DOJ Developments Archives - Page 11 of 42

DOJ Developments

DOJ Set to Increase Scrutiny of Government Contractors with New Procurement Collusion Strike Force

by James W. Kim and Stephen Wu | Nov 6, 2019 | Cartel Enforcement, DOJ Developments

Government contractors should be aware that the Department of Justice (DOJ) is taking new steps to scrutinize public procurement. The DOJ Antitrust Division’s creation of the Procurement Collusion Strike Force (PCSF) means that government procurement enforcement will be a significant focus for the agency moving forward. Although the new strike force builds on past government-wide efforts to detect illegal conduct in public procurement, recent activity from the Antitrust Division has raised the stakes. In light of this, government contractors should broaden their compliance programs to include antitrust so they can avoid heightened monetary penalties and possible prison terms for implicated employees.

I. What Happened

The DOJ’s Antitrust Division took another step to increase its attention on government procurement by focusing resources on a new task force designed to detect anticompetitive behavior amongst government contractors. On October 24, 2019, the Antitrust Division posted a notice in the Federal Register inviting public comment on its implementation of a “Procurement Collusion Strike Force” complaint form. The complaint form will facilitate “reporting by the public of complaints, concerns, and tips regarding potential antitrust crimes affecting government procurement, grants, and program funding.” While the DOJ’s unveiling of the PCSF is significant in itself, the event is just one of several pieces of activity from the Antitrust Division indicating that government contractors must begin to consider antitrust risk much more seriously.

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6 Trends in Global Antitrust M&A, and How General Counsel Can Deal with Them

by Jon B. Dubrow and Joel R. Grosberg | Oct 16, 2019 | Chinese Developments, DOJ Developments, EC Developments, FTC Developments, German Developments, Mergers & Acquisitions

Today, companies looking to merge with others across jurisdictions would do well to consider antitrust issues at the beginning of the transaction process; regulatory antitrust challenges to M&A are increasing globally. On Corporate Counsel, McDermott partners Jon B. Dubrow and Joel R. Grosberg discuss six risks to deals from antitrust regulators, such as vertical merger enforcement changes at the US DOJ, and ways to manage them.

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DOJ and Merging Parties Agree on Unprecedented Arbitration Procedure to Resolve Merger Challenge

by Anthony S. Ferrara, Gregory E. Heltzer and Noah Feldman Greene | Oct 11, 2019 | DOJ Developments, Mergers & Acquisitions

WHAT HAPPENED:

On September 4, 2019, the US Department of Justice’s Antitrust Division (DOJ) sued to block Novelis Inc.’s proposed $2.6 billion acquisition of Aleris Corporation.
DOJ alleged that the transaction would combine two of only four North American producers of aluminum auto body sheet (ABS). DOJ further alleged that Aleris was a new and disruptive rival supplier of aluminum ABS whose expansion into the North American market immediately impacted pricing.
Prior to DOJ’s suit to block the transaction, the merging parties and DOJ agreed that the dispute boiled down to a single dispositive issue: whether aluminum ABS constitutes a relevant product market, and specifically, whether the market for aluminum ABS also includes steel ABS.
DOJ and the merging parties agreed to refer this product market issue to arbitration pursuant to the Administrative Dispute Resolution Act of 1996 (5 U.S.C. § 571 et seq.) and the Antitrust Division’s implementing regulations (61 Fed. Reg. 36,896 (July 15, 1996).
In a filing in federal court the DOJ explained that it decided to arbitrate rather than litigate the merger in federal court because all sides agreed that the case turned on the single question of product market definition and referring the matter to arbitration would lessen the burden on the Court and reduce litigation costs to the merging parties and to the United States.

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Antitrust M&A Snapshot | US Agencies Aggressive While the EC Publishes Report on Competition Policy for the Digital Era

by Joshua W. Eastby | Aug 28, 2019 | DOJ Developments, EC Developments, EU Developments, FTC Developments, Mergers & Acquisitions

The second quarter of 2019 proved to be a busy season for antitrust matters. In the United States, agencies continued to be aggressive and blocked transactions or required significant remedies. They cleared three mergers where divestitures were required; and in the face of FTC or DOJ opposition, companies abandoned several transactions, including between Republic National Distribution Company and Breakthru Beverage Group. Regarding vertical transactions, we continued to see a split between the FTC Republican and Democratic Commissioners regarding whether enforcement is required and the appropriate remedies.

In the European Union, the EC published a report on competition policy for the digital era, which deals with, among other things, acquisitions of nascent competitors. The EC also closed two merger control proceedings subject to divestitures, blocked a proposed joint venture, and showed that it will seek large fines for companies violating EU competition rules for merger notifications.

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The Latest: New DOJ Antitrust Division Policy Makes Compliance Programs More Critical than Ever

by Nicole Castle and Paul M. Thompson | Jul 16, 2019 | Cartel Enforcement, DOJ Developments

What Happened:

Last week, the Antitrust Division reported that it has changed its Justice Manual to state that it will consider antitrust compliance at the charging stage in criminal antitrust investigations, instead of waiting for plea negotiation or the sentencing stage.
Previously, the Antitrust Division had granted leniency only to the first whistleblower to come completely clean. Under the Antitrust Division’s policy reversal, this is no longer the only way to gain credit with the Antitrust Division, and the Antitrust Division will now consider if the Company has “robust” compliance programs when determining whether to bring charges.
With the announcement this past Thursday, the Antitrust Division published a guidance document that focuses on evaluating compliance programs in criminal antitrust investigations. This is the first time the Antitrust Division has published guidance on evaluating compliance programs in the context of criminal antitrust violations, and companies can now use this document to determine whether their compliance programs are in line with the Antitrust Division’s standards.
The Antitrust Division lists certain factors that Antitrust Division prosecutors should consider when evaluating the effectiveness of an antitrust compliance program. These are:
1. The design and comprehensiveness of the program
2. The culture of compliance within the company
3. Responsibility for, and resources dedicated to, antitrust compliance
4. Antitrust risk assessment techniques
5. Compliance training and communication to employees
6. Monitoring and auditing techniques, including continued review, evaluation and revision of the antitrust compliance program
7. Reporting mechanisms
8. Compliance incentives and discipline
9. Remediation methods
In general, when analyzing a program, the Antitrust Division will ask whether the compliance program is well designed, whether it is being applied earnestly and in good faith, and whether it works.
Finally, the Antitrust Division also revised sections of its Manual on the processes for recommending indictments, plea agreements and selecting compliance monitors.

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The Latest: Changes Coming to Revenue Reporting for HSR Filings

by Jonathan Ende | Jun 28, 2019 | DOJ Developments, FTC Developments, Mergers & Acquisitions

What Happened:

The Federal Trade Commission (FTC), along with the Antitrust Division of the Department of Justice (DOJ), approved amendments to the Hart-Scott-Rodino (HSR) Rules and the instructions for completing the HSR Form.
After the amendments take effect on September 25, 2019, HSR filers will be required to use new 10-digit North American Product Classification System (NAPCS) codes in place of the current 10-digit North American Industry Classification System (NAICS) codes when reporting revenues in the HSR Form. The Form will continue to use 6-digit NAICS codes, but will switch from the 2012 codes to the latest version, released in 2017 by the Census Bureau.
Data on non-manufacturing revenue will be required to be reported using the updated 6-digit NAICS codes, while data on manufacturing revenue will be required to be reported using both the 6-digit NAICS industry code and the 10-digit NAPCS product codes.
The FTC intends to update the instructions for the HSR Form to reflect the changes made to the revenue reporting requirements.

What this Means:

Companies expecting to file an HSR after September 25 will need to familiarize themselves with the new 10-digit NAPCS codes and the updated 6-digit 2017 NAICS codes, and may want to update their databases to be in a position to file promptly when the new codes take effect on September 25.

Cartel Snapshot: Mid-Year Update

by McDermott Will & Emery and Louise Aberg | Jun 13, 2019 | Cartel Enforcement, DOJ Developments, EC Developments, EU Developments

2019 MID-YEAR UPDATE

The Department of Justice (DOJ) Antitrust Division announced three new investigations and several developments in its other investigations, including new investigations in the commercial flooring industry, online auctions for surplus government equipment and insulation installation contracts. The Antitrust Division also released its Spring 2019 Division Update, which notes that the Division “is preparing for trial in six matters and had 91 pending grand jury investigations at the close of FY 2018.”

In April 2019, the Division held a public roundtable discussion on the Antitrust Criminal Penalty Enhancement & Reform Act (ACPERA), which is due to sunset next year. ACPERA reduces the criminal liability and civil damages exposure of companies and individuals who are granted leniency under the Division’s Leniency Program for cooperating in investigations into cartel and other anticompetitive conduct. The roundtable consisted of a series of panel discussions allowing judges, attorneys, economists, academics, the business community and other interested stakeholders to weigh in on how the law can be improved. The Division was particularly interested in the public’s views on whether ACPERA has properly incentivized the self-reporting of criminal conduct and whether there are issues that have impeded the law’s intended effect.

The European Commission (Commission) announced developments in ongoing investigations in the auto parts industry, and in its government bonds and car emissions cases. The Commission also launched a new online tool to make it easier for companies to submit statements and documents as part of leniency and settlement proceedings in cartel cases.

US DEVELOPMENTS

The first new investigation disclosed by the DOJ is in the commercial flooring industry. The DOJ charged a former vice president of a commercial flooring contractor in Chicago of exchanging price information with its rivals to fix prices of contracts for removal and installation of commercial flooring. Assistant Attorney General Delrahim of the Antitrust Division said that the indictment “is the first of what we expect to be many in this ongoing investigation into bid rigging” in the commercial flooring industry.
The DOJ disclosed a second new investigation into bid rigging of Government Services Administration (GSA) contracts. The owner of a Texas company pleaded guilty to rigging bids for surplus government equipment—computers for resale and for recycling—in online GSA auctions.
The DOJ announced a third new investigation into bid rigging by insulation installation contractors. A manager for a Connecticut-based insulation contractor pleaded guilty for his role in rigging $45 million worth of bids for insulation installation contracts in New England from 2011 to 2018.
The DOJ’s investigation into fuel-supply contracts for the armed services remains active. Two more Korean companies pleaded guilty for their involvement in a bid-rigging conspiracy that targeted contracts to supply fuel to US Armed Forces in South Korea.
The DOJ’s investigation into price fixing in the promotional products space appears quite active.
In May 2019, state attorneys general for 43 states and Puerto Rico brought federal and state antitrust, consumer protection and common law claims against 18 generic [...]

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Recent Indictments Demonstrate Increased Focus on Bid-Rigging in Government Procurements

by Joshua W. Eastby, James W. Kim, Michelle Lowery and Stephen Wu | Jun 6, 2019 | Cartel Enforcement, DOJ Developments

Companies involved in the government contracting industry should take note that the government is honing in on anticompetitive conduct affecting government procurements. The federal government has demonstrated an increased interest in this area, and companies should refresh and audit their compliance programs to avoid hefty civil and criminal penalties and potential prison terms for implicated employees.

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Antitrust Litigation Update for Health Care Providers

by Joshua W. Eastby, Katharine M. O'Connor and Stephen Wu | Jun 4, 2019 | DOJ Developments, FTC Developments, Healthcare Antitrust, Joint Ventures/Competitor Collaboration, Mergers & Acquisitions, Monopolization/Abuse of Dominance, Private Litigation

2018 saw a significant upswing in antitrust litigation against health care providers; 27 cases were filed in 2018 versus 17 in 2017. In the latest Antitrust Update for Health Care Providers, we discuss what caused the notable rise, what kinds of cases were brought over the past two years and how they were decided, and what cases warrant particular attention in 2019.

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Antitrust M&A Snapshot | US Tackles Vertical Merger Enforcement Guidelines while the EC Blocks 2 Transactions

by McDermott Will & Emery, Anthony S. Ferrara, Jon B. Dubrow and Joel R. Grosberg | May 15, 2019 | DOJ Developments, EC Developments, EU Developments, FTC Developments, Mergers & Acquisitions

The first quarter of 2019 proved to be as active as ever for antitrust regulators in both the United States and Europe. In the United States, vertical merger enforcement was the focus of a few high-profile matters. The US DOJ has been working on an update to the Non-Horizontal Merger Guidelines, possibly providing clarification for merging parties.

Meanwhile in Europe, although the European Commission cleared a number of merger control proceedings with remedies, the European Commission also blocked two transactions during the first quarter of 2019.

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Hélène de Cazotte, a trainee in the Firm’s Brussels office, also contributed to this publication.