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ANTITRUST ALERT
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A Global Resource for Compliance Officers & Legal Advisors
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The Latest: Changes Coming to Revenue Reporting for HSR Filings

by | Jun 28, 2019 | , ,

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.


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Antitrust Enforcement Update: Spotlight on Physician Transactions

by , , , and | Jun 21, 2019 | ,

At both the state and federal level, antitrust enforcement agencies continue to pursue successful challenges to physician practice transactions. This article summarizes two recent enforcement actions, as well as a new state law that requires prior notice of healthcare provider transactions. We also offer practical takeaways for providers pursuing practice acquisitions.

Access the full article.



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Texas Court Declares Licensing Offer Based on End Device Is FRAND, Diverges from California Court in Qualcomm

by , and | Jun 3, 2019 | ,

Standard-essential patent holders and implementers may face uncertainty regarding licensing practices following a May 23 Texas court ruling. In the ruling, a Texas federal judge reached a conclusion different from a recent California court decision—FTC v. Qualcomm—on the question of whether an SEP holder must base its royalty rates on the “smallest salable patent-practicing unit” in order to comply with a fair, reasonable and non-discriminatory royalty commitment.

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Federal Judge Finds Qualcomm Violated the FTC Act Through Monopolistic and Exclusionary Conduct

by , and | May 23, 2019 | , ,

On May 21, a California federal judge ruled in favor of the Federal Trade Commission (FTC) in its suit against Qualcomm in a much-anticipated decision, concluding that Qualcomm violated the FTC Act by maintaining its monopoly position as a modem chip supplier through a number of exclusionary practices, including refusing to license standard essential patents (SEPs) on fair, reasonable and non-discriminatory (FRAND) terms. Qualcomm likely will appeal the decision to the US Court of Appeals for the Ninth Circuit, but in the meantime, the court’s sweeping decision is likely to affect the course of dealing between SEP-holders and licensees. The decision is likely to substantially affect the ways in which SEP-holders take their technology and associated components that they manufacture to market.

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

by , , and | May 15, 2019 | , , , ,

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.

Access the full issue.

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



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FTC Hearing on Broadband

by | Apr 25, 2019 | ,

The tenth of the FTC’s Hearings on Competition and Consumer Protection in the 21st Century focused on competition and consumer protection issues in US broadband markets. The panelists addressed developments in US broadband markets, technology, and law since the FTC staff’s 2007 Broadband Connectivity Competition Policy report and the FTC staff’s 1996 Competition Policy in the New High-Tech, Global Marketplace report.

Four panels of industry experts broadly discussed: (i) how the FTC should identify and evaluate advertising claims by internet service providers (ISPs) with respect to delivery speed; (ii) how broadband networks and markets have evolved since the 2007 Broadband Report; and (iii) how the FTC should identify and evaluate anticompetitive conduct in the broadband industry.

Read the full article.

Originally published by Competition Policy International, April 2019.



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Antitrust M&A Snapshot | Regulator Focus on High-Tech Transactions, Acquisitions and Impact on Innovations

by , , , and | Mar 11, 2019 | , , , , ,

Antitrust regulators in the United States and Europe were very active in the final quarter of 2018 closing a large number of cases requiring in-depth investigations. In the United States, regulators continue their focus on the potential need to update their methods of reviewing high-tech transactions with public hearings on the future of antitrust enforcement.

In Europe, recent reviews of Takeda’s acquisition of Shire and the creation of a joint venture between Daimler and BMW show a focus on how transactions will impact innovation for new products.

Read the full issue.



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Out of Bounds: Sports Agencies Flagged for Anticompetitive Bidding Agreements

by and | Feb 27, 2019 | , , ,

The US Department of Justice (DOJ) recently sued former joint venture partners because they allegedly coordinated their competitive activities beyond the legitimate scope of their venture. This case illustrates several important points. First, companies who collaborate through joint ventures and similar arrangements need to be mindful that any legitimate collaborative activity does not “spill over” to restrain competition in other unrelated areas. Second, DOJ discovered the conduct during its review of documents produced in connection with a merger investigation. This is the most recent reminder of how broad ranging discovery in merger investigations can result in wholly unrelated conduct investigations and lawsuits. Third, one of the parties was a portfolio company of a private equity sponsor, highlighting how private investors can be targeted for antitrust violations. (more…)



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Notification Threshold Under the Hart-Scott-Rodino Act Increased to $90 Million

by and | Feb 15, 2019 | ,

The US Federal Trade Commission recently announced increased thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and for determining whether parties trigger the prohibition against interlocking directors under Section 8 of the Clayton Act.

Notification Threshold Adjustments

The US Federal Trade Commission (FTC) announced revised thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) pre-merger notifications on February 15, 2019. These increased thresholds will become effective mid-to-late March. These new thresholds apply to any transaction that closes on or after the effective date.

  • The base filing threshold, which frequently determines whether a transaction requires filing of an HSR notification, will increase to $90 million.
  • The alternative statutory size-of-transaction test, which captures all transactions valued above a certain size (even if the “size-of-person” threshold is not met), will be adjusted to $359.9 million.
  • The statutory size-of-person thresholds will increase slightly to $18 million and $180 million.

The adjustments will affect parties contemplating HSR notifications in various ways. Transactions that meet the current “size-of-transaction” threshold, but will not meet the adjusted $90 million threshold, will only need to be filed if they will close before the new thresholds take effect mid-to-late March.

Parties may also realize a benefit of lower notification filing fees for certain transactions. Under the rules, the acquiring person must pay a filing fee, although the parties may allocate that fee amongst themselves. Filing fees for HSR-reportable transactions will remain unchanged; however, the size of transactions subject to the filing fee tiers will shift upward as a result of the gross national product (GNP)-indexing adjustments:

Filing Fee Size-of-Transaction $45,000 $90 million, but less than $180 million $125,000 $180 million, but less than $899.8 million $280,000 $899.8 million or more Interlocking Directorate Thresholds Adjustment

The FTC also announced revised thresholds for interlocking directorates. The FTC revises these thresholds annually based on the change in the level of GNP. Section 8 of the Clayton Act prohibits a person from serving as a director or officer of two competing corporations if certain thresholds are met. Pursuant to the recently revised thresholds, Section 8 of the Clayton Act applies to corporations with more than $36,564,000 in capital, surplus and undivided profits, but it does not apply where either interlocked corporation has less than $3,656,400 in competitive sales. These new thresholds are effective immediately upon publication in the Federal Register, expected within the week.



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THE LATEST: FTC Submits Comment on FDA Guidance Aimed at Deterring Abuse of Citizen Petition Process

by , and | Dec 11, 2018 | ,

The Federal Trade Commission (FTC) submitted comments supporting the Food and Drug Administration’s (FDA) guidance for assessing whether a pharmaceutical company petitioner is misusing the citizen petition process to delay approval of a competing drug.

WHAT HAPPENED:
  • The FDA released revised draft guidance intended to discourage pharmaceutical companies from gaming the citizen petition process.
  • The FTC expressed approval of the considerations the FDA will use to determine whether a petition was submitted to delay or inhibit competition.
  • The considerations the FDA will use include:
    • The petition was submitted unreasonably long after the petitioner learned or knew about the relevant information;
    • The petitioner submitted multiple and/or serial petitions;
    • The petition was submitted close to the expiration date of a known patent or exclusivity;
    • The petition’s scientific positions were unsupported by data or information;
    • The petition was the same or substantially similar to a prior petition to which the FDA had already substantively responded;
    • The petitioner had not commented during other opportunities for input;
    • The petition requested a standard more onerous or rigorous than the standard applicable to the petitioner’s drug product; and
    • Other relevant considerations, including the petitioner’s history with the FDA.
WHAT THIS MEANS:
  • Each of the FTC commissioners testified during Senate confirmation hearings that scrutinizing health care and pharmaceutical companies would remain a top priority of the Commission.
  • The FTC’s support of the FDA guidance appears to be part of a broader agenda to actively pursue sham petitions and discourage attempted abuses that seek to use Noerr-Pennington immunity as a shield in an administrative setting.
    • In 2017, the FTC filed a lawsuit in federal court alleging that Shire ViroPharma Inc. (Shire) violated antitrust laws through repeated use of sham petitioning.
    • Though the district court dismissed the FTC’s complaint, the FTC has lodged an appeal and appears committed to reining in alleged abuses of the citizen petition process.
    • Going forward, citizen petitions are likely to face even more scrutiny. Under the revised draft guidance, once the FDA determines that a petition was submitted primarily to delay competition, it will refer that determination to the FTC. Potentially anticompetitive petitions will now face two rounds of review by federal regulators.


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