Insights

Four days before the change in administration and in the wake of several high-profile trial losses in cases involving alleged “no-poach” and wage-fixing agreements, the Federal Trade Commission (FTC) and the Department of Justice, Antitrust Division (DOJ) jointly approved new guidelines, Antitrust Guidelines for Business Activities Affecting Workers” (the “2025 Guidelines” or “Guidelines”), that explain how antitrust enforcers have identified and assessed whether an agreement or business practice affecting workers may violate the antitrust laws.  The 2025 Guidelines were voted out at the FTC on a split 3-2 vote along party lines, with a brief but scathing dissenting statement from the Republican commissioners (including incoming FTC Chair Andrew Ferguson) that raises serious doubts as to how well the Guidelines reflect the approach the agencies will take during the next four years.  On the eve of the incoming Trump Administration, the 2025 Guidelines replaced the previous joint DOJ and FTC antitrust guidelines regarding employment practices that were issued in 2016, “Antitrust Guidance for Human Resource Professionals” (the “2016 Guidelines”), during the tail-end of the Obama Administration.

Plaintiffs battling the Federal Trade Commission’s ban on non-compete clauses in employment agreements notched a significant victory recently.  On August 20, 2024, U.S. District for the Northern District of Texas Judge Ada Brown permanently blocked the agency’s action in Ryan LLC v. Federal Trade Commission, concluding the rulemaking exceeded the agency’s statutory authority.  Judge Brown had previously granted a preliminary injunction that limited its effect to the plaintiffs in the case.  Yesterday’s ruling, however, which granted the plaintiffs’ summary judgment motion, permanently blocks the ban nationwide.

The Federal Trade Commission (“FTC”) is now batting .500 in its effort to defend its rule banning most employee non-compete agreements.  On July 23, 2024, Judge Kelley Hodge of the U.S. District Court for the Eastern District of Pennsylvania denied the request for a preliminary injunction to block that rule from going into effect pending a full trial.  This decision is at odds with the decision issued earlier this month by Judge Ada Brown of the U.S. District Court for the Northern District of Texas, which found that the FTC had exceeded its statutory authority and issued a limited preliminary injunction that prevented the rule from becoming effective as to the plaintiffs in that case. 

On July 3, 2024, Judge Ada Brown of the U.S. District Court for the Northern District of Texas temporarily blocked the Federal Trade Commission (“FTC”) from enforcing its recent rule banning virtually all employee non-compete agreements in the United States.  In its 33-page opinion, the court ruled that the plaintiffs are likely to succeed on the merits of their claims that the FTC lacks statutory authority to issue its non-compete ban via rulemaking and that the FTC’s decision to ban non-competes broadly was arbitrary and capricious. However, in a surprise twist, the court declined to grant nationwide preliminary relief, opting instead to limit its injunction to the specific plaintiffs in the action.  The court indicated that it intends to issue a final ruling by August 30, 2024—days before the non-compete ban is scheduled to take effect on September 4.

This week, a DOJ Antitrust Division official signaled a significant expansion of its criminal enforcement program. While speaking at the ABA White Collar Conference in San Francisco, Deputy Assistant Attorney General Richard Powers said that the Division is considering criminally prosecuting violations of Section 2 of the Sherman Act, which prohibits monopolization. This is a major break from long-standing Division policy that it would prosecute only per se violations of the antitrust laws, and raises potentially significant due process concerns.

Today, President Biden signed an Executive Order establishing a “whole-of-government” effort to promote competition across broad swaths of the American economy. The Order is intended to address perceived harms from “excessive” corporate consolidation, which threatens “basic economic liberties, democratic accountability, and the welfare of workers, farmers, small businesses, startups, and consumers.” Sectors that receive particular focus are agriculture, healthcare, banking, internet platforms, telecommunications and labor markets generally. The Order builds upon the Biden/Sanders Unity Task Force recommendations for “Tackling Runaway Corporate Concentration.”

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. 

On March 30, 2021, the Federal Trade Commission announced that it voted in unanimous, bipartisan fashion (4-0) to file a complaint to block Illumina’s proposed acquisition of Grail. Illumina sells next-generation gene sequencing (NGS) equipment and consumables, while Grail is developing a multi-cancer early detection test that uses Illumina’s NGS platform. The FTC alleges a vertical theory of harm whereby the merger would give Illumina both the incentive and ability to disadvantage Grail’s multi-cancer testing competitors by raising their costs for, or by foreclosing them from, accessing Illumina’s must-have NGS technology. This is the first time in recent memory that the FTC is challenging a vertical merger in court; it represents the FTC’s first challenge under newly issued Vertical Merger Guidelines; and it is the first suit filed under Acting FTC Chair Rebecca Slaughter—all of which demonstrates that the FTC is likely to take a more aggressive approach to vertical merger enforcement for at least the next four years.

On October 6, 2020, the majority staff of the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law released a long-awaited report on the state of competition in digital markets titled Investigation of Competition in Digital Markets, Majority Staff Report and Recommendations (“Staff Report”). The 450-page Staff Report is the capstone of a year-plus investigation of digital markets, the conduct of the largest online companies, and the effectiveness of current antitrust laws and enforcement. The Staff Report lodges heavy criticism of the state of competition in the digital economy and antitrust enforcement, and recommends an array of legislative proposals—including specific reforms to address anticompetitive conduct in digital markets, as well as strengthening merger and monopolization enforcement and significant revisions to the antitrust laws generally—that would arguably represent the largest overhaul of antitrust law and enforcement in history, not just in digital markets but across all industries. A group of Republican Subcommittee members issued a separate report, The Third Way: Antitrust Enforcement in Big Tech, which supports bipartisan efforts to reform antitrust enforcement to address competitive harm in digital markets, but disagrees with some of the majority staff's recommended proposals.  

On August 20, 2020, the U.S. Department of Justice Antitrust Division announced three organizational changes that, if fully implemented, could significantly influence the manner in which it conducts its civil investigations and enforces its judgments and consent decrees. Specifically, the Antitrust Division announced: (i) the creation of an Office of Decree Enforcement and Compliance, which will be responsible for investigating and prosecuting both merger and non-merger judgment and consent decree violations; (ii) the establishment of a permanent Civil Conduct Task Force, which will be responsible for investigating and prosecuting non-merger-related anticompetitive business practices; and (iii) the reallocation of certain industries and related commodities among its civil Sections.

The Department of Justice and Federal Trade Commission issued final updated Vertical Merger Guidelines yesterday. Although the Agencies had planned to hold a second joint public workshop on the draft Guidelines and several Senators in June urged the Agencies to continue the public process of updating the Guidelines to garner bipartisan support, the Agencies issued the final Guidelines on June 30, with two FTC Commissioners opposed. The final Guidelines significantly revise the draft Guidelines issued in January—including eliminating a proposed “soft” safe harbor, as Senators and other critics had urged—and now replace obsolete Non-Horizontal Merger Guidelines from 1984.

Earlier this week, the U.S. Department of Justice issued a business review letter approving a competitor collaboration intended to accelerate and increase the manufacture, sourcing, and distribution of medications and other healthcare supplies needed to treat COVID-19 patients. This is the second business review letter that the DOJ has issued under the expedited process created to review COVID-19-related competitor collaborations. The DOJ’s business review letters provide helpful guidance for companies considering participating in a competitor collaboration designed to help reduce the health and economic harm caused by COVID-19. 

In a joint statement, the U.S. Department of Justice and Federal Trade Commission recognized that protecting the health, safety and welfare of Americans during the COVID-19 crisis will require unprecedented cooperation among governmental and private sector entities. In doing so, however, the agencies cautioned companies that “COVID-19 does not provide a reason to tolerate anticompetitive conduct that harms workers,” including medical professionals, first responders, and other essential service providers. Thus, while praising companies and individuals that have “demonstrated extraordinary compassion and flexibility in responding to COVID-19,” the agencies stated that they “will not hesitate to hold accountable” those that “may use [the crisis] to prey on American workers by subverting competition in labor markets.”

Economic actors across the U.S. have had their hands full contending with the outbreak of novel coronavirus strain COVID-19. As companies face significant effects on demand (largely but not exclusively negative) and significant disruptions in their supply chains, many are considering whether there is scope for industry- or association-focused responses. 

The Department of Justice (“DOJ”) Antitrust Division recently released a business review letter (“BRL” or “letter”) approving the expansion of the American Optometric Association’s (“AOA”) group purchasing activities even though the proposed expansion fell outside of the “antitrust safety zone,” implicated products that will be re-sold to consumers, and involved joint activity by competing group members.  The letter serves as a helpful reminder about the types of group purchasing activities that are permissible, as well as the safeguards that group purchasing organizations can implement to ensure that their activities result in efficiencies and promote competition.

In what it described as “the most significant enforcement action of an existing antitrust decree by the Department in 20 years,” the United States Department of Justice’s Antitrust Division recently required Live Nation Entertainment, Inc. and Ticketmaster Entertainment, Inc. to agree to several significant modifications to the 2010 consent decree that allowed the largest U.S. concert promoter to combine with the dominant ticketing service.  Citing the companies’ “repeated [decree] violations,” the DOJ required Live Nation and Ticketmaster to agree to significant monetary penalties and remedial measures, including extending the decree’s term by five and a half years, reimbursing the DOJ $3 million for its investigatory costs, implementing a whistleblower protection policy and DOJ-approved antitrust training, appointing an independent monitoring trustee, and paying a predetermined $1 million fine for each future decree violation.

On January 13, 2020, the Department of Justice Antitrust Division confirmed that Maria Christina “Meta” Ullings, a Dutch national and former Senior Vice President of Cargo Sales & Marketing for Dutch carrier Martinair had been extradited from Italy to the U.S. to face charges for her alleged involvement in a long-running international conspiracy to fix prices in the air cargo industry. She made her initial appearance in federal court on January 13, 2020 after being indicted in the U.S. District Court for the Northern District of Georgia nearly ten years ago on September 21, 2010. Ullings was not apprehended until July 2019 by Italian authorities when she contested extradition. The Court of Appeals of Palermo ruled against her and she waived appeal.

In the wake of recent criminal bid rigging cases involving government contractors, the Justice Department Antitrust Division is escalating its focus on collusion in public procurement. The Antitrust Division yesterday announced the formation of an interagency strike force dedicated to the deterrence, investigation and prosecution of antitrust violations by defense and other firms selling to the government. The Procurement Collusion Strike Force (PCSF) will include prosecutors from the Antitrust Division and 13 U.S. Attorneys’ Offices, as well as investigators from the FBI, Department of Defense Office of Inspector General, the U.S. Postal Service Office of Inspector General, and the General Services Administration Office of Inspector General.

For the first time in its 100-year history, the U.S. Department of Justice Antitrust Division has agreed to binding arbitration to resolve an enforcement action.  Invoking its arbitration authority under the Administrative Dispute Resolution Act of 1996 (the “ADR Act”) – which Assistant Attorney General Makan Delrahim described as a law that “many attorneys [have] never heard of” – the Antitrust Division and defendants have agreed to arbitrate the dispositive issue in a merger challenge that the Division recently filed in federal court.

In late January, the U.S. Department of Justice’s Antitrust Division submitted a statement providing its views on antitrust theories advanced by the plaintiff in u-blox v. InterDigital, a district court case involving the licensing of standard-essential patents in the wireless communications sector.