- AI-focused Antitrust & Consumer Protection
Matters — The rise of artificial intelligence (AI)
has come under scrutiny of government enforcers and private
litigants. On the competition side, plaintiffs have alleged that AI
could be used in ways that harm competition, including as part of a
conspiracy to use AI-supported algorithms related to pricing or
other competitive datapoints. Additionally, government enforcers
have made clear they are paying attention to proposed mergers
involving AI assets that could lessen competition at various levels
of the AI or cloud computing infrastructure. With respect to
consumer protection, regulatory authorities around the world are
watching closely as well, with some implementing AI-specific
legislation (e.g., EU AI Act enforcement to begin as early as
February 2025) and others already bringing enforcement actions
under existing laws (e.g., FTC addressing AI in fake online
reviews).
- Criminal Enforcement Priorities — Based
on historical trends, the incoming U.S. presidential administration
is likely to maintain the current moderate level of criminal
antitrust enforcement. However, it is likely we will see a return
to focusing on price fixing, market allocation, and other
historically per se illegal activities, and a shift away from
recent attempts to expand criminal enforcement to other conduct
historically evaluated by balancing harms to competition and
pursued as civil violations (e.g., monopolization). Additionally,
with leniency applications on the rise, the incoming
administration's response to these also will be important to
follow.
- Pre-Litigation Merger Remedies with DOJ/FTC
— In the last two years, there have been no pre-litigation
settlements that involved divestitures, and parties to just three
deals were able to settle in litigation. Some parties were able to
restructure their deals prior to litigation to eliminate concerns;
however, that is not always a practical option. While
pre-litigation remedies may make a comeback during the incoming
administration, how aggressive authorities will be in negotiating
them remains to be seen, especially in light of recent court
victories.
- Continued Enforcement Against Board Interlocks
— Given that the new Hart-Scott-Rodino (HSR) Act Form (expected
to be effective Feb. 10, 2025) requires information about board
overlaps between parties, the U.S. authorities now will receive
more systematic information about potential interlock violations.
While the incoming administration may be satisfied with mere
resignations as opposed to the formal consent decrees seen recently
with the FTC, companies should still expect diligent enforcement of
Section 8. Even where the underlying transaction may not raise
concentration concerns, the authorities are unlikely to ignore an
obvious interlock violation.
- Fallout from New HSR Act Filing Rules — The FTC issued new rules requiring a significant amount of additional information for most HSR Act filings made on or after Feb. 10, 2025. While the changes passed with a unanimous vote, the outgoing administration also unilaterally withdrew informal guidance associated with the old form, which still has relevance in the new regime. Withdrawing of guidance has been a more common phenomenon in the outgoing administration; however, the remaining Commissioners transitioning to the majority have stated the importance of limiting burdens in reaching consensus on the new HSR rules. In light of this, it is likely that any new informal interpretations of the updated filing requirements will not be used as a back door to unreasonably widen the scope of filing information, although, for some wholly new aspects of the HSR Form, it remains to be seen where certain lines will be drawn.
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