RECENT DEVELOPMENTS

Blocking Mergers

• UPDATED MERGER GUIDELINES AND NOTIFICATION. Since 1968 and most recently in 2010, the FTC and DOJ have released merger guidelines to help courts and businesses understand how the agencies identify and block anticompetitive mergers. After reviewing more than 5,000 public comments, the agencies released thirteen draft guidelines citing relevant Supreme Court precedent. FTC Chair Khan and AAG Kanter wrote an op-ed in the WSJ explaining how the guidelines aim to support businesses and the broader public’s understanding of how antitrust laws apply to mergers. Anyone can submit comments by September 18, 2023 to inform the final guidelines, expected to be published next year. Separately, the agencies are also proposing changes to the Hart-Scott-Rodino form that merging companies must submit to the antitrust agencies for mergers valued at more than $90 million. For the first time, the proposed form would require disclosure of a transaction’s impact on workers and private equity investments. Comments are due by August 28, 2023.
  
  
• MICROSOFT/ACTIVISION FORGES AHEAD. Microsoft’s $68.7 billion acquisition of Activision, maker of Call to Duty and Candy Crush, appears likely to close. A district court judge rejected FTC’s attempt to block the acquisition, and an appellate judge and Supreme Court Justice Elena Kagan similarly denied a preliminary injunction to stop the deal. The UK Competition and Market Authority is now offering the firms the opportunity to restructure the deal to gain approval, and the deal deadline is extended until October 18, 2023.
  
  
• BANK MERGER DEBATE CONTINUES. In a speech at the Brookings Institution, AAG Kanter clarified that the DOJ Antitrust will fulfill its congressional mandate to consider a range of harms when reviewing bank mergers. His comments follow the Division’s planned updates to the 1995 bank merger guidelines that inform its merger review. And while Treasury Secretary Janet Yellen and OCC Acting Comptroller Michael Hsu express openness to further bank consolidation, Sen. Warren hosted a hearing (where I testified!) highlighting the harms of bank mergers to local economies, small businesses, and consumers. For more information on bank merger harms and the relevant statutes, check out this Economic Liberties report.

• GOLFERS CAUGHT IN A MONOPOLY GAME. LIV Golf, owned by Saudi Arabia’s Public Investment Fund, is offering $3 billion to purchase the Professional Golfers Association (PGA). Congressional members have questions. Senator Warren wrote that the “antitrust concerns are clear” in a letter to the DOJ. The Senate Homeland Security Committee hosted a hearing on the merger’s implications. The PGA’s board has yet to approve the merger.

Appropriations

• ANTITRUST AGENCIES IN APPROPS CROSSHAIRS. The Commerce-Justice-Science (CJS) appropriations bills in both the House and Senate contain problematic provisions for the antitrust agencies. The Senate’s bill (S. 2321), which was voted out of Committee by a vote of 28-1 on July 13, seeks to redirect $50 million from the DOJ Antitrust Division to the DOJ’s Operations account and also adds a requirement for the Antitrust Division to report to Congress in order to use the additional merger filing fee funding provided by last year’s Merger Filing Fee Modernization Act. The House bill, which has not yet been reported out, has poison pill riders that mandate that the DOJ and the FTC receive Congressional approval before any spending connected to Merger Guideline revisions and hiring any new employees to the DOJ Antitrust Division. If Congress does not approve spending legislation for Fiscal Year 2024 by Oct. 1, then it must either pass a continuing resolution, which would continue funding the government at present levels, or face a shutdown.

Lowering Prices

• BAN RENTAL HOUSING JUNK FEES? The Biden administration’s crusade against junk fees is now targeting the rental housing market. The Department of Housing and Urban Development released research exposing extraneous rental applications and convenience fees of $100 or more that disproportionately impact Black renters. The report highlighted banning fees altogether as one solution. The Senate Banking Committee also held its first-ever junk fees hearing, where Senator Cortez-Masto detailed her constituents’ experiences with rental junk fees. Vario us members have introduced legislation to combat junk fees as well.

Building Worker Power

• NY TO BAN NONCOMPETES? One in five workers in the United States is subject to a noncompete agreement. The New York legislature passed a bill to ban noncompetes, including employees of all disciplines and income levels, similar to the FTC’s proposed ban. Governor Kathy Hochul must indicate by December 31, 2023 if she will sign the bill into law and join 11 other states in banning the agreements. Corporations, including Blackstone, DoorDash, and AT&T, are lobbying aggressively against the law, and some are speculating NY will land on a compromise bill that falls short of an outright ban.

Airlines

• FAA REAUTHORIZATION DELAYED. Both the Senate and the House have released markups that include competition policies for the FAA reauthorization, a must-pass bill every five years. The Senate markup would require the Government Accountability Office (GAO) to examine airline competition, consolidation, and airport access (also in an amendment to the House markup Rep. Deluzio and Rep. Garcia have proposed); and expand passenger rights on issues such as eliminating junk fees. The timing of hearing markups is uncertain due to infighting over pilot training requirements and slots at Washington’s DCA Airport.

Reining in Big Tech 

• NEWS PUBLISHERS FIGHT BACK. Facebook and Google have a duopoly over the digital ad market, squeezing profit from news publishers. Gannett, the largest publisher in the U.S., and hundreds of local newspapers sued Google for anticompetitive conduct. Sen. Klobuchar’s bipartisan Journalism Competition and Preservation Act (JCPA) advanced out of committee, which would allow news publishers to bargain collectively with Big Tech to share ad revenue. Canada passed its own version of the JCPA, prompting Google to remove news links from search results. Economic Liberties released a policy brief debunking common misconceptions about the JCPA.
• AMAZON PRIME EXPOSED. 200 million people globally have completed a one or two-step process to become Amazon Prime members. But, as alleged in a new FTC lawsuit, some of those sign-ups were non-consensual, and Amazon made it virtually impossible to cancel the service. Amazon dubbed Prime cancellation, “Iliad Flow,” a reference to the Homer epic, given its “four-page, six-click, fifteen-option cancellation process.” Senator Warner introduced bipartisan legislation to address “dark patterns” in user sign-ups. Rumors are also swirling that a bigger FTC case against Amazon is also on its way.

Improving Health Care

• HEALTHCARE DATA COLLECTION MERGER BLOCKED. In 2021, healthcare and pharmaceutical companies spent $14 billion on digital advertising, which depends on data. IQVIA, the world’s largest healthcare data provider, wants to acquire Propel Media, a healthcare advertising agency for reportedly $700 million. The FTC is blocking the merger, alleging the combined company could thwart competition by withholding information from advertising rivals.
  
  
• AGs STOP OPIOID PRODUCT HOPPING. 10 million people annually misuse opioids. Suboxone, a drug to treat opiate addiction, is effective, but expensive. Over forty AGs, led by Wisconsin, sued Suboxone’s manufacturer, Indivior, for patent “product hopping,” making insignificant changes to prolong patents and block generics, among other antitrust violations. The company recently settled for $102.5 million. This follows $60 million settlements with the FTC in 2019 and 2020 for the same practices. Senators Cornyn and Blumenthal also have a bill to address these practices at the federal level. Economic Liberties released a report recently documenting how Big Pharma product hopping and other patent abuse scams cost taxpayers $40 billion every year.

ICYMI

• President Biden’s newly-released “Bidenomics” economic plan centers on the need to increase competition across the economy.
  
  
• The CFPB fined Bank of America $250 million for opening banking accounts without customers’ consent, doubling overdraft fees, and withholding rewards from consumers.
  
  
• FTC Chair Khan testified in front of the House Judiciary Committee where she received bipartisan support for her fight against anticompetitive conduct.
  
  
• The FTC opened an investigation into OpenAI’s data collection practices and use of false information.
  
  
• Sen. Sanders announced an investigation into Amazon’s working conditions in its warehouses.
  
  
• The White House and Department of Agriculture met with 16 food and agriculture organizations, including Economic Liberties to discuss the Farm Bill and the need for more competition in agriculture. Economic Liberties published a policy brief outlining Farm Bill priorities.
  
  
• The FTC will not block L3Harris Technologies’ acquisition of Aerojet, a rocket motor manufacturer used by key U.S. military weapon suppliers.
  
  
• Senator Warren and Senator Graham announced the Digital Consumer Protection Commission Act, which would establish an independent agency to regulate the tech industry, among other safeguards to rein in Big Tech’s market power.