Antitrust Agency Turf War Over Big Tech Investigations

The Federal Trade Commission and the Department of Justice have found themselves under the microscope as calls for antitrust investigations into “Big Tech” companies escalate.

The Federal Trade Commission and the Department of Justice have found themselves under the microscope as calls for antitrust investigations into “Big Tech” companies escalate. The agencies, which share civil antitrust enforcement authority, are reportedly engaged in a turf war over investigations of companies operating in the social media, online retail, search engine and app store space. In September, FTC Chairman Joseph Simons reportedly sent a letter to Assistant Attorney General Makan Delrahim expressing concern about the agencies’ interactions. Meanwhile, they both appear to be investigating the same Big Tech companies, contrary to a clearance agreement penned by the agencies in 2002 and, reportedly, a more recent agreement concerning Big Tech. What is causing this largely uncharacteristic dispute and what effect will it have on enforcement? Continue Reading

Does Section 2 of the Sherman Antitrust Act Need More Bite?

Last month, two members of Congress introduced the Monopolization Deterrence Act, which would allow the Justice Department and the Federal Trade Commission to seek civil penalties for monopolization offenses under U.S. antitrust law.

After almost 120 years, does the Sherman Antitrust Act need statutory tweaking? Sens. Amy Klobuchar and Richard Blumenthal seem to think so. Last month, they introduced the Monopolization Deterrence Act, which would allow the Justice Department and the Federal Trade Commission to seek civil penalties for monopolization offenses under U.S. antitrust law. The bill would create two versions of a penalty for antitrust violations under Section 2, either 15% of a company’s total U.S. revenue of the previous calendar year or 30% of the company’s total U.S. revenue related to the unlawful conduct during the time it took place – whichever amount is greater. Section 2237 names no particular offenders or recent events as its impetus. Whether such massive civil fines would end up in the hands of the injured or just thrown into the public treasury remains unclear under the language of the bill.

The Sherman Antitrust Act already carries hefty civil penalties in terms of automatic treble damages, injunctive relief and related lengthy consent decrees, reasonable attorney fees and costs and possible disbarment from government contracts. Moreover, criminal penalties are also available for conspiratorial conduct under Section 1, but also arguably for predatory monopoly conduct under Section 2, with fines not to exceed $100 million for a corporation, or $1 million for an individual, and a prison term of up to 10 years. Continue Reading

Private Antitrust Litigation and State Action Immunity in the U.S. since 2015

An article written by Partners Carl Hittinger and Danyll Foix and Counsel William DeVinney was published Sept. 20, 2019, by Global Competition Review. The article, “United States: Private Antitrust Litigation,” reviews private antitrust litigation developments in the five years since the U.S. Supreme Court’s 2015 ruling in North Carolina State Board of Dental Examiners v. Federal Trade Commission, which limited application of state action immunity.

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CLE Webinar Series: Antitrust and White-Collar Investigations – What You Should Know

We invite you to join us for one, two or all three of our upcoming high-level webinars offering vital insights into antitrust issues and white-collar investigations. These CLE webinars will be led by our knowledgeable and experienced attorneys, many of whom are former prosecutors and investigators who worked for the Department of Justice (DOJ) and the Federal Trade Commission (FTC). They will discuss the new FTC, the revamped Trump DOJ and State Attorneys General Offices, the top priorities of those government organizations and best practices for dealing with investigatory agencies at the state and federal levels.

Register now for one or all of the webinars in this series:

 1 hour of CLE credit is approved for CA, NY, TX, PA and available via reciprocity in NJ for each session.

1 hour CLE credit pending in FL, GA, CO, OH, VA, IL for each session.

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Is Big Chicken Cooked? DOJ Intervenes in Price-Fixing Investigation

Pork is the other white meat, beef is what’s for dinner, and chicken is now under investigation by the Department of Justice for possible antitrust violations. Looks like the DOJ is back in the criminal cartel investigation business.

In June, the DOJ intervened in a class action antitrust lawsuit, filed in the U.S. District Court for the Northern District of Illinois, asking the court to stay discovery for six months while the Antitrust Division pursued potential criminal charges against key players in the chicken industry. Just recently the district court granted the stay, but reduced the request to three months as opposed to six. The class action as filed alleged that the some of the biggest poultry companies, such as Pilgrim’s Pride, Tyson Foods, Sanderson Farms and Perdue Farms, coordinated prices between 2008 and 2016, resulting in a 50% price hike for broiler chicken. The complaint further alleges that they took this action “despite input costs … falling roughly 20% to 23% over the same time period … .” According to the allegations, the poultry industry as it currently exists, is highly consolidated, with just two companies, Tyson and Pilgrim’s Pride, controlling about 40% of the market, and the top 10 poultry companies controlling nearly 80% of the market. Such market power, it is alleged, gives the Big Chicken industry enough power to manipulate pricing and supply.

The major allegation lodged at the defendants in the current lawsuit revolves around a company called Agri Stats, a subscription service that documents production practices across the chicken industry. According to the complaint, it is alleged that chicken companies used the platform to share detailed marketing and supply information, thereby allowing competitors to potentially discover how many chickens its rivals were hatching and then reduce their own production as a result. The lawsuit specifically alleges that “the principal … method by which defendants implemented and executed their conspiracy was by coordinating output and limiting production with the intent and expected result of increasing prices of broilers in the United States. In furtherance of their conspiracy, defendants exchanged detailed, competitively sensitive and closely guarded nonpublic information about prices, capacity, sales volume and demand, including through third party co-conspirator Agri Stats.”

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Carl Hittinger, Jeanne-Michele Mariani Article Takes a Look at Antitrust Division’s Renewed Focus on Bid Rigging

Partner Carl Hittinger and Associate Jeanne-Michele Mariani authored an article published May 8, 2019, by The Legal Intelligencer. The article, “Antitrust Division’s Renewed Focus on Bid Rigging Promises to be Perilous,” focuses on the Department of Justice Antitrust Division’s campaign to investigate and

prosecute criminal cartel behavior relating in particular to bid rigging involving government contracts overseas and in the United States. The division has revealed that there are presently 91 grand juries examining such bid-rigging activities.

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Carl Hittinger, Tyson Herrold Article Examines Antitrust Legacy of Former Chief Judge Dolores Sloviter

Partner Carl Hittinger and Associate Tyson Herrold authored an article published on April 12, 2019, by Temple University’s business law publication, The Temple 10-Q. The article, “Judge Dolores K. Sloviter’s Antitrust Legacy,” discusses the significant antitrust contributions of former Chief Judge of the Third Circuit Sloviter, from her days as an antitrust lawyer to her rulings in the Third Circuit, including her landmark en banc decision in LePage’s Inc. v. 3M.

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Carl Hittinger, Jeanne-Michele Mariani Author Article Examining NCAA’s Monopoly Status

Partner Carl Hittinger, the Antitrust and Competition team leader, and Associate Jeanne-Michele Mariani authored an article published in the March 29, 2019, issue of The Legal Intelligencer. The article, “The NCAA, Which Is Tied to Education, May Be a Necessary Monopoly,” discusses a recent successful challenge made to the NCAA’s governing policies on antitrust grounds. That ruling, now on appeal, upheld the plaintiffs’ argument that the NCAA has a monopoly on the college athletic market and has misused it.

Hittinger and Mariani discuss the potential inequities of permitting player compensation and some of the scenarios that could arise and conclude: “The verdict is still out as to whether a drastic change is necessary or even better, but if the status quo of at least the operation of [Division 1] sports is optimal, then it may be that the NCAA’s monopoly presence remains necessary.”

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Carl Hittinger, Julian Perlman Article Examines Antitrust Legacy of Judge Thomas Vanaskie

Partner Carl Hittinger and Counsel Julian Perlman authored an article published March 1, 2019, by The Legal Intelligencer. The article, “Circuit Judge Thomas Vanaskie’s Antitrust Legacy: 2 Significant Cases,” examines opinions issued by recently retired Third Circuit and former MDPA Chief Judge Vanaskie. The article discusses Vanaskie’s thorough and fair-minded opinions in the epic antitrust dispute between competitors Santana Products and Bobrick Washroom Equipment in the late 1990s through the early 2000s (in which Carl Hittinger was lead counsel for Bobrick). Hittinger and Perlman also consider Vanaskie’s decisions in a precedential antitrust class action dispute involving the adhesive label industry. Both cases serve as role models for other judges to follow.

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