Regulatory and Legal Barriers to Tech-Company Market Entry, Success, Stubbornly Persist

FTC_Man_Controlling_TradeLast month at The Atlantic Festival, FTC Commissioner Slaughter and former FTC Chair Ohlhausen participated in an enlightening interview on technology regulation. When discussing how the United States approaches regulation compared to other nations, Ohlhausen said the U.S. has such an “enormous presence in the tech space” due in part to America’s “lighter touch” on regulation.

Slaughter questioned whether regulation stifled innovation to the extent Ohlhausen inferred, noting that Silicon Valley is located in a state with a particularly challenging regulatory and legal environments.

Commissioner Slaughter’s comments, and the perspective they represent, merit serious reflection and analysis, especially with the FTC holding an ongoing series of Hearings on Competition and Consumer Protection in the 21st Century. Stakeholders participating in and commenting on those hearings should remind the Commission of regulation’s impact on innovation. Evidence abounds of that connection. Continue reading “Regulatory and Legal Barriers to Tech-Company Market Entry, Success, Stubbornly Persist”

Lessons from FTC’s Loss in, and Subsequent Abandonment of, DirecTV Advertising Case

Featured Expert Contributor, Antitrust & Competition Policy — Federal Trade Commission

06633 - Royall, M. Sean ( Dallas )M. Sean Royall, a Partner in the Dallas, TX office of Gibson, Dunn & Crutcher LLP, with Richard H. Cunningham, a Partner, and Brett S. Rosenthal and Emily Riff, Associates, with Gibson, Dunn & Crutcher LLP.

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The FTC recently suffered a significant setback in a closely watched advertising practices case against DirecTV.  Specifically, on August 16, 2018, Judge Gilliam of the U.S. District Court for the Northern District of California granted judgment in favor of DirecTV on the majority of the claims at the close of the FTC’s case in chief—including all claims relating to DirecTV’s disclosures in its advertising—before DirecTV began to present its own case in defense. And then yesterday, the FTC agreed to dismiss the remainder of its case voluntarily with prejudice, fully ending the enforcement action.

Judge Gilliam’s decision reflects an emphatic rejection of both the disclosure standards sought by the FTC and the agency’s proposed approach to monetary equitable remedies.  The court’s analysis should be of interest to companies that sell services on a subscription basis or that offer a variety of price, service, and promotional options. Continue reading “Lessons from FTC’s Loss in, and Subsequent Abandonment of, DirecTV Advertising Case”

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”

D.C. Circuit Further Clarifies Attorney-Client Privilege “Primary Purpose” Test

Featured Expert Contributor, White Collar Crime & Corporate Compliance

Brower_GregGregory A. Brower, a Shareholder with Brownstein Hyatt Farber Schreck, LLP in Las Vegas, NV and Washington, DC.

In an unusually short, but to-the-point opinion, the U.S. Court of Appeals for the D.C. Circuit recently reaffirmed that the attorney-client privilege applies to a communication between attorney and client if at “one of the significant purposes” of the communication was to obtain or provide legal advice.  The case is Federal Trade Commission v. Boehringer Ingelheim Pharmaceuticals, Inc.  Judge Kavanaugh authored the unanimous opinion for the three-judge panel, which also included Judges Pillard and Randolph.  Continue reading “D.C. Circuit Further Clarifies Attorney-Client Privilege “Primary Purpose” Test”

The Eleventh Circuit Limits the FTC’s Authority to Challenge Practices as “Unfair”

06633 - Royall, M. Sean ( Dallas )Featured Expert Column: Antitrust & Competition Policy — Federal Trade Commission

By M. Sean Royall and Richard H. Cunningham, Partners with Gibson, Dunn & Crutcher LLP, and Bennett Rawicki, Associate Attorney, all in the firm’s Dallas, TX office.

The U.S. Court of Appeals for the Eleventh Circuit’s recent LabMD, Inc. v. FTC decision imposes significant limits on the Federal Trade Commission’s freedom to prosecute and settle cases the agency pursues pursuant to the “unfair acts or practices” prong of Section 5 of the FTC Act.

Overview of the FTC’s Case Against LabMD

In 2013, the FTC brought an administrative enforcement action against LabMD alleging a Section 5 violation based on purported unfair data security practices.  Among other alleged deficiencies, LabMD failed to identify that a file-sharing program an employee installed on a company computer had for years been exposing confidential patient information to the public.  Continue reading “The Eleventh Circuit Limits the FTC’s Authority to Challenge Practices as “Unfair””

FTC Enforcement Powers Face Serious Challenge

FTC_Man_Controlling_TradeThe Federal Trade Commission (FTC) has long asserted broad authority to sue businesses for engaging in unfair or deceptive acts or practices.  But a recent federal court decision (Federal Trade Commission v. Shrire Viropharma Inc.) calls that authority into serious question.  If upheld on appeal, the decision could lead to major changes in the way FTC carries out its enforcement responsibilities.

The decision focused on § 13(b) of the Federal Trade Commission Act (FTCA).  That statute authorizes FTC to seek injunctive relief in federal court against anyone who “is violating, or is about to violate” a law enforced by FTC.  FTC has long contended that § 13(b) also authorizes actions against entities based on past violations, even in the absence of evidence that the entity “is about to” commit new violations.  A Delaware federal district judge’s rejection of that contention has thrown a monkey wrench into FTC’s enforcement apparatus. Continue reading “FTC Enforcement Powers Face Serious Challenge”

Tronox/Cristal Merger Fight Highlights the FTC/DOJ Divide in U.S. Merger Control Proceedings

06633 - Royall, M. Sean ( Dallas )Featured Expert Column: Antitrust & Competition Policy — Federal Trade Commission

By M. Sean Royall and Richard H. Cunningham, Partners with Gibson, Dunn & Crutcher LLP, and Justin Epner, an Associate in the firm’s Washington, DC office.  The authors would like to thank Jasper Hicks, who is an Associate in Gibson Dunn’s Denver, CO office, for his substantial contributions to this post.

In early 2017, Mississippi-based titanium dioxide (TiO2) pigment producer Tronox Limited (“Tronox”) agreed to purchase the TiO2 business of one of its rivals, Saudi Arabian producer Cristal (“Cristal”).  Alleging a horizontal competitive effects theory, the Federal Trade Commission (FTC) voted in December 2017 to challenge the deal in its internal administrative court.  Roughly two months after the FTC initiated the administrative challenge, however, the litigation took an interesting and unusual turn—Tronox filed a federal lawsuit of its own against the Commission in the Northern District of Mississippi.  Continue reading “Tronox/Cristal Merger Fight Highlights the FTC/DOJ Divide in U.S. Merger Control Proceedings”