Insights

On March 18, President Trump fired the Federal Trade Commission’s two Democratic Commissioners, Alvaro Bedoya and Rebecca Kelly Slaughter. The move represents the latest effort by the Trump administration to exert greater control over executive-branch agencies, including bi-partisan independent agencies like the FTC.

On February 18, President Trump issued an Executive Order titled “Ensuring Accountability for All Agencies” that directs independent agencies (as well as Cabinet Departments and their sub-agencies) to route all “proposed and final significant regulatory” and budgetary actions through the White House and the Office of Management and Budget. If implemented to its full extent, this action will significantly strengthen the authority of the White House by weakening the political autonomy of these independent agencies. As an assertion of the President’s inherent powers under Article II of the U.S. Constitution, it also stands to weaken congressional influence over these independent agencies, both through the appropriations and confirmation processes.

On Friday, June 28, 2024, the U.S. Supreme Court overruled Chevron U.S.A. v. Natural Resources Defense Council (“Chevron”)[1] in Loper Bright Enterprises v. Raimondo (No. 22-451) and Relentless v. Dep’t of Commerce (No. 22–1219)[2] (the two cases collectively referred to as “Loper Bright”), bringing an official end to the decades-old and eponymously named “Chevron deference” doctrine. Not content to stop there, the Court returned fresh to work Monday, July 1, to, in Corner Post, Inc. v. Board of Governors of the Federal Reserve System (No. 22-451)[3] (“Corner Post”), effectively extend the limitations period to challenge final agency actions under the Administrative Procedure Act (“APA”).

This week, after months of anticipation, the Antitrust Division of the Department of Justice and the Federal Trade Commission issued draft revised Merger Guidelines containing 13 principles that the Agencies use as a framework for evaluating all forms of transactions. As widely expected, the Draft Guidelines harken back to 1960s-era legal precedents and seek to roll back the modern structural presumptions adopted in the 2010 Horizontal Merger Guidelines. They also express a far more skeptical view of the benefits of mergers in ways that would subject more mergers to challenge. At the same time and in line with current DOJ and FTC practices, the Draft Guidelines expressly expand the reach of merger reviews into labor markets, take a skeptical view of serial acquisitions, add new provisions for multi-sided platforms, and espouse broader theories of harm.

The Supreme Court yesterday heard oral arguments in Axon Enterprises v. The Federal Trade Commission and Securities and Exchange Commission v. Cochran, both of which present the question whether parties to administrative enforcement actions can promptly challenge the authority and structure of the agencies in federal district courts, or must await the conclusion of the administrative proceedings to raise their objections in the courts of appeals, as is provided for in the FTC Act, the Securities Exchange Act, and the Administrative Procedures Act. The two cases come at a time when the Supreme Court has been receptive to complaints about administrative agency authority and at least some of the justices appeared ready to clear the way for Axon and Cochran to return to the district courts to pursue their wide-ranging challenges to the authority of the FTC and SEC, respectively. 

The DOJ and FTC announced on Tuesday that they are jointly reviewing the most recent versions of both the Horizontal and Vertical Merger Guidelines, and invited public comments on a wide range of issues detailed in a lengthy Request For Information. The RFI itself and the announcement of the review signal that the agencies are aligned in making significant changes to the merger guidelines, both to expand the scope of issues covered by the guidelines and to reflect an approach rooted in older case law that would support much more stringent merger scrutiny and enforcement.

On January 11, 2022, District Judge James Boasberg (D.D.C) largely denied Facebook’smotion to dismiss an amended complaint filed by the FTC. The FTC sued Facebook in December 2020 under Section 13(b) of the FTC Act, which authorizes the FTC to seek an injunction against an entity that “is violating” or “is about to violate” any provision of law enforced by the Federal Trade Commission. The FTC alleges that Facebook has acted unlawfully to maintain its monopoly in an alleged Personal Social Networking market in violation of Section 2 of the Sherman Act, which is alleged to constitute an unfair method of competition under Section 5 of the FTC Act. In June 2021, Judge Boasberg granted Facebook’s initial motion to dismiss, but allowed the FTC to file an amended complaint, and the FTC did so in August 2021. 

On December 1, 2021, Crowell & Moring and The George Washington University Competition Law Center co-hosted our third annual Antitrust & Tech Conference. This year’s (virtual) conference focused on the factors motivating a re-evaluation of approaches to merger enforcement, and revisions to the U.S. merger guidelines that may be considered by the agencies. During two panel discussions followed by a fireside chat, thought leaders representing diverse perspectives from academia, industry, and antitrust think tanks discussed the issues facing enforcers and legislators as they assess concerns about the state of merger enforcement and what companies across all industries should expect regarding proposed reforms. We have provided a short summary of each session below. A video recording of the panel discussions and fireside chat is available here (please register first to gain access to the video recordings).

On Monday, the Supreme Court dealt a unanimous blow to the NCAA in NCAA v. Alston, 594 U. S. ____ (2021).  The Court not only ruled against the NCAA on the issue of whether it can ban member schools from providing certain education-related benefits to their players, but it also invited challenges to the NCAA’s ban on other forms of athlete compensation.  The decision capped years of litigation regarding the NCAA’s rules restricting various forms of such compensation and is likely to influence the course of those rules for years to come.  As the Court’s most recent examination of the Sherman Act, however, the decision has broader implications.  It will influence antitrust litigation more generally and includes discussions that will be touted by antitrust plaintiffs and defendants alike.

House Antitrust Subcommittee leaders David Cicilline and Ken Buck unveiled last Friday five antitrust reform bills that would target the largest technology platforms, as well as the need to increase federal enforcement agency budgets.  The effort follows the Subcommittee’s extensive Fall 2020 report and earlier proposed legislation by Senator Amy Klobuchar that would expand the federal antitrust laws’ coverage of exclusionary conduct and unlawful mergers. 

The Federal Trade Commission and the Antitrust Division of the Department of Justice recently released a long-anticipated draft update to the agencies’ Vertical Merger Guidelines. The draft Guidelines—which come on the heels of the DOJ’s failed bid to block the AT&T/Time Warner merger and several recent and very public skirmishes among the FTC Commissioners in vertical transactions—are the first update to the agencies’ guidance on vertical merger enforcement in nearly four decades.

On its face, last Monday’s Supreme Court decision in Apple v. Pepper does not radically change the law. Applying its existing precedent, the Supreme Court affirmed the Ninth Circuit Court of Appeal’s ruling and held that a group of iPhone owners did directly buy apps from Apple (rather than app developers) and thus could sue Apple for federal antitrust violations. But a deeper dive reveals six important takeaways for forward-looking businesses.

Crowell & Moring LLP is pleased to release its "2018 Antitrust M&A Year in Review." Following a year of significant and industry-transforming transactions, this publication provides insight and analysis into developments and trends in global antitrust enforcement of mergers and acquisitions. We examine how changes, such as the first full-year of Trump administration appointments at the Antitrust Division and the seating of five new FTC Commissioners, have impacted the U.S. antitrust agencies’ enforcement priorities and policies. We also look at merger control in the EU, which saw a record-breaking number of filings in 2018.

The Supreme Court recently heard argument in Apple v. Pepper, a case we are following that tests the long-standing prohibition on suits by “indirect purchasers” who are further down the supply chain—in the context of Internet-based platforms. Under the 1977 Supreme Court decision in Illinois Brick v. Illinois, only “direct purchasers” can bring suit under federal antitrust laws because the court believed that: (1) direct purchasers are best positioned to enforce antitrust laws and (2) it is difficult to apportion damages and prevent duplicative recovery among multiple plaintiffs. While the Illinois Brick rule has been an important shield for companies facing federal antitrust claims, most states do not have an analogous defense under state antitrust law, creating a patchwork regime of recovery and greater inefficiencies for the courts.

For the first time since President Woodrow Wilson appointed the first Federal Trade Commission over a century ago, one president has secured the nominations of five new Commissioners, who will soon replenish a Commission that has served for more than a year with just two. This complete overhaul of the FTC’s composition injects added uncertainty about the direction of U.S. antitrust and consumer protection policies, but also presents opportunities as the five Commissioners establish their priorities and shape their views of the many pressing issues now facing the agency. In this Client Alert, we consider the issues likely to be at the forefront of the FTC’s enforcement agenda.

The Federal Trade Commission continues to test limits in its efforts to enforce federal antitrust laws against state regulatory agencies engaged in policies that may unreasonably restrain competition. On May 31, 2017, the FTC filed a complaint alleging the Louisiana Real Estate Appraisers Board (the Board) unreasonably restrained price competition for appraisal services provided to appraisal management companies (AMCs) in Louisiana through a complex, rate-floor-setting scheme. This is the first FTC complaint against a state regulatory agency since the Supreme Court affirmed the FTC’s ability to prosecute inadequately supervised state agencies in North Carolina State Board of Dental Examiners v. FTC. Akin to North Carolina’s Dental Board, the Louisiana Board consists primarily of licensed members of Louisiana’s appraisal industry, who regulate and enforce standards for Louisiana’s appraisal industry. Also akin to its position in the North Carolina case, the FTC alleges that the Board is inadequately supervised by the State to be immune from federal antitrust laws. The FTC’s Complaint serves as a reminder to similar regulatory bodies that they too can be subject to federal antitrust scrutiny for pricing or other competition-influencing policies they may promulgate at the state level.

On January 13, 2017, the Antitrust Division of the Department of Justice and the Federal Trade Commission released the final version of their revised Antitrust Guidelines for the Licensing of Intellectual Property. While the revised Guidelines update relevant authorities to reflect developments in federal statutory law, Supreme Court precedent, and other agency guidance that has been issued over the past 20 years—particularly the 2010 Horizontal Merger Guidelines—the 2017 Antitrust-IP Guidelines retain the core concepts and enforcement principles of the original version, first issued in 1995.

On November 17, 2016, the Federal Trade Commission issued a Staff Report exploring competition and consumer protection issues associated with what is often referred to as the sharing economy. "The 'Sharing' Economy: Issues Facing Platforms, Participants and Regulators" synthesizes information that was presented at the FTC’s June 2015 workshop and in the 2,000 comments that were filed with the agency in association with that workshop. Although the agency does not make broad policy recommendations for balancing the competition and consumer protection issues implicated by the sharing economy, the Report signals the FTC’s ongoing commitment to innovation “as a major driver of long-term consumer welfare gains” and to use of its advocacy tools to protect competition for emerging business models and disruptive technologies.

In Woodman's Food Market v. Clorox Co., the Seventh Circuit has dismissed a grocery chain's claim that Clorox's refusal to sell it the same large package sizes it sold to club stores violates the Robinson-Patman Act. Chief Judge Diane Wood's concise opinion holds that section 2(e) of the Act pertains "only to promotional services or facilities" and that "package size alone is not a promotional service or facility." The decision continues a long trend of cases attempting to harmonize the Act's historical emphasis on the protection of small retailers with the broader focus of the antitrust laws on competition and "the consumer welfare norm." It provides valuable guidance to manufacturers who differentiate their offerings to different retail channels, but leaves other key issues under the Act unresolved.

On August 12, 2016, the Antitrust Division of the Department of Justice and the Federal Trade Commission announced that they are seeking public comments on a proposed revision of the 1995 Antitrust Guidelines for the Licensing of Intellectual Property. The proposed revisions leave the main principles and substantive guidance of the 1995 IP Guidelines largely intact, while modernizing language and updating relevant authorities to reflect developments in federal statutory law, Supreme Court precedent, agency practice, and other agency guidance that has been issued in the interim, especially the 2010 Horizontal Merger Guidelines. Importantly though, more subtle revisions indicate that the agencies were careful to preserve their flexibility to pursue potentially novel enforcement theories when innovation and intellectual property rights play a key role in competitive dynamics.