Restraints of trade and dominance in the United States: overview

A Q&A guide to restraints of trade and dominance in the United States.

The Q&A gives a succinct overview of restraints of trade, monopolies and abuses of market power in the United States. In particular, it covers the regulatory authorities and the regulatory framework, the scope of rules, exemptions, exclusions, statutes of limitation, notification, investigations, penalties and enforcement, third party damages claims, EU law, joint ventures and proposals for reform.

For information on merger control, regulatory framework and regulatory authorities, relevant triggering events and thresholds in the United States, visit Merger control in the United States: overview.

This Q&A is part of the global guide to competition and cartel leniency. For a full list of jurisdictional Restraints of Trade and Dominance Q&As visit www.practicallaw.com/restraintsoftrade-guide. For a full list of jurisdictional Merger Control Q&As visit www.practicallaw.com/mergercontrol-guide.

For a full list of jurisdictional Cartel Leniency Q&As, which provide a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities in multiple jurisdictions, visit www.practicallaw.com/leniency-guide.

Lisl Dunlop and Shoshana Speiser, Manatt Phelps & Phillips, LLP
Contents

Restraints of trade

Scope of rules

1. Are restrictive agreements and practices regulated? If so, what are the substantive provisions and regulatory authority?

Regulatory framework

Section 1 of the Sherman Act regulates restrictive agreements and practices by prohibiting agreements that unreasonably restrain trade. Whether an agreement unreasonably restrains trade is evaluated under one of the following two standards:

  • Per se rule. Certain kinds of restrictive agreements and practices have been found to be so harmful to competition that courts consider those agreements to be illegal per se. Per se agreements are those which, due to their ''pernicious effect on competition and lack of any redeeming virtue, are conclusively presumed to be unreasonable, and therefore illegal" (Northern Pacific R.R. Co. v United States, 356 U.S. 1 (1958)). The categories of per se illegal conduct are limited to:

  • horizontal price fixing;

  • market allocation agreements;

  • big-rigging;

  • group boycotts.

Agreements that are per se illegal often can lead to criminal penalties.

  • Rule of reason. Agreements and practices that restrain trade but may have pro-competitive benefits are judged under the rule of reason. Under this rule the court weighs the pro-competitive benefits of the agreement against its anti-competitive effects. Once the court examines the totality of the circumstances a determination is made whether the overall impact of the conduct or proposed transaction is anti-competitive.

In addition, the Federal Trade Commission (FTC) enforces section 5 of the FTC Act, which prohibits unfair methods of competition in interstate commerce and unfair or deceptive acts or practices. Most states have laws that mirror the federal anti-trust statutes.

Regulatory authority

Both the FTC and the Antitrust Division of the Department of Justice (DOJ) review anti-competitive conduct. Although the agencies have concurrent jurisdiction over civil anti-trust investigations, the DOJ has exclusive jurisdiction over criminal matters. Each civil matter is assigned to either the FTC or the DOJ based on the agencies' industry expertise. By statute, the DOJ is assigned matters relating to telecommunications, banking, transportation, energy, insurance and national security.

In addition, restrictive practices may be challenged by private litigants and state attorneys general.

 
2. Do the regulations only apply to formal agreements or can they apply to informal practices?

The Federal Trade Commission Act (FTC Act) and the Sherman Act apply both to formal agreements and informal business practices as well as implied agreements. Courts look at both direct and circumstantial evidence to determine if parties acted together or unilaterally. Although parallel conduct on its own is not prohibited, businesses that act independently are best protected from the anti-trust laws.

 

Exemptions

3. Are there any exemptions? If so, what are the criteria for individual exemption and any applicable block exemptions?

Certain industries are exempt from the anti-trust law by statute. These include:

  • Capper-Volstead Act, which provides an exemption for agricultural co-operatives.

  • Webb-Pomerane Act, which provides an exemption for export cartels.

  • McCarren-Ferguson Act, which exempts the business of insurance.

  • Clayton Act, which exempts labour unions and permits collective bargaining.

In addition, professional sports leagues, utilities and certain transportation companies have non-statutory exemptions.

There are also judicially created exemptions from anti-trust laws including:

  • The state action doctrine, which exempts actions taken by state and local government from federal anti-trust laws. The Tenth Amendment to the US Constitution allows states to regulate commerce within their own jurisdiction. State action immunity exempts from the anti-trust laws, actions taken by the state and by other institutions subject to active supervision by the state and carrying out a clearly articulated state policy.

  • The Noerr-Pennington doctrine provides that private entities are immune from liability under the anti-trust laws for attempts to influence the passage or enforcement of laws, even if the laws they advocate for would have anti-competitive effects. The First Amendment to the US Constitution allows citizens to lobby for government action.

 

Exclusions and statutes of limitation

4. Are there any exclusions? Are there statutes of limitation associated with restrictive agreements and practices?

Exclusions

Other than specific statutory and non-statutory exemptions (see Question 3), there are no formal exclusions to the anti-trust laws. Federal enforcement agencies use their discretion when choosing which cases to investigate and when to seek a remedy. As a general rule, the agencies tend to focus on conduct that causes consumer harm.

Statutes of limitation

The following statutes of limitation apply:

  • Civil actions. Private damages claims brought under the Clayton Act are subject to a four-year statute of limitations from the time the ''cause of action accrues''. The statute of limitations begins to run from the commission of the last overt act causing injury or damage. The statute of limitations may be tolled by fraudulent concealment or government action.

  • Criminal actions. Criminal actions brought under the Sherman Act have a five-year statute of limitations. The statute of limitations begins to run at the last overt act in furtherance of the conspiracy.

 

Notification

5. What are the notification requirements for restrictive agreements and practices?

Notification

There is no notification requirement for entering into restrictive agreements or practices and there is no official procedure to follow.

Informal guidance/opinion

Parties can consider asking for an advisory opinion from the Federal Trade Commission (FTC) or a business review letter from the Department of Justice (DOJ). Advisory opinions and business review letters are non-binding. However, as a practical matter the agencies have not taken an enforcement action against conduct that was adequately described in an application for an advisory opinion or business review letter.

Responsibility for notification

Either party can approach the agencies for advisory opinions or business review letters (see above, Informal guidance/opinion). However, there is no duty to do so.

Relevant authority

The DOJ and FTC are the relevant authorities.

Form of notification

There is no official form for voluntary notification or informal guidance.

Filing fee

There is no filing fee for voluntary notifications or informal guidance.

 

Investigations

6. Who can start an investigation into a restrictive agreement or practice?

Regulators

Investigations into a restrictive agreement or practice can be initiated by both federal anti-trust enforcement agencies and state attorneys general. In addition, other regulators may get involved in an investigation. For example, in the financial services industry, the Securities Exchange Commission, Commodities Futures Trading Commission and main DOJ have all been involved in investigating and taking action against antitrust violations and related fraud.

Third parties

Third parties can complain to federal and state anti-trust enforcement authorities and request that the government agencies open an investigation. In addition, they can commence a private action in court and obtain discovery in those proceedings.

 
7. What rights (if any) does a complainant or other third party have to make representations, access documents or be heard during the course of an investigation?

Representations

Third parties do not have a right to make representations to federal agencies during an investigation. However, many request to do so. Anti-trust enforcement agencies can require that third parties submit information and documents to assist with its investigation. They can also require third parties to make sworn written or live testimony. Third parties and any member of the public can comment on a proposed consent order during the comment period.

Document access

Third parties do not have a right to review confidential information obtained by the anti-trust agency reviewing a restrictive agreement. Third parties can seek information through discovery in private litigation.

Be heard

Third parties do not have a right to be heard by the anti-trust enforcement agencies. However, third parties are routinely contacted as part of an investigation into the effects of a restrictive agreement or practice.

 
8. What are the stages of the investigation and timetable?

There is no set timetable or procedure for an investigation into a restrictive agreement or practice. Parties are free to enter into a consent agreement, settlement or terminate the conduct (at issue in the investigation) at any time. However, the typical phases of an investigation are:

  • Preliminary.

  • Formal.

  • Post-investigation.

Preliminary investigation

Before opening a formal investigation, the agencies open a preliminary investigation where parties can voluntarily submit information and documents. Witnesses and third parties can receive requests to offer information and documents voluntarily.

Formal investigation

Once an agency has reviewed the information and documents collected in a preliminary investigation it may decide that a closer look is necessary. It can use its compulsory process powers to formally investigate the conduct at issue. In this phase the agency can require documents, testimony and interrogatory responses from the parties and relevant third parties.

Post-investigation

If the agency concludes its investigation and decides to commence an adversarial action, either the Department of Justice (DOJ) or the Federal Trade Commission (FTC) can seek injunctive relief in court, or the FTC can decide to pursue an administrative action before an Administrative Law Judge. The parties will have the opportunity to mount a vigorous defence and both sides can appeal a district court decision to an appellate court.

A respondent in an FTC administrative proceeding or the FTC staff supporting the complaint can appeal to the FTC from an adverse ruling by an FTC administrative law judge; only the respondent can appeal to an appellate court from an adverse FTC decision. Any of these can be a slow and complex process.

Criminal prosecution

If the DOJ decides criminal prosecution is appropriate, it can use the grand jury process to further its investigation. The grand jury decides whether a criminal indictment is warranted. If the parties want to resolve the matter they can enter into a plea agreement. Although there are no specific types of criminal conduct listed in the Sherman Act, the government typically seeks criminal prosecution for per se violations like horizontal price-fixing, bid-rigging and market allocation.

 

Publicity and confidentiality

9. How much information is made publicly available concerning investigations into potentially restrictive agreements or practices? Is any information made automatically confidential and is confidentiality available on request?

Publicity

Generally, government investigations remain confidential unless the parties make a public statement. The reviewing agency rarely comments publicly on a pending investigation. However, it will sometimes issue a statement on closing an investigation. If enforcement action is taken, the agency will issue a press release and any court filings will become part of the public record.

Automatic confidentiality

Confidentiality is statutorily required for information submitted to the federal agencies. In civil litigation or administrative proceedings, certain information and documents may be disclosed. Information obtained from parties in criminal grand jury investigations is confidential. However, witnesses are not bound by the same confidentiality provisions.

Confidentiality on request

Parties can and often do request that information is kept confidential during an investigation by designating the information or documents as confidential. In the event of litigation, parties can seek a protective order to prevent commercially sensitive information from being disclosed in the court record.

 
10. What are the powers (if any) that the relevant regulator has to investigate potentially restrictive agreements or practices?

The agencies have the following powers:

  • Civil investigation. Federal anti-trust enforcers can issue subpoenas or civil investigative demands for production of documents, answers to interrogatories and testimony from relevant persons.

  • Civil litigation. Conduct broad discovery and hold adversarial proceedings.

  • Criminal grand jury investigation. The Department of Justice and state attorneys generals can require production of information, documents and testimony using grand jury subpoenas. In addition, they can use search warrants, wiretaps and electronic surveillance to gather evidence.

 

Settlements

11. Can the parties reach settlements with regulators to bring an early resolution to an investigation? If so, what are the circumstances for doing so and the applicable procedure?

Civil investigation

Parties can settle at any time. Typically, parties willing to modify a restrictive agreement or practice enter into a consent agreement. Consent agreements with the Department of Justice (DOJ) must be approved by the Assistant Attorney General and filed with a competitive impact statement in a federal court. The consent is published in the Federal Registrar to facilitate public comment for 60 days. The court reviews the comments and decides whether the consent is in the public interest. If the consent is with the Federal Trade Commission (FTC), it is subject to a 30-day public comment period and must be approved by a FTC vote. Proposed FTC consents are published in the Federal Registrar for public comment and a final consent is entered after the FTC reviews the public comments and determines that the consent is in the public interest.

Criminal investigation

A plea can be entered at any time. The DOJ staff negotiate plea agreements. The key provisions of a plea agreement include:

  • The proposed charging language.

  • An explanation of the methodology used to compute the defendant's sentencing range under the US Federal Sentencing Guidelines.

  • An explanation of how staff arrived at the recommended sentence.

  • Any unique provisions in the plea agreement.

  • Any substantive deviations from the DOJ's standard plea agreement language.

  • A description of the potential charges faced by the proposed defendant had the case proceeded to indictment.

  • A discussion of relevant victims' rights issues.

Pleas are subject to final approval by the Assistant Attorney General and then must be submitted to a US District Court for approval and entry.

 
12. Can the regulator accept remedies (commitments) from the parties to address competition concerns without reaching an infringement decision? If so, what are the circumstances for doing so and the applicable procedure?

Yes, regulators can accept a remedy that does not require a consent agreement. For example, the government may allow parties to solve competition concerns by entering into a long-term supply agreement or a licensing agreement. The agencies can decide such agreement effectively solve competition concerns.

 

Penalties and enforcement

13. What are the regulator's enforcement powers in relation to a prohibited restrictive agreement or practice?

Orders

Practices that violate section 5 of the Federal Trade Commission Act may be subject to a "cease and desist" order requiring that the restrictive conduct is terminated. The Department of Justice (DOJ) and state attorneys general must seek injunctive action orders, civil remedies and criminal sanctions. In addition, federal and state enforcement agencies can enter into consent orders to end restrictive agreements or practices.

Civil Penalties

The maximum civil penalty for violating a final order is US$16,000 for each violation or each day of a continuing violation. The regulators can seek disgorgement of profits in civil enforcement actions. Private parties can seek treble damages.

Criminal Penalties

Criminal penalties are calculated and imposed on a company-by-company basis. The maximum criminal fine is US$100 million for corporations that violate the Sherman Act. The alternative fines statute allows penalties of up to twice the pecuniary gain to the parties or loss to victims; the government interprets this provision to provide for effectively no upper limit on fines. The Sentencing Guidelines use a formula based on the affected volume of commerce, with various multipliers for size of the undertaking, participation and co-operation. Current trends are towards jail time of approximately 24 months.

Personal liability

For criminal violations of section 1 of the Sherman Act individuals can be fined up to US$1 million and sentenced to prison time of up to ten years.

For civil violation of an FTC cease and desist order an individual can be fined up to US$16,000 for each violation or for each day of a continuing violation.

Immunity/leniency

The DOJ has leniency programmes both for individuals and corporations. There are specific requirements for admission to the programmes. Corporate leniency requires that the corporation is the first to:

  • Report the conduct.

  • Terminate participation.

  • Fully disclose the conspiracy.

  • Co-operate with the DOJ's investigation.

  • Provide restitution where possible.

  • Is not a "ringleader" or chief orchestrator of the conspiracy.

The corporation must also admit wrongdoing. If the investigation is on-going, a corporation can participate if the DOJ does not have enough evidence to sustain a conviction against the corporation and it would not be unfair to other parties. If a corporation enters the leniency programme, their officers, directors and employees are included in the programme.

Individual leniency is available when the individual:

  • Is the first to report the conduct.

  • Co-operates with the DOJ.

  • Is not the ringleader.

All participants in the leniency programme have their potential damages capped at actual damages (instead of treble damages) under the Antitrust Criminal Penalty Enhancement and Reform Act.

Impact on agreements

The federal agencies can seek an order or court opinion that voids the leniency agreement.

 

Third party damages claims and appeals

14. Can third parties claim damages for losses suffered as a result of a prohibited restrictive agreement or practice? If so, what special procedures or rules (if any) apply? Are collective/class actions possible?

Third party damages

The Clayton Act gives third parties the right to sue for damages if they have been harmed by an anti-competitive agreement or practice. Third parties can seek:

  • Treble damages.

  • Injunctive relief.

  • Court costs.

  • Legal fees.

Special procedures/rules

Other than court and federal procedural rules, there are no special procedures for private anti-trust actions.

Collective/class actions

Injured parties can choose to bring their claims as a class. This process is often long and difficult. The process is governed by Rule 23 of the Federal Rules of Civil Procedure. Firstly, to file a class action, the proposed class action and representative must satisfy four prerequisites listed in Rule 23(a). These are:

  • The class is so numerous that joinder of all members is impracticable.

  • There are questions of law or fact that are common to the class.

  • The claims or defences of the class representatives are typical of the claims or defences of the class; and

  • The representative parties will fairly and adequately protect the interests of the class.

Second, the proposed class action must fit into one of three categories provided in Rule 23(b). These categories are:

  • That prosecuting separate actions by or against individual class members would create a risk of either:

    • inconsistent adjudication of individual class member claims leading to incompatible standards of conduct for the party opposing the class; or

    • adjudications of individual class member claims that as a practical matter would substantially impair non-party class members' interests.

  • The opposing party acted or refused to act on grounds that apply generally to the class as a whole.

  • The court finds that questions of law or fact common to class members predominate over any questions affecting only individual members and that a class action is superior to other available methods. Factors that the court considers to determine whether a class falls into this category are the:

    • class members' interests in individually controlling the prosecution or defence;

    • extent and nature of any litigation concerning the controversy already begun by or against any class members; and

    • likely difficulties in managing a class action.

At some point early in the case, the court will decide whether to certify one or more classes. If the court certifies a class, it will issue a certification order defining the class, the class claims, issues or defences, and appointing class counsel and class counsel's duties.

In the event that the class action is successful or a settlement is reached, the court may award attorneys' fees and non-taxable costs to class counsel. Class action victories for plaintiffs typically result in large settlements and fees for the lead class counsel.

 
15. Is there a right of appeal against any decision of the regulator? If so, which decisions, to which body and within which time limits? Are rights of appeal available to third parties, or only to the parties to the agreement or practice?

Rights of appeal and procedure

FTC Administrative Law Judge (ALJ) decisions can be appealed to the full FTC. The FTC's final decision can be appealed to the US Courts of Appeals.

US District Court decisions in civil or criminal action brought by the DOJ and state attorneys general can be appealed to the US Court of Appeals for the relevant circuit.

Final decisions made by the US Courts of Appeals can be appealed to the US Supreme Court.

Third party rights of appeal

Third parties do not have any rights to appeal decisions.

 

Monopolies and abuses of market power

Scope of rules

16. Are monopolies and abuses of market power regulated under administrative and/or criminal law? If so, what are the substantive provisions and regulatory authority?

Regulatory framework

Federal enforcement agencies and state attorneys generals can bring actions for monopolisation or attempted monopolisation. Monopolies that are naturally acquired or maintained without exclusionary conduct are not illegal as the law does not punish businesses for having a superior product or business acumen. Monopolisation claims focus on monopolies that are acquired or maintained as a result of exclusionary conduct. The Department of Justice (DOJ) brings civil claims under section 2 of the Sherman Act and the state attorneys general bring claims under their respective state's anti-trust laws. The Federal Trade Commission (FTC) brings civil monopolisation claims under section 5 of the FTC Act. Monopolisation claims are typically civil, not criminal, actions.

Substantive standard

To bring a claim under section 2 of the Sherman Act it must be established that the defendant both:

  • Possesses monopoly power in the relevant market.

  • Engaged in exclusionary conduct to obtain or preserve monopoly power.

To maintain an attempted monopolisation claim, the claimant must establish that the defendant both:

  • Engaged in exclusionary conduct with the specific intent of obtaining monopoly power.

  • Had a dangerous probability of obtaining monopoly power.

For a successful conspiracy-to-monopolise claim, the claimant must prove that both:

  • Two or more parties entered into a combination or conspiracy with a specific intent to monopolise.

  • An overt act was taken in furtherance of the conspiracy.

 
17. How is dominance/market power determined?

The US Supreme Court has defined monopoly power as the ability to control prices or output. To establish that a defendant has monopoly power, a court first examines a party's market share in the relevant market. As a general rule, market share above 70% is prima facie evidence of monopoly power in a relevant market and those below 30% are generally considered too low (see, Jefferson Parish v Hyde, 466 U.S. 2 (1984)) (finding that 30% market share was insufficient to constitute ''dominance'' or market power). However, courts do not rely solely on market share when deciding whether a defendant is a monopolist. Courts also consider barriers to entry and market conditions along with econometric (applying statistical methods to economic data) evidence.

 
18. Are there any broad categories of behaviour that may constitute abusive conduct?

The Supreme Court has held that the following types of agreements, among others, are often anti-competitive:

  • Exclusive dealing. When a seller with market power in a market for a product requires a buyer to purchase all of its requirements exclusively from the seller.

  • Tying arrangements. When a seller with sufficient market power in one market for a "tying product" imposes a requirement on a buyer forcing it to purchase a "tied product" with purchase of the desired product. For example, XYZ, a monopolist in the widget market will only sell widgets in a package with a less desirable product, widget holders, that XYZ is not able to effectively compete on standing alone. Therefore the sale of widgets, the "tying product", is "tied" to the sale of widget holders, the "tied product", making is more difficult for other widget holder manufacturers to effectively and fairly compete in the widget holder market.

  • Predatory pricing. A firm with sufficient market power lowers its price below its cost of production to drive competitors out of the market and later raise prices. This claim is difficult to maintain due to a heavy burden of proof.

  • Refusals to deal. The anti-trust laws generally do not impose a duty to deal with third parties. However, courts have held that it can be anti-competitive, for example, for a firm with a high market share to refuse to do business with a competitor without legitimate business justification.

 

Exemptions and exclusions

19. Are there any exemptions or exclusions?

Certain industries are exempt from the anti-trust law by statute. Those include:

  • Capper-Volstead Act, which provides an exemption for agricultural co-operatives.

  • Webb-Pomerane Act, which provides an exemption for export cartels.

  • McCarren-Ferguson Act, which exempts the business of insurance.

  • Clayton Act, which exempts labour unions and permits collective bargaining.

  • Certain professional sports leagues, utilities and certain transportation companies have non-statutory exemptions.

Additionally, there are judicially created exemptions from anti-trust laws including:

 

Notification

20. Is it necessary (or, if not necessary, possible/advisable) to notify the conduct to obtain clearance or (formal or informal) guidance from the regulator? If so, what is the applicable procedure?

There is no notification requirement for entering into restrictive agreements or practices and there is no official procedure to follow. However, it is advisable to voluntarily meet with the agencies about any action that is likely to lead to a significant number of consumer or competitor complaints.

Parties can also consider asking for an advisory opinion from the Federal Trade Commission or a business review letter from the Department of Justice. Business review letters and advisory opinions are non-binding. However, as a practical matter the agencies have not taken an enforcement action against conduct that was adequately described in a business review letter.

 

Investigations

21. What (if any) procedural differences are there between investigations into monopolies and abuses of market power and investigations into restrictive agreements and practices?

See Questions 21 to 24.

 
22. What are the regulator's powers of investigation?

See Questions 21 to 24.

 

Penalties and enforcement

23. What are the penalties for abuse of market power and what orders can the regulator make?

See Questions 21 to 24.

 

Third party damages claims

24. Can third parties claim damages for losses suffered as a result of abuse of market power? If so, what special procedures or rules (if any) apply? Are collective/class actions possible?

See Questions 21 to 24.

 

EU law

25. Are there any differences between the powers of the national regulatory authority(ies) and courts in relation to cases dealt with under Article 101 and/or Article 102 of the TFEU, and those dealt with only under national law?

Not applicable.

 

Joint ventures

26. How are joint ventures analysed under competition law?

The agencies examine joint ventures similarly to mergers. However, ancillary issues can also arise. These can relate, for example, to ensuring that the joint venture is not utilised as a conduit for the flow of competitively sensitive information from one party to the other.

 

Inter-agency co-operation

27. Does the regulatory authority in your jurisdiction co-operate with regulatory authorities in other jurisdictions in relation to infringements of competition law? If so, what is the legal basis for and extent of co-operation (in particular, in relation to the exchange of information)?

The federal anti-trust enforcement agencies share information with competition authorities in other jurisdictions through bilateral agreements and informal understandings with other countries. Often, large scale international cartels and conduct investigations are pursued simultaneously by competition authorities in multiple jurisdictions. Agencies must request the parties to grant the anti-trust agencies written waivers of the confidentiality provisions of the mandatory disclosures for information obtained through compulsory process or under to a Hart-Scott-Rodino filing. This permits the agencies share confidential information with competition authorities in other jurisdictions.

 

Recent cases

28. What are the recent developments or notable recent cases concerning abuse of market power?

The agencies have been active in anti-trust enforcement in the health care arena, notably pharmaceuticals, as well as the financial services industry. In the pharmaceutical area, the Federal Trade Commission (FTC) has pursued several branded drug manufacturers for anti-competitive conduct designed to exclude generics from the market following expiry of the branded drug patent. For example, the FTC's recent suit against Endo Pharmaceuticals Inc. and others involves allegations that Endo unlawfully protected its monopoly for two drugs, Opana ER and Lidoderm, through a series of agreements with two generic drug manufacturers. The FTC alleged that Endo sued the generic drug makers for patent infringement and later paid them hundreds of millions of US dollars to drop their patent challenges and delay their entry into the market for periods ranging from about seven and half months to three years.

In April 2016, the FTC announced a settlement with Invibo resolving allegations of monopolisation of the market for implant-grade polyetheretherketone, known as PEEK, sold to medical device makers. Invibio allegedly employed various anti-competitive tactics to impede Solvay Specialty Polymers LLC and Evonik Corporation from effectively competing for customers and thereby generated 90% of PEEK sales worldwide. Under the proposed consent order, Invibio is barred from: entering into exclusive supply contracts; preventing current customers from using an alternate source of PEEK in new products and using pricing terms in new contracts that could effectively result in an exclusive arrangement. They must also allow certain current customers to modify existing contracts to eliminate exclusivity requirements.

The Department of Justice (DOJ) also has been active in this area, with a major enforcement action against American Express and other credit card companies. After Visa and MasterCard settled, the DOJ went to trial against AmEx. The basis for the litigation was whether AmEx's "no steering" rules, which prevented merchants from encouraging customers to use cheaper payment mechanisms, were anti-competitive. The court found that AmEx had enough market power in the credit card services market (which did not include debit cards) to thwart competition, given its market share, how concentrated the credit card market is and AmEx cardholders' insistence on using their AmEx cards.

 

Proposals for reform

29. Are there any proposals for reform concerning restrictive agreements and market dominance?

Currently, there are no significant proposals to reform the US anti-trust laws.

 

Online resources

Federal Trade Commission (FTC)

W www.ftc.gov/about-ftc/bureaus-offices/bureau-competition

Description. This is the official website of the FTC Bureau of Competition. It is updated regularly and available in English only.

Department of Justice (DOJ)

W www.justice.gov/atr

Description. This is the official website of the US DOJ, Antitrust Division official website. It is updated regularly and available in English only.



The regulatory authority

United States Department of Justice (US DOJ), Antitrust Division

Head. Renata HesseContact details. 950 Pennsylvania Avenue, Washington, DC 20530-0001
T +1 202 514 2558 (Premerger Notification Unit)
E antitrust.atr@usdoj.gov
F +1 202 514 2363 (Premerger Notification Unit)
W www.justice.gov/atr

Outline structure. The Antitrust Division is organised into several units, each with specific subject area responsibility, including:

  • Networks and technology enforcement.
  • Telecommunications and media enforcement.
  • Transportation, energy and agriculture.
  • National criminal enforcement.
  • Economic analysis group.
  • Appellate section.
  • Pre-merger notification.
  • Foreign commerce.
  • Legal policy.
  • Regional offices.

In addition, there are several specialised litigation sections that have primary responsibility for specific industries and commodities. There is some overlap in industry specific expertise between the Federal Trade Commission and the US Department of Justice, Antitrust Division. Therefore, it is not always immediately clear which agency will investigate a particular transaction.

Responsibilities. The mission of the Antitrust Division is to promote economic competition through enforcing and providing guidance on anti-trust laws and principles.

Procedure for obtaining documents. Publicly available documents are available on the agency's website.

Federal Trade Commission (FTC)

Head. The Commission is headed by five commissioners that serve a seven-year term. They are nominated by the President and confirmed by the Senate. No more than three commissioners can be from the same political party. The President chooses one commissioner as chairman. The post is currently held by Chairwoman Edith Ramirez. The other commissioners currently are Maureen K Ohlhausen and Joshua D Wright.

Contact details. 600 Pennsylvania Avenue, NW, Washington, DC 20580
T +1 202 326 2222
E HSRhelp@hsr.gov (Premerger Notification Office)
W www.ftc.gov

Outline structure. The FTC is organised into the following two main units:

  • Bureau of Competition.
  • Bureau of Consumer Protection.

The Bureau of Competition is responsible for mergers. The bureau is further organised into several smaller units with specific industry area expertise, plus regional offices. There is some overlap in industry specific expertise between the FTC and the US DOJ, Antitrust Division. Therefore, it is not always immediately clear which agency will investigate a particular transaction.

Responsibilities. The FTC's mission is to:

  • Prevent business practices that are anti-competitive, deceptive or unfair to consumers.
  • Enhance informed consumer choice and public understanding of the competitive process.
  • Accomplish this without unduly burdening legitimate business activity.

The Bureau of Competition seeks to prevent anti-competitive mergers and other anti-competitive business practices.

Procedure for obtaining documents. Publicly available documents are available at the agency website.



Contributor profiles

Lisl Dunlop, Partner

Manatt Phelps & Phillips, LLP

T +212 790 4507
E ldunlop@manatt.com
W www.manatt.com

Professional qualifications. Partner admitted in Supreme Court of the United States; New York; District of Columbia; US District Court, District of Columbia; US District Court, New York, Eastern District; US District Court, New York, Southern District; US Court of Appeals, Second Circuit; Solicitor, England and Wales; Solicitor, New South Wales, Australia

Areas of practice. Anti-trust; health care; pharmaceuticals; financial services; media and entertainment; manufacturing.

Non-professional qualifications. Cornell University Law School, LLM; University of Sydney, BSc, LLB

Professional associations/memberships. ABA Section of Antitrust Law; Member, International Task Force; ABA Section of International Law, Chair, International Antitrust Committee, Liaison to Section of Antitrust Law; New York State Bar Association, Antitrust Section, Chair; American Health Lawyers Association.

Shoshana Speiser, Associate

Manatt, Phelps & Phillips LLP

T +212 790 4502

E sspeiser@manatt.com

W www.manatt.com

Professional qualifications. Associate, admitted in the New York; District of Columbia; US District Court, New York, Southern District; Boston University School of Law, JD; Brandeis University, BA

Areas of practice. Anti-trust; health care; media; litigation.

Professional associations/memberships. ABA Section of Antitrust Law, Member; New York State Bar Association, Member; American Health Lawyers Association, Member.


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