In a nutshell
Antitrust attorneys advise clients on whether their business practices comply with regulations domestically and abroad so that markets function effectively on the basis of fair and open competition. In doing so, they undertake a broad range of different legal activities, including litigation, government investigations, merger advice and counseling.
Within litigation, generally there are cases alleging improper single company conduct and those alleging anticompetitive agreements or collusion among two or more entities. The former refers to claims against a single entity for monopolistic conduct, such as predatory pricing or abuse of monopoly power. The latter refers to an agreement or conspiracy among two or more entities that could include conduct such as boycotting, bid-rigging, price-fixing and dividing markets or customers. Many of these cases are brought by a class of affected customers or consumers. Both types are private and civil.
Government investigation, or enforcement, can be brought as a civil or criminal proceeding. Civil enforcement involves investigating companies for certain conduct, asking them to change their behavior, and sometimes fining them. Criminal investigations revolve primarily around cartels and price-fixing, and carry steep criminal penalties.
Merger advice (often called merger control) is another big piece of antitrust work, whereby attorneys shepherd their client through major regulations associated with M&A transactions, which generally result in a greater market share, the likely elimination of competitors and a greater risk of monopolistic conduct. Counseling involves providing clients with advice about their current and future business practices, such as co-marketing or distribution.
What lawyers do
Civil litigation on the defense side
- Receive complaint and file for motion to dismiss. This can often go through several rounds, as the claimant amends the complaint.
- If working on a class action, attorneys conduct 'class' discovery, during which they work with experts to attempt defeating class action certification. They will depose the experts and file and defend their reports.
- If class certification is granted, or if the case was never a class action to begin with, lawyers conduct 'merits' discovery. This requires producing all the relevant documents and conducting depositions about liability and damages.
- Apply for summary judgment. If summary judgment is denied, attorneys prepare for trial, which involves determining what evidence and depositions to use and whether they will be admitted, drawing up the exhibit list, and deciding what sort of discovery or motions to push for.
- Go to trial. Handle post-trial steps.
- Attorneys for plaintiff conduct due diligence before filing a complaint, oppose motions to dismiss, defend class action certification and oppose summary judgment.
Civil government investigation
- Receive Civil Investigative Demand (CID) from the Federal Trade Commission or Department of Justice, requesting documents. State attorneys general can also initiate investigations.
- Negotiate with the government to narrow the categories of violations, limit the bounds of discovery and win more time.
- Produce the requested documents, ensuring those provided comply with the government’s demand. Jay Srinivasan of Gibson Dunn describes this portion as capable of being a “massive implementation effort” in larger cases.
- Negotiate and maybe give interviews to the government while waiting for its decision.
Depending on the three possible outcomes, attorneys close the investigation, negotiate, or defend the client in court or before an administrative law judge.
Criminal government investigation
- Receive grand jury subpoena or FBI warrant.
- Conduct investigation into possible wrongdoing.
- Produce materials requested by the subpoena or warrant.
- If evidence suggests possible wrongdoing, counsel client on strategies to defend against a possible charge or advise on possible plea arrangements.
- Client decides whether to fight or plea. If the latter, negotiate plea agreement (including scope of charge and fine amount).
- Enter into a plea agreement.
- If negotiations fail and the client does not enter into plea, or chooses to fight the charge, attorneys will go to trial.
- If the merger meets one or more of the government’s enumerated thresholds, attorneys file a Hart-Scott-Rodino form (HSR), indicating the intent to merge.
- Conduct due diligence and spot issues.
- Determine the likelihood that the merger will be challenged, reviewed or investigated.
- Depending on the government’s response to the HSR, lawyers wait, go ahead with the merger, agree to a consent decree, or defend the client in an injunctive trial or administrative hearing.
Realities of the job
- Attorneys must know how markets work, how they are defined and how different forces will affect them. You don't need to have studied economics as an undergraduate but it will certainly help if you have.
- The Sherman Antitrust Act of 1890 and the Clayton Antitrust Act of 1914 are the body of law most antitrust attorneys work with and which forms the foundation for most state antitrust laws.
- Legal precedent plays the largest role in antitrust matters. Lawyers must know their case law, especially US Supreme Court decisions, and the issues that have and have not been resolved.
- Even the smallest antitrust case can take two to three years to make its way through litigation. If it’s only a two-party case of smaller companies, it could still take two years or more.
- Because the cases tend to be large and high-profile, young associates often have to share responsibility among a larger team. If the case is big enough, however, associates may get an opportunity to second-chair depositions.
- Discovery is a crucial part of the litigation process and is document and time-intensive. Associates will play a key role in document review and become integral members of the team, because nobody is more valuable to litigation than those who know the documents well.
- The stakes in criminal cases are higher than in civil ones, since there is more potential for individual exposure. Public companies will tend to plead if there is a substantial basis for criminal charges, since trial will carry significant risk and uncertainty.
- The DOJ, the only agency that handles criminal matters, has historically lost more than half its cases. Juries are very particular in applying an exacting burden of proof on the government. Recent Supreme Court decisions have also been favorable to antitrust defendants.
- Whereas the antitrust section of the DOJ is a small part of a large department, the FTC is an independent regulatory agency and handles some matters the DOJ doesn’t, such as unfair competition and advertising. Attorneys will have different experiences with people at both the DOJ and FTC, based on the different rules and procedures of each, as well as on personalities.
- Generally speaking, antitrust work on mergers will increase when the economy is good, while a downturn will bring more litigation work.
- David Wales of Jones Day explains how “antitrust is really quite cyclical, so moves from periods of intense activity to moderate activity. By nature, antitrust issues are company issues, so with that comes the client demands so that you sometimes have to work night and day to get good results.”
- Antitrust will also be affected by intellectual cycles and en vogue economic theories. Daniel Swanson of Gibson Dunn says: “We’re currently in an upswing of thought calling for greater activism, internationalization, and coordination in jurisdictions.”
- Antitrust is renowned for its constantly evolving nature, as David Wales says: “It's not about black and white answers, so you have to be someone that embraces ambiguity. You have to be able to take a vague area of the law and give clients practical advice.”
- Steven Newborn at Weil, Gotshal & Manges says: “One of the advantages of working on mergers is that they have a beginning, a middle and an end and they normally last only a few months. I find it very attractive to be able to have a decision within a relatively short period of time.”
- A significant number of antitrust litigation has emerged in recent years, in part due to the US' general economic climate. Cravath Chairman Evan Chesler explains: “After a significant downturn in the economy there is often an after effect and echo effect on antitrust litigation which follows. This is either because people believe that during a downturn companies did things they shouldn't have done or during the recovery from a downturn there is a belief that companies engaged in that sort of conduct. It's not that unusual for there to be an uptick in antitrust litigation after a recession.”
- Twenty-five merger investigations in the USA during 2015 were subject to merger remedies while one deal was banned outright and five more were abandoned after coming under regulatory scrutiny.
- The antitrust landscape varies from administration to administration. The recent rise in federal prosecutions has also been driven by the adoption of a much tougher enforcement stance under Obama than the preceding Bush administration. The first year of Obama's presidency saw the total in fines for criminal antitrust cases top $1 billion for the first time ever while in 2015 alone that figure rocketed to $3.6 billion. It remains to be seen how much of an effect the coming administrative change will have on this area.
- Private antitrust claims – these are brought alongside Department of Justice investigations or prosecutions – continue to hit companies hard, with some of the largest ever civil antitrust settlements being awarded in 2015. Until the DOJ's tough enforcement stance is relaxed, this trend won't be waning any time soon.
- The US has traditionally been the most popular venue for antitrust litigation, especially when it comes to class actions suits. In recent years, however, the number of claims being brought in Europe and Asia is steadily increasing as enforcement regimes within these jurisdictions rapidly develop. US lawyers need to become increasingly familiar with antitrust regulations in these locations and their affect on issues arising in the USA.
- In March 2016 it was announced that Japan and the EU would expand the extent to which their antitrust regulators share information. This extension should allow more comprehensive enforcement in both jurisdictions while also decreasing the chances of conflicting rulings.
- Concerns were raised in early 2016 by the US Treasury that the European Commission (the EU's regulatory body) is unfairly targeting US companies in tax regulations, pointing out that three out of four EU investigations into tax deals with EU countries revolve around US corporations. The EU has denied the allegations but with both sides intent on hammering home their point, it doesn't look like this difference of opinion will be resolved any time soon.
- At the time of going to press, debates were currently ongoing in the US House of Representatives over a bill that would see the merger review procedures of the Federal Trade Commission and Department of Justice more closely aligned.