 2, the DOJ filed a complaint in the US District Court for the District of Columbia to block Penguin Random House’s proposed acquisition of Simon & Schuster. DOJ alleged that “the proposed merger would eliminate [ ] important competition, resulting in lower advances for authors and ultimately fewer books and less variety for consumers.” The complaint notes that Penguin Random House’s internal documents characterized the US publishing industry as an “oligopoly” and observed that the proposed acquisition would “cement” its position as a dominant publisher in the US.

  • Klobuchar, Grassley Introduce Bipartisan Bill on Digital Platforms. On October 14, Senators Klobuchar (D-MN) and Grassley (R-IA) introduced legislation meant to regulate large technology platforms. The “American Innovation and Choice Online Act” (AICOA) bill—a companion to the House’s “American Choice and Innovation Online Act”—would prohibit the largest technology platforms from engaging in practices that favor their own products. While the bipartisan bill has received support from organizations like the Consumer Federation of America, a study commissioned by the Computer & Communications Industry Association claims that AICOA and a related package of legislation pending in the House would cost the economy approximately $300 billion due to forced reductions of scale that decrease efficiencies and increase costs to consumers. It is possible that the scope of the bill will be narrowed as it moves through committee.

  • New House Reconciliation Bill to Fund Antitrust Enforcement and Amend the FTC Act. On November 3, 2021, the House introduced a new version of H.R. 5376, the Build Back Better Act. The bill appropriates $1 billion for antitrust enforcement, to be divided evenly between the FTC and DOJ. The new version also amends the Federal Trade Commission (FTC) Act to allow the FTC to “commence a civil action and recover a civil penalty” for engaging in “unfair or deceptive acts or practices,” including misleading consumers about their privacy and data security practices. This amendment comes after the Supreme Court held the FTC Act does not generally authorize the Commission to obtain disgorgement. For a more detailed assessment of the Court’s prior ruling, please see our recent client alert.

  • Senate to Vote Soon on DOJ Antitrust Nominee. On Thursday, October 28, the Senate Judiciary Committee, in a bipartisan vote, recommended that President Biden’s nominee, Jonathan Kanter, be confirmed as the assistant attorney general of the Antitrust Division at DOJ. Senator John Cornyn (R-TX) was the only senator to vote against the nomination, voicing concerns over Kanter’s support for using “antitrust tools as a hammer to achieve political or social ends.” Kanter’s nomination will now head to the full Senate for a final vote, potentially before Thanksgiving.

Intellectual Property and Data Security

  • FTC Makes a Push Against Abuses by Standard Essential Patent (SEP) Holders. On October 29, FTC Commissioner Rebecca Kelly Slaughter suggested that the FTC should bring antitrust cases against owners of patents covering industry standards that demand unfairly high royalty rates and use their position to “obtain or enhance monopoly power.” In a meeting of the American National Standards Institute, Slaughter said, “When patent holders obtain market power by virtue of being included in standards, the way they exercise that market power is not immunized from the antitrust laws merely because patents are involved.” This is an important indication that the current FTC may take a more aggressive posture than the prior administration against abusive practices by SEP holders.

  • FTC Publishes 6(b) Study on Internet Service Providers (ISPs). On October 21, the FTC published a report that concludes many ISPs are surveilling users and gathering a significant amount of data without providing notice or consent. FTC Chair Lina Khan remarked that ISPs are able to collect this data through vertical integration with content creators and ad sellers. She also suggested that the study’s findings could be a basis for increased scrutiny of tech-related mergers going forward.

  • European Commission Scrutinizes No-Poach Deals and Other Collusion Concerns in the Labor Market. The European Commissioner for Competition, Margarethe Vestager, recently warned that EU cartel enforcers are preparing to launch a series of “dawn raids” targeting collusion in the labor market such as no-poach agreements, buyer cartels and wage fixing. Vestager said that the Commission hopes to improve its efforts at detecting cartel or collusive behavior by deploying a special intelligence unit, analyzing data and relying on its recently introduced whistleblower tool.