2020 Competition
Law Developments:
Reviewing a Notable Year and
Looking Ahead to 2021
Competition law appears to be at an inflection point.
Over the past year, authorities, policy makers, and commentators across the globe have debated whether current laws and enforcement approaches are appropriately calibrated or whether they should be changed, including to try to protect interests that go well beyond the consumer welfare standard that has been applied for decades. Authorities are demonstrating an increased willingness to challenge acquisitions based on novel and more aggressive claims. They have filed suits against large tech companies, blocked a significant number of proposed transactions, and challenged acquisitions that they had previously permitted to proceed, raising significant—and as yet-unanswered—questions about the proper scope of the antitrust laws.
The level of antitrust activity in 2020 was particularly striking in light of the global COVID-19 pandemic. In addition to their traditional work, authorities offered guidance to companies seeking to collaborate on COVID-19-related responses and ramped up efforts to scrutinize potential antitrust violations relating to aid provided to companies at risk from the pandemic. In some ways, the real story is how much there is to report in this review despite the pandemic.
The expansive enforcement approach—and the accompanying debate about its propriety—are likely to continue in 2021, with the incoming Biden Administration pushing for increased enforcement and a new Democratic-controlled Congress perhaps more
willing to consider revisions to U.S. antitrust laws, and authorities in the European Union strengthening their enforcement powers while focusing on regulating digital markets. At the same time, an increasingly assertive Competition and Markets Authority will be exercising its jurisdiction post-Brexit, and Chinese authorities are continuing to ramp up antitrust enforcement.
Past is often prologue, and the increased competition law enforcement in 2020 highlights why companies should expect to face more challenges to proposed transactions and more scrutiny of their activities in 2021.
U.S.
EU
UK
China
Merger Control
Digital Markets
Cartel Enforcement
Intellectual Property
Cartel Enforcement
Merger Control
COVID-19
Enforcement Policy
Digital Markets
Intellectual Property
Antitrust Investigations - Cartels and Abuse of Dominance
Legislative and Rule-making Developments
The U.S. Agencies Sought to Regulate Mergers Using the Section 2 Monopolization Statute
Invoking Sherman Act Section 2, which prohibits monopolization, the DOJ filed suit to block Visa’s proposed acquisition of Plaid, a provider of mobile-focused financial technology. The DOJ alleged that the acquisition would maintain Visa’s existing monopoly in the “online debit” market by eliminating a “nascent” competitor. Similarly, the FTC alleged that Facebook’s acquisitions of Instagram and WhatsApp violated Section 2, even though the FTC had previously reviewed both acquisitions pursuant to the Hart-Scott-Rodino Act and allowed them to proceed. Some enforcers have argued that Section 2 presents a lower bar to merger challenges than the Section 7 merger statute, but commentators—including a federal appellate judge who was involved in a Section 2 decision that the enforcers cite—have called this theory flawed and troubling.
The U.S. Agencies Challenged Many Proposed Mergers Across Industries
FTC was particularly busy in 2020, voting to challenge 21 transactions in which it either accepted consent orders or sought to prohibit the transaction entirely. The DOJ challenged 12 transactions, accepting consent decrees in ten and filing contested challenges to two others.
The FTC sued to block the proposed consolidation of the Wyoming coal operations of Arch Coal and Peabody Energy and Altria’s acquisition of Juul. The coal transaction was abandoned after a federal court entered a preliminary ruling in favor of the FTC; the Altria/Juul transaction remains in litigation. The FTC also sued to block the Philadelphia-area combination of Jefferson Health and Albert Einstein Healthcare, but the federal court rejected the challenge, concluding that the agency had failed to prove that the transaction was likely to increase prices.
In the Visa/Plaid transaction discussed above, the parties abandoned the transaction after the DOJ filed suit. The DOJ also filed suit to block a hospital merger (Geisinger Health/Evangelical Community Hospital), and Cengage and McGraw-Hill (publishers of educational materials) abandoned their proposed merger after the DOJ indicated its opposition. A federal judge ruled against the DOJ in its effort to block Sabre’s acquisition of Farelogix, but the UK CMA prohibited the transaction (with a decision currently under appeal).
Finally, a coalition of state Attorneys General lost their bid to block the Sprint/T-Mobile merger after the DOJ and the FCC cleared the transaction with a consent decree imposing conditions.
The U.S. Agencies Adopt New Merger-Related Guidelines
The FTC and the DOJ released joint draft Vertical Merger Guidelines, over the objections of the two Democratic FTC Commissioners, that seek to present the policies, and the analytical practices and techniques, that the agencies apply in evaluating vertical mergers and acquisitions. Read more here.
In addition, the DOJ issued another revision to its Merger Remedies Manual that emphasizes the DOJ’s commitment to structural remedies and its concerns with conduct remedies.
Technology Companies Faced Aggressive Enforcement and Legislative Oversight in the U.S.
Federal and state antitrust enforcement agencies were active in the technology sector. They filed three separate lawsuits against Google. The lawsuits claim that Google is maintaining a monopoly position—as a “gatekeeper” of the internet and/or in search and search advertising markets—through exclusionary conduct that has cut off competition from smaller rivals. They also filed two controversial lawsuits against Facebook, claiming that the company maintained a monopoly in an alleged market for personal social networking services, through acquisitions and policies relating to software developers. These actions faced immediate criticism that they are not well founded and raise serious policy concerns; two commissioners, for example, dissented from the FTC’s decision to sue.
In October 2020, the House Judiciary Committee’s Antitrust Subcommittee completed its 16-month investigation into Competition in the Digital Marketplace. The report issued by the Democratic majority is critical of Google, Apple, Facebook, and Amazon.
The report contains numerous legislative and other proposals that, if enacted, could have significant ramifications across the economy.
Consumers and businesses have filed a series of follow-on class action complaints against these technology companies.
Cartel Enforcement in U.S. was Limited, but the DOJ Retained its Focus on Labor Markets
Criminal antitrust enforcement in 2020 hit a 20-year low in terms of case filings and criminal fines. Read more here. Nevertheless, the DOJ continues to highlight criminal antitrust enforcement as a priority and did report some high-profile activities.
The DOJ broke new ground by announcing its first criminal indictment related to employee wage-fixing and “no poach” agreements, charging the former owner of a therapist staffing company on allegations that he and his co-conspirators agreed to pay lower rates to physical therapists. The indictment treats this alleged agreement on employee wages as per se unlawful, and the DOJ is expected to maintain that position—and its focus on labor markets—in 2021. The DOJ also broke new ground by entering into deferred prosecution agreements with several corporate defendants in criminal antitrust investigations, following through on a policy shift announced in 2019 to permit such agreements.
Finally, the DOJ successfully extradited a fugitive from Italy who had been indicted in the Air Cargo cartel investigation in 2010. Once brought to the U.S. in January 2020, she pled guilty and was sentenced to 14 months incarceration. Read more here.
U.S. Agency Divergence on Intellectual Property-Related Issues
The divergence between the DOJ and the FTC on certain intellectual property and remedy issues came to light in the FTC’s challenge to Qualcomm’s licensing practices for standard-essential patents. The DOJ filed amicus briefs in both the district court and the Ninth Circuit court of appeals taking positions at odds with the arguments presented by the FTC. The Ninth Circuit reversed the district court’s judgment in favor of the FTC, holding that the FTC had not “met its burden under the rule of reason to show that Qualcomm’s practices have crossed the line to ‘conduct which unfairly tends to destroy competition itself.’”
Merger Control
Digital Markets
Cartel Enforcement
Intellectual Property
EU is Strengthening Member State Competition Authorities and Cross-border Co-operation
Member States are required to implement the ECN+ Directive by February 2021. The Directive seeks to further harmonize competition law enforcement across the EU by giving Member State National Competition Authorities (“NCAs”) a minimum common toolkit and effective enforcement powers. In practice, the implementation of the Directive will make less difference to the more mature competition authorities, but it should help some of the newer agencies that have at times struggled with limited powers and domestic political interference in their activities.
Enforcement Policy
Huge EU Member State Aid Packages Granted in Light of COVID-19
On March 19, 2020, the Commission adopted a Temporary Framework for State aid measures to support the economy in the COVID-19 pandemic. The Framework is based on Article 107(3)(b) of the TFEU, which allows State aid to be granted in order to remedy a serious disturbance in the economy. The Framework provides for five types of aid:
(i) direct grants, repayable advances or tax advantages,
(ii) loan guarantees,
(iii) subsidized interest rates for loans,
(iv) guarantees and loans channeled through financial institutions, and
(v) short-term export credit insurance.
State aid granted in response to the COVID-19 pandemic may also be exempted under Article 107(2)(b) and other provisions of the TFEU to enable Member States to compensate companies in sectors that have been particularly impacted (such as transport, tourism and hospitality) and organizers of cancelled events.
The Framework was amended on April 3, 2020 to increase the possibilities for public support for research, testing and production of products to fight the COVID-19 pandemic, to protect jobs and to further support the economy. It was further amended on May 8, 2020 to extend to recapitalization and subordinated debt measures, and on June 29, 2020 to support micro, small and start-up companies and to incentivize private investments. Finally, on January 28, 2021, the Commission has announced it has extended the Framework until December 31, 2021. Read more here and here.
Currently, close to 200 programs and individual measures affecting all Member States have been notified and approved by DG COMP.
COVID-19
European Commission Seeks to Increase Scrutiny of Potential Nascent Competitors
European competition authorities have increasingly been concerned with what they perceive to be acquisitions by incumbent players of new companies that might one day have competed with their acquirers (so-called “nascent competitors” or “killer acquisitions”). Transactions that could present these potential issues often do not meet the merger filing thresholds at European or Member State level, even with the “size of transaction” thresholds in Germany and Austria. However, Article 22 of the EU Merger Regulation (the “Dutch Clause”) enables one or more Member State authorities to request that the Commission review a transaction that affects trade between Member States and that threatens to significantly impede competition within the Member State(s) making the request, regardless of whether the transaction is reviewable in the Member State(s). In recent years, the Commission discouraged referrals that did not meet national filing thresholds, but, in September 2020, European Commissioner Vestager announced that the Commission plans to “start accepting referrals from national competition authorities of mergers that are worth reviewing at the EU level—whether or not those authorities had the power to review the case themselves.” Not surprisingly, given the significant potential for uncertainty and delay that could result from this policy change, the Commissioner indicated that the Commission will “put guidance in place about how and when we’ll accept these referrals” and that she hopes “to put this new policy into effect around the middle of [2021].”
Implementing this new policy without legislative reform may leave the Commission vulnerable to a court challenge at some point down the line. As a result, there is some doubt as to whether this change will lead to significant changes in substantive assessments, particularly given the General Court’s May 2020 judgment in CK Telecom that overturned the Commission’s prohibition of a merger of mobile communications network providers. The decision underscores that the Commission could face significant challenges in developing evidence sufficient to support a prohibition of an acquisition of a small company based on a theory of potential competition.
Merger Control
In EU, Business as Usual?
Although the European Commission issued a clear message that cartel enforcement would remain a priority, it adopted only two settlement decisions in 2020. That is the lowest number of annual cartel decisions in the last 5 years.
Cartel Enforcement
European Commission Takes Measures to Counter the Drop in Leniency Applications
As in the rest of the world, the number of first-in immunity applications in the European Union dropped significantly. DG COMP is trying to counterbalance that trend through various countermeasures:
First, DG COMP is seeking to open a significant number of own-initiative investigations that are not triggered by immunity applications. However, the recent partial annulment of the dawn raids in the Carrefour/Intermarché own-initiative investigation may limit the effectiveness of this effort.
Second, DG COMP has established a new unit within the Cartel Directorate to use data-mining and algorithms to try to detect potential collusion that would be difficult for humans to identify. DG COMP also has established a centralized information network comprised of all national enforcers and the other Commission Directorates General and Agencies to provide leads and to flag potential competition issues.
Third, the anonymous whistle-blower tool that was introduced in 2017 is starting—according to the Commission—to bear fruit. The fruit remains as yet invisible to the outside world.
EU Agencies Continue their Focus and Enforcement in the Digital Sector
The digital sector remained under the spotlight of European competition authorities in 2020. For example, EU investigations are currently ongoing against Facebook, Apple, Amazon and Google. In addition, the Commission analyzed the Google/Fitbit merger, approving it with conditions on December 17, 2020. National competition authorities have also pursued various investigations of digital services. The theories of harm that are being put forward in a number of these cases are controversial within the economic and legal community. That may be one reason why a number of the practices that are under investigation as potential abuses of dominance are now included in the proposed Digital Markets Act, which means the Commission would no longer have to prove anti-competitive effects to take action against them.
European Commission Seeks to Increase Scrutiny of Potential Nascent Competitors
European competition authorities have increasingly been concerned with what they perceive to be acquisitions by incumbent players of new companies that might one day have competed with their acquirers (so-called “nascent competitors” or “killer acquisitions”). Transactions that could present these potential issues often do not meet the merger filing thresholds at European or Member State level, even with the “size of transaction” thresholds in Germany and Austria. However, Article 22 of the EU Merger Regulation (the “Dutch Clause”) enables one or more Member State authorities to request that the Commission review a transaction that affects trade between Member States and that threatens to significantly impede competition within the Member State(s) making the request, regardless of whether the transaction is reviewable in the Member State(s). In recent years, the Commission discouraged referrals that did not meet national filing thresholds, but, in September 2020, European Commissioner Vestager announced that the Commission plans to “start accepting referrals from national competition authorities of mergers that are worth reviewing at the EU level – whether or not those authorities had the power to review the case themselves.” Not surprisingly, given the significant potential for uncertainty and delay that could result from this policy change, the Commissioner indicated that the Commission will “put guidance in place about how and when we’ll accept these referrals” and that she hopes “to put this new policy into effect around the middle of [2021].”
Implementing this new policy without legislative reform may leave the Commission vulnerable to a court challenge at some point down the line. As a result, there is some doubt as to whether this change will lead to significant changes in substantive assessments, particularly given the General Court’s May 2020 judgment in CK Telecom that overturned the Commission’s prohibition of a merger of mobile communications network providers. The decision underscores that the Commission could face significant challenges in developing evidence sufficient to support a prohibition of an acquisition of a small company based on a theory of potential competition.
Digital Markets
EU Digital Markets Act Proposal Seeks to Regulate Gatekeepers
On December 16, 2020, the Commission presented its proposal for a Digital Markets Act (“DMA”). The proposed DMA would regulate “intermediary services” and “designated gatekeepers.” It would apply to “designated gatekeepers,” which are companies (i) with a significant impact on the internal market, (ii) that operate one or more important gateways to customers and (iii) enjoy, or are expected to enjoy, an entrenched and durable position in their operations. Designated gatekeepers would be subject to a number of obligations and prohibitions relating to self-preferencing, interoperability, data-related practices, and tying. The European Commission would receive new investigatory powers, and the ability to impose fines and periodic penalties.
Read more here.
EU Sees Substantial Litigation Involving Standard Essential Patents
In August 2020, the UK Supreme Court in Unwired Planet set out the conditions under which requesting injunctive relief for purported infringements of Standard Essential Patents (SEPs) could be deemed abusive under EU (and national ) competition law. Issued prior to the end of the Brexit transition period, this decision incorporates into UK law the underlying EU law principles set forth by the CJEU in its 2015 Huawei judgment. Coupled with a wide interpretation of jurisdiction and far-reaching disclosure rules, the Unwired Planet decision likely will maintain the UK as a major venue for SEP-related disputes across Europe.
The CJEU will have the opportunity to revisit its position on the balancing of the interests of SEP licensors and licensees when it considers the Nokia/Daimler dispute, which was referred from the German courts.
At the same time, noting that SEP-related litigation continues before national courts and that industry-led initiatives may facilitate keeping such disputes out of court, Commissioner Vestager pushed the issuance of an Intellectual Property Action Plan and a Pilot Study for the assessment of SEPs. In addition, the ongoing review of the Horizontal Guidelines provides the Commission with an opportunity to set out its SEP-related policy views.
Antitrust and Intellectual Property
European Commission Continues its Process of Revising Antitrust Block Exemptions and Guidelines
The Commission is currently in the process of revising its (i) Vertical Block Exemption Regulation (“VBER”) and the accompanying Guidelines on Vertical Restraints, and (ii) its Horizontal Block Exemption Regulations on R&D and Specialization Agreements and the accompanying Horizontal Guidelines. Key issues under consideration include how these policy instruments will function in the digital age, bearing in mind the growing importance of e-commerce and sustainability issues.
Read more here.
Since January 1, 2021, EU competition law no longer applies in the UK, and UK authorities are solely responsible for enforcing competition law within the UK.
The CMA projects that its workload will increase substantially to reflect the fact that large mergers and antitrust investigations affecting the UK will no longer be led from Brussels. For example, the CMA estimates that the number of mergers that it reviews annually will increase by approximately 40 percent. The CMA has expanded and has established regional offices in Edinburgh, Cardiff, and Belfast to address this increased workload.
The CMA’s substantive approach to enforcement is not expected to change materially, and the prospect of material divergence from the EU’s substantive competition laws appears to be low, at least for now. The CMA’s priorities are expected to continue to include rigorous merger review, protecting competition in digital markets, and enforcement and policy interventions targeted at protecting consumers and promoting innovation and growth.
Read more here.
Brexit
New Antitrust Guidelines
In August 2020, the State Administration for Market Regulation (SAMR) published four sets of long awaited antitrust guidelines. The Antitrust Guidelines for the Automobile Industry and the Antitrust Guidelines Governing the Field of Intellectual Property Rights provide detailed rules governing conduct in the respective industry sectors with regard to horizontal and vertical agreements, abuse of dominant market positions, and merger control. The Antitrust Guidelines on the Application of Leniency in Horizontal Monopoly Agreement Cases and the Antitrust Guidelines on Companies’ Commitments in Antitrust Cases provide detailed procedural guidance for companies to seek leniency or offer commitment in return for suspension or termination of an antitrust investigation.
Legislative and Rule-making Developments
Fewer new antitrust investigations were launched in 2020, due to a number of factors, including the COVID-19 pandemic. SAMR concluded only one abuse of dominance case at the central government level, and there were only six cases concluded at the provincial level. There were no cartel cases concluded by SAMR during 2020 at the central level and fewer than ten at the provincial and local level.
Consistent with their enforcement priorities in the past few years, SAMR and its provincial and local agencies continued to focus on the pharmaceutical sector in its investigations. In April 2020, SAMR imposed RMB 204.5 million (approximately USD 29 million) in cumulative penalties on three calcium gluconate active pharmaceutical ingredient (API) distributors—Kanghui Medicine, Puyunhui Pharma, and Taiyangshen Pharma—for abusing dominant positions by selling products at unfairly high prices and imposing unreasonable conditions on transactions. Two companies subsequently sought judicial review of SAMR's decision, which could result in the first ever judicial review of administrative penalty decisions made by the central AML enforcement agency.
Antitrust Investigations—Cartels and Abuse of Dominance
National Security and Investment Bill
Subsidy Controls/State Aid
Digital
Cartel Enforcement
Merger Control
Brexit
In 2020, China stepped up its rule-making efforts by promulgating new or revised implementing regulations and guidelines to provide more guidance and reduce uncertainties to businesses. These new policies will govern merger reviews and industry conduct in 2021.
Interim Merger Review Provisions
On December 1, 2020, SAMR’s “Interim Provisions” came into effect. The Interim Provisions consolidate existing documents and departmental regulations on merger review and replace previous regulations such as the Measures for the Notification of Concentration of Undertakings. They provide detailed rules governing the full process of merger review, including notification requirements, investigation and assessment of a merger, monitoring and implementation of restrictive conditions (i.e., remedies), and legal liabilities for failure to file.
Antitrust Guidelines for Platform Economy
In November, SAMR collected public comments on its draft “Platform Economy Guidelines.” These guidelines reflect China’s first attempt at formulating rules to regulate competition among platform companies that are active in sectors such as e-commerce.
Proposed Amendment to the AML
In January 2020, SAMR published proposed amendments to the AML for public comment. Proposed revisions include for example harsher penalties for failure to file, strengthened investigatory power of the AML enforcers, and specific factors that need to be taken into account for the purpose of assessing existence of dominance in the Internet sector. The Chinese government has announced that amending the AML will be one of its key legislative tasks in 2021.
Digital
Previously, the highest level of the government had announced that efforts should be made to strengthen antitrust enforcement and prevent “disorderly capital expansion” with regard to platform companies. In response, in late 2020, SAMR announced that it plans to “strengthen” antitrust regulation in the Internet sector and digital economy and to promptly investigate alleged violations. This announcement—along with the draft Platform Economy Guidelines—is an indication that evaluations of platform companies will likely be a top priority for SAMR in 2021.
Expansive Approach to Asserting Jurisdiction to Review Transactions
The UK merger regime is voluntary, but the CMA can review transactions that meet either a turnover or a “share of supply” threshold. The CMA has adopted an increasingly expansive approach to the “share of supply” test, particularly in technology and healthcare markets, asserting jurisdiction over a wide range of transactions, even where there is a very limited nexus to the UK. Recent examples include Sabre’s proposed acquisition of Farelogix (where Farelogix had no direct supply relationships with UK airlines and de minimis indirect UK revenues) and Hunter Douglas/247 (where the CMA sought to review a transaction that had closed in 2013 in addition to reviewing a subsequent 2019 transaction).
Merger Control
High Number of Phase 2 Cases Blocked or Abandoned Over Competition Concerns
Of nine Phase 2 investigations in the first 11 months of 2020, there were three outright prohibition decisions and four mergers were abandoned due to competition concerns raised by the CMA, underscoring the importance of the UK as an antitrust enforcement jurisdiction in pre-Brexit global transactions, which will certainly continue post-Brexit.
Return of “Failing Firm” Considerations
The COVID-19 pandemic has made “failing firm” considerations central to a number of different merger reviews during 2020. JD Sports successfully challenged the CMA’s failure to assess properly the impact of the pandemic on its acquisition of Footasylum. In Amazon/Deliveroo, the CMA’s initial provisional findings found that the pandemic meant Deliveroo was likely to exit the market absent the investment, only later to reverse that position (while ultimately still clearing the transaction). By contrast, the CMA did not consider a failing firm counterfactual in its parallel Takeaway.com/Just Eat review. The CMA has issued guidance reiterating that it will continue to apply tough thresholds for the failing firm defense, even in light of the pandemic.
Read more here.
Increased Use of Hold Separate and Other Interim Orders
Another relatively recent shift is the UK’s increasing use of initial enforcement orders (“IEO”), which are applied to prevent merging parties from taking action during the investigation that may prejudice the outcome of the CMA’s review. The CMA has started to require a monitoring trustee and/or hold separate manager to be appointed, or to implement IEOs in relation to transactions that have not closed and will not imminently close (for example, in Amazon/Deliveroo).
The CMA has continued to pursue a large number of behavioral competition enforcement investigations throughout 2020, which have resulted in fines of over GBP 10 million on cartel conduct in five decisions during the year. While the volume of behavioral enforcement cases has remained generally higher than in the EU, the focus of those investigations has ranged in complexity and scale. For example, in 2020 the CMA issued several decisions relating to resale price maintenance involving several small, independent resellers of musical instruments while at the same time continuing to investigate suspected collusive trading by a number of global financial services firms.
A notable trend in the CMA’s approach to cartel enforcement (and, indeed, to enforcement more generally) is the increased use of Competition Disqualification Orders (“CDO”), which disqualify an individual from acting as a director of a business for up to 15 years. The CMA sought disqualification orders or obtained disqualification undertakings from nine individuals, a significant increase from prior years.
Cartel Enforcement
The digital sector has continued to be a focus for CMA enforcement. In November, the CMA issued an infringement decision against ComparetheMarket, one of the UK’s largest price comparison websites, for its use of so-called “wide” Most Favoured Nation (“MFN”) clauses in its contracts with a number of home insurance providers selling through its website. The MFN clauses prohibited the relevant insurers from offering lower prices on rival price comparison websites and resulted in a penalty of GBP 17 million.
In addition to active cases, the CMA has recommended extensive measures to address competition concerns with online platforms and digital markets, including the creation of a new “pro-competition framework” applicable to digital firms designated as having “strategic market status.” The framework would require those firms, for example, to adhere to a legally binding Code of Conduct and report most proposed transactions to the CMA. Read more here.
Digital
The UK-EU Trade Cooperation Agreement requires the UK to put in place its own independent system of subsidy control, with no obligation to follow existing EU State aid rules. The Agreement provides greater flexibility for the UK than when it was bound by the EU State aid regime, but the high-level principles that will underpin the UK’s new regime broadly reflect EU State aid concepts with regard to the definition of what amounts to a “subsidy”. Further details of this new regime are expected to be set out in the New Year, including whether the regime will provide for ex ante or ex post scrutiny and approval of subsidies.
Subsidy Controls and State Aid
The UK merger landscape will become more complex if (as expected) a comprehensive NSI screening regime for transactions that raise national security concerns becomes law in the first half of 2021. The regime will impose filing requirements for an extensive range of transactions across 17 specified sectors, and the government will retain a “call-in” power to review such transactions for up to five years after they take place.
Read more here.
National Security and Investment (“NSI”) Bill Screening Regime
Cartel Enforcement
Intellectual Property
Digital Markets
Merger Control
Merger Control
Digital Markets
Cartel Enforcement
Intellectual Property
Merger Control
Digital Markets
Cartel Enforcement
Intellectual Property
Merger Control
Digital Markets
Cartel Enforcement
Intellectual Property
Intellectual Property
Digital Markets
Cartel Enforcement
Merger Control
COVID-19
Enforcement Policy
Intellectual Property
Digital Markets
Cartel Enforcement
Merger Control
COVID-19
Enforcement Policy
Intellectual Property
Digital Markets
Cartel Enforcement
Merger Control
COVID-19
Enforcement Policy
Intellectual Property
Digital Markets
Cartel Enforcement
Merger Control
COVID-19
Enforcement Policy
Intellectual Property
Digital Markets
Cartel Enforcement
Merger Control
COVID-19
Enforcement Policy
Intellectual Property
Digital Markets
Cartel Enforcement
Merger Control
COVID-19
Enforcement Policy
National Security and Investment Bill
Subsidy controls/State aid
Digital
Cartel Enforcement
Merger Control
Brexit
National Security and Investment Bill
Subsidy Controls/State Aid
Digital
Cartel Enforcement
Merger Control
Brexit
National Security and Investment Bill
Subsidy Controls/State Aid
Digital
Cartel Enforcement
Merger Control
Brexit
National Security and Investment Bill
Subsidy Controls/State Aid
Digital
Cartel Enforcement
Merger Control
Brexit
National Security and Investment Bill
Subsidy Controls/State Aid
Digital
Cartel Enforcement
Merger Control
Brexit
National Security and Investment Bill
Subsidy Controls/State Aid
Digital
Cartel Enforcement
Merger Control
Brexit
Antitrust Investigations - Cartels and Abuse of Dominance
Legislative and Rule-making Developments
The U.S. Agencies Sought to Regulate Mergers using the Section 2 Monopolization Statute
Invoking Sherman Act Section 2, which prohibits monopolization, the DOJ filed suit to block Visa’s proposed acquisition of Plaid, a provider of mobile-focused financial technology. The DOJ alleged that the acquisition would maintain Visa’s existing monopoly in the “online debit” market by eliminating a “nascent” competitor. Similarly, the FTC alleged that Facebook’s acquisitions of Instagram and WhatsApp violated Section 2, even though the FTC had previously reviewed both acquisitions pursuant to the Hart-Scott-Rodino Act and allowed them to proceed. Some enforcers have argued that Section 2 presents a lower bar to merger challenges than the Section 7 merger statute, but commentators—including a federal appellate judge who was involved in a Section 2 decision that the enforcers cite—have called this theory flawed and troubling.
Despite COVID-19, SAMR remained open throughout 2020 and reviewed and cleared more than 400 deals in 2020. Improving efficiency of merger review was one of the top priorities for SAMR in 2020, and more than 80% of the notified mergers were cleared through the simplified case procedure more quickly than in previous years.
SAMR in 2020 approved four transactions with conditions, namely GE/Danaher, Cypress/Infineon, Mellanox/Nvidia, and WABCO/ZF. Structural remedies were imposed in GE/Danaher, and behavioral remedies were imposed in the other cases, including that the merged entity will ensure stable supplies of its products and services and refrain from engaging in tying or imposing other terms on counterparties that are deemed to be unfair.
In 2020, SAMR also fined companies for failure to notify 14 reportable transactions, which is roughly in line with the previous year. The three most recent decisions indicate a shift in SAMR’s approach to the review of merger filings involving the Variable Interest Entity (VIE) structure, a form of contractual control commonly adopted by companies in the Internet, telecom, education and cultural sectors. Since the AML took effect in 2008, the antitrust enforcers have not formally reviewed or made decisions on merger filings involving the VIE structure. The enforcers have been concerned that any competition review decision might be considered as endorsing the legal validity of the VIE structure itself, a grey area under PRC law. In December 2020, however, SAMR fined Alibaba Investment, China Literature, and Shenzhen Hive Box Network Technology (Hive Box) RMB 500,000 (approximately USD 76,463) each for their failure to file reportable transactions involving the VIE structure. These penalty decisions, closely followed by SAMR’s statements urging digital platforms to rectify AML violations, indicate that future transactions involving the VIE structure that meet the notifying thresholds will need to be reviewed and cleared by SAMR before closing.
Merger Control
Merger Control
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
Despite COVID-19, SAMR remained open throughout 2020 and reviewed and cleared more than 400 deals in 2020. Improving efficiency of merger review was one of the top priorities for SAMR in 2020, and more than 80 percent of the notified mergers were cleared through the simplified case procedure more quickly than in previous years.
SAMR in 2020 approved four transactions with conditions, namely GE/Danaher, Cypress/Infineon, Mellanox/Nvidia, and WABCO/ZF. Structural remedies were imposed in GE/Danaher, and behavioral remedies were imposed in the other cases, including that the merged entity will ensure stable supplies of its products and services and refrain from engaging in tying or imposing other terms on counterparties that are deemed to be unfair.
In 2020, SAMR also fined companies for failure to notify 14 reportable transactions, which is roughly in line with the previous year. The three most recent decisions indicate a shift in SAMR’s approach to the review of merger filings involving the Variable Interest Entity (VIE) structure, a form of contractual control commonly adopted by companies in the Internet, telecom, education and cultural sectors. Since the AML took effect in 2008, the antitrust enforcers have not formally reviewed or made decisions on merger filings involving the VIE structure. The enforcers have been concerned that any competition review decision might be considered as endorsing the legal validity of the VIE structure itself, a grey area under PRC law. In December 2020, however, SAMR fined Alibaba Investment, China Literature, and Shenzhen Hive Box Network Technology (Hive Box) RMB 500,000 (approximately USD 76,463) each for their failure to file reportable transactions involving the VIE structure. These penalty decisions, closely followed by SAMR’s statements urging digital platforms to rectify AML violations, indicate that future transactions involving the VIE structure that meet the notifying thresholds will need to be reviewed and cleared by SAMR before closing.
Merger Control
If you have questions about these developments, please contact a member of our Antitrust/Competition team.
Merger Control
Antitrust Investigations - Cartels and Abuse of Dominance
Merger Control
Legislative and Rule-making Developments
Antitrust Investigations - Cartels and Abuse of Dominance
Merger Control
Legislative and Rule-making Developments
Invoking Sherman Act Section 2, which prohibits monopolization, DOJ filed suit to block Visa’s proposed acquisition of Plaid, a provider of mobile-focused financial technology. DOJ alleged that the acquisition would maintain Visa’s existing monopoly in the “online debit” market by eliminating a “nascent” competitor. Similarly, the FTC alleged that Facebook’s acquisitions of Instagram and WhatsApp violated Section 2, even though the FTC had previously reviewed both acquisitions pursuant to the Hart-Scott-Rodino Act and allowed them to proceed. Some enforcers have argued that Section 2 presents a lower bar to merger challenges than the Section 7 merger statute, but commentators—including a federal appellate judge who was involved in a Section 2 decision that the enforcers cite—have called this theory flawed and troubling.
The U.S. agencies sought to regulate mergers using the Section 2 monopolization statute.