The Federal Trade Commission and the Department of Justice's Antitrust Division recently released the Hart-Scott-Rodino Annual Report for Fiscal Year 2018, covering 1 October 2017 to 30 September 2018. This report is the first opportunity to review data regarding the merger challenges issued exclusively during Trump's administration. The data underscores the importance and benefit of advance planning and strategy to avoid a second request investigation whenever possible.
In a historic shift, the Department of Justice's Antitrust Division will now consider providing credit to companies in the charging and sentencing stages of an antitrust criminal investigation if they have a robust and effective antitrust compliance programme. While a positive step, significant questions remain regarding the extent to which the opportunity for compliance credit will incentivise companies to self-report criminal antitrust violations and how the guidance interacts with the division's leniency programme.
The assistant attorney general recently suggested that antitrust enforcers should update their analytical framework to account for modern corporate structures, signalling the potential for antitrust violations when officers and directors serve multiple competing companies. The assistant attorney general's speech is a reminder that behaviour that is not explicitly prohibited by the letter of the antitrust statutes may still raise eyebrows.
The US Federal Bureau of Investigation (FBI) and the Australian Competition and Consumer Commission (ACCC) recently signed a new memorandum of cooperation to strengthen their ability to combat cartels and other anti-competitive conduct. According to the section chief of the FBI's Criminal Investigative Division, the memorandum codifies the FBI's relationship with the ACCC and provides an opportunity for increased information and resource sharing.
Second requests can be expensive, time consuming and distracting to clients' employees. One way to ease the burden of a second request is to avoid it altogether. While second requests are inevitable for some transactions, certain strategies can help to lessen the likelihood of one being issued.
Litigants often enter into settlement agreements without giving much thought to whether those agreements could form the basis for an antitrust claim – and for good reason because most settlement agreements simply resolve a dispute through money payments. However, agreements that restrict rivals' abilities to engage in advertising or other competitive activities could fall foul of the antitrust laws.
Department of Justice Principal Deputy Assistant Attorney General Andrew Finch recently stated that the Antitrust Division is re-examining whether, and to what extent, it should recognise pre-existing compliance programmes with some form of credit, including potentially at the charging stage or at sentencing. This might take the form of fine discounts of up to 20% for companies that have a credible and effective compliance programme.
The US Department of Justice Antitrust Division has further intensified its compliance focus by announcing the creation of the Office of Decree Enforcement, which will have the sole goal of ensuring compliance with, and enforcement of, Antitrust Division decrees. Firms that operate under existing decrees should stay ahead of any complaints of violation, as a newly energised and dedicated enforcement office will likely be investigating any claimed default.
According to press reports, the Antitrust Division of the Department of Justice (DOJ) is investigating several issues relating to the admission of students to institutions of higher learning. The DOJ expects institutions of higher learning to compete freely for students and faculty much as ordinary businesses compete for customers and employees. In today's high-enforcement environment, college and university counsel should be alert to Sherman Act pitfalls and seek antitrust counsel if close calls arise.
The International Trade Commission (ITC) has issued an opinion dismissing US Steel Corporation's antitrust claim made under Section 337 of the Tariff Act 1930 against several Chinese steel manufacturers and distributors, ruling that a complainant must show an antitrust injury even in a trade case. The case demonstrates that a complainant with a Section 337 antitrust claim before the ITC must satisfy the same antitrust pleading requirements that a plaintiff in a federal court is required to satisfy.
It is difficult to predict how the antitrust trends and policies that have evolved over the past decade will play out under the Trump administration. The president has already made some picks for antitrust leadership that suggest – consistent with his overall pro-business platform – that antitrust enforcement will decrease in some areas. Thus, the cartel space will be an interesting one to watch.
With the departure of now former Chair Edith Ramirez in early February 2017, among the most discussed vacancies in the new administration is the post of permanent chair of the Federal Trade Commission (FTC). According to reports, one leading candidate is Acting Chair Maureen Ohlhausen, whose selection could have significant implications for FTC policy areas, particularly with respect to disgorgement remedies in antitrust cases.
Although tolling agreements are increasingly common in the energy industry, parties that have or may have an interest in acquiring the other party to the agreement must be careful to avoid assuming beneficial ownership of the target before complying with the Hart-Scott-Rodino reporting requirements if Hart-Scott-Rodino notification is required. Failure to do so may result in the tolling agreement constituting evidence of gun jumping and the acquiring person being subject to significant penalties.
The Federal Trade Commission released the annual jurisdictional adjustments for pre-merger notification filings made pursuant to Section 7A of the Clayton Act, known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as for Section 8 of the act. The new filing thresholds for Hart-Scott-Rodino notification will become effective 30 days after publication in the Federal Register, while the revisions to Section 8 will become effective immediately on publication in the register.
The US Antitrust Division of the Department of Justice and the Federal Trade Commission recently issued guidance for human resources (HR) professionals on steps to avoid antitrust violations. The guidelines – which cover 'no-poaching' agreements, agreements to fix wages or other terms of employment and the exchange of HR information – reveal the agencies' determination to scrutinise the employment arena and their intention to use, if necessary, their most powerful enforcement tools.
The Second Circuit Court of Appeals recently overturned a federal district court judgment in a class action antitrust lawsuit against two Chinese companies accused of conspiring to fix the price and output of vitamin C sold into the United States. The court held that the companies were compelled to fix the price and output by Chinese law, and therefore their conduct was outside the antitrust jurisdiction of the US federal courts.
The Federal Trade Commission recently announced that a UK public limited company has agreed to pay a fine to settle charges that it had violated the Hart-Scott-Rodino Act pre-merger notification and waiting period requirements when it acquired voting securities through the vesting of restricted stock units. Parties should take care when acquiring voting shares, assets or non-corporate interests, regardless of whether they are US entities and how the acquisition is structured.
The Department of Justice and the Federal Trade Commission recently issued proposed updates to their Antitrust Guidelines for the Licensing of Intellectual Property. The revisions do not substantively modify the general principles of the 1995 guidelines; nor do they address some of the hottest topics at the intersection of antitrust and IP law – in particular, conduct involving standard-essential patents and patent assertion entities.
The Department of Justice recently announced that ValueAct Capital has agreed to pay a record $11 million civil penalty to settle allegations that the activist investment firm violated the notification and waiting period requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 when it acquired more than $2.5 billion in voting shares of Halliburton and Baker Hughes. The previous record fine for an Hart-Scott-Rodino Act violation was $5.67 million.
The Federal Trade Commission (FTC) has announced significant increases to the maximum civil penalties for violations of numerous laws and regulations that it enforces, including pre-merger notification requirements under the Hart-Scott-Rodino Antitrust Improvements Act. The FTC has increased the civil penalties for Hart-Scott-Rodino Act violations by 150%, from $16,000 per day to $40,000 per day.