United States: ABA Spring Meeting Sessions Key Highlights From US Antitrust Enforcers' Statements (March 29–31, 2023)

Below are key highlights from statements by US antitrust enforcers at the ABA Antitrust Section's Spring Meeting held from March 29-31 in Washington DC.

CIVIL AND CRIMINAL ENFORCEMENT

• The DOJ highlighted the "whole of government" approach that has been a priority for the Biden Administration. Deputy Assistant Attorney General (DAAG) Michael Kades said that the Sherman, Clayton and FTC Acts are not the only competition statutes. There are competition mandates in other statutes, such as the Packers and Stockyards Act. The DOJ has been reaching out to other agencies to ensure that they understand competition-related issues they have been encountering and how those issues might be addressed.
• Rahul Rao, Deputy Director of the Bureau of Competition at the FTC, and Catherine Reilly, Counsel for Civil Operations at DOJ, highlighted that the agencies will continue to focus on transactions involving private equity firms, especially in the healthcare sector.
• Assistant Attorney General (AAG) Jonathan Kanter said the DOJ recognizes there are "many additional opportunities" to investigate and take enforcement actions under Section 8 of the Clayton Act against interlocking directors or officers involving competing firms, and that the DOJ has over 20 open investigations into possible Section 8 violations.
• AAG Kanter said the DOJ will not hesitate to bring monopolization cases when supported by facts and law.
• FTC Chair Lina Khan said that the FTC intends to use every enforcement tool in its statutory toolbox, including the Clayton, FTC and Robinson-Patman Acts. She also said that the FTC has four ongoing market studies covering digital markets and digitization, supply chains, PBMs, and cloud computing. She observed that past FTC market studies have identified problems and led to enforcement actions and legislation.
• Emma Burnham, Acting Director of Criminal Enforcement at DOJ, said the Antitrust Division's criminal sections are extremely busy. The Antitrust Division has more open grand jury investigations than it has had in over a decade, has an active litigation docket and is pursuing a wider range of theories for criminal enforcement than it has in the past.
• DAAG Manish Kumar said that DOJ's withdrawal of three sets of policy statements on antitrust enforcement in healthcare, which provided safe harbors for liability for certain conduct—including information sharing—does not represent a change in law. He said that the safe harbors suggested to courts that DOJ believes certain conduct is not problematic. But given the changing competitive environment, DOJ was concerned that the safe harbors might sometimes be inconsistent with proper application of the law.
• FTC Commissioner Alvaro Bedoya said that he had been focusing on enforcement under the Robinson-Patman Act after hearing congressional testimony from a fourth-generation grocer in South Dakota, who testified that he could not obtain for his shelves products that larger grocery stores had no issues getting. Bedoya addressed arguments that enforcing the Robinson-Patman Act—which prohibits certain kinds of price discrimination—will raise consumer prices. He said that these arguments are largely theoretical, and there is little empirical evidence or research supporting them. He challenged those opposed to Robinson-Patman enforcement to produce evidence supporting their position, commenting that "if there is a paper showing price increases under the Robinson-Patman Act's enforcement, show me it." The FTC has not brought a Robinson-Patman enforcement action for over two decades, but Bedoya's comments and press reports regarding current investigation in the liquor and soft drink industries may presage a change in the FTC's approach.
• Both DOJ and the FTC emphasized that enforcement against anticompetitive conduct in labor markets remains a high priority:
  • DAAG Kumar stated that criminal antitrust enforcement in labor markets is "highly worthy" and protects Americans' rights to sell their own labor in a competitive market and pursue the American Dream. The Antitrust Division expects to continue to bring those cases.
  • AAG Kanter stressed that antitrust cases to protect workers are just as important as antitrust cases to protect consumers.
  • The FTC defended its proposed rule that would ban most employee non-competes. Chair Khan said that non-competes affect all types of workers across the economy and undermine business dynamism. FTC economists estimate that removing non-competes could increase wages and salaries by $300 billion across the economy.
  • Holly Vedova, Director of the FTC's Bureau of Competition, said the FTC has received significant feedback on its proposed non-compete rule. The Agency believes there are various legal and policy rationales to support its proposed rule, and the public comment period remains open.
  • Gwendolyn Cooley, Wisconsin's Assistant Attorney General for Antitrust and leader of the Antitrust Task Force for the National Association of Attorney Generals, said that employee non-competes are a high priority for state enforcement actions.
  • Rebecca Kelly Slaughter, FTC Commissioner, pointed to California as an innovator in enforcement against anticompetitive conduct in labor markets.

• State antitrust enforcers said that state enforcement is complementary to federal efforts.
  • Lizabeth Brady, the Director of the Antitrust Division for Florida's Attorney General, pointed out that state enforcement is important because states can take innovative approaches to develop the law, not just enforce it. She highlighted several cases in which state enforcement has been instrumental in securing remedies. Notable state enforcement actions have involved hospital mergers, PBMs and the Daraprim case, in which the FTC lacked authority to seek monetary disgorgement but states had such authority. She also observed that state enforcers are paying particular attention to differences between their states' antitrust laws and federal statutes to look for enforcement options under state law that might be unavailable under federal law.
  • Beatriz Marques, AAG for the New York Attorney General's Office, said that states are forging their own path by bringing cases beyond what federal counterparts are bringing based on complaints that are brought under federal and state laws. She emphasized that claims under state law sometimes allow for remedies that are different from and can complement those available under federal law.

MERGER ENFORCEMENT

• Chair Khan expects the FTC and the DOJ to publish new merger enforcement guidelines in "short order," and the guidelines' content should fully reflect marketplace realities. DAAG Maggie Goodlander indicated that the content of the guidelines should not surprise anyone. Consistent with Supreme Court precedent, they will focus on market realities.
• DAAG Andrew Foreman said there is a "very high bar" to the DOJ accepting a remedy to resolve competitive concerns regarding a merger. He categorically denied rumors that there is a "shadow" consent decree process where the Agency secretly reaches agreements with parties outside of the formal consent decree process mandated by the Tunney Act.
• Mark Seidman, Assistant Director of the FTC's Mergers IV Section, said the FTC is closely scrutinizing hospital mergers. The FTC is considering potential harm to competition from "cross-market" effects – i.e., possible competitive harm from combinations of hospitals operating in different markets – and vertical integration in addition to more traditional scrutiny of horizontal overlaps.
• Director Vedova said the FTC will continue its aggressive approach to litigating merger cases and is undeterred by its recent loss in Meta/Within, where it pursued potential competition theories. She said that case is a good example of positive results from the FTC litigating hard cases, and that the decision there will help advance enforcement, notwithstanding that the FTC lost. Specifically, Vedova claimed the court sided with the FTC on the law, affirming that the potential competition doctrine is alive and well.
• Director Vedova said the FTC is focusing especially on mergers that would have disproportionate effects on underserved communities, and cited the agency's five-year strategic plan and equity action plan outline in that regard. The FTC is also seeking to address negative effects on communities from emerging technologies, since the FTC has a goal of ensuring fair and equitable marketplaces for all.
• DAAG Goodlander emphasized the DOJ's intent to pursue violations of the HSR Act, including failures to make required premerger notification filings, failures to provide all Item 4 documents and "gun-jumping" (i.e., the buyer assuming control over the acquisition target before the HSR waiting period expires).
• Director Vedova emphasized that merging parties must submit all Item 4 documents with their HSR notifications, and that there will be negative consequences if the FTC later finds documents that should have been submitted with the HSR notification.

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