Look out for significant news on the criminal side from the DOJ's Antitrust Division within the next few weeks, warned Attorney General Eric Holder in what may be one of his final talks as AG. (The Senate voted to confirm Loretta Lynch on Thursday, five months after her nomination.)
The Antitrust Division won't tolerate "dishonest and destructive behavior" from "all those who would take advantage of American consumers, exploit our markets, or subvert our laws," said Holder, before announcing the upcoming criminal action. Speaking at the 63rd Spring Meeting of the ABA Section of Antitrust Law at the JW Marriott, he also discussed the extent of previous criminal antitrust enforcement efforts, including obtaining a record $1.3B in fines and penalties in the most recent fiscal year. During the Obama Administration, the Antitrust Division's criminal program has prosecuted 385 individuals and 129 corporations.
The event featured a high-profile panel of enforcers (starting fourth from left): DOJ antitrust chief Bill Baer, FTC chair Edith Ramirez, European Commission Competition Commissioner Margrethe Vestager, UK Competition and Markets Authority Chairman David Currie, and National Association of Attorneys General Multistate Antitrust Task Force Chair Kathleen Foote. Moderators were (from left) Howard Feller (chair of McGuireWoods' antitrust practice and the ABA's Antitrust Section) and ABA Antitrust Spring Meeting co-chairs Sharis Pozen (GE VP) and Hartmut Schneider (WilmerHale partner).
Amidst highly publicized antitrust matters such as the proposed $45.2B Comcast-Time Warner merger and possible actions against Google in the EU, hot issues discussed by the enforcers included:
- Cartel enforcement (Bill says it's about 40 percent of what they do).
- Pharma (healthcare issues are "front and center" in the next year with the maturing of ACA and state exchanges, and an enormous amount of merger activity, says Kathleen).
- International enforcement cooperation (Edith calls coordination and regular dialogue a top priority).
- Issues stemming from mobile and new technologies such as Uber, Airbnb and Redfin (the FTC is holding a workshop June 9 to discuss consumer protection and competition in the "sharing economy").
"There are some ideas that should never get out of corporate headquarters," said Asst AG Bill Baer (in particular, he was referring to the National CineMedia and ScreenVision merger that the DOJ challenged and was ultimately abandoned). At the end of the day it is a "huge embarrassment" for a company to invest in something, get its shareholders excited, and have to pull out at the last minute. FTC chairwoman Edith Ramirez (second from left) spoke to the proposed $3.5B Sysco-US Foods merger, saying that sometimes a company will have a remedy in mind; here, the parties felt that unloading distribution centers to the third-largest player in the market would be enough. The FTC concluded otherwise and proceeded with the challenge; there will be a preliminary injunction hearing in early May.
Pharma and healthcare are having another year in the spotlight, said a panel moderated by Hartmut and Sharis (second and third from left), with FTC Commissioner Julie Brill, UC Berkeley professor Carl Shapiro, Simpson Thacher antitrust head and former FTC GC and Bureau of Competition director Kevin Arquit, and European Commission Director-General Alexander Italianer. Much cited were reverse payments or "pay-for-delay" deals to hold back generic drugs. With healthcare spending a whopping 17% of US GDP and pharma 12% of that, it is an important issue to the FTC, Julie says. Teva Pharmaceuticals and subsidiary Cephalon just agreed to pay a record $512M class action settlement for pay-for-delay deals. The FTC also sued Teva and is heading toward a trial in June.
For the scoop on international agency cooperation, we turned to FTC Deputy Director for International Antitrust Elizabeth Kraus, Competition Commission of Hong Kong CEO Stanley Wong, Competition Bureau Canada Commissioner of Competition John Pecman, and Allen & Overy's Vanessa Turner. There's no way around international cooperation, says Stanley. Cooperation has come a long way, Vanessa agrees, especially with mergers. It's critically important to have agencies speak early, Elizabeth says, and to make remedies as consistent as possible.