US Competition law

On November 3, 2023, FTC Chair Lina Khan sent a letter addressed to Representative Thomas P. Tiffany describing the FTC’s merger enforcement program during her tenure at the agency. The letter was a response to an inquiry from seven members of congress for information about the costs associated with certain litigated merger challenges brought by the FTC. Chair Khan’s letter included an appendix that listed all of the merger enforcement actions the FTC had initiated during her tenure. The data in that appendix corroborate the key finding from an article I authored for Law360 in October 2023: merger enforcement actions during the Biden Administration are at their lowest level in decades.

The Chair’s letter is also noteworthy because it seems to acknowledge the practical and substantive benefits of consent decrees, which may suggest a softening of the FTC’s views on settlements.Continue Reading Recently Published FTC Data Confirm Historically Low Number of Merger Enforcement Actions

On October 17, 2023, the U.S. Government Accountability Office (“GAO”) published a report on mergers and acquisitions (“M&A”) in the defense industrial base. The report details the current M&A review process of the Department of Defense (“DOD”) and provides recommendations to proactively assess M&A competition risks.

Currently, DOD’s Industrial Base Policy (“IBP”) office, with input

On July 19, 2023, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice (collectively, “the Agencies”) issued a new set of merger guidelines in draft form for public comment (the “Draft Guidelines”).  The Draft Guidelines, if adopted, will replace the Horizontal Merger Guidelines issued in 2010 and the Vertical Merger Guidelines issued in 2020 (the latter of which the FTC withdrew in September 2021).  The updates make significant changes to the guidelines, such as:

  • Lowering the thresholds for when the Agencies are likely to presume that horizontal mergers are illegal;
  • Including—for the first time—a presumption of illegality for certain vertical mergers;
  • Adding guidelines focused on serial acquisitions and acquisitions of potential competitors;
  • Introducing concepts related specifically to multi-sided “platforms”; and
  • Explicitly addressing the effects of transactions on labor markets for the first time.

Continue Reading U.S. Antitrust Agencies Propose Major Changes to Merger Guidelines

On June 27, 2023, the U.S. Federal Trade Commission (“FTC”), with the concurrence of the Antitrust Division of the Department of Justice (“DOJ”) (together, “the Agencies”), issued a Notice of Proposed Rulemaking (the “Notice”) that proposes extensive changes to the Hart-Scott-Rodino (“HSR”) Act premerger notification form and associated instructions, as well as to the rules implementing the Act. The proposed changes represent the most significant revisions to the requirements that HSR filing persons must satisfy in the nearly 50 years since the inception of the HSR notification process. Continue Reading FTC and DOJ Propose Sweeping Changes to the HSR Form

On January 5, 2023, the Federal Trade Commission (“FTC”) issued a groundbreaking proposed rule that would, if finalized:

  • prohibit most employers from entering into non-compete clauses with workers, including employees and individual independent contractors;
  • prohibit such employers from maintaining non-compete clauses with workers or representing to a worker that the worker is subject to a non-compete clause; and
  • require employers to rescind any existing non-compete clause with workers by the compliance date of the rule and notify the affected workers that their non-compete clause is no longer in effect.

The FTC’s notice of proposed rulemaking explains that the FTC considered possible limitations on the rule—such as excluding senior executives or highly paid employees from the ban—but it ultimately proposed a categorical ban on non-competes.  The only exception is for non-competes related to the sale of a business.  However, even this exception is unusually narrow: it would only apply to selling business owners who own at least 25% percent of the business being sold.  (The proposal also would not apply to most non-profits, certain financial institutions, common carriers, and others who are also outside the scope of FTC regulation.)

As discussed in Covington’s January 5 client alert, the FTC explained that it issued the proposed rule due to its belief that non-competes reduce wages, stifle innovation and business, and are exploitative and unnecessary. Continue Reading FTC Proposes Rule to Ban Most Non-Competes

On September 29, 2022, the U.S. House of Representatives passed a package of three antitrust bills (H.R. 3843) by a vote of 242-184. The package includes: (1) the Merger Filing Fee Modernization Act; (2) the Foreign Merger Subsidy Disclosure Act; and (3) the State Antitrust Enforcement Venue Act.Continue Reading U.S. House of Representatives Passes Antitrust Legislative Package

In his State of the Union address last week, President Biden declared that he wants to: “strengthen privacy protections, ban targeted advertising to children, and demand tech companies stop collecting personal data on our children.”  This statement comes just a couple of weeks after Senators Richard Blumenthal (D-CT) and Marsha Blackburn (R-TN) introduced the Kids Online Safety Act.  That legislation, together with the Senate Judiciary Committee’s consideration of the EARN IT Act, a bill aimed at protecting children from online sexual exploitation, gives Congress several options to focus on the internet and child safety—now with the President’s blessing.

The timing of the President’s declaration is important because the number of days available for Congress to take legislative action is shortening as the midterm elections approach.  Though Congress has already held several hearings about online platforms, particularly in the Judiciary Subcommittees with jurisdiction over antitrust, now remains an important time for stakeholders to engage in the discussion.  After the President’s address, the U.S. Senate is almost certainly laying the groundwork for what it would call a larger “tech accountability” package.Continue Reading Is the U.S. Congress Preparing a “Tech Accountability” Package?

While much of the Senate Judiciary Committee’s meeting next Thursday, February 3, will focus on the pending Supreme Court nomination, the Committee is still scheduled to mark up and vote on the Open App Markets Act (S. 2710)—which purports to address unfair competition in the app market.  This vote follows a particularly contentious markup of the American Innovation and Choice Online Act (S. 2992)—a more sweeping piece of legislation that addresses platforms self-preferencing their own goods or services.  Though that bill was voted out of Committee on a 16-6 vote (with all Democrats voting yes), concerns were raised by both parties about its scope.  Because the Open App Markets Act is a much more targeted piece of legislation, the degree to which members raise similar concerns on Thursday will be a good bellwether of the level of openness or resistance to passing any form of antitrust legislation this Congress.
Continue Reading U.S. Senate Judiciary Committee To Consider Legislation On Unfair Competition in App Market

Yesterday, the Federal Trade Commission (“FTC”) published revised thresholds for the Hart-Scott-Rodino (“HSR”) Act, which will take effect on February 23, 2022. Earlier, the FTC also announced new thresholds for Section 8 of the Clayton Act, which governs interlocking directorates. Each of these thresholds is higher for 2022, than for 2021. The HSR Act and Section 8 thresholds are adjusted annually based on the change in gross national product. The maximum daily civil penalty for violations of the HSR Act, which is tied to inflation, has also increased.
Continue Reading FTC Announces New Higher HSR Filing and Interlocking Directorate Thresholds, Higher Civil Penalties

The Federal Trade Commission (“FTC”) announced on February 4, 2021, that it is temporarily suspending the discretionary practice of granting “early termination” of the Hart-Scott-Rodino (“HSR”) Act waiting period, with support from the Antitrust Division of the U.S. Department of Justice (“DOJ”). The Agencies cited “the unprecedented volume of HSR filings” and “challenging transition period” as the reasons for suspending grants of early termination.
Continue Reading Early Termination of HSR Waiting Periods Temporarily Suspended