Antitrust

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.

Mergers

• 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 might help if you have.
•        The Sherman Antitrust Act of 1890, The Federal Trade Commission Act of 1914, and the Clayton Antitrust Act of 1914 form the body of law that most antitrust attorneys work with – together they provide the foundation for most state antitrust laws.
•        Attorneys must also be familiar with amending acts, such as the Hart–Scott Rodino Act of 1976 in relation to merger guidance.
•        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, former partner at 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.”

Current issues

 June 2023

• There is a general push from authorities towards stronger antitrust enforcement in the US, with the DOJ and FTC requesting historic budget increases to support their more assertive agendas.  
• There is a move – exemplified by Biden’s Executive Order 14036, signed in July 2021 – to set up the White House Competition Council, an inter-agency effort to promote market competition. Biden also established a position for a so called ‘competition czar’ (a.k.a. the Special Assistant to the President for Technology and Competition Policy), which was held by Tim Wu for two years until the beginning of 2023, albeit without a replacement. In the midst of a merger wave, the Biden administration spent 2022 focusing on aggressive merger enforcement, especially in the healthcare, labor, consumer and technology sectors.
• Jennifer Rie a senior antitrust ligation analyst at Bloomberg, describes “the antitrust world as being in the midst of a revolution.” She notes that current policies and weak enforcement of those policies has led to the monopolization of several industries, with Rie pointing to Big Tech as one example. Growing dissatisfaction of business-friendly policies and legal precedent is behind the drive of reviewing and renewing current competition policies.
• This approach has been illustrated by the chair of the FTC, Lina Khan, who has promised to take a progressive and bold stance, by taking on riskier cases to enforce antitrust laws.
• For example, the DOJ and FTC are looking to tweak current merger guidelines, with proposed revisions expected imminently after a surge in filings, which, according to the FTC, more than doubled in the 2020-21 period.
• In terms of litigation, the DOJ and FTC took bolder antitrust enforcement positions in 2022 and demonstrated that they were willing to pursue innovative legal theories. The DOJ has pursued more open grand jury investigations and charged more cases last year than it has in decades.
• Regulation of the digital economy is, and will continue to be, a contentious battle ground in the years ahead. Big Tech continues to dominate this front, as tech specialists Wilson Sonsini’s managing partner, Doug Clark notes: “There has been heightened scrutiny of all activity in life sciences and tech and litigation flows from both, so that’s kept us busy too.”
• The DOJ is gearing up to show its mettle against Google in a pending lawsuit that targets the tech giant’s advertising practices. The states of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia joined the DOJ in the lawsuit and the case is expected to go to trial in September 2023. This case is evolving alongside anticipated litigation against Amazon and Apple in a bid for the DOJ and FTC to secure wins against Big Tech.
• Wedded to these concerns is the emergence of 'killer' acquisitions in the tech sphere. Defined as an acquisition from an established company acquiring a smaller start-up, these strategic buys ostensibly eliminate potential future competitors.
• For example, social media giant Meta took center stage once again and (this time) had a successful run of the courts. A district court judge in California ruled against an FTC complaint that was filed against the tech powerhouse in July 2022, prompted by concerns around its acquisition of VR creator Within Unlimited. The ruling follows a string of losses for the FTC in the courts as of late.
• Additionally, the Microsoft/Activision merger sent antitrust enforcers across the globe into action in 2022, fueled by growing concerns that the deal could impact competitors and consumers, as Activision holds the IP rights to popular games such as Call of Duty. The UK’s Competition and Markets Authority, the EU commission and the FTC have all launched ongoing investigations into the merger.
• Within the EU, Margrethe Vestager – the European Commissioner for Competition – continues to have antitrust enforcement in her sights. But much like the US, the EU has also suffered from losses in the courts, with key general court appeals for Google Android and Qualcomm against the Commission resulting in both former decisions being annulled.
• However, things are looking up for the Commission following a recent success in the general court against another Google appeal, this time in relation to the Commission’s Google Search decision. This result will likely embolden regulators to take on more cases against the tech behemoth.
• As the world becomes further defined by its commitment to decarbonization and a greener economy, companies working together to fight climate change will need to be cognizant of existing antitrust laws.