Join Us for a Teleconference on New ABA Publication, “Antitrust Class Actions Handbook”

The ABA recently released a new publication that should be of interest to antitrust practitioners, the Antitrust Class Actions Handbook, Second Edition. The Handbook comprehensively addresses issues that arise before, during and after the filing of an antitrust class action. The ABA Antitrust Section is hosting a teleconference featuring Handbook authors and editors this Friday, February 23, 2018, at 12 p.m. EST/11 a.m. CST/9 a.m. PST. BakerHostetler partner Dan Foix, one of the authors, will be a speaker.

As a bonus, teleconference attendees will receive a code allowing them a 20% discount on purchase of the Handbook.  The teleconference description with a button for registration can be found here.


No Health Care Merger Too Small for the FTC to Take an Antitrust Look

In our November and December 2016 articles, we discussed the Federal Trade Commission’s proclivity to challenge health care mergers, even when the purported anticompetitive effects of the relatively economically limited merger would be confined to a local geographic region. For example, in 2014, the FTC, joined by the Idaho state attorney general, in St. Alphonsus Medical Center Nampa v. St. Luke’s Health System successfully forced two small hospitals to unwind a consummated merger that affected only 81,557 people in the town of Nampa, Idaho. In 2016, the FTC blocked the merger of Penn State Hershey Medical Center and Pinnacle Health System, both of which mostly operate in a small, four-county area surrounding Harrisburg, Pennsylvania. In 2017, the FTC  in In re CentraCare Health challenged and obtained a favorable settlement in a merger in St. Cloud, Minnesota involving a physician group that operated only four health clinics employing only 40 doctors. The merger was small enough to avoid triggering the Hart Scott Rodino Act’s reporting rules.

Continue Reading

Has the Third Circuit Just Scrambled ‘Umbrella Damages’?

A recent decision by the Third Circuit permits plaintiffs to pursue antitrust damages for egg products supplied by non-conspiring parties. This decision could represent a crack in the “umbrella damages” rule that precludes plaintiffs from seeking damages for transactions with parties that are not part of an alleged antitrust conspiracy.

Umbrella damages often come up in cases where an alleged conspiracy could increase the price level across a market. In such situations, it is said that non-conspirators are able to increase their prices without fear of losing market shares because they are protected by the conspiracy’s price “umbrella.” Courts usually cite two main rationales for concluding that plaintiffs lack antitrust standing to recover damages for alleged anticompetitive prices paid to non-conspirators selling under a conspiracy’s umbrella. First is the high degree of uncertainty with attributing the non-conspirators’ prices to the conduct of the alleged conspirators. See Mid-West Paper Prods. Co. v. Cont’l Group, 596 F. 2d 573 (3rd Cir. 1979). Second is the amount of speculation inherent in tracing the distribution chain and apportioning the amount of overcharge to the alleged conspirators to avoid multiple liability. See Illinois Brick Co. v. Ill., 431 U.S. 720 (1977).

Continue Reading

The FTC Is Looking You Up and Down(stream): Insights From the Acting Director of the Bureau of Competition on Antitrust Enforcement for Vertical Mergers

Since Assistant Attorney General Delrahim’s inaugural remarks on vertical mergers (covered here), the business press has been atwitter about the antitrust enforcement agencies’ views of those mergers. Bruce Hoffman, the acting director of the Federal Trade Commission Bureau of Competition, recently delivered a speech explaining that the FTC will continue to review vertical mergers as part of its enforcement efforts, and providing insight into the FTC’s current analysis of proposed vertical mergers.[1]

As background, Hoffman described that the FTC applies the same broad analysis to vertical mergers that it does to horizontal mergers: it defines the relevant markets, tests theories of harm, and examines the efficiencies created by the merger. But vertical mergers pose analytical challenges that horizontal mergers do not. Horizontal mergers combine competitors, which necessarily reduces competition by removing substitute goods from the market. Although a horizontal merger may create efficiencies or other pro-competitive effects, they are not a natural consequence.

Continue Reading

New Antitrust Division Chief Prioritizes Regulation of Standard Setting Organizations

As we discussed in our May 2017 article, the current head of the DOJ’s Antitrust Division, Makan Delrahim, brings considerable intellectual property experience to the division. Delrahim started his legal career at the Office of the U.S. Trade Representative as deputy director for intellectual property rights. He later served on the Intellectual Property Task Force while serving a stint at the DOJ in the early 2000s. Then-acting Antitrust Division Chief R. Hewitt Pate referred to Delrahim as a “patent lawyer.” Therefore, it is not surprising that, in a Nov. 10 maiden speech at the University of California’s Transactional Law and Business Conference, Delrahim chose to discuss antitrust violations in IP licensing, specifically urging federal and state antitrust enforcement agencies to prioritize review of standard setting organizations (SSOs). Continue Reading

The Trump DOJ’s View on Merger Enforcement and Remedies Explained

President Trump’s head of the Department of Justice’s Antitrust Division, Makan Delrahim, recently explained that the division will cut back on behavioral commitments such as consent orders regulating conduct and will instead rely more on structural changes such as divestitures to remedy merger concerns. This could signal significant changes in how the DOJ resolves concerns with proposed mergers going forward.

Continue Reading

Supreme Court to Decide First Antitrust Case in Two Years

On Oct. 16, the U.S. Supreme Court granted certiorari in United States v. American Express, the court’s first antitrust case of the 2017 term and the first antitrust case they have reviewed since 2015. The American Express case presents complex questions about the legality of anti-steering provisions in agreements between credit card companies and the merchants that agree to accept their cards. It also presents the Supreme Court with an opportunity to provide real guidance for the first time on the application of the rule of reason, which is used to assess the anticompetitive effects of a “contract, combination … or conspiracy in restraint of trade” under the Sherman Act. This case will also be the first antitrust case which antitrust expert Justice Neil Gorsuch will join.

Continue Reading

Antitrust Partner Dan Foix Presents at AAI Conference

Danyll Foix, an antitrust partner in BakerHostetler’s Washington, DC office, will be a speaker at the 11th Annual Private Enforcement Conference of the American Antitrust Institute on November 7, 2017.

Foix will join a panel discussion of “Agriculture Antitrust Class Actions,” which will review recent private enforcement actions in agricultural industries, consider challenges specific to such cases, and discuss relevant structural remedies beyond monetary relief.

Following the panel discussion, Senator Amy Klobuchar (D-MN), Ranking Member, Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, is scheduled to deliver a keynote address.

Additional information, including registration information, is available at AAI’s website.


Presidential Powers and Antitrust Politics: Part Three

In July and August, we discussed the president’s role in setting antitrust policy at the Department of Justice, Antitrust Division. Specifically, we pointed out that presidents routinely face competing domestic and foreign policy challenges that require a delicate balance and flexible approach to antitrust enforcement. For example, President John F. Kennedy directed the DOJ to investigate the steel industry for price fixing because of concerns about labor strikes and monetary inflation. Likewise, President Harry S. Truman chose not to pursue criminal antitrust charges against the oil industry because of national security concerns, specifically the threat of a political coup in Iran and concerns that the Soviet Union would encroach American interests in the Middle East. Therefore, we concluded that the Antitrust Division has not historically (and should not be constitutionally) completely independent from the White House. Read Full Article >>

Reprinted with permission from the September 29, 2017 issue of The Legal Intelligencer.  Copyright 2017.  ALM Media Properties, LLC.  Further duplication without permission is prohibited.  All rights reserved.

Recent Investigation Closing Suggests FTC’s Process Reforms Might Be Meaningful

Back in April, we reviewed several new initiatives within the Federal Trade Commission (FTC) focused on eliminating “wasteful, legacy regulations and processes that have outlived their usefulness,” including “process reforms” for civil investigatory demands (CIDs) for reviewing and closing some investigations. Now, six months later, we thought it useful to consider whether these new initiatives have been meaningfully applied to investigations.

Since announcing its process reforms, the FTC has attributed the closing of only one investigation to the reforms. This previously nonpublic investigation reportedly began six years ago. In a press release on the closing, Acting Chairman Maureen K. Ohlhausen explained: “Matters that ultimately do not merit enforcement action can and should be closed promptly.” Continue Reading