Monopolization/Abuse of Dominance Archives

Monopolization/Abuse of Dominance

How Orange Book Antitrust Scrutiny Is Intensifying

by Elai Katz, Lisa P. Rumin and Betty Zhang | Aug 1, 2024 | FTC Developments, Healthcare Antitrust, IP Antitrust, Monopolization/Abuse of Dominance

Pharmaceutical patent holders beware: Over the past year, antitrust enforcers have taken a more aggressive approach challenging Orange Book listings as an anticompetitive practice. According to the Federal Trade Commission, improperly listing patents in the Orange Book constitutes an unfair method of competition, among other violations.

In this article, Elai Katz, Lisa Rumin and Betty Zhang discuss the recent heightened scrutiny of Orange Book listings and highlight risks brand manufacturers should be aware of with respect to their Orange Book listing practices. Going forward, brand manufacturers should think proactively and consider carefully documenting their evaluation process and reasoning for listing patents in the Orange Book to satisfy the statutory requirements.

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New DOJ Task Force to Target ‘Multisided Giants’ in Healthcare

by Stephen Wu, Ashley Fischer, Daniel Powers and Noah Feldman Greene | May 10, 2024 | DOJ Developments, FTC Developments, Healthcare Antitrust, Mergers & Acquisitions, Monopolization/Abuse of Dominance

The US Department of Justice’s (DOJ) announcement of the formation of a new healthcare task force signals an even stronger emphasis on addressing competition issues in the healthcare industry. Large, multisided platforms involved in multiple sectors (e.g., insurance companies acquiring physician practices and/or essential healthcare IT and data services) are a key target for enforcement.

WHAT HAPPENED:

On May 9, 2024, the DOJ announced the formation of the Antitrust Division’s Task Force on Health Care Monopolies and Collusion (HCMC). The HCMC will be tasked with guiding and developing policy advocacy and conducting investigations – and ultimately civil and criminal enforcement actions –in healthcare markets.
US Assistant Attorney General Jonathan Kanter stated that the HCMC “will identify and root out monopolies and collusive practices that increase costs, decrease quality and create single points of failure in the health care industry.” The press release specifically identified the following non-exhaustive set of issues that will be priority areas for the HCMC: payer-provider consolidation, serial acquisitions, labor, quality of care, medical billing, healthcare IT services, and the access to and misuse of healthcare data.
In announcing the formation of the task force at a Washington Post Live event, Kanter highlighted the changing nature of the healthcare marketplace. In what he coined the “platformization of healthcare,” patients and consumers now interact with “multisided giants, intermediaries that have a coordinated stack of businesses that flow together, including payers, including providers, including PBMs, claims processing, banks” which have become the “gatekeepers of our healthcare system.” According to Kanter, it is crucial that the Antitrust Division adapt its enforcement policies and strategies in healthcare to reflect these new market realities.
The HCMC will be led by Katrina Rouse, an antitrust prosecutor at the DOJ since 2011 who previously served as chief of the Defense, Industrials, and Aerospace Section and a trial attorney in the Healthcare and Consumer Products Section. Rouse will oversee a team of civil and criminal prosecutors, economists, experts in healthcare and technology, data scientists, investigators and policy advisors.

WHAT THIS MEANS:

The antitrust enforcement agencies have used similar task forces in the past to focus resources and accumulate subject matter expertise. For example, the DOJ’s Procurement Collusion Strike Force has been successful at investigating and pursuing government contracting cases.
The launch of the HCMC reflects the antitrust enforcement agencies’ increasing efforts to respond to changing dynamics in the healthcare space and address the potential harmful results of these changes on patients, healthcare workers and communities. In March 2024, the DOJ, Federal Trade Commission (FTC) and US Department of Health and Human Services (HHS) jointly launched a cross-government inquiry into the increasing role of private equity firms in healthcare transactions and whether such firms prioritize maximizing profits at the expense of healthcare quality and affordability.
Of note, the DOJ, rather than the FTC, typically investigates mergers involving health plans and contracting issues among health plans and providers. Therefore, healthcare industry participants, [...]

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What California’s DOJ Said at the 2024 Antitrust Law Section Spring Meeting

by Michelle Lowery, Betty Zhang, Russell Hayman, Jon Dean, Julian Andre, Maria Rodriguez and Yesenia Gallegos | Apr 29, 2024 | DOJ Developments, FTC Developments, Mergers & Acquisitions, Monopolization/Abuse of Dominance

The American Bar Association Antitrust Law Section’s annual Spring Meeting earlier this month featured federal, state and international enforcers discussing a variety of antitrust and competition issues across jurisdictions. Paula Blizzard, the California Department of Justice’s antitrust chief, provided insights into the California attorney general office’s current and upcoming enforcement activities.

Read more here.

Heard at the 2024 Antitrust Law Section Spring Meeting: Part II

by Lisa P. Rumin, Anthony S. Ferrara, Reese Poncia, Noah Feldman Greene, Zachary Sproull, Han Cui, Graham Hyman, Glenna Siegel, Alex Grayson, Betty Zhang and Gregory E. Heltzer | Apr 12, 2024 | Agriculture, DOJ Developments, FTC Developments, Healthcare Antitrust, Mergers & Acquisitions, Monopolization/Abuse of Dominance

The American Bar Association Antitrust Law Section’s annual Spring Meeting concluded on April 12. The annual Spring Meeting featured updates from federal, state and international antitrust enforcers and extensive discussion on priority antitrust issues affecting various industries. In this article, we highlight takeaways from the final two days of the Spring Meeting.

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Heard at the 2024 Antitrust Law Section Spring Meeting: Part I

by Gregory E. Heltzer, Lisa P. Rumin, Reese Poncia, Anthony S. Ferrara, Claire Danberg, Glenna Siegel, Bailey K. Sanders, Betty Zhang and Alex Grayson | Apr 11, 2024 | DOJ Developments, FTC Developments, Healthcare Antitrust, Mergers & Acquisitions, Monopolization/Abuse of Dominance

The American Bar Association Antitrust Law Section’s annual Spring Meeting is underway in Washington, DC. The annual Spring Meeting features updates from federal, state and international antitrust enforcers and extensive discussion on priority antitrust issues affecting various industries. In this article, we highlight the key takeaways from the first portion of the Spring Meeting.

Read more here.

Google Moves to Dismiss Third Complaint Alleging Tying of Google Maps API Services

by Gregory E. Heltzer, Lisa P. Rumin and Glenna Siegel | Feb 28, 2024 | DOJ Developments, Monopolization/Abuse of Dominance, Private Litigation

BACKGROUND Google LLC and Alphabet Inc. (Google) moved to dismiss a third successive complaint that alleged it tied the sales of Maps, Routes and Places application programming interface (API) services to one another. A basic tying claim involves a seller leveraging its market power in one product (the “tying” product) to force sales and gain market share over a different product (the “tied” product). Following the dismissal of an initial complaint filed in 2022, the plaintiffs filed an amended complaint alleging Google created a “three-way” tying arrangement by conditioning the sale of one API service (e.g., Maps) on the required purchase of the two other services (e.g., Routes and Places) through its contractual terms of service. The plaintiffs alleged that the tying product could be any of the three APIs and that Google had market power in all three. Whichever plaintiffs bought first was the tying product, and the other two were tied products – allegedly locked in by forced sale or prohibition on use of competitor APIs as a condition of the first sale. The court granted Google’s motion to dismiss because the plaintiffs did not explain how a product could be both a tying product (requiring market power) and the tied product (lacking market power) depending simply on the order of the sales. In their second amended complaint, the plaintiffs abandoned the three-way tying claim, instead bringing a basic tying claim with Maps as the tying product and Routes and Places as the tied products. Google has again moved to dismiss the complaint. THE DETAILS

Maps, Routes and Places APIs are interrelated but separately licensed services that appear alongside each other in mapping applications like Google Maps.
In response to the first amended complaint, Google argued that the plaintiffs did not explain how a product could be both a tying and a tied product depending on the order of sale, given the inherent conflicts in market power required of each.
Google also argued that it had broad rights to dictate the terms of use and display of its mapping services, including a right to protect and control user experience through restricting use of its mapping API services in conjunction with or in proximity to non-Google mapping API services, relying in part on a case called Sambreel. 906 F. Supp. 2d at 1073 (S.D. Cal. 2012).
The US Department of Justice Antitrust Division (DOJ) intervened, filing a Statement of Interest urging the court to reject Google’s interpretation of Sambreel as establishing an “unqualified right” over the use and display of its services. The DOJ did not take a position on whether the claim should survive otherwise.
The court agreed with the DOJ, holding that Google’s interpretation of “control” is too broad and could justify any tying arrangement as an exercise of a supplier’s right to determine or dictate the terms on which its product or service was used.
The court also found that the plaintiffs failed to explain how a product could be either a tying [...]

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Court Finds Red Cross Has Antitrust Immunity, Rejecting Broad Interpretation of the Sherman Act

by Bailey K. Sanders and Lisa P. Rumin | Feb 5, 2024 | Monopolization/Abuse of Dominance

WHAT HAPPENED

Recently, in a rarely considered question, the US District Court of Massachusetts held that the American Red Cross (ARC), a federally chartered corporation, is not subject to liability under the Sherman Antitrust Act (Sherman Act) because it is not an antitrust “person.” The court narrowly construed the Sherman Act to exclude a quasi-public entity like ARC, resulting in a broad interpretation of immunity for quasi-public entities under the antitrust laws.

ARC is the largest supplier of blood platelets in the United States and, until recently, sold “untreated” platelets to hospitals which then employed various services to mitigate the risk of platelets becoming infected. Verax Biomedical Inc. (Verax) manufactures one such mitigation service. After ARC announced its plan to begin using Cerus Corporation’s INTERCEPT Blood System on its platelet supply prior to sale – a system that is incompatible with Verax’s service – Verax sued ARC for allegedly leveraging its power in the market for platelets to monopolize the market for mitigation services.

The court found that, although Congress had clearly waived ARC’s sovereign immunity, it did not constitute a “person” under the Sherman Act in form or function because its public attributes outweighed its private ones.

BACKGROUND

ARC is a federally chartered nonprofit corporation responsible for “provid[ing] volunteer aid in time of war to the sick and wounded of the Armed Forces.” 36 U.S.C. § 300102(1). It is also the largest supplier of blood platelets in the United States.
Verax produces and sells US Food and Drug Administration (FDA)-cleared tests for detecting bacterial growth in platelets.
In the past, ARC sold both “untreated” and “treated” platelets to hospitals. Untreated platelets require further treatment to ensure bacterial growth is controlled. Hospitals could choose which mitigation services to use, including Verax’s.
In 2020, ARC announced its intention to stop selling untreated platelets and to begin treating all platelets with Cerus Corporation’s INTERCEPT Blood System prior to sale. Verax’s service cannot be used on platelets that have been treated with the INTERCEPT system, as the FDA has not endorsed the pairing of the two technologies.
Verax filed suit against ARC, bringing three counts under the Sherman Act: tying, exclusive dealing and attempted monopolization.
ARC moved to dismiss the lawsuit, arguing, in part, that ARC cannot be sued under the Sherman Act. Shortly after, the federal government filed a statement of interest arguing that ARC can be sued under the Sherman Act.
The court concluded that, although it was a close question, ARC was not a “person” under the Sherman Act in either form or function and therefore dismissed the antitrust claims.

HOW THE DECISION WAS REACHED

To determine whether the Sherman Act extends to ARC, the court applied the two-step analysis laid down by the US Supreme Court in FDIC v. Meyer and asked (1) whether there was a waiver of sovereign immunity for actions against ARC and (2) whether the substantive prohibitions of the Sherman Act apply to ARC.
The [...]

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Cartel Corner | July 2023

by Justin P. Murphy, Paul M. Thompson, Stéphane Dionnet, Han Cui, Reese Poncia, Alexandra Lewis, Graham Hyman, Nabil Lakhal, Glenna Siegel and Bailey K. Sanders | Jul 13, 2023 | Cartel Enforcement, DOJ Developments, EC Developments, EU Developments, FTC Developments, Monopolization/Abuse of Dominance

In the first half of 2023, antitrust enforcers remained remarkably busy both in the United States (US) and across the European Union (EU). The US Department of Justice’s (DOJ’s) Antitrust Division (Division) and the Federal Trade Commission (FTC) have continued their aggressive and novel effort to drag antitrust enforcement into the labor markets. The DOJ Procurement Collusion Strike Force (PCSF) has pursued its crackdown on antitrust and fraud involving government procurement with a number of recent cases. And DOJ has pushed the boundaries under Section 2 of the Sherman Act—both by revitalizing the criminal provisions of the law and by pursuing “attempts” to monopolize criminally. The European Union has also kept the pressure on those doing business overseas, imposing significant fines in recent matters and upgrading its online leniency program to make it easier for companies to report wrongdoing.

In this installment of Cartel Corner, we examine this continued aggressiveness toward antitrust enforcement. While these government enforcement efforts have not always been successful, they have nonetheless reframed the landscape for many companies and individuals. What was once thought of as a civil antitrust violation at worst—or no violation at all—is now often pursued criminally. And antitrust enforcers are speaking in more strident tones as they attempt to remake, in certain ways, the way companies do business in the United States and abroad.

Whether antitrust enforcers are ultimately successful remains to be seen. Nonetheless, the trend is real, and it is one that all companies should be prepared to address in the weeks and months to come.

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Vertical Agreements & Restriction of Competition by Object: What’s New in Europe?

by Jacques Buhart, Stéphane Dionnet and Frédéric Pradelles | Jul 12, 2023 | Brussels Developments, EU Developments, Monopolization/Abuse of Dominance

On June 29, 2023, the Court of Justice of the European Union (CJEU) delivered a preliminary ruling in the Super Bock Bebidas vs. Autoridade da Concorrência case (C-211/22) on the questions referred by the Tribunal da Relaçao de Lisboa (Lisbon Court of Appeal). To some extent, the recent judgement is not particularly noteworthy or innovative, as it mainly applies well-established EU competition law principles prevalent through existing case law. However, the Super Bock case marks a significant step forward by introducing these principles for the first time in the context of vertical price-fixing agreements.

Read more here.

Heard at the 2023 Spring Meeting: Part 2

by Gregory E. Heltzer, Lisa P. Rumin, Reese Poncia, Joshua W. Eastby, Graham Hyman, Claire Danberg, Bailey K. Sanders, William Paige and Glenna Siegel | Apr 5, 2023 | Consumer Protection/Privacy, DOJ Developments, FTC Developments, Healthcare Antitrust, Mergers & Acquisitions, Monopolization/Abuse of Dominance

The American Bar Association’s Antitrust Law Section held its annual Spring Meeting in Washington, DC, on March 29–31, 2023. The Spring Meeting sessions featured updates from federal, state, and international antitrust enforcers and thought-invoking discussions on leading antitrust issues facing the business community today. Following Part 1, this post summarizes key takeaways from the second portion of the Spring Meeting, including updates regarding premerger notification filings, labor markets, state antitrust enforcement, compliance programs, national security, consumer protection, interlocking directorates, and remedies.

FTC Zeros in on Missing Material in HSR Filings

Federal Trade Commission (FTC) Bureau of Competition Director Holly Vedova underscored the consequences of failing to submit Item 4 material in HSR filings. She noted the FTC will bounce filings found to have missing Item 4 documents. If the waiting period has not expired and newly surfaced documents change the scope of the request, the FTC may issue a Second Request. If the waiting period has expired when consequential missing material is realized, the FTC will require a corrective filing for the original transaction and may impose “significant” civil penalties.
Vedova also reminded practitioners that changes in a merger agreement can require an additional HSR filing. If material changes are made before the waiting period expires, parties should proactively reach out to the FTC to inquire as to whether further action is needed. Parties may need to amend their original filing or submit a new one entirely.

Labor Markets Remain High Priority

The antitrust enforcement agencies have promised continued, fervent action in labor markets. In keeping with this promise, this January, the FTC issued a proposed rule that would make it illegal to enter into or maintain noncompete agreements with employees or independent contractors.
- FTC Chair Lina Khan emphasized that noncompetes impede business dynamism, innovation, and entry, and eliminating noncompetes is estimated to return $300 billion back into the pockets of American workers.
- FTC Commissioner Rebecca Kelly Slaughter pointed to California as an innovator in labor market enforcement, citing its prohibition on noncompetes. FTC enforcers encouraged the continued submission of public comments on the proposed rule. The comment period is set to close on April 19, 2023.
- Wisconsin Assistant Attorney General Gwendolyn Cooley also noted that enforcing noncompetes has been a hallmark of state enforcement, especially in New York and Washington, and additional states are considering legislation that would ban noncompetes.
The Department of Justice (DOJ) Antitrust Division’s Acting Director of Criminal Enforcement Emma Burnham and the Chief of DOJ’s Criminal II Section James Fredericks noted practitioners should expect an uptick in criminal cases in the labor and employment space. DOJ Antitrust Division’s Deputy Assistant Attorney General Jonathan Kanter stressed that antitrust crimes focused on workers are just as important as those focused on consumers.
New York’s antitrust chief, Elinor Hoffman, indicated that New York is focused on labor issues, including no-poach agreements and noncompete clauses that may arise during merger reviews. [...]

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