Competition

On December 12, 2024, the U.S. Federal Trade Commission (FTC) authorized its staff to file a complaint against alcohol distributor Southern Glazer’s Wine and Spirits, LLC (“Southern Glazer’s”). The complaint alleges that the company engaged in price discrimination—charging higher prices to independent businesses and lower prices to large national and regional chains—in violation of Section 2(a) of the Robinson-Patman Act (“RPA”). The Commission voted 3-2 along party lines to file the lawsuit in federal district court, with the two Republican-appointed Commissioners—Commissioners Melissa Holyoak and Andrew Ferguson—issuing strongly worded dissenting statements (see here and here, respectively). Prior to this case, the federal antitrust agencies—the FTC and the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”)—had not brought an enforcement action under the RPA in more than two decades.

The Robinson-Patman Act:

According to the Supreme Court in Volvo Trucks N. Am., Inc. v. Reeder-Simco GMC, Inc.,546 U.S. 164, 175 (2006), Congress enactedthe RPA in 1936 to “target the perceived harm to competition occasioned by powerful buyers” in response to the advent of large chain stores. At the time, Congress was worried that large firms could extract lower prices from manufacturers or suppliers than smaller businesses. Id.

The RPA covers several categories of conduct. Most relevant here, Section 2(a) makes it unlawful for any person “engaged in commerce” to “discriminate in price between purchasers of commodities of like grade and quality” where the effect of such discrimination may be to lessen competition, tend to create a monopoly, or injure competition with any person who receives the benefit of such discrimination or their customers. There are several potential legal defenses to this provision, including that the price difference was justified by costs incurred by the seller, that the lower price was available to all customers, that the price differential did not cause the customer that paid a higher price to lose sales, and that the price difference was the result of meeting a competitor’s price.Continue Reading FTC Brings First Robinson-Patman Act Case in More Than Two Decades

On October 10, 2024, the federal antitrust agencies finalized the most significant changes to the U.S. merger notification regime since the enactment of the Hart-Scott-Rodino (“HSR”) Act in 1976. The Final Rule—which was issued by the U.S. Federal Trade Commission (“FTC”) with the concurrence of the Antitrust Division of the Department of Justice (“DOJ”) (together, “the Agencies”)—will significantly increase the burden on companies whose transactions must be notified to the Agencies pursuant to the HSR Act.

The Final Rule will become effective 90 days after publication in the Federal Register, meaning that the expanded filing requirements will take effect no earlier than mid-January 2025.

Although the Agencies significantly scaled back the changes they originally proposed in June 2023, the Final Rule will still fundamentally reshape the HSR process. According to the Agencies themselves, filings in most cases will take additional time to prepare and become much more expensive, which could extend deal timelines.

Notable new requirements include:

  • adding a “supervisory deal team lead” to the individuals from whom transaction-specific documents must be collected;
  • requiring production of certain non-transaction specific documents that analyze competitive overlaps relevant to the Transaction that were provided to the CEO (or CEOs of subsidiaries involved in the transaction) or members of the board;
  • submission of narrative descriptions of each strategic rationale for the transaction and of any horizontal overlaps or vertical relationships between the parties; and
  • providing the most recent year’s sales data for each overlapping product or service between the parties.

The FTC vote to issue the Final Rule was unanimous. The FTC and DOJ each issued press releases to accompany the issuance of the Final Rule, FTC Chair Lina M. Khan issued a statement (joined by Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya), and Commissioners Andrew N. Ferguson (here) and Melissa Holyoak (here) each issued a statement as well. Commissioner Holyoak’s statement identifies many of the key differences between the Final Rule and the proposed rule.Continue Reading FTC and DOJ Announce Final Rule Reshaping HSR Filing Requirements

In the past several months, two state courts in the District of Columbia and California decided motions to dismiss in cases alleging that the use of certain revenue management software violated state antitrust laws in the residential property rental management and health insurance industries.  In both industries, parallel class actions

Continue Reading State Courts Dismiss Claims Involving the Use of Revenue Management Software in Residential Rental and Health Insurance Industries

Various national competition authorities (“NCAs”) are continuing to consider sustainability arguments in competition cases. However, NCAs are increasingly diverging in their approach as to whether, and to what extent, they are willing to allow sustainability considerations in the competition law framework. This blogpost highlights a few recent developments in jurisdictions on both sides of the Atlantic.

Belgian approval of an initiative in the banana sector

On 30 March 2023, the Belgian Competition Authority (“BCA”) approved a sustainability initiative concerning living wages in the banana industry. This marks the first initiative based on sustainability grounds  approved by the Belgian NCA.

The IDH Sustainable Trade Initiative, a social enterprise working with various entities towards facilitating sustainable trade in global supply chains, and five Belgian supermarkets proposed a collaboration scheme aimed at closing the gap between actual wages and living wages in the banana sector. The collaboration will consist of meetings and discussions where the companies’ internal conduct will be assessed and further developed with the aim to better support living wages for workers in the participants’ banana supply chains.

The collaboration will involve the exchange of certain data and information which the BCA did not consider anticompetitive. The participants have committed to not set mandatory or recommended minimum prices and to not communicate any changes in costs relating to their supply chains. IDH will supervise the collaboration and any data shared will be verified by an independent third party.

Similar initiatives concerning the banana sector  have been proposed in Germanythe Netherlands and the UK. The German NCA has already approved the proposed initiative. Neither the Belgian nor the German NCA considered the initiatives in question to infringe competition law. There is, however, a fine line between such agreements falling in or outside the scope of competition law, and potentially amounting to an infringement. For example, clauses which lead to non-negligible price increases for end-consumers could raise questions and potentially be considered to have anticompetitive effect. It can therefore be expected that that NCAs will periodically monitor the implementation of such initiatives.Continue Reading Sustainability Agreements: Potential Divergence between Authorities

On 22 June 2022, the EU’s General Court (“GC”) fully dismissed thyssenkrupp’s appeal against the European Commission’s (“Commission”) decision to block its proposed joint venture (“JV”) with Tata Steel in 2019.

This is the first time that the GC has considered the prohibition of a “gap” case under the EU Merger Regulation (“EUMR”) since it annulled the Commission’s prohibition of CK Hutchison’s proposed acquisition of Telefónica UK (O2) in 2020 (“CK Hutchison”) (see our previous blog post here). A “gap” case is a merger in an oligopolistic market that does not result in the creation or strengthening of an individual or collective dominant position. Rather, it risks causing a “significant impediment to effective competition”.

This result may indicate a return to a more traditional approach by the GC as regards “gap” cases than that demonstrated in the CK Hutchison judgment. The judgment also provides helpful guidance on the interpretation of the EUMR and other legal instruments (such as the Market Definition Notice and the Notice on Remedies). The key findings are:Continue Reading EU General Court Upholds Tata Steel/thyssenkrupp JV Prohibition