Encouraging Signals on Merger Review from DOJ’s Antitrust Division

swisherFeatured Expert Column: Antitrust & Competition Policy — U.S. Department of Justice

By Anthony W. Swisher, a Partner in the Washington, DC office of Baker Botts LLP.

Recently, Assistant Attorney General Makan Delrahim of the U.S. Department of Justice’s Antitrust Division gave a speech that offered a new vision for how DOJ approaches the merger review process. The most notable feature of Mr. Delrahim’s speech—certainly the one garnering the most press attention—is his goal of completing Second Request merger investigations in six months.

For those unfamiliar with DOJ antitrust enforcement, a “Second Request” is issued by the DOJ (or the Federal Trade Commission) at the end of the initial 30-calendar-day waiting period under the Hart-Scott-Rodino filing process. A Second Request consists of an extensive list of document and data requests, and frequently includes numerous depositions of company executives. A Second Request often requires the production of millions of documents and terabytes of data. Currently, it is not uncommon for a Second Request investigation to take 12-15 months or more to complete. Mr. Delrahim cited a study that indicated the average time for the agencies to complete a significant merger review has increased by 65% in the last five years. A dedicated effort to shorten this process is welcome indeed. Continue reading “Encouraging Signals on Merger Review from DOJ’s Antitrust Division”

Updates: Supreme Court Refuses to Review Philly Cab Drivers’ Suit Against Uber

supreme courtOn April 24 in Ruling on Philly Taxis’ Suit vs. Uber, Third Circuit Reaffirms Antitrust Focus on Competition, not Competitors, one of our Featured Expert Contributors on antitrust, Baker Botts partner Anthony Swisher, wrote about a U.S. Court of Appeals for the Third Circuit decision that rejected a claim for attempted monopolization lodged against Uber. The taxi association sought a writ of certiorari from the U.S. Supreme Court, which yesterday announced in an orders list that it had denied the request.

A denial of certiorari has no precedential value; it simply means that the lower court decision stands. That said, the outcome may deter taxi organizations from other jurisdictions, as well as perhaps other businesses whose market share is threatened by “gig economy” entities, from filing similar antitrust suits. In addition, the Court let stand a decision that properly elevated protection of consumers over assisting competitors, a fundamental antitrust-law concept that is under attack by some politicians, legal activists, and antitrust academics. As the Third Circuit explained:

Appellants urge the application of antitrust laws for the express opposite purpose of antitrust laws: to compensate for their loss of profits due to increased competition from Uber. However, harm to Appellants’ business does not equal harm to competition.

Big Business Will (Probably) Save Us

corporateHQIn the 1960s and 1970s, as South Korea and Hong Kong liberalized, India persisted in Jawaharlal Nehru’s vision of state planning and protectionism. No one deserves more blame than Nehru’s daughter, Indira Gandhi, the nation’s third prime minister.

One of Gandhi’s many sins was to limit capital investment. Most factories could not contain more than a few hundred-thousand dollars’ worth of equipment. At its height this control affected more than 800 products, including car parts, clothes, shoes, toys, and toothpaste. While China gained an economic foothold exporting cheap consumer goods, India could not even produce pencils efficiently.

By 2005 large firms employed more than half of China’s manufacturing workers, but only about ten percent of India’s. This is one reason why China’s GDP per capita was equal to India’s in the 1970s, but triple India’s by the 2000s.

In the abstract, at least, most Americans like small businesses and dislike big corporations. In Big is Beautiful: Debunking the Myth of Small Business, Robert D. Atkinson and Michael Lind argue for an attitude adjustment. Continue reading “Big Business Will (Probably) Save Us”

At Stake in “Apple v. Pepper”: Why the Supreme Court’s Direct-Purchaser Rule is a “Super-Precedent”

app storeOne of the more interesting cases the Supreme Court will hear in the new term is Apple, Inc. v. Pepper. We’ve blogged previously about the case here. Superficially, the Court will decide whether iPhone users who buy apps from Apple’s App Store may sue Apple for alleged antitrust violations, or whether only app developers may bring such claims. But more fundamentally, resolution of the case hinges on the continued viability of Illinois Brick Co. v. Illinois, which holds that only the direct purchaser of a good or service may sue an allegedly abusive monopolist for damages.

In February, two high-level officials in the Department of Justice’s Antitrust Division floated the possibility of asking the Supreme Court to abandon Illinois Brick’s direct-purchaser rule. But the Solicitor General, in the United States’ amicus brief, insists that the question is not properly joined in the case. If either the Respondents or their amici urge the Court to overturn Illinois Brick, they will face a high hurdle. Continue reading “At Stake in “Apple v. Pepper”: Why the Supreme Court’s Direct-Purchaser Rule is a “Super-Precedent””

Three Antitrust Developments to Watch in Wake of High Court’s “Ohio v. American Express” Ruling

swisherFeatured Expert Column: Antitrust & Competition Policy — U.S. Department of Justice

By Anthony W. Swisher, a Partner in the Washington, DC office of Baker Botts LLP

As vertical issues continue to attract attention in the world of antitrust, the U.S. Supreme Court’s decision in Ohio v. American Express was a long-awaited milestone.  The outcome of the decision was not surprising—many commenters had predicted that a Court that has generally been skeptical of antitrust plaintiffs would uphold the U.S Court of Appeals for the Second Circuit’s decision in favor of American Express—but a few features of the decision were noteworthy.

Recall that the case involved Amex’s use of non-discriminatory provisions, or “NDPs,” that prevent a merchant that accepts Amex cards from engaging in strategic behavior to steer customers toward use of a different payment card that might carry a lower transaction fee for the merchant. At issue was whether the NDPs constituted unreasonable restraints that suppressed interbrand competition by preventing merchants from favoring lower-cost payment methods by customers. Continue reading “Three Antitrust Developments to Watch in Wake of High Court’s “Ohio v. American Express” Ruling”

Europe’s Antitrust Demagogues Shake Down Google

thumbnail_imageToday the European Union imposed a $5 billion fine on Alphabet Inc., owner of Google, for antitrust violations. The punishment illustrates the power of that most abiding of monopolists, government, to extract rents and impose deadweight losses.

The EU’s core theory is that Google improperly pressures smartphone manufacturers to bundle Google apps with Android, Google’s free smartphone operating system. Continue reading “Europe’s Antitrust Demagogues Shake Down Google”

Thanks to the Court, Justice Done in AT&T/Time Warner Merger Challenge

DOJOur nation’s federal prosecutors recommend themselves as dispassionate champions of the law. As then-Attorney General Robert Jackson put it: “Although the government technically loses a case, it has really won if justice has been done.” The government, he said, should seek “truth and not victims.” The United States’ top lawyers repeat these sentiments often.

For the Justice Department’s Antitrust Division, seeking “truth and not victims” means prosecuting cases that benefit consumers. And it means winning with strong economic analysis rather than with legalistic maneuvering or chicanery.

By this measure the government’s lawsuit to block the merger of AT&T and Time Warner was a shambles. Continue reading “Thanks to the Court, Justice Done in AT&T/Time Warner Merger Challenge”