The Antitruster

The Antitruster is WilmerHale’s bi-weekly newsletter on the latest antitrust and competition developments in the US and abroad. 

• WilmerHale Welcomes Two Senior FTC Officials as Partners to Antitrust Practice. We are excited that Jennifer Milici and Dominic Vote have joined WilmerHale after serving in senior roles at the Federal Trade Commission (Commission or FTC). Jennifer was chief trial counsel for the Bureau of Competition and Dom was head of the Mergers II Division.

Merger Enforcement

• Commissioner Phillips Says the FTC Has Sent at Least 50 “Close at Your Own Risk” Letters in FTC Merger Investigations and Discusses Future of HSR Early Termination. On February 25, FTC Commissioner Noah Phillips stated in a speech that the FTC had sent at least 50 close-at-your-own-risk letters in merger investigations since it started issuing such letters in August 2021. These letters inform merging parties that “the FTC’s investigation remains open” after expiration of the Hart-Scott-Rodino (HSR) Act waiting period, and that the Commission could challenge the transaction after closing. We estimate that this represents about 4% of all mergers that the FTC has reviewed since August. There have not yet been any post-closing challenges to mergers since the FTC began issuing these letters.

  In the same speech, Commissioner Phillips said he does not foresee the FTC resuming granting early terminations to transactions under review. Historically, the Commission and Department of Justice (DOJ) would grant termination of the initial 30-day waiting period early if it or the DOJ were able to conclude that the transaction did not warrant a second request, but the FTC and DOJ suspended early terminations in February 2021.

• Rhode Island Hospitals Abandon Merger After FTC Challenged Acquisition. On February 24, Lifespan Corp. and Care New England Health System, two Rhode Island hospital systems, abandoned their proposed attempted merger after the FTC brought a challenge in its administrative court. The FTC had alleged the proposed merger would likely result in 70% combined market share in Rhode Island and neighboring Massachusetts communities for inpatient general acute care hospital services and inpatient behavioral health services.

Conduct Enforcement

• DOJ Suggests Potential Criminal Charges for Monopolization. On March 2, Deputy Assistant Attorney General for Criminal Enforcement Richard Powers said that the Antitrust Division was prepared to pursue criminal enforcement against “companies and executives” that “flagrantly” engage in monopolizing conduct in violation of Section 2 of the Sherman Act. Powers remarked that criminal charges “deter the worst” types of conduct and that “if the facts and the law lead us to the conclusion that a criminal charge based on a Section 2 violation is warranted, then that’s what we’ll do, we’ll charge it." The DOJ has not brought criminal charges under Section 2 in over 40 years.

• AG Garland Underscores Antitrust Enforcement in Labor Markets. On March 7, Attorney General (AG) Merrick B. Garland delivered remarks at the White House Roundtable on the State of Labor Market Competition in the U.S. Economy that underscored the DOJ’s interest in aggressively enforcing antitrust laws in labor markets. AG Garland touted DOJ’s recent indictments alleging wage fixing and “no poach” agreements.

• DOJ Probes Poultry Industry Labor Practices. On March 4, The Wall Street Journal reported that Pilgrim’s Pride disclosed the DOJ has opened a civil investigation into “human resource antitrust matters.” Early reports suggest that the DOJ’s investigation focuses on whether poultry processors engaged in unlawful information sharing to suppress worker wages.

• DOJ Partners With FMC to Enforce Shipping Act. On February 28, the DOJ announced that it would provide the Federal Maritime Commission (FMC) with attorneys, economists and other litigation support from the Antitrust Division to help enforce the Shipping Act and related laws. The FMC in return will provide the Antitrust Division with maritime industry expertise to help enforce the antitrust laws. AG Garland observed that “[c]ompetition in the maritime industry is integral to lowering prices, improving quality of service, and strengthening supply chain resilience.”

Congressional Update

• House Member Letter Calls for DOJ to Conduct Criminal Investigation of Amazon for Misleading Congress. On March 9, members of the House Judiciary Committee—including the committee chair, Rep. Jerry Nadler—wrote a letter to AG Garland calling for DOJ to investigate “potential criminal conduct by Amazon and certain of its executives” for misleading a congressional investigation. The bipartisan letter alleges that Amazon intentionally misled Congress during an investigation by the House Subcommittee on Antitrust, Commercial, and Administrative Law into Amazon’s practices regarding third-party sellers that might violate the antitrust laws. According to the letter, which was co-signed by the chair and the ranking member of the antitrust subcommittee, Amazon made sworn statements that it did not use information collected from third-party sellers in its marketplace. The letter claims that the subcommittee’s investigation found that Amazon’s representations were false and that “throughout this process, Amazon repeatedly endeavored to thwart the Committee’s efforts to uncover the truth about Amazon’s business practices.”

Europe

• EC Proposes Changes to Guidelines and Block Exemptions on Horizontal Cooperation Agreements. On March 1, the EC published draft revisions to its horizontal “block exemptions,” which permit certain categories of competitor cooperation without detailed review, and its Horizontal Guidelines. The draft revisions to the block exemptions notably include (1) removing an exemption for R&D Agreements that leave less than three competing comparable R&D efforts, and (2) expanding the scope of an exemption for unilateral Specialisation Agreements to include agreements involving more than two parties and subcontractor agreements. The draft revision to the Horizontal Guidelines adds guidance that would permit certain “sustainability agreements” between competitors that address issues like climate change, human rights, resilient infrastructure, healthy food, and animal welfare. They also propose additional guidance on how the EC will handle issues including information exchanges, standardization, and joint purchasing agreements. The EC is accepting comments from interested parties until April 26. The final version is planned to become effective on January 1, 2023.