Noncompete Agreements

  • FTC Proposes Ban on Noncompete Agreements the Day After Announcing Enforcement Actions. On January 5, the FTC proposed a rule in a 3-1 vote that would ban noncompete clauses in employment contracts that prevent workers from leaving for a competitor or starting a competing business. The proposal would bar employers from entering or enforcing noncompetes with employees, independent contractors, and other workers and would require companies to nullify any existing clauses within six months. Commissioner Christine Wilson issued a dissenting statement in which she described the proposed rule as a “radical departure” from precedent. The FTC will accept public comment on the proposal for 60 days. Traditionally, courts have evaluated noncompete clauses under Section 1 of the Sherman Act, applying the rule of reason to assess whether they harm competition in any relevant market and proffered procompetitive benefits.

    The proposal comes on the heels of the FTC’s January 4 announcement of three enforcement actions against three companies and two individuals for requiring workers to enter “unlawful noncompete restrictions.” Each of the companies and individuals agreed to a settlement that requires them to nullify the challenged noncompetes and prohibits them from imposing future noncompetes, among other things.

    For more information about the proposed rule and recent enforcement actions, please see our recent alert.

Policy Updates

  • Merger Filing Fee Modernization Act Passes. On December 29, President Biden signed a $1.7 billion government spending bill, which includes several important antitrust provisions. The spending bill includes the Merger Filing Fee Modernization Act, which restructures merger fees. For deals valued at less than $1 billion, the new fee will range between $30,000 and $250,000, slightly below the current range of $45,000 to $280,000. The fee for deals valued above $5 billion will increase considerably, to $2.25 million, however. The antitrust package also requires companies filing pre-merger notifications to include notification of subsidies from a “foreign entity of concern.” The bill also prevents antitrust lawsuits that state attorneys general bring under federal law from being transferred to other districts by the Judicial Panel on Multidistrict Litigation. The package also increases the FTC’s operating budget by roughly $50 million over last year’s appropriation. For more information about the new law, please see our recent alert.

  • Commissioner Bedoya Highlights His Enforcement Priorities. In a recent interview with Politico, the FTC’s newest commissioner, Alvaro Bedoya, stated that he will be focused on “basic[]” issues that “have a disproportionate impact on society’s most disadvantaged,” such as groceries, prescriptions, and wages. For example, Bedoya expressed a desire to focus on the effects of hospital and pharmaceutical mergers on consumers without health insurance or financial security. He also advocated for reinvigorated enforcement of the Robinson-Patman Act, which prohibits certain types of price discrimination for the sale of goods. Bedoya also discussed his interest in the intersection of privacy, data and antitrust law, and observed that if companies “come to the commission and seek to justify conduct [or mergers] that seem to limit competition, on privacy grounds, they’re going to face a lot of questions.”

  • Biden Calls for Bipartisan Legislation on Tech-Antitrust Reform. On January 11, the Wall Street Journal published an opinion piece by President Joe Biden calling on “Democrats and Republicans to come together to pass bipartisan legislation to hold Big Tech accountable.” As to competition, he claimed that “[w]hen tech platforms get big enough, many find ways to promote their own products while excluding or disadvantaging competitors—or charge competitors a fortune to sell on their platform.” The President recognized that his Administration’s “existing authority has limits” and called on “bipartisan action from Congress” to “bring more competition back to the tech sector.” Last year, the House of Representatives passed the American Choice and Innovation Online Act, an antitrust bill targeting large technology platforms, but it failed to pass in the Senate.

  • Key Antitrust Advisor Leaves White House. On January 4, Tim Wu departed from the National Economic Council, where he had served as Special Assistant to the President for Competition and Technology for nearly two years. During that time, Wu spearheaded progressive antitrust reform, including President Biden’s July 2021 Executive Order on Promoting Competition and the American Economy. Hannah Garden-Monheit, who has worked with Wu on competition policy since joining the Administration in February 2021, will take over his competition portfolio.


  • FTC Investigating Soft Drink Discounting Under Robinson-Patman Act. The press is reporting that the FTC has launched a preliminary investigation for price discrimination in the soft drink market. News of the investigation follows the FTC’s June policy 2022 statement and Commissioner Alvaro Bedoya’s December speech promising to revive the Robinson-Patman Act in various industries. The Robinson-Patman Act bars suppliers from engaging in price discrimination for goods (e.g., offering discounts to larger retailers but not smaller competitors) but has not been actively enforced in decades. According to the reporting, the FTC has reached out to large retailers seeking data on their purchase of soft drinks.

  • FTC Orders Mastercard to Stop Blocking Competing Debit Card Payment Networks. On December 23, the FTC issued a proposed order that would require Mastercard to start providing competing networks with customer account information that is necessary to process debit payments. Under the FTC order, when a competing network receives a token to process a debit card payment, Mastercard must provide it with the customer’s personal account number that corresponds to the token. The order also bans Mastercard from taking any action to prevent competitors from providing their own payment token service or offering tokens on Mastercard-branded debit cards and requires Mastercard to comply with certain provisions of the 2010 Dodd-Frank Act and its implementing rule. With this order, the FTC seeks to clamp down on Mastercard’s alleged practice of setting “tokenization” policies that prevent merchants from using competing payment card networks.


  • EC Accepts Amazon’s Revised Commitments. On December 20, the European Commission (EC) accepted and made binding revised commitments Amazon offered in response to the EC’s concerns regarding Amazon’s alleged use of nonpublic data from independent retailers selling on its marketplace to compete with those same retailers. The commitments include, among other things, refraining from using nonpublic data regarding the independent retailers’ activities on Amazon’s marketplace—such as sales terms, revenues, shipments, inventory information, and consumer data—for Amazon’s own sales activities. Amazon’s commitments also address EC concerns about Amazon allegedly giving preferential treatment to its own retail business through its “Buy Box” or to sellers using Amazon’s logistic and delivery services, including by mandating equal treatment of competitors. Amazon enhanced its initial commitments offered in July 2022, for instance, by introducing a complaint mechanism and increasing the duration of certain commitments from five to seven years. Amazon is required to implement the commitments by June 2023.