As the United States reacts and adjusts to the developing COVID-19 situation, the two federal antitrust agencies – the Federal Trade Commission and the Department of Justice Antitrust Division – have revised certain rules and procedures relating to their civil merger investigation processes to address these new challenges. Although both agencies have shifted most of their personnel to remote working arrangements, agency staff have demonstrated a willingness to be reasonable and accommodating.
While antitrust and consumer protection laws provide flexibility for firms to respond to changing market conditions, such as those created by the COVID-19 pandemic, it is important to remember that certain conduct will remain prohibited by antitrust and consumer protection laws no matter the circumstances.
Until recently, the Federal Trade Commission's (FTC's) ability to seek monetary equitable remedies (particularly disgorgement and restitution) for alleged antitrust violations went virtually unchallenged. However, the most recent appellate case that interprets the FTC's monetary equitable remedies under Section 13(b) of the FTC Act leaves open many questions about the FTC's ability to seek monetary equitable remedies in antitrust cases pursuant to Section 13(b).
The Department of Justice Antitrust Division and the Federal Trade Commission have announced the release of the 2020 Draft Vertical Merger Guidelines (VMG) for a 30-day comment period. As with any guidelines issued by the agencies, the finalised VMG will be instructive for the agencies' review of vertical mergers and will be persuasive but not binding on the courts should a contested merger enter litigation.
California's governor recently signed a bill designed to enhance antitrust scrutiny of patent settlements between branded and generic pharmaceutical companies. The bill follows the California attorney general's nearly $70 million settlement in Summer 2019 with several pharmaceutical companies based on patent settlements that the attorney general claimed violated the Cartwright Act and is yet another example of diverging interpretations between federal and state antitrust laws.
The Federal Trade Commission and the Department of Justice's Antitrust Division recently released the Hart-Scott-Rodino Annual Report for Fiscal Year 2018, covering 1 October 2017 to 30 September 2018. This report is the first opportunity to review data regarding the merger challenges issued exclusively during Trump's administration. The data underscores the importance and benefit of advance planning and strategy to avoid a second request investigation whenever possible.
In a historic shift, the Department of Justice's Antitrust Division will now consider providing credit to companies in the charging and sentencing stages of an antitrust criminal investigation if they have a robust and effective antitrust compliance programme. While a positive step, significant questions remain regarding the extent to which the opportunity for compliance credit will incentivise companies to self-report criminal antitrust violations and how the guidance interacts with the division's leniency programme.
The assistant attorney general recently suggested that antitrust enforcers should update their analytical framework to account for modern corporate structures, signalling the potential for antitrust violations when officers and directors serve multiple competing companies. The assistant attorney general's speech is a reminder that behaviour that is not explicitly prohibited by the letter of the antitrust statutes may still raise eyebrows.
The US Federal Bureau of Investigation (FBI) and the Australian Competition and Consumer Commission (ACCC) recently signed a new memorandum of cooperation to strengthen their ability to combat cartels and other anti-competitive conduct. According to the section chief of the FBI's Criminal Investigative Division, the memorandum codifies the FBI's relationship with the ACCC and provides an opportunity for increased information and resource sharing.
Litigants often enter into settlement agreements without giving much thought to whether those agreements could form the basis for an antitrust claim – and for good reason because most settlement agreements simply resolve a dispute through money payments. However, agreements that restrict rivals' abilities to engage in advertising or other competitive activities could fall foul of the antitrust laws.