The Commission’s decisions of 24 July 2018, fining Philips, Asus, Denon & Marantz and Pioneer for fixing online retail prices, inaugurates a much-awaited wave of verdicts on vertical restrictions, with the noteworthy peculiarity that they involve the use of algorithms.
Shearman & Sterling’s bi-annual Trends & Patterns in FCPA Enforcement report provides insightful analysis of recent enforcement trends and patterns in the US, the UK and elsewhere, as well as helpful guidance on emerging best practices in FCPA and global anti-corruption compliance programs.
On June 25, 2018, the U.S. Supreme Court, in a 5-4 decision by Justice Thomas, held that provisions in American Express Company’s (“American Express”) and its operating subsidiary’s contracts with merchants that restricted the ability of these merchants to steer customers to other credit or charge cards did not violate the Sherman Act. Ohio v. American Express Co., 585 U.S. __, slip op. at 1 (2018). The Court held that plaintiffs—the United States Department of Justice and the Attorneys General of several states—failed to satisfy their burden of proving anticompetitive effects in the relevant market under the rule of reason.
On June 14, Justice Ginsburg, writing for a unanimous U.S. Supreme Court, reversed a 2016 opinion by the Second Circuit and held that a foreign government’s interpretation of its own law is not binding on U.S. courts.
On June 12, 2018, following a six-week-long bench trial, Judge Richard J. Leon of the United States District Court for the District of Columbia ruled that AT&T’s proposed acquisition of Time Warner does not violate the antitrust laws, rejecting the United States Department of Justice’s (DOJ) challenge to the merger.
The “standstill obligation” under Article 7 of the Regulation 139/2004 on Merger Control (EUMR) prevents parties from implementing their transaction before receiving merger clearance from the European Commission (EC). Failure to comply with this obligation (known as “gun-jumping”) may result in fines up to 10% of their aggregate worldwide turnover and the obligation to reverse any step taken by the parties.
Traditionally, the European Commission’s (EC) approach towards public funding of infrastructure was that such aid fell outside the scope of State aid rules. Recent investigations show that this approach is changing, as the scope for commercial exploitation of infrastructure has increased due to increased liberalization, privatization, market integration and technological progress.
Last year’s Antitrust Annual Report described American Express’ sweeping victory over the Department of Justice (DOJ) and 17 state Attorneys General (AGs) in the Second Circuit pertaining to its use of Non-Discrimination Provisions (NDPs) in its merchant contracts – that is, contractual provisions that forbid merchants from trying to influence consumers to use lower cost forms of payment. But the Second Circuit’s decision was not the end of the dispute. The Supreme Court agreed to hear the case –only without the DOJ’s continued participation.
Under the Federal Rules of Civil Procedure, there are no geographical limitations on discovery requests.
This past year has seen renewed challenges to reverse payment settlement agreements in the pharmaceutical industry. Since the Supreme Court’s Actavis decision in mid-2013, potentially anti-competitive agreements are reportedly down, enforcement continues and more plaintiffs are seeing success as private class actions move forward at both the class certification and summary judgment stages.
In perhaps the most hotly anticipated judgment in the European competition law world this year, the Court of Justice of the European Union (CJEU) handed down its landmark ruling on September 6, 2017 in Intel’s appeal against its €1.06 billion European Commission (EC) fine for abuse of dominance.
The European Commission (EC) and other national competition authorities (NCAs) have traditionally shied away from investigating allegations of excessive pricing and appearing as price regulators. Commissioner Vestager warned that such investigations should only be commenced with caution.
Large online platforms such as Amazon, Facebook and Google have a strong presence in Europe. Although general competition law principles apply to them, cases concerning online platforms give rise to a lot of novel questions in respect of the application of Article 102 of the Treaty on the Functioning of the European Union (TFEU) compared to traditional ‘analog’ markets.
The growth of e-commerce and the resulting increase in price transparency and price competition have a significant impact on companies’ distribution strategies and consumer behavior.
It has been a year since Article 50 was triggered on March 29, 2017, and if no extension is given, the U.K. will leave the European Union (EU) on March 29, 2019. This means that negotiations are now at the half-way point, but we are still no closer to figuring out what Brexit means Brexit actually means.
Divining trends in antitrust enforcement in a given presidential administration can take some time. Many commentators didn’t notice material changes in antitrust enforcement in the Obama administration – at least in merger enforcement – until the summer of 2011, when the Antitrust Division of the Department of Justice (DOJ) brought suit challenging AT&T’s acquisition of T-Mobile, more than two years into President Obama’s term.
Algorithms and the use of Artificial Intelligence (AI) have become commonplace in a vast number of markets, and this has drawn the attention not only of competition law academics and practitioners, but also of competition authorities. These authorities have expressed their concerns over the use of these algorithms to engage in anti-competitive practices.
Our enforcement agencies are tasked with the difficult job of evaluating mergers to assess their effect on the competitive landscape. While most mergers are able to pass agency review unscathed, there are a select number that could lead to anti-competitive outcomes if allowed to proceed. It is for these mergers that remedies come into play.
Many jurisdictions across the world have mandatory notification regimes. When the relevant filing thresholds are met, the merger review process has a suspensive effect on the transaction, meaning that the parties must continue to operate as competitors and cannot integrate until they receive merger approval.
2017 witnessed a wave of foreign investment control reform in Europe, both at Member State and European Union level. Across the Atlantic, the Committee on Foreign Investment in the United States (CFIUS) has recommended blocking one foreign transaction, which may portend increasing trade protectionism in the United States as part of the Trump administration’s ‘America First’ policy.
The role of fairness in EU competition policy and enforcement has been the subject of renewed debate. A perception has emerged among commentators that the European Commission’s (EC) enforcement priorities under the current Competition Commissioner, Margrethe Vestager, seem to have become increasingly focused on ‘fairness,’ rather than the more traditional competition objectives of promoting consumer welfare and an efficient allocation of resources.
The Federal Trade Commission (FTC) has recently re-emphasized the potential risks of antitrust violations stemming from the exchange of competitively sensitive information during pre-merger negotiations and due diligence. Although the FTC recognizes the legitimate need for sharing and accessing detailed information about a company for the purposes of an M&A transaction, they cautioned that the exchange of competitively sensitive information such as pricing information, strategic plans and costs has to follow appropriate procedural safeguards, and noted enforcement actions when the parties did not comply with them.
The European Commission has routinely considered potential harm to innovation as part of its merger assessments, particularly in R&D driven sectors such as pharmaceuticals and technology. In recent years, however, the Commission’s traditional innovation concerns have developed into broader, more far-reaching concerns, requiring divestments of assets and R&D related to early stage pipeline products as well as of entire R&D capabilities. Such an approach has been applied most recently in the Commission’s conditional approval of Bayer/Monsanto.
By a decision adopted on 7 March 2018 and published in its Bulletin of 12 March 2018, the Italian Competition Authority has updated the thresholds for merger notification, adjusting them to the inflation rate.
The London Interbank Offered Rate (ICE LIBOR, often referred to colloquially as Libor) is an important interest rate benchmark. It is currently set with reference to the rate at which certain large and financially sound Libor “panel” banks indicate that they can borrow short-term wholesale funds from one another on an unsecured basis in the interbank market. The benchmark is now administered by ICE Benchmark Administration Limited (IBA), which is a regulated benchmark administrator, based in the U.K. Libor was previously administered by the British Bankers’ Association. Various scandals concerning alleged manipulation of the benchmark led to regulation of the activity of its administration and to IBA, an independent subsidiary of Intercontinental Exchange, Inc. (ICE) (a global operator of exchanges and clearing houses and a global data and listings provider) taking on the administrator role.
On January 26, 2018, the U.S. Federal Trade Commission (FTC) announced the annual changes to the thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The new size of transaction threshold is $84.4 million. This change and the other related increases are expected to go into effect in late February/early March 2018, 30 days after publication in the Federal Register, and will apply to all transactions closing on or after the effective date.