Competition Corner

Last week, Donald Trump was elected to serve as the 47th president of the United States. President Trump’s election raises questions about the future of antitrust policy and enforcement, particularly following the major policy shifts and increased scrutiny of mergers and acquisitions under the Biden administration.

On September 17, 2024, the DOJ’s Antitrust Division withdrew from its 1995 Bank Merger Guidelines and announced that, going forward, it will use the 2023 Merger Guidelines, along with a 2024 Banking Addendum, in evaluating the competitive impact of mergers and acquisitions in the banking industry. The DOJ’s announcement comes roughly three years after President Biden issued an executive order encouraging the DOJ to enhance the enforcement standards set forth in the previous Bank Merger Guidelines. 

In early August, the U.S. Department of Justice (DOJ) entered a consent decree with Legends Hospitality Parent Holdings, LLC (“Legends”) to resolve gun-jumping allegations that Legends improperly exerted operational control over ASM Global, Inc. (ASM) while its HSR filing for its acquisition of ASM remained pending. Although the DOJ allowed the transaction to close, Legends agreed to pay $3.5 million and be subject to seven years of DOJ oversight to resolve the allegations. This action by the DOJ provides a reminder to buyers and sellers of the need to continue operating independently after a deal is signed until closing even when the deal does not present significant antitrust concerns.

The Federal Trade Commission (FTC) announced yesterday the increased Hart-Scott-Rodino (HSR) Act thresholds for 2024. 

In analyzing a government contractor target for a proposed acquisition—such as a merger, asset sale, or stock purchase—due diligence may uncover a seller’s noncompliance with certain Federal Acquisition Regulations or other applicable regulations.

On September 27, 2023, a Louisiana federal court issued a landmark ruling addressing the intersection of the Hart-Scott-Rodino (HSR) Act and the Certificate of Public Advantage (COPA) regimes adopted by various states.

The Federal Trade Commission’s (FTC) continued scrutiny of private equity “roll-up” strategies resurfaced in a recent complaint filed in Texas federal court alleging that the private equity firm Welsh, Carson, Anderson & Stowe (Welsh Carson) and its portfolio company U.S. Anesthesia Partners, Inc. (USAP) entered into a “multi-year anticompetitive scheme to consolidate anesthesiology practices in Texas, drive up the price of anesthesia services provided to Texas patients, and boost their own profits.” 

Illinois has adopted a new antitrust law, effective January 1, 2024, requiring pre-merger notification of certain transactions between health care entities, including hospitals and provider groups. 

After a series of withdrawals of key antitrust policy statements and guidance documents and announcing an intention to make changes to the merger guidelines, the Federal Trade Commission and Department of Justice (the Agencies) have released new proposed Merger Guidelines.

On June 27, 2023, the Federal Trade Commission (FTC) announced that it will issue a 132-page Notice of Proposed Rulemaking drafted in concurrence with the U.S. Department of Justice (DOJ) that, if implemented, would bring sweeping changes to the U.S. merger review process. The proposed changes would require merging parties reporting transactions under the Hart-Scott-Rodino Act (HSR) to collect and submit to the FTC and DOJ significantly more information than is currently reported in the HSR form, likely significantly lengthening the time and expense associated with reporting transactions under the HSR Act. Indeed, the FTC’s own estimate is that the number of hours required to prepare an average HSR filing will increase nearly four-fold from 37 to 144 hours. Although the FTC states in its press release that the purpose of the proposed changes is to improve the efficiency and effectiveness of merger reviews, the additional burden on merging parties will be substantial. 

The Federal Trade Commission (FTC) announced yesterday the increased Hart-Scott-Rodino (HSR) Act thresholds for 2023.

Last year, we previewed the Department of Justice’s antitrust lawsuit seeking to block Penguin Random House’s purchase of its competitor, Simon & Schuster, as a prominent example of the DOJ’s recent increased focus on monopsony theories of competitive harm.  After a year of litigation, the case reached resolution in November, when U.S. District Court for the District of Columbia (now D.C. Circuit) Judge Florence Pan issued a decision enjoining the merger, determining it would lessen competition in the market to acquire publishing rights and therefore violated Section 7 of the Clayton Act.  

On Friday, December 23, 2022, the House of Representatives passed the Consolidated Appropriations Act, 2023 (the “Act”) after the Senate had passed the Act on Thursday with bipartisan support. President Biden is expected to sign the Act shortly, averting a potential government shutdown. 

The Department of Justice’s Antitrust Division recently highlighted several new enforcement priorities of the DOJ. These enforcement priorities should be of particular interest to businesses, such as private equity funds, that regularly make Hart-Scott-Rodino filings in connection with M&A transactions.

While regulators are signaling their goals to revise and strengthen merger enforcement, they are picking a fight against a particular obstacle to achieving their vision in health care. Specifically, the Federal Trade Commission is currently pushing states to restrict their use of Certificates of Public Advantage. 

China’s Anti-Monopoly Law (AML) was significantly amended in June 2022, with changes taking effect August 1, 2022. 

The U.S. Federal Trade Commission (FTC) and Department of Justice, Antitrust Division (DOJ) recently hosted a two-day virtual workshop titled “The Future of Pharmaceuticals: Examining the Analysis of Pharmaceutical Mergers.”

On June 14, 2022, the Federal Trade Commission (“FTC”) announced that it had required ARKO Corp. and its subsidiary GPM to roll back certain provisions of their acquisition of 60 Express Stop retail fuel outlets from Corrigan Oil Company, including limiting a broad non-compete provision.

On June 2, 2022, the Federal Trade Commission (“FTC”) continued its aggressive scrutiny of health system mergers, announcing administrative challenges to two proposed mergers – one in Utah, and the other in New Jersey. The Utah challenge seeks to block the proposed merger between HCA Healthcare and Steward Health Care System in the Wasatch Front region of Utah, which surrounds Salt Lake City. The New Jersey challenge is aiming to prevent RWJBarnabas Health’s proposed acquisition of Saint Peter’s Healthcare System in Middlesex County, New Jersey. The FTC is also pursuing injunctive relief in federal court in both cases. The FTC voted unanimously to challenge both mergers.

In a recent settlement agreement with JAB Consumer Partners (JAB), the Federal Trade Commission (FTC) continued the trend of increased regulatory scrutiny of private equity “roll-up” transactions when it imposed broad prior notice requirements on future acquisitions as a condition to closing JAB’s proposed $1.1 billion acquisition of SAGE Veterinary Partners, LLC (SAGE).