Facebook Has Poached the DoJ’s Silicon Valley Antitrust Chief

TechCrunch reports that Facebook has recruited Kate Patchen, a veteran of the U.S. Department of Justice who led its antitrust office in Silicon Valley, to be a director and associate general counsel of litigation.

Patchen spent 16 years at the DoJ, where she began as a trial attorney before becoming an assistant chief in the antitrust division in 2014, and two years later she was made chief.

TechCrunch reporter Natasha Lomas writes that Patchen takes up her post amid ongoing scandals and reputation crises for her new employer, joining Facebook this month, according to her LinkedIn profile.

“Patchen, meanwhile, joins Facebook at the same time as some long-serving veterans are headed out the door — including public policy chief Elliot Schrage,” according to Lomas.

Read the TechCrunch article.

 

 




Gauri Prakash-Canjels, Ph.D. Has Joined Litigation Economics

Gauri Prakash-Canjels, Ph.D. has joined Litigation Economics, LLC as a principal in its Washington, DC office.

In a release, the firm said Prakash-Canjels has worked on more than 150 cases, including intellectual property, antitrust, breach of contract, natural resource damages, personal injury and other matters. She is a seasoned expert and has served as an expert in federal and state courts as well as mediation and the Federal Trade Commission hearings, according to the firm.

Prior to being a principal at Litigation Economics, Prakash-Canjels was a consulting director at Brewer Attorneys and Counselors (formerly, Bickel and Brewer). She was a managing director and founding member of GreatBridge Consulting, Inc. Prior to founding GreatBridge Consulting in 2012, Prakash-Canjels was a principal at The Kenrich Group, a national business and litigation consulting firm.

Her background includes academic, corporate, economic consulting, and non-governmental organization positions.

 

 




No-Poach, No-Solicit Provisions of Corporate Agreements Now Face Criminal Prosecution

U.S. Department of JusticeThe Antitrust Division of the U.S. Department of Justice recently announced a settlement of criminal charges against Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp. for having maintained agreements not to compete for each other’s employees, according to Locke Lord.

Authors Stephen P. Murphy and Joseph A. Farside Jr. write that one executive went so far as to state in an email that no-soliciting was a “prudent cause for both companies” and that the companies would “compete in the market.”

In announcing the settlement, an assistant AG noted that the criminal complaint was part of a broader Antitrust Division investigation into agreements not to compete for employees, typically known as no-solicit or no-poach agreements.

Read the article.

 

 




No-Poach Agreements Targeted by Plaintiffs, Enforcement Agencies and Senators

Agreements among companies to not hire each other’s workers are more risky than ever, warns Pepper Hamilton LLP in a post on its website.

“The DOJ’s Assistant Attorney General for the Antitrust Division, Makan Delrahim, stated on January 19 that the division has criminal cases targeting these agreements in the works,” the post says. “Meanwhile, lawsuits challenging no-poach agreements in technology, entertainment, health care and other industries have settled, sometimes for hundreds of millions of dollars. The DOJ announced its latest settlement, a civil settlement with two rail equipment suppliers, on April 3, underscoring that it did not bring criminal charges only because the suppliers ended their agreements before the FTC and DOJ issued guidance on ‘no-poach’ agreements in October 2016.”

The article concludes with some actions that firms should take to identify and limit their exposure.

Read the article.

 

 




AT&T Wants to Buy Time Warner To ‘Weaponize’ Its Content, Government Says in Antitrust Trial

Image by Mike Mozart

The biggest U.S. antitrust case of this century kicked into high gear Thursday as a government lawyer warned that AT&T Inc. wants to buy media giant Time Warner Inc. to “weaponize” its must-have content — a move that would raise prices for consumers and hinder innovation, according to the Los Angeles Times.

In opening arguments, Justice Department lawyer Craig Conrath said AT&T could use Time Warner’s content as a weapon against competitors that rely on the programming.

Reporter Jim Puzzanghera writes: “AT&T’s added leverage over pay-TV competitors to withhold content from some of the most valuable assets in entertainment — including HBO, CNN, TBS, TNT and Warner Bros., Hollywood’s largest TV and film studio — would cause prices to rise by more than $400 million a year for Americans, Conrath said.”

Read the LA Times article.

 

 




Antitrust Litigation: How an Amicus Brief Can Win an Appeal

The Antitrust Update of Patterson Belknap Webb & Tyler discusses a Federal Trade Commission case in which it appears an amicus brief may have been dispositive to the outcome of an appeal.

In Federal Trade Commission v. Penn State Hershey Medical Center, a group of 36 economists affiliated with top universities across the country filed an amicus brief explaining that the lower court used a faulty economic theory when it ruled against the FTC. The appellate court cited the brief when it reversed the district court.

Authors Jake Walter-Warner and Jonathan H. Hatch examine the brief’s influence on the appellate court and show how the court laid out the issues with the district court’s analysis just as the amicus brief did.

Read the article.

 

 

 




DOJ Warns of Criminal Actions Against Companies with Agreements Not to Poach Competitors’ Employees

An assistant attorney general in the Department of Justice has warned that the DOJ would soon launch criminal enforcement actions against companies that have so-called “no poaching agreements” with each other, whereby they agree not to solicit one another’s employees, reports Bloomberg.

Makan Delrahim, assistant AG in the Antitrust Division, says his division has “been very active” in reviewing potential violations of the antitrust laws caused by these agreements and added that “in the coming couple of months,” the public “will see some announcements” of DOJ actions.

Writing for Bloomberg, three Seyfarth Shaw lawyers warn, “The bright line has now been drawn: Any violative anti-poaching policies after October 2016 expose employers to criminal punishment. In fact, for the DOJ Antirust Division, such enforcement actions might prove to be like shooting fish in a barrel.”

Read the Bloomberg article.

 

 

 




Qualcomm Just Got Fined $1.23 Billion for Illegal Payments to Apple

Fortune is reporting that  Qualcomm has been hit with a massive $1.23 billion antitrust fine in the European Union, for illegally paying billions of dollars to Apple to make sure that its components were used in iPhones and iPads.

Reporter David Meyer writes: “The payoffs ensured that rival manufacturers of LTE baseband chipsets—the components that let mobile devices connect to cellular networks in order to provide internet connectivity—had no chance of getting into Apple’s devices for half a decade.”

The commission found that Qualcomm effectively shut down competition in the market, no matter how good competitors’ products were.

Read the Fortune article.

 

 




AT&T Counsel, an Ex-Trump Attorney, Calls DOJ’s Suit on Time Warner Deal ‘Fake Antitrust’

“There is no credible evidence” that AT&T’s proposed $85.4 billion acquisition of media powerhouse Time Warner poses any threat to industry competition or consumer prices, AT&T attorney Dan Petrocelli told CNBC on Tuesday.

Petrocelli is the lead outside counsel for AT&T in the case, in which the Department of Justice has sued to block the deal.

He cited increasing competition for television and video distribution and content as a reason not to block the proposed merger, writes reporter Matthew J. Belvedere.

“Earlier this month, reports circulated that the government had demanded AT&T sell its DirectTV unit or Time Warner’s Turner Broadcasting, operator of the CNN, as a condition of approval,” Belvedere explains. “However, the government had pushed back at those reports, and AT&T said it had no intention of selling CNN.”

Read the CNBC report.

 

 




U.S. States Allege Broad Generic Drug Price-Fixing Collusion

Image by Images Money

A large group of U.S. states accused key players in the generic drug industry of a broad price-fixing conspiracy, reports Reuters.

Reporter Karen Freifeld writes: “The states said the drugmakers and executives divided customers for their drugs among themselves, agreeing that each company would have a certain percentage of the market. The companies sometimes agreed on price increases in advance, the states added.”

The suit names 18 companies and subsidiaries and named 15 medicines. Mylan NV, Teva Pharmaceuticals USA, Ascend Laboratories and Encure Pharmaceuticals are among the 18 companies named.

The Los Angeles Times also covered Mylan’s challenges: “A price-fixing noose tightens around Mylan, the company that profiteered from the Epipen.

Read the Reuters article.

 

 




Intel Scores Victory (For Now) In Fight Against $1.3 Billion Fine

Fortune reports that Intel has won a victory of sorts in its long-running fight against a €1.06 billion ($1.26 billion) antitrust fine that was levied against it by the European Commission eight years ago.

David Meyer writes that the Court of Justice of the European Union, the EU’s top court, on Wednesday set aside the 2014 ruling of the General Court, which upheld the 2009 fine, on the basis that the General Court had made a legal error.

“This does not mean Intel is off the hook — rather, it means the General Court needs to examine Intel’s legal arguments more closely than it did before, potentially giving Intel a chance to have the fine annulled or reduced,” Meyer explains.

Read the Fortune article.

 

 

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Former FTC Chairman Timothy J. Muris Joins Sidley in Washington, D.C.

Timothy J. Muris has joined Sidley Austin LLP as senior counsel in the firm’s Antitrust/Competition practice.

Muris, a former chairman of the Federal Trade Commission (FTC), has experience inantitrust enforcement as well as in key consumer protection issues, including advertising, consumer finance and privacy regulation, the firm said in a release.

The release continues:

During his lengthy tenure with the FTC, Muris held multiple high-level posts and was the only person ever to direct both of the FTC’s enforcement bureaus. It was under his leadership that the FTC established the National Do Not Call Registry and brought numerous high-profile cases against firms for misusing government practices to raise prices. He also led the agency’s efforts to bring lawsuits against physicians for price-fixing and in challenging fraudulent and deceptive advertising and health claims to protect consumers. In addition, Muris is responsible for spearheading the FTC’s efforts to implement increased antitrust scrutiny of intellectual property issues and hospital mergers.

Muris has also spent a significant amount of time in private practice representing clients before the FTC, the U.S. Department of Justice and the European Commission as well as other domestic and international agencies. He regularly advises clients on antitrust issues in high-stakes mergers and acquisitions, as well as on important consumer protection issues pertaining to advertising, consumer finance and privacy. He serves as a George Mason University foundation professor at the Antonin Scalia Law School, a post he’s held since 1988.

“Tim is recognized as being among the best antitrust lawyers in the U.S. and we are delighted he chose to join Sidley,” said Mark Hopson, managing partner of Sidley’s Washington, D.C. office. “He’s earned the respect of both the business and government communities for his vast knowledge of antitrust and consumer protection practices. Having Tim on our team puts us in an enviable position and adds to our already considerable capabilities in helping clients navigate these challenging issues.”

 

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Antitrust Lawyers Leiv Blad and Zarema Jaramillo Join Lowenstein in D.C. Office

Lowenstein Sandler LLP announced that Leiv Blad has joined the firm as a partner and co-chair of the firm’s antitrust practice in Washington, D.C. Blad joins with Zarema Jaramillo, who becomes senior counsel in the firm’s antitrust practice. Both join from Morgan, Lewis & Bockius.

In a news release the firm said, Blad has spent nearly two decades representing domestic and international companies in complex antitrust investigations and litigation, including matters involving price fixing and monopolization, including defending clients in the pharmaceutical and financial services industries, both of which have been the subject of government scrutiny for pricing practices.

Jaramillo has antitrust experience, providing counseling and representing clients in investigations related to mergers and acquisitions and complex antitrust class actions. She represents clients from the financial services, technology, life sciences, and telecommunications and other sectors before the U.S. Federal Trade Commission, the U.S. Department of Justice, and foreign competition agencies. Jaramillo also advises clients in government investigations and civil litigation involving violations of U.S. Securities Law and the Foreign Corrupt Practices Act.

The release continues:

Said Mr. Blad, “Lowenstein’s sophisticated and accomplished team in D.C. impressed me, as did the firm’s entrepreneurial culture and client focus. I was particularly struck by the fact that every attorney I met throughout the firm could articulate with great clarity the strategy of his or her practice group and of the firm. I don’t know of another firm with that kind of strategic focus. I am grateful to be part of such a strong team as we help steer our clients through an evolving antitrust environment.”

“Leiv is a leader among his peers with a strong reputation in the antitrust arena. Zarema brings important additional strengths to the team,” said Jeffrey Blumenfeld, Co-Chair of Lowenstein’s antitrust practice. “Leiv’s extensive experience navigating the D.C. landscape will be invaluable to our clients. As we continue to grow our Washington office, Leiv and Zarema add to our already significant capabilities in core sectors including life sciences and financial services.”

Gary Klein of Klein Landau provided legal search services to the firm on this placement.

 

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How a Typical Tolling Agreement Cost Duke Energy Corporation $600,000

High-voltage transmission linesTolling agreements are a common feature of the energy industry. Through these agreements, a buyer will supply fuel to an electric generator and, in return, the generator will provide power back to the buyer, according to an article posted on the website of Hogan Lovells.

But a court recent ruled that such a tolling agreement, when entered into between companies that intended to merge, violated the Hart-Scott-Rodino Antitrust Improvements Act of 1976, leading to the imposition of significant financial penalties against the buyer.

“Parties that have or may have an interest in acquiring the other party to the agreement must be careful to avoid assuming beneficial ownership of the target before complying with the HSR Act’s reporting requirements if HSR notification would be required,” the article says. “Failure to do so may result in the tolling agreement being construed as evidence of gun-jumping and the acquiring person being subject to significant penalties of up to $40,654 per day for noncompliance.”

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Judge Blocks $54 Billion Anthem-Cigna Health Insurance Merger

A federal judge blocked the $54 billion merger between health insurance giants Anthem and Cigna, saying the deal would increase prices and reduce competition, according to a report by The Washington Post.

 is the second recent court decision to uphold the Justice Department’s opposition to deals that would have consolidated the five largest insurers in the United States into three companies.

“The evidence has also shown that the merger is likely to result in higher prices, and that it will have other anticompetitive effects: it will eliminate the two firms’ vigorous competition against each other for national accounts, reduce the number of national carriers available to respond to solicitations in the future, and diminish the prospects for innovation in the market,” U.S. District Judge Amy Berman Jackson wrote in a 12-page order.

In the merger agreement, Anthem had agreed to pay Cigna a $1.85 billion termination fee if the deal is blocked because of regulatory interference.

Read the Washington Post article.

 

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Event – A Wake-Up Call: Antitrust Compliance in the U.S.

Bloomberg BNA will present a complimentary event to discuss the widespread corporate apathy towards antitrust risks — and why the business community needs a collective wake-up call.

The event will be at the Bloomberg LP offices at 731 Lexington Ave. in New York on Thursday, Jan. 19, 2017, 8-10 a.m.

Robins Kaplan LLP is an underwriter of the event, will carries up to 1.5 CLE credits.

“Companies rely on their sales personnel to drive business growth and generate new revenue, while the in-house compliance team must prevent, detect, and report actions that could draw scrutiny from antitrust enforcement agencies,” Bloomberg says on its website. “But what if those employees don’t even know what types of conduct is problematic under the antitrust laws?”

Bloomberg BNA and Robins Kaplan LLP conducted a survey of corporate sales and compliance professionals, and the results show a widespread lack of awareness of antitrust guidelines. Among the alarming findings: 25% of respondents are engaged in pricing activities that could rise to the level of illegality.

The event is designed for in-house counsel, compliance and business executives responsible for antitrust compliance.

Register for the event.

 

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Lex Machina Expands Legal Analytics Platform to Cover Antitrust Litigation

Lex Machina, a LexisNexis company,  announced the latest expansion of its Legal Analytics® platform into antitrust law, following its recent expansion into securities law in July.

In a release, the company said the move is part of the company’s ongoing plan to expand its Legal Analytics platform beyond intellectual property law to cover every federal practice area, including commercial, product liability, employment, commercial bankruptcy and more.

The release continues:

With the expansion, antitrust litigators will be able to use Legal Analytics to make data-driven decisions based on detailed information from more than 7,800 antitrust cases active since 2009 which have thus far resulted in more than $20 billion in damages awarded. The platform gives attorneys a competitive advantage in antitrust litigation by providing strategic insights about trends in antitrust case timing, resolutions, findings, damages and remedies, as well as actionable intelligence on opposing counsel, law firms, parties, judges, venues, and more. These capabilities also extend to Multidistrict Litigation (MDL) – complex cases that could potentially have hundreds of plaintiffs across dozens of jurisdictions.

“In antitrust litigation, where potentially billions of dollars and companies’ entire futures could be at stake, Legal Analytics for Antitrust helps law firms, in-house counsel and government attorneys develop winning case strategies and data-driven arguments based on the outcomes of thousands of prior cases,” said Josh Becker, CEO of Lex Machina. “The power of Legal Analytics truly becomes apparent in multidistrict litigation where untangling some of the more complex cases could encumber attorneys for months, instead of finding the desired insights in minutes.”

As part of the product development process, Lex Machina interviewed antitrust litigators from top law firms, major corporations and government agencies to better understand their particular antitrust needs. The product team incorporated their feedback directly into the new offering. Some of the new features include:
• Expanded case coverage: Attorneys can now analyze federal cases brought under the Sherman Act, Clayton Act, Robinson-Patman Act, or Federal Trade Commission Act.
• New data source and case linking: Existing Lex Machina case data is integrated with data from the Judicial Panel on Multidistrict Litigation to provide accurate MDL case counts. The platform also links procedurally connected cases to let attorneys analyze them in the right context.
• Antitrust findings analytics: New tags have been added for Class Actions, DOJ/FTC Enforcement cases, Robinson-Patman Act price discrimination cases, and cases where counterclaims were asserted.
• Enhanced case timing analytics: Median days have been added to Dismissal, Class Certification and Summary Judgment Orders — useful for budgeting, resource allocation and legal strategy.

Lex Machina’s Legal Analytics is a “must have” tool for litigators in many of America’s top law firms and corporations. Half of the AmLaw100 law firms use Lex Machina to craft successful litigation strategies, win cases and land new clients. Due to the depth and breadth of antitrust cases, which span every industry, Legal Analytics can help attorneys gain a competitive edge in antitrust litigation.

Prior to launch, Lex Machina mined all of the antitrust cases filed since 2009 and identified a number of important trends and insights, including:
• Judge Marianne Battani of the Eastern District of Michigan has handled the most antitrust cases (393 cases) since 2009 – more than twice as many as the next leading judge.
• The top defendants since 2009 include financial institutions like JPMorgan Chase & Co (270 cases), Goldman Sachs & Co (192 cases), UBS (188 cases), and Deutsche Bank (185 cases); electronics companies like Panasonic (265 cases) and Hitachi (253 cases); and several airlines, including Delta (231 cases), American Airlines (212 cases), Southwest (211 cases), and United Airlines (206 cases).
• Cotchett Pitre & McCarthy is the top law firm representing plaintiffs (255 cases), followed by Miller Canfield (248 cases), and Spector Roseman Kodroff & Willis (236 cases).
• Latham & Watkins (340 cases), Gibson Dunn & Crutcher (334 cases), and Freshfields Bruckhaus Deringer (294 cases) are the top law firms representing defendants.
• The median time to the grant of a permanent injunction is just under a year and a half (507 days).
• Judgments favoring the defense side – especially findings of “no antitrust injury,” “no Sherman Act violation § 1 (restraint of trade), and “no Sherman Act violation § 2 (monopolization) – tend to be issued as a judgment on the pleadings or as a summary judgment.

For more information about Lex Machina’s newest practice area and to get an early look at findings from Lex Machina’s first Antitrust Litigation Report, click here. Register here for Lex Machina’s half-hour launch webcast entitled “Legal Analytics for Antitrust Litigation,” scheduled for November 17th at 11:00 am PST (2:00pm EST).

 




U.S. Sues to Block Anthem-Cigna and Aetna-Humana Mergers

Mergers - acquisitionsThe U.S. Department of Justice has filed lawsuits to block the proposed mergers of four of the nation’s five biggest health insurers, reports The New York Times.

The proposed mergers involve Aetna and Humana, and Anthem and Cigna.

U.S. Attorney General Loretta E. Lynch said the proposed mergers “would leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies.”

“If these mergers were to take place, the competition among insurers that has pushed them to provide lower premiums, higher-quality care and better benefits would be eliminated,” she said.

“The companies responded by vowing, in varying degrees, to fight the government’s challenge,” report Leslie Picker and Reed Abelson. “Aetna, which had hoped to gain an advantage by being the first to reach a deal, aggressively defended its proposed merger, which it contended was different from the larger Anthem-Cigna deal that followed.”

Read the article.

 

 




Governance Challenges 2016: M&A Oversight

National Association of Corporate DirectorsThe National Association of Corporate Directors’ 2016 edition of Governance Challenges combines guidance from five strategic content partners of the NACD with broad M&A expertise. The report addresses the importance of early board engagement in strategy, the need for proactive dialogue with all key stakeholders, and the imperative to balance short-term and long-term goals throughout the M&A process.

A complimentary copy of the report is available for download.

Boards can use this new resource to:

  • identify “drive and drag” factors that can advance or delay transaction results;
  • monitor key aspects of the due-diligence process before approving the deal;
  • understand the tax implications of a prospective transaction;
  • consider exposure to risk from antitrust liability, cybersecurity challenges, and environmental liability; and
  • select and retain talent and adjust compensation arrangements during the leadership change.

Download the report.

 

 




Reverse Break-Up Fees and Specific Performance: A Survey of Remedies

Thomson Reuters is offering a complimentary copy of the 2016 edition of Practical Law’s study, Reverse Break-Up Fees and Specific Performance: A Survey of Remedies for Financing and Antitrust Failure.

This year’s edition analyzed all 85 merger agreements entered into in 2015 for debt-financed acquisitions of U.S. reporting companies in deals valued at $100 million or more. The study provides a detailed guide to the negotiation of remedies for buyer breach by:

  • Examining how deal characteristics such as the size of the transaction and the profile of the buyer affect the negotiation of enforcement and monetary remedies.
  • Reviewing the sizes of reverse break-up fees in leveraged deals as percentages of deal value and as multiples of the target company’s break-up fee, and compares reverse break-up fees that cap the damages payable by the buyer against those that do not.
  • Analyzing other techniques for allocating risk in debt-financed transactions, including the buyer’s financing covenants, the definition of the lenders’ marketing period, and the agreement’s “Xerox” provisions.

New this year, the study contains a supplement analyzing antitrust-triggered reverse break-up fees and other mechanisms for allocating the risk of antitrust failure. For this inquiry, the study surveyed all 49 agreements in the Practical Law What’s Market M&A database for 2015 that contained a reverse break-up fee payable for antitrust failure. These included 27 agreements for the acquisition of a US reporting company in deals valued at $100 million or more and 22 publicly filed agreements for private M&A deals involving the acquisition of a US company or business valued at $25 million or more.

Download the study and receive free temporary access to Practical Law online resources.