Jeffrey Kessler Speaks at the 2022 ABA Antitrust Law Spring Meeting

On April 6, Winston & Strawn Co-Executive Chairman and Co-Chair of Winston’s global Antitrust/Competition Practice Jeffrey Kessler spoke on a panel entitled “Navigating Per Se and Rule of Reason” at the 2022 ABA Antitrust Law Spring Meeting in Washington, D.C.

The panel examined recent decisions and what they suggest about courts’ proper mode of analysis in Sherman Act Section 1 cases moving forward (per se vs. rule of reason vs. quick look). Panelists also addressed the Biden administration’s focus on antitrust enforcement in labor markets and the government’s move towards criminal enforcement.

Key takeaways from the panel include:

• While the rule of reason’s three-step framework is a useful analytical tool, it is not a rigid formula that will always provide a clean answer. The ultimate question is whether the restraint promotes or suppresses competition. The Supreme Court’s decision in Alston v. NCAA reaffirmed the use of the fact-specific “reasonably less restrictive alternative” test at step three, which had been challenged as too rigid.
• Alston v. NCAA reaffirmed that courts will not accept special justifications for behavior if such rationales are not procompetitive. Proffering policy arguments will not subject firms to reduced scrutiny for anticompetitive conduct.
• The quick look analysis has traditionally not been used in the context of vertical restraints, but questions remain as to whether it can be used to uphold horizontal restraints (in addition to being used to strike them down).
• The fact that a quick look analysis does not require a full market analysis and showing of market power puts plaintiffs and enforcers in an interesting spot at the beginning of cases. If a trial judge determines that quick look doesn’t apply (as happened in the Second Circuit’s 1-800 Contacts v. Federal Trade Commission), courts cannot simply go back and conduct a full market analysis later. To avoid this problem and preserve judicial resources, plaintiffs should plead rule of reason in the alternative, and either litigants should seek early summary judgment on this question, or courts should set up a process for early determination.
• Antitrust enforcement in labor markets will continue to be an area to watch. The Departments of Justice and Labor have announced that they will participate in joint enforcement with the goal of promoting competition in labor markets, which will be treated the same as any other markets. Likewise, the Treasury Department issued a report on how a lack of competition depreciates wages for workers.
• While antitrust violations in labor markets had traditionally been enforced civilly, the DOJ and FTC announced in 2016 that moving forward, naked no-poach and wage-fixing agreements would be criminally prosecuted. The first such criminal case was not brought until 2021, but it has been followed by numerous others. Defense attorneys have argued that that these lawsuits violate due process due to insufficient notice, but the government insists that the Obama Administration provided ample resources regarding labor and antitrust issues to HR officials at companies.