European Commission Announces New Approach to Merger Review Referrals Falling Below Thresholds

Under current EU merger control rules, whether a concentration has to be notified to the European Commission (“Commission”) depends, among other things, on the level of revenue generated by the parties worldwide and in the European Union.  A key question that has sparked considerable debate in recent years is whether the current merger control thresholds cover all transactions that have the potential to harm competition, or whether there is a so-called “enforcement gap”. On September 11, during the International Bar Association’s 24th Annual Competition Conference, Competition Commissioner Margrethe Vestager announced that the Commission intends to change its approach towards referrals to the EU from national competition authorities. Commissioner Vestager noted that although the current, revenue-based thresholds set out in the EU Merger Regulation generally work well, revenue does not always reflect a company’s significance – particularly in innovative...

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Antitrust M&A Snapshot | Q2 2020

In the United States, despite requesting additional time to review pending mergers, the US antitrust agencies have continued their work through the COVID-19 pandemic. The Department of Justice (DOJ) and Federal Trade Commission (FTC) reached settlements with a number of merging parties during Q2 2020, and the FTC is proceeding to trial in several merger cases. Both the FTC and the DOJ are conducting investigational hearings and depositions via remote videoconferencing technology such as Zoom. The FTC also announced it prevented 12 deals from closing in 2020 despite the COVID-19 pandemic. Five of the transactions were blocked and another seven were abandoned due to antitrust concerns, putting the FTC on pace for one of its busiest years for merger enforcement in the past 20 years. In Europe, in light of the COVID-19 outbreak, the European Commission (EC) warned that merger control filings would likely not be processed as swiftly as usual. The EC encouraged...

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European Commission Consultation on Ex Ante Regulation of Online Platforms: Is Change Coming?

In parallel to a public consultation to seek feedback from the public regarding the New Competition Tool, the European Commission (Commission) is consulting on a proposal for an ex ante regulatory instrument that would ensure that “online platform ecosystems controlled by large online platforms that benefit from significant network effects remain fair and contestable, in particular in situations where such platforms may act as gatekeepers”. This proposal stems from a range of concerns which, according to the Commission, could lead to large-scale unfair trading practices, less innovation and reduced consumer choice. Feedback on the Commission’s inception impact assessment was due on 30 June (85 opinions were collected). The period for stakeholders from public and private sectors to contribute to the Commission’s public consultation (via online questionnaires) ends on 8 September 2020. Identified Need to Regulate Large Online Platforms In its inception impact...

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THE LATEST: Antitrust Agencies Show Frustration with Slow Divestitures

The US Federal Trade Commission (FTC) recently extracted a $3.5 million civil penalty from two companies involved in a gas station merger. The FTC asserts the companies violated their settlement agreement with the government, which required the divestment of 10 gas stations within 120 days from the date of the settlement agreement. The parties overshot the divestiture deadline by more than three months. The Commission stated its deadlines are not a suggestion and it will not permit parties to profit from order violations of any kind, including late divestitures. FTC commissioner Rohit Chopra’s dissenting statement, made in an unrelated case just two weeks prior to this fine, emphasized that divestitures should be completed promptly and raised concerns with settlements involving divestitures that are made "after a prolonged period of time." Taken together, if there is a change in administrations in November, we may see even more focus on requiring buyers up...

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European Commission Initiates Consultation on Possible New Competition Investigation Tool

On 2 June 2020, the European Commission (the Commission) published its inception impact assessment (or roadmap) on the possible adoption of regulation that would introduce a new market investigation tool. This assessment was immediately followed by the launch of a public consultation to seek views and feedback from the public regarding such a tool. The new tool would enable the Commission to investigate and impose behavioural and/or structural remedies on businesses with significant market power, whether dominant or not - and without any prior finding of a competition law infringement. As such, this new tool could present a significant risk and potential burden for companies with market power. On the other hand, it offers potential benefits to market participants, such as new entrants, who might otherwise see their access to markets foreclosed. Enforcement Gap As digitalization evolves and spreads across sectors rapidly, the Commission has come to understand...

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If Past is Prologue, Ramped up Antitrust Compliance is Critical

The COVID-19 pandemic has brought not only a healthcare crisis, but also one of the worst economic downturns in history. As businesses emerge from this crisis, there may be increased risk that employees may cross the line and engage in anticompetitive conduct. Therefore, it is critical that companies and individuals prepare now to ensure that antitrust compliance and, if necessary, reporting of conduct through internal hotlines are strongly encouraged. In this article, published on Bloomberg Law, our authors explore the risks associated with antitrust cartel conduct, review enforcement by government authorities following past economic crises, and outline compliance steps companies and individuals should take to minimize enforcement risks. Access the Full Article.

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CA SB 977 Would Expand AG Review of Healthcare Transactions

California Senate Bill (SB) 977, if passed, would broaden the type of healthcare transactions that require California Attorney General (AG) review and approval. SB 977 would require that a healthcare system, private equity group or hedge fund provide written notice to, and obtain the written consent of, the AG prior to any acquisition of or affiliation with a healthcare facility or provider. Access Full Article

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FTC Continues To Zero In On Problematic M&A Noncompetes

Since September 2019, the Federal Trade Commission has challenged noncompete provisions in at least three transactions. These challenges demonstrate that the FTC will challenge noncompete provisions even when it concludes that the underlying transaction raises no substantive antitrust issues and when the provision relates to minority investments. Noncompete provisions help protect a buyer's significant investment in an acquired business by restricting the seller from turning around and starting a new business that devalues the business sold. Although noncompete clauses often play a vital role in mergers and acquisitions, they are not immune from antitrust scrutiny. The recent challenges to noncompete provisions show that the FTC and other antitrust enforcers are closely scrutinizing noncompetes and will not hesitate to challenge problematic provisions — whether standalone or as part of a larger challenge to a transaction. Parties to a commercial transaction,...

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Top Takeaways: Permissible Provider Collaborations During COVID-19 and Beyond

If you missed our latest webinar, enjoy the replay below and learn more as we provide highlights on competitor collaborations, avoiding violations in labor markets, provider M&A and partial acquisitions. Competitor Collaborations Antitrust compliance remains an important priority in the US. While companies have been engaged in finding creative solutions to COVID-19 challenges and regulators are expressing a willingness to be more flexible in interpreting and enforcing the law, the pandemic is not a carte blanche to engage in anti-competitive Regulators are more prone to accept collaborations limited in scope to respond to COVID-19 and its aftermath, and arrangements undertaken at the behest of or in partnership with government actors. Companies should avoid high-risk conduct such as direct exchanges of competitively sensitive Procompetitive agreements not relating to price, wages or market/product allocations remain possible. Companies should conduct an...

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Government Amicus Efforts Show Antitrust Policy Via Advocacy

Under the administration of President Donald Trump, the US Department of Justice's Antitrust Division has significantly ramped up its private litigation amicus program. The Antitrust Division has filed an increasing number of amicus briefs and statements of interest at the appellate and district court levels in an effort to influence the development of antitrust law. In this articles, featured in Law 360, our authors explore how analysis of this advocacy may give us the shape of antitrust policy. Access Full Article

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