Insights

Two bills currently making their way through the California Legislature could, if passed, have far-reaching implications for how companies doing business in California price their goods and services. California Assembly Bill 325 (Aguiar-Curry) and Senate Bill 384 (Wahab), as drafted, seek broad prohibitions against the use, distribution of, and inputs into algorithmic pricing and supply software, even where there is no coordination among competitors on the use of such software or the setting of prices. Their enactment would reach every business that uses software applications to develop pricing, supply levels and other commercial terms in California. Crowell & Moring represents the California Chamber of Commerce (“CalChamber”) in monitoring, analyzing and responding to the proposed bills.

Over the last year, the California Law Revision Commission (“CLRC”), the influential body that makes recommendations to the legislature, has been considering sweeping reforms to California’s antitrust law, the Cartwright Act. Recently, the CLRC voted to propose several changes to the Cartwright Act aimed at expanding the reach and scope of the law. Companies doing business in California should pay close attention to this ongoing process because of the potentially dramatic impact such new state laws could have, including increased exposure to antitrust litigation. Crowell & Moring is representing the California Chamber of Commerce (“CalChamber”) in monitoring, analyzing and responding to the CLRC’s recommendations.

In the last days of the Biden Administration, the Antitrust Division (DOJ) took the rare step of bringing two separate enforcement actions relating to violations of the Hart-Scott-Rodino (HSR) Act. The DOJ announced a record $5.6 million civil penalty for “gun jumping” in connection with a 2021 acquisition of a crude oil producer. Days later, the agency sued a private equity fund for violating the HSR rules by failing to make required notifications and omitting or altering required “Item 4” documents.

Four days before the change in administration and in the wake of several high-profile trial losses in cases involving alleged “no-poach” and wage-fixing agreements, the Federal Trade Commission (FTC) and the Department of Justice, Antitrust Division (DOJ) jointly approved new guidelines, Antitrust Guidelines for Business Activities Affecting Workers” (the “2025 Guidelines” or “Guidelines”), that explain how antitrust enforcers have identified and assessed whether an agreement or business practice affecting workers may violate the antitrust laws.  The 2025 Guidelines were voted out at the FTC on a split 3-2 vote along party lines, with a brief but scathing dissenting statement from the Republican commissioners (including incoming FTC Chair Andrew Ferguson) that raises serious doubts as to how well the Guidelines reflect the approach the agencies will take during the next four years.  On the eve of the incoming Trump Administration, the 2025 Guidelines replaced the previous joint DOJ and FTC antitrust guidelines regarding employment practices that were issued in 2016, “Antitrust Guidance for Human Resource Professionals” (the “2016 Guidelines”), during the tail-end of the Obama Administration.

On December 20, 2024, the Federal Circuit affirmed a district court’s holding that five device patents had been improperly listed in the Orange Book by Teva Pharmaceuticals, Inc. as claiming a drug, and ordering that they be delisted.

On January 31, 2023, U.S. District Court Judge Edward Davila (N.D.Cal.) denied the request of the Federal Trade Commission (FTC) for a preliminary injunction to halt Meta’s acquisition of virtual reality (VR) fitness app developer Within.  Because Meta does not compete in the VR dedicated fitness app business, the litigation was a rare example of how a court assesses the “actual” and “perceived” potential competition theories of harm.  Although the court upheld the FTC’s market definition, claims of a highly concentrated market, and the validity of these potential competition theories, the court ultimately held that the FTC failed to demonstrate it was “reasonably probable” Meta would have entered the VR dedicated fitness app business without the Within acquisition, or that VR dedicated fitness app developers’ perception of Meta as a potential entrant had a direct effect on tempering anticompetitive conduct in that market. 

On January 11, 2022, District Judge James Boasberg (D.D.C) largely denied Facebook’smotion to dismiss an amended complaint filed by the FTC. The FTC sued Facebook in December 2020 under Section 13(b) of the FTC Act, which authorizes the FTC to seek an injunction against an entity that “is violating” or “is about to violate” any provision of law enforced by the Federal Trade Commission. The FTC alleges that Facebook has acted unlawfully to maintain its monopoly in an alleged Personal Social Networking market in violation of Section 2 of the Sherman Act, which is alleged to constitute an unfair method of competition under Section 5 of the FTC Act. In June 2021, Judge Boasberg granted Facebook’s initial motion to dismiss, but allowed the FTC to file an amended complaint, and the FTC did so in August 2021. 

House Antitrust Subcommittee leaders David Cicilline and Ken Buck unveiled last Friday five antitrust reform bills that would target the largest technology platforms, as well as the need to increase federal enforcement agency budgets.  The effort follows the Subcommittee’s extensive Fall 2020 report and earlier proposed legislation by Senator Amy Klobuchar that would expand the federal antitrust laws’ coverage of exclusionary conduct and unlawful mergers. 

On March 18, the House Subcommittee on Antitrust, Commercial, and Administrative Law held its third investigative hearing this year, entitled, “Reviving Competition, Part 3: Strengthening the Laws to Address Monopoly Power.” The hearing underscored increasing calls from some lawmakers, law enforcers, and judges to rethink the nation’s recent approach to competition law and policy in favor of more extensive government intervention.

On October 23, 2020, the European Commission published its impact assessment providing its plans for the reform of the Vertical Block Exemption Regulation (VBER) and Vertical Guidelines. A number of impactful changes to the current rules are envisaged in relation to dual distribution, active sales restrictions, online sales restrictions, and Most Favored Nation clauses (MFNs). Moreover, the Commission will provide additional guidance on the circumstances in which Resale Price Maintenance (RPM) and non-compete obligations are permitted.

On October 6, 2020, the majority staff of the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law released a long-awaited report on the state of competition in digital markets titled Investigation of Competition in Digital Markets, Majority Staff Report and Recommendations (“Staff Report”). The 450-page Staff Report is the capstone of a year-plus investigation of digital markets, the conduct of the largest online companies, and the effectiveness of current antitrust laws and enforcement. The Staff Report lodges heavy criticism of the state of competition in the digital economy and antitrust enforcement, and recommends an array of legislative proposals—including specific reforms to address anticompetitive conduct in digital markets, as well as strengthening merger and monopolization enforcement and significant revisions to the antitrust laws generally—that would arguably represent the largest overhaul of antitrust law and enforcement in history, not just in digital markets but across all industries. A group of Republican Subcommittee members issued a separate report, The Third Way: Antitrust Enforcement in Big Tech, which supports bipartisan efforts to reform antitrust enforcement to address competitive harm in digital markets, but disagrees with some of the majority staff's recommended proposals.  

Last week, the Ninth Circuit issued its long-awaited decision in FTC v. Qualcomm and vacated the district court’s injunction against the company. The decision provides guidance on how the antitrust laws should be applied to novel patent licensing schemes and settles some uncertainty surrounding if and when a company is obligated to cooperate with its competitors. The decision also closes one more chapter in a battle between the two federal agencies tasked with enforcing American antitrust law.

On May 11, 2016, the European Commission prohibited the proposed acquisition of Telefónica UK (O2) by Hutchison 3G UK (Three). The transaction would have been a 4:3 merger involving the number 2 and number 4 U.K. mobile network operators. The merged entity would have had a non-dominant share of around 40% and network sharing arrangements with both its remaining competitors (BT/EE and Vodafone). The Commission’s decision was based, in particular, on the elimination of Three as “an important competitive force” that offered the most competitive prices in certain market segments and 4G at no extra cost. The Commission made no finding of coordinated effects.

On March 3rd, the Antitrust and Public Contract Law Sections are hosting a joint meeting to discuss the Department of Justice’s new Procurement Collusion Strike Force (PCSF). Attendees will have the opportunity to hear directly from DOJ representatives as they provide their insights into the PCSF. The meeting will be held at the offices of Crowell & Moring from 12:30-2:00 pm, with the panel commencing at 1:00 pm. Lunch will be available for a charge of $10.00. Please RSVP to Victoria Walker at vwalker@crowell.com if you will attend in person or would like to participate by telephone.