Posted in DOJ
Despite back-to-back losses in the Department of Justice’s (DOJ) first-ever criminal no-poach and wage-fixing cases, the Antitrust Division (the Division) is not backing down from its enforcement focus on labor. In fact, the Division and Assistant Attorney General Jonathan Kanter continue to proudly tout their continued aggressive stance, with Kanter recently stating that the Division is going to “continue to bring cases” and “will not back down.”
Posted in Antitrust Litigation
On Sept. 13, Assistant Attorney General Jonathan Kanter delivered remarks[1] at the Georgetown Antitrust Law Symposium, largely focusing on merger control enforcement at the Department of Justice (DOJ) under his leadership. After touting the Antitrust Division’s increased appetite for merger control litigation in the 10 months since his appointment, delivering on a promise that negotiated divestitures should be “the exception, not the rule,”[2] Kanter offered a preview of DOJ’s thoughts as it collaborates with the Federal Trade Commission (FTC) on updating their joint Horizontal Merger Guidelines and Vertical Merger Guidelines. President Biden instructed the agencies to review the merger guidelines in his 2021 Executive Order on Promoting Competition in the American Economy.[3]
Two themes emerged from Kanter’s remarks, which indicate likely objectives for the new merger guidelines: that speculative theories of harm are sufficient to block a deal under the Clayton Act and that, at times, direct evidence of competition dynamics can supplant a structural analysis of concentration in a fastidiously defined market.
Posted in Class Action Litigation
Seventeen of U.S. News & World Report’s top 25 universities in the nation recently lost their bid to dismiss allegations of an antitrust conspiracy to suppress student financial aid awards. The ruling by the U.S. District Court for the Northern District of Illinois is notable because it held that the “568 Exemption,” on which many universities’ financial aid systems are based, does not provide antitrust immunity unless all participating universities admit their students on a need-blind basis. It also highlights the risk in relying on narrow exemptions to the antitrust laws in reaching horizontal agreements with competitors.
Posted in Antitrust Exemptions & Immunities, Sports
On August 9, 2022, a federal judge hearing the antitrust lawsuit filed by 11 professional golf players against the PGA Tour ruled against three of the players who had sought a temporary restraining order. The order, if granted, would have allowed those three players who had qualified for the PGA Tour’s playoffs to play in this weekend’s FedEx Cup. Judge Beth Labson Freeman determined that the players knew the potential consequences of joining the rival LIV Golf circuit and thus emergency injunctive relief was not warranted. Further, because the players had already been compensated by LIV Golf, the Court found that they had failed to establish irreparable harm in being unable to play in the PGA Tour’s post-season.
Posted in Antitrust Exemptions & Immunities, Sports
On August 3, 2022, 11 professional golfers, led by Phil Mickelson, filed an antitrust complaint in the Northern District of California against the PGA Tour for the actions it took against the golfers – including suspension from PGA Tour events – for their participation in events for the new Saudi-backed LIV Golf Invitational Series (LIV Golf). It is no secret that the new LIV Golf league seeks to compete with the PGA Tour, having publicly offered nine-figure payments to players joining its tournaments.
Posted in Antitrust Litigation
For more than a century, minor league baseball and Major League Baseball (MLB) have thrived in a symbiotic relationship. Minor league teams affiliate with major league teams for financial support and access to major league staff. In exchange, major league teams receive a share of minor league revenue and access to budding talent. The year 2020 marked the expiration of an agreement governing these affairs. According to a case filed in the Southern District of New York, Nostalgic Partners v. Office of the Commissioner of Baseball, a new agreement capping the number of minor league affiliates at 120 is alleged to constitute a group boycott in violation of the Sherman Act § 1.
Posted in Antitrust Litigation
In June 2021, the Supreme Court reaffirmed in NCAA v. Alston that antitrust claims under Section 1 of the Sherman Act “presumptively” call for rule-of-reason analysis and that only the rare case merits “quick look” or per se treatment. __ U.S. __, 141 S.Ct. 2141, 2151 (2021). Recently, in Deslandes v. McDonald’s USA, LLC, Judge Jorge Alonso of the U.S. District Court for the Northern District of Illinois applied that guidance in dismissing claims that no-poach agreements between McDonald’s franchises and corporate-owned locations violated Section 1, holding that, under the rule-of-reason analysis, the plaintiffs’ failure to allege a relevant market doomed those claims. No. 17 C 4857, 2022 WL 2316187, at *2 (N.D. Ill. June 28, 2022). Judge Alonso also determined that the plaintiffs were not entitled to rely on a “quick look” approach to escape the required analysis of markets and competitive effects under the rule of reason. Judge Alonso’s reliance on Alston to reject the quick-look approach illustrates the difficulty of prosecuting no-poach cases in the context of a franchise or other legitimate business arrangement. Even in a time of increased Federal Trade Commission (FTC) scrutiny of no-poach agreements, plaintiffs must still plead and prove a relevant geographic market when seeking to invalidate no-poach agreements under Section 1 of the Sherman Act and thus face significant burdens in bringing such claims.
Posted in Antitrust Litigation
The U.S. Supreme Court’s June 30 decision in West Virginia v. Environmental Protection Agency[1] will reverberate throughout the administrative state, inviting challenges to agency actions on major policy issues – including those in the competition arena – that Congress has not directly addressed in legislation.
Posted in Food Industry, FTC
On May 23, 2022, the Federal Trade Commission (FTC), at the prompting of President Joe Biden, announced that it will launch a civil investigation into the ongoing shortage of baby formula throughout the country. The FTC is hoping to unearth the factors that have contributed to market consolidation in light of the pressing supply chain issues affecting the baby formula industry. Frequently, investigations such as these impact players up and down the supply chain, including ingredient manufacturers and suppliers, distributors, and retailers.
This week, during a panel discussion at the American Bar Association’s annual National Institute on White Collar Crime, Antitrust Division Deputy Assistant Attorney General Richard Powers sent shockwaves through the defense bar with a surprising revelation. Speaking about the Antitrust Division’s plans for vigorous enforcement, he revealed that the Division intends to use its power to criminally prosecute violations of Section 2 of the Sherman Act, i.e., monopolization cases –something the department has not done in four and a half decades, when antitrust crimes were prosecuted as misdemeanors.
