As this year’s roundtable of enforcers demonstrated, big business is probably antitrust enforcers’ greatest fear. Spring in Washington means Cherry blossoms and antitrust. And last week, 3,700 antitrust lawyers and government officials from around the globe descended on Washington to visit the Cherry blossoms and discuss how they need more government intervention to make the economy work for everybody and need to bring ever more “plausible” cases in order to nudge and push the courts along.
If you ever noticed a coupon dispenser or colorful cardboard display while walking down the aisle of your local supermarket, there is a good chance it was put there by News Corp.’s News America Marketing (NAM) – in-store marketing’s dominant player. News Corp.’s dominance, however, was allegedly the result of anticompetitive conduct, according to its former competitor Valassis Communications, Inc. In a 2017 lawsuit, Valassis alleged that News Corp.’s practice of “staggering” the expiration date of exclusive contracts with retailers violated, among other things, sections 1 and 2 of the Sherman Act and section 3 of the Clayton Act, and resulted in preventing Valassis from establishing itself as a viable competitor. After four years of litigation, the case finally went to trial last month, but the parties settled after the jury indicated it would be unable to reach a verdict. Nevertheless, Valassis’ allegations raise an interesting question: what supporting facts and allegations might suggest staggered exclusive contracts constitute anticompetitive conduct?
Under the Clayton Act (15 U.S. Code § 18), certain business acquisitions are prohibited where “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.” Long-standing jurisprudence has established that merger challenges require, at the outset, a prima facie showing of the likelihood of a substantial lessoning of competition that would result from the merger or acquisition. Such prima facie showing typically takes the form of claims and evidence related to market shares above a certain level, but can take other forms.
The Sherman Act was passed in 1890. The Clayton Act in 1914. And they have hardly changed since. Last month, Senator Amy Klobuchar, the new chair of the Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights, proposed an overhaul of the antitrust laws: CLERA, the Competition and Antitrust Law Enforcement Reform Act. If passed, CLERA would constitute the most significant change to antitrust law in a least a generation. In particular, it would also pose substantial new antitrust concerns for technology companies seeking to engage in what have been standard mergers and acquisitions.
On January 26, 2018, the Federal Trade Commission announced revisions to HSR Act and Clayton Act Section 8 thresholds, which are indexed annually to account for inflation. We have identified the adjustments that are likely to be the most relevant to our clients, and reiterate several important practice tips.…