E-Briefs, News and Notes: February 2026

At a Section Executive Committee meeting nearly 10 years ago, the idea for an organized celebration of women competition lawyers in California first took flight. Since then, Celebrating Women in Competition Law has grown to become among the most anticipated and well-loved perennial Section events and regularly sells out. Over the years, the Celebration has spotlighted the most preeminent California female practitioners from government service, the judiciary, and all sides of private practice together in dynamic conversation. And this year’s panel continues to set the standard for can’t-miss programming.

We’re thrilled that our 2026 Celebrating Women in Competition Law in California will feature Megan Jones of Hausfeld, Beatriz Mejia of Cooley, Katie Larkin-Wong of Door Dash, and Paradi Javandel of United States Department of Justice, Antitrust Division, moderated by the Honorable Lucy H. Koh, United States Court of Appeal for the Ninth Circuit.

Please join us Thursday, March 5, 2026 from 5:00 to 8:30 pm in downtown San Francisco at Salesforce Tower for an evening of unique insights, candid exchanges, and new and strengthening connections. We’re delighted to welcome new and returning attendees to celebrate the incredible work and personal stories of women competition lawyers. You can register and learn more about programming and the speakers here. We look forward to seeing you there!

Register for the Ninth Annual Celebrating Women in Competition Law in California today.

Jiamie Chen

Each year, the Antitrust and Consumer Protection Section honors an Antitrust Lawyer of the Year at a dinner that follows the annual Golden State Institute. The Antitrust Lawyer of the Year award acknowledges that attorney’s achievements, contributions, and advancements in the field of Antitrust and Consumer Protection Section law. Nominations are due February 27, 2026. Self-nominations are accepted.  

The Inclusion & Diversity Fellowship program is a joint program managed by the California Lawyers Foundation and the California Lawyers Association Antitrust and Consumer Protection Section. The Foundation and the Section are dedicated to increasing the participation and visibility of diverse and underrepresented lawyers in the practice of Antitrust and Consumer Protection Section law.

Apply or make a contribution.

Our Executive Committee is seeking new members for our next term! CLA Section Executive Committees (ExCom) play a vital role in carrying out a section’s basic functions while also acting as an important pillar in the organization’s overall structure. In addition to handling fundamental responsibilities behind the scenes, such as budgeting and strategic planning, executive committees also collaborate on delivering programs, publications, services, and benefits to section members.

Joining the Executive Committee opens new doors to your CLA experience, including your professional network, your expertise in your field of law, and your voice in our volunteer-driven organization. The application deadline is March 1, 2026. Get started here.Apply or make a contribution.

Competition is a semi-annual law journal published by the Antitrust and Consumer Protection Section. The journal includes scholarly and practice-oriented articles relating to current issues and developments in the areas of antitrust, unfair competition, and trade regulation. Competition invites articles from attorneys, judges, economists, academics, and others who have an interest in antitrust, unfair competition, and trade regulation issues. A free annual subscription is a benefit of Section membership.

Have an article submission? Submission for our journal is currently open!  

Spradlin v. Elanco Animal Health, Inc., No. 1:24-cv-01299-JPH-MKK (S.D. Ind. Oct. 7, 2025)

By Wesley Sweger

On October 7, 2025, Judge Pratt of the Southern District of Indiana granted in part and denied in part Elanco Animal Health, Inc.’s (“Elanco”) motion to dismiss a putative antitrust class action challenging alleged “no-generics” agreements between Elanco and major pet-specialty retailers.  The court dismissed Plaintiff’s federal Sherman Act damages claims for failure to plausibly plead a hub-and-spokes conspiracy sufficient to qualify for an exception to the Illinois Brick doctrine, but allowed a broad set of state-law indirect-purchaser claims to proceed past the pleading stage.

Background

Elanco manufactures branded topical flea- and tick-prevention products for pets, including Advantage II and K9 Advantix II, which use imidacloprid as their active ingredient.  Plaintiff Tracy Spradlin, a Kansas resident who purchased Advantix products from pet-specialty retailers, alleged that Elanco entered into agreements with major pet-specialty retailers—including PetSmart, Petco, Chewy, and others (the “Pet Retailer(s)”)—under which those retailers agreed not to carry generic imidacloprid products in exchange for favorable pricing and loyalty discounts across a bundle of Elanco products.

According to the complaint, “nearly every” purchase agreement states that each retailer and distributor receives the same base price for Elanco’s products and that discounts are offered on an “equivalent basis.”  Dkt. 89 at 3.  These terms allegedly “assured” each Pet Retailer that the other Pet Retailers will be entering the same no-generics agreement with Elanco.

Plaintiff alleged that these agreements foreclosed lower-priced generic competition in the relevant retail market, resulting in supracompetitive prices paid by consumers.  She asserted claims under Section 1 of the Sherman Act (conspiracy to unreasonably restrain trade), Section 2 (monopolization through exclusive dealing arrangements), and the antitrust laws of thirty so-called “Illinois Brick repealer” states, which permit indirect purchasers to recover damages.

Elanco moved to dismiss on the grounds that (1) Plaintiff lacked Article III standing to assert claims under the laws of states in which she did not purchase products; (2) Plaintiff failed to plausibly allege a hub-and-spokes conspiracy sufficient to invoke an exception to the Illinois Brick doctrine, which bars indirect purchasers from recovering damages under the federal antitrust laws; and (3) Plaintiff failed to plead a relevant antitrust market for purposes of her state-law claims.

Article III Standing

Elanco first argued that Plaintiff lacked Article III standing to pursue claims under the antitrust laws of states where she did not purchase products.  The court rejected this argument, relying on Seventh Circuit precedent holding that, once a class is properly certified, standing is assessed with reference to the class as a whole, and that district courts in the Seventh Circuit routinely defer standing determinations where they overlap with Rule 23 issues. 

Because Plaintiff plausibly alleged an antitrust injury—namely, paying inflated prices as a result of the challenged conduct—the court held that questions concerning her ability to represent out-of-state class members could be deferred until the class-certification stage.

Conspiracy Allegations for Sherman Act Damages

The court next addressed Plaintiff’s federal antitrust claims.  Because Plaintiff purchased Elanco products from retailers rather than directly from Elanco, she was an indirect purchaser barred from seeking Sherman Act damages under the Illinois Brick doctrine, absent a recognized exception.

Plaintiff invoked the “hub-and-spokes” conspiracy exception.  In such a conspiracy, a central coordinating firm (the “hub”) enters into vertical agreements with multiple downstream actors (the “spokes”).  The court noted that individual conspiracies along separate spokes is not enough for a hub-and-spokes conspiracy—instead, “each participant” must “coordinate[] or otherwise carr[y] out its duties as part of the broader group,” satisfying the so-called “rim” requirement.  Id. at 8.  Where indirect purchasers buy from a conspirator participating in such a scheme, they are treated as direct purchasers for purposes of damages “because they have dealt directly with the conspiracy,” bringing their claims within an exception to the Illinois Brick doctrine.

Elanco argued, and the court agreed, that Plaintiff failed to plausibly allege the required “rim”—i.e., coordination or agreement among the Pet Retailers.  Although the complaint alleged parallel conduct, uniform contractual terms, and assurances from Elanco that other Pet Retailers were entering the same “no-generics” agreements, the court held that these allegations fell short under Twombly.  Parallel conduct, the court emphasized, “must be placed in a context that raises a suggestion of a preceding agreement,” not merely conduct that “could just as well be independent action.”  Id. at 10 (quoting Twombly).

Critically, Plaintiff alleged that each pet retailer received substantial loyalty discounts across a large bundle of Elanco products—discounts that “could be millions of dollars more than a Pet Retailer could make in margin selling a generic imidacloprid product.”  Id. at 11.  As a result, the alleged conduct was consistent with rational, independent self-interest rather than coordinated horizontal action.  Absent allegations of conduct against self-interest or other “plus factors,” the complaint failed to plausibly plead a horizontal agreement among retailers.

Because Plaintiff did not plausibly plead a hub-and-spokes conspiracy that would qualify for an exception to Illinois Brick, the court dismissed her federal Sherman Act damages claims.

State Antitrust Law Claims

Elanco next argued that Plaintiff’s state-law claims should also be dismissed. Plaintiff asserted claims under the antitrust laws of thirty “Illinois Brick repealer” states, all of which permit indirect purchasers to seek damages.

Across these claims, Elanco contended that Plaintiff failed to plead a relevant antitrust market because she defined the market narrowly as topical imidacloprid products sold through pet-specialty retailers.  The court rejected this argument, emphasizing that market definition is a deeply fact-intensive inquiry and rarely suitable for resolution at the pleading stage.  Plaintiff’s allegations concerning product characteristics, consumer preferences, and the distinct nature of the pet-specialty retail channel were sufficient to plausibly allege a relevant market.

The court also briefly addressed and rejected Elanco’s state-specific statutory defenses, including arguments that certain state laws barred indirect-purchaser class actions or required pre-filing notice.  Relying on recent authority, the court held that these provisions did not warrant dismissal at the pleading stage.

FTC v. Meta Platforms, No. 20-3590 (JEB), —F. Supp.3d —, 2025 WL 3211725 (D.D.C. Nov. 18, 2025)

By Cheryl Johnson

After a six-week bench trial, D.C. Judge Boasberg rejected the FTC’s claims that Meta wrongfully maintained a monopoly in personal social networking (PSN) services by acquiring Instagram and WhatsApp. In doing so, he decided only that there was not a separate PSN market, and that Meta competed in a broader market for social media in which both TikTok and You Tube were fierce competitors. 2025 WL 3211725, at **1,10, 32. In that broader market, Meta had a market share that was redacted but described as falling and “modest” and that did not meet established thresholds for monopoly power. Id. at **36-38.

In the five years since the FTC filed this case, the social media landscape had “changed markedly,” with Meta apps evolving from primarily showing content from users’ friends to apps primarily showing users short unconnected videos recommended by algorithms. Id. at **1,5 7. At the same time, other apps like TikTok and YouTube adopted social features similar to those of the Meta apps, and all these apps “met in the middle” and sport nearly identical main features and experiences. Id. at *7.

The FTC had to establish that Meta currently has monopoly power as only conduct that currently violates the law or imminently could be enjoined.  Id. at *11. While PSN may have been a market unto itself when FTC filed in 2020, the court found it was no longer the case. Id. at *19. Direct evidence of Meta’s market power from profit margins, app degradation or price discrimination was found wanting. Id. at **11-16.

The court rejected the FTC’s claim that the PSN market was a separate social media market consisting only of Facebook, Instagram, Snapchat and MeWe. Rather, the evidence convincingly established that TikTok and YouTube were competitors of Meta and were considered reasonable substitutes that prevented Meta from profitably exercising market power. Id. at **19, 23, 25. Several real world experiments with pricing, Meta outages, and TikTok bans and outages showed that when users could not use TikTok or YouTube that they turn to Facebook and Instagram and vice versa. Id. at **21-23. Indeed, TikTok’s competition with Meta was so fierce, it forced Meta to fundamentally transform its apps and to invest billions launching Take Reels to compete with TikTok. Id. at *24. 

The FTC’s counterarguments were also rejected. The Cellophane fallacy was deemed inapplicable as Meta was not shown to be a monopolist. Id. at *26.  Evidence also rebutted any argument that Meta competed in a PSN market separate from a broader social media market, including industry recognition and the similarity in features, prices, resources and constitutions of the two alleged markets.  Id. at **29-33.

In terms of market share, the court redacted Meta’s actual market share that was calculated based upon the hours of users’ use of the apps.  However, it described Meta’s share as “falling” and “modest” and below accepted thresholds of monopoly power which some cases indicate was north of 55 to 60 percent. Id. at **36-38.  

The FTC has announced that it will appeal the ruling.

Sabol v. PayPal Holdings Inc., No. 23-cv-05100-JSW (N.D. Cal. Nov. 5, 2025)

By Rose Burnam

In Sabol v. PayPal Holdings Inc., No. 23-cv-05100-JSW (N.D. Cal. Nov. 5, 2025), the court dismissed Plaintiffs’ complaint because they failed to allege PayPal had market power and failed to allege antitrust standing, with leave to amend.

Plaintiffs alleged that PayPal violated Section 1 of the Sherman Act, California’s Cartwright Act, and California’s Unfair Competition Law by requiring merchants to enter a User Agreement with the following provisions: first, it prohibits merchants from imposing a surcharge or fee for accepting PayPal as a payment method, and second, it prohibits merchants from exhibiting a preference for a non-PayPal method of payment or from discouraging customers from using PayPal. Plaintiffs contended that these provisions, termed anti-steering rules, function as a platform most-favored nation restraint, and that in the absence of these rules, merchants could and would incentivize customers to use relatively cheaper payment gateways. Plaintiffs also contended that these provisions inflate transaction fees across the industry, and that merchants incorporate the costs from these inflated fees into their retail prices.  Because, Plaintiffs alleged, the anti-steering rules prevent merchants from incentivizing consumers to use cheaper non-PayPal payment gateways, PayPal faces no incentive to lower its fees.

The court found Plaintiffs failed to allege factual allegations in support of market power because they failed to allege facts showing PayPal’s dominance as a payment platform. Due to the absence of allegations about other payment platforms, the court lacked facts from which it could infer PayPal is the dominant payment platform in the market. The court clarified that Plaintiffs’ allegations regarding market power were not insufficient because the allegations depended on the aggregate impact of the anti-steering rules. Aggregation of this sort is permitted under Ninth Circuit precedents.

The court also found that Plaintiffs failed to allege antitrust standing because they did not sufficiently allege an antitrust injury and because their alleged injuries were too speculative. First, Plaintiffs failed to allege an antitrust injury because they failed to sufficiently allege market power, as discussed above. Second, the court found that Plaintiffs’ alleged injury was too attenuated and speculative because Plaintiffs leaned on the allegation that the merchants with which PayPal contracts are co-conspirators. However, the court found that, in the absence of a showing of market power, Plaintiffs could not rely on the co-conspirator exception to Illinois Brick Co. v. Illinois, 431 U.S. 720, 729 (1977). That is, in the absence of a finding of market power, the signing of a form contract was insufficient. Moreover, the court found that Plaintiffs failed to allege a direct link between the anti-steering rules and retail prices. Although Plaintiffs offered factual support for the proposition that transaction fees are incorporated into retail prices, they failed to explain the significance of the passed-on transaction fees relative to all the other potential pricing factors. The court found that explaining the relative significance of the transaction fee was necessary to show Plaintiffs’ injuries were not indirect and speculative. 

Although the court dismissed Plaintiffs’ complaint, it found Plaintiffs’ allegations of the product market facially sustainable, following Frame-Wilson v. Amazon, Inc., 591 F. Supp. 3d 975, 990 (W.D. Wash. 2022).  Plaintiffs alleged that PayPal’s anti-steering rules caused anticompetitive effects in the retail eCommerce market. The court explained that the relevant product market is a factual question, and therefore, the complaint will only be dismissed at this stage when the market definition is “facially unsustainable.” Although the court credited PayPal’s argument that the Frame-Wilson reasoning was inapplicable because it did not compete as a commerce retailer, as Amazon.com does, the court explained that argument is better addressed in assessing market power.

Case No. 2:23-cv-629-JKW-LRL, 2025 WL 3497098 (E.D. Va. Dec. 5, 2025); 2025 WL 3634085 (E.D. Va. Dec. 15, 2025); 2026 WL 114415 (E.D. Va. Jan. 14, 2026)

By Matt Veldman

In opinions released on December 5 and December 15, 2025, Judge Walker (E.D. Va.) granted Plaintiff CareFirst’s motion for class certification on its Sherman Act claims (though not as to state-law consumer protection and unjust enrichment claims), denied cross-motions to exclude expert testimony, and denied CareFirst’s motion for partial summary judgment on market power, while also denying in large part Defendant Johnson and Johnson (J&J)’s motion for summary judgment. Then, on January 14, 2026, after J&J moved for reconsideration, the court further narrowed Plaintiffs’ Walker Process claims.

CareFirst brought claims on behalf of a class of third-party payers (TPPs) against J&J for allegedly delaying competition from biosimilar drugs for its ulcerative colitis drug Stelara. Plaintiffs alleged a Walker Process fraud claim for J&J’s conduct prosecuting the relevant ‘307 patent at the PTO and a monopolization claim based on J&J’s acquisition of Momenta, a company which had in its portfolio four patents that could have helped a competitor develop a biosimilar for Stelara.  

Class Certification, Case No. 2:23-cv-629-JKW-LRL, 2025 WL 3497098 (E.D. Va. Dec. 5, 2025) 

Plaintiffs overcame challenges to ascertainability and predominance to certify a class of TPPs for their Sherman Act claims against J&J.

Ascertainability. In the Fourth Circuit, class members must be “readily identifiable … in reference to objective criteria,” with some “administratively feasible way for the court to determine whether a particular individual is a member at some point” to certify a class. Id. at *4 (quoting EQT Prod. Co. v. Adair, 764 F. 3d 347, 358 (4th Cir. 2014); Krakauer v. Dish Network, LLC, 925 F. 3d 643, 648 (4th Cir. 2019)).

The court was satisfied that CareFirst met this standard by demonstrating that 90-95% of the class was readily identifiable. Here, the highly regulated, data-heavy pharmaceutical industry aided Plaintiffs: the six largest pharmacy benefit managers (PBMs) process 90-95% of all outpatient prescription drug transactions, the records of which contained detailed transaction information.

Plaintiffs presented a plan to subpoena, compile, and analyze the relevant data from PBMs and from Rawlings, a healthcare data company. Then, during claims administration, TPPs could access their own claims data, filter for Stelara purchases during the class period, and submit a claim form attesting to the steps taken. The court was satisfied that this methodology was administratively feasible.

Predominance. J&J attacked Plaintiffs’ class expert for focusing on class-wide injury, ignoring individualized factors like how rebates varied among TPPs. But the court found that the expert sufficiently accounted for those factors. 

J&J also faulted Plaintiffs’ yardstick aggregate damages methodology, since analogizing to other drugs may not yield an accurate yardstick, and because averaging masks price variation between individual TPPs. The court found, however, that using averages was a widely accepted method of proving injury and damages on a class basis, and similarly that the yardstick approach was a common and appropriate model given the inherent difficulty of identifying a precise but-for world. 

Summary Judgment, Case No. 2:23-cv-629-JKW-LRL, 2025 WL 3634085 (E.D. Va. Dec. 15, 2025); 2026 WL 114415 (E.D. Va. Jan. 14, 2026)

Monopoly Power. Plaintiffs moved for summary judgment on monopoly power, arguing that Stelara did not exhibit cross elasticity of demand with other drugs, but the court found that J&J introduced sufficient factual disputes about Plaintiffs’ cross elasticity analysis to preclude summary judgment.

CareFirst’s argument relied extensively on the In re Zetia decision, where the court granted summary judgment to plaintiffs on the relevant market. In re Zetia (Ezetimibe) Antitrust Litig., 587 F. Supp. 3d 356 (E.D. Va. 2022). The court distinguished Zetia, finding thatthe evidence there was significantly stronger. In Zetia, the plaintiffs used actual data of generic entry for Zetia in their natural experiments, including using an AIDS pricing model to measure cross elasticity of demand. Here, by contrast, sufficient biosimilar entry data was not yet available. Instead, plaintiffs’ model analyzed prior biosimilar entry for two potential therapeutic substitute drugs, Humira and Remicade, to evaluate whether biosimilar entry for those drugs affected price or demand for Stelara.

Without actual biosimilar entry data for Stelara, the court found that J&J’s critiques of Plaintiffs’ model, along with evidence of J&J’s increased rebates (and therefore decreased net prices), was enough to raise material questions of fact on market power to deny summary judgment. 

In denying summary judgment, the court also denied cross-motions to exclude expert opinions on market power, finding the disputes were “quintessentially jury questions and not questions of admissibility.” 2025 WL 3634085, at *8.

Walker Process. Turning to J&J’s motion, the court trimmed Plaintiffs’ Walker Process claims, finding that one of the three prior studies Plaintiffs relied on and one of three alleged misrepresentations made by J&J’s attorney to the PTO could survive summary judgment. Plaintiffs produced sufficient evidence that J&J withheld a prior study involving Ustekinumab and ulcerative colitis in prosecuting its patent with the PTO. This, along with J&J’s statement to the PTO that there were no prior studies conducted with Ustekinumab and ulcerative colitis, was sufficient to withstand summary judgment. 

J&J acquiring Momenta patents. After initially allowing CareFirst to proceed on its theory that J&J anticompetitively acquired four patents in its Momenta acquisition, the court reversed course on reconsideration. After correcting for its misapprehension of the record on how Plaintiffs planned to use J&J’s privilege logs to prove the acquisition was anticompetitive, the court found that the intended negative inference about privileged communications was impermissible, and granted summary judgment to J&J on the Momenta patent theory.

Pac-12 Conference v. Mountain West Conference, No. 24-cv-06685-SVK, 2025 WL 2781313 (N.D. Cal. Sept. 30, 2025)

By Anjalee Behti

On September 30, 2025, the Northern District of California denied the Mountain West Conference’s motion to dismiss an antitrust action challenging escalating fees imposed on the Pac-12 for recruiting individual member schools.

Background and Contract Terms

The dispute arose from the rapid realignment of NCAA Division I athletic conferences during 2022 and 2023.  After ten of its twelve member schools left for rival conferences, the Pac-12 entered the 2024-25 season with only Oregon State University and Washington State University, leaving the conference with an incomplete football schedule and placing its Football Bowl Subdivision status at risk under NCAA bylaws that require at least eight active members within a two-year grace period. 

In December 2023, the Pac-12 reached a Scheduling Agreement with the Mountain West to secure six football games for each remaining school in the 2024-25 season.  The agreement required the Pac-12 to pay “Withdrawal Fees” if it recruited individual Mountain West schools instead of bringing all Mountain West institutions into the Pac-12 in a single, no-fee transaction.  Pac-12 Conf. v. Mountain W. Conf., No. 24-cv-06685-SVK, 2025 WL 2781313, at *1-2 (N.D. Cal. Sept. 30, 2025).  Fees escalated from $10 million for the first departing school to $15 million for the eleventh, with a total potential liability of $137.5 million.  After five MWC schools announced plans to join the Pac-12 in September 2024, the MWC demanded $55 million in fees.  The Pac-12 responded by filing suit under Section 1 of the Sherman Act, California’s Cartwright Act, California’s Unfair Competition Law, and California common law barring unenforceable contract penalties.

Antitrust Standing

Magistrate Judge Susan van Keulen’s order rejected each theory of the MWC’s motion to dismiss.  On antitrust standing, the court rejected the argument that the Pac-12 lacked standing because it voluntarily accepted the challenged terms.  Citing the Ninth Circuit’s decision in Epic Games, Inc. v. Apple, Inc. (67 F.4th 946, 982 (9th Cir. 2023) (citation omitted)), the court noted that Section 1 of the Sherman Act reaches “every contract” that unreasonably restrains trade, even when one party accepts the restraint under pressure.  Pac-12 Conf., 2025 WL 2781313, at *5.  The complaint’s allegations that the Pac-12 was “desperate” and had “little leverage” when negotiating, combined with the MWC’s demand for tens of millions in fees, sufficiently alleged both injury to the Pac-12’s competitive position and to competition among conferences more broadly.  Id.

Per Se vs. Rule of Reason Analysis

The court declined to resolve at the pleading stage whether the termination fees should be analyzed as a per se violation or under the rule of reason.  The MWC urged the rule of reason analysis, characterizing the fees as ancillary restraints that supported the procompetitive goals of the Scheduling Agreement.  It pointed to contractual language that described the fees as “essential” to protecting confidential information and preserving conference integrity while creating competitive opportunities for student athletes.  Id. at *6.

Judge van Keulen found that classification premature.  The case did not fit neatly within traditional sports league precedent or the employee non-poaching cases cited by the parties.  Although the agreement recited procompetitive purposes, the complaint alleged that such language resulted from the MWC’s superior bargaining position over the Pac-12, which was facing severe time constraints and limited alternatives.  Detailed allegations regarding the negotiation timeline and surrounding circumstances required further factual development before the court could determine whether the fees constituted naked restraints subject to per se treatment or ancillary restraints subject to the rule of reason.

The court acknowledged the MWC’s argument that it would be “rare” but not “unheard of” for courts to resolve this issue at the pleading stage, but it concluded that the Pac-12 adequately pleaded a plausible per se theory.  Id. at *7.  The complaint characterized the fees as horizontal market allocation between competing conferences that suppressed competition for member schools.  Whether that theory would succeed remained a question for a more fully developed record.

Having found the per se allegations sufficient, the court declined to dismiss the antitrust claims based on purported deficiencies in the Pac-12’s alternative rule of reason pleading.  The Pac-12 included those allegations in anticipation of an ancillary restraint defense, and the court found no reason to dismiss claims based on asserted weaknesses in a defensive alternative theory.

Unfair Competition Law Claims

The court also allowed the Unfair Competition Law claims to proceed.  The Pac-12’s “unlawful” prong rested on the same alleged Sherman Act and Cartwright Act violations and therefore rose or fell with the antitrust claims.  Id. at *8.  The “unfair” prong claim likewise survived because it rested on conduct that allegedly violated the policy and spirit of antitrust law.  Id. at *9.

Contract Penalty Analysis

On the contract penalty claim, the court rejected the MWC’s argument that California Civil Code §1671(b) presumptively made the fees enforceable or that the fees constituted alternative performance rather than liquidated damages.  Although California law presumes liquidated damages provisions valid, that presumption does not apply where the challenger plausibly alleges the provision lacked a reasonable relationship to anticipated damages at the time of contracting.  The MWC emphasized language in the Scheduling Agreement describing the fees as “fair, reasonable and appropriate approximations” of anticipated losses.  Id.

Judge van Keulen found premature a determination of enforceability on the partial record, particularly where the Pac-12 sufficiently alleged the fees “disproportionately penalized breach.”  Id.  (citation omitted).  California courts focus on substance over form when evaluating whether provisions constitute unenforceable penalties.  The complaint plausibly alleged that the language was pretextual and imposed through superior bargaining power, warranting further factual development.

The court also declined to resolve whether the fees constituted alternative performance.  The MWC argued the fees did not follow a breach but instead followed the Pac-12’s election to recruit fewer than all the MWC schools.  The Pac-12 countered that cases recognizing alternative performance arose in materially different contexts, such as consumer early termination fees.  The court noted inconsistencies in the Scheduling Agreement, which labeled the fees “liquidated damages” tied to “economic damages and losses,” yet never characterized the recruitment of individual schools as a “breach.”  Id. at *10.  Because of those ambiguities, the court held that factual development would better show the substance of the parties’ agreement.

Conclusion

The decision reflects the court’s view that traditional frameworks do not always fit a rapidly changing collegiate athletics market.  It confirms that voluntary contracts remain subject to antitrust scrutiny where unequal bargaining power and competitive harm appear, and that courts will examine substance and effects rather than labels.

Procedurally, the decision follows a broader trend of deferring classification questions, such as per se versus rule of reason analysis and liquidated damages versus penalties, until factual development occurs.  This approach allows claims to proceed past the pleading stage where plaintiffs have alleged sufficient facts to make their claims plausible.

The case is now proceeding to discovery and expert witness proceedings.  On November 18, 2025, the court held its initial case management conference and established a schedule for expert witness disclosures and Daubert motions, with a hearing set for March 30, 2027.  The litigation has also expanded beyond the Pac-12’s initial complaint with the MWC filing a counterclaim, which the Pac-12 moved to dismiss on December 5, 2025.  The MWC filed its opposition to that motion on January 16, 2026.

DirecTV, LLC v. Nexstar Media Group, Inc., No. 24-981 (2d Cir. Dec. 16, 2025)

By Alex J. Tramontano

The Second Circuit reversed dismissal of DirecTV’s Sherman Act claims against Nexstar Media Group and its affiliated “sidecar” broadcasters, Mission Broadcasting and White Knight Broadcasting. The Circuit Court held that a plaintiff alleging horizontal price-fixing need not have actually paid supracompetitive prices to establish antitrust standing, and lost profits flowing from output reduction represent an independently cognizable antitrust injury.

Background and District Court’s Analysis

DirecTV purchases retransmission consent from broadcasters to deliver local Big-4 (ABC, CBS, NBC, and Fox) network affiliates to its subscribers. Nexstar, the nation’s largest broadcaster, maintains ownership of 200 stations across 116 markets. The complaint alleges when FCC regulations prohibit Nexstar from owning multiple Big-4 affiliates in a single designated market area Nexstar, divests stations to nominally independent “sidecar” entities when FCC duopoly regulations apply, while retaining substantial operational control.

DirecTV alleged that during 2022 negotiations, Nexstar orchestrated a price-fixing conspiracy through a single consultant who demanded fees “radically disproportionate” to the sidecars’ portfolios and “intentionally calculated to prevent the parties from reaching an agreement.” When DirecTV refused, stations were purportedly blacked out for nearly one million subscribers, causing substantial cancellations.

The district court dismissed for lack of antitrust standing. Reasoning that price-fixing causes harm only through payment of inflated prices, and because DirecTV chose to “abandon RCA negotiations” rather than pay, its losses flowed from “its own choice to exit the market.” Further the district court found that DirecTV was not an efficient enforcer of this antitrust lawsuit.

The Second Circuit’s Analysis

Antitrust Injury. The court rejected the premise that overcharge payment is the sole cognizable injury. Horizontal price-fixing harms competition by interfering with market forces, resulting in both higher prices and reduced output. When buyers decline artificially inflated prices, the expected consequence is reduced transactions. The circuit court found that DirecTV’s lost profits from blacked-out stations “flowed directly from” this output reduction, an anticompetitive effect the antitrust laws aim to prevent.

Efficient Enforcer Factors. On directness, DirecTV’s injury occurred at “the first step” as the direct counterparty in negotiations, unlike cases where plaintiffs suffered more attenuated or derivative harm through third-party reactions. On more direct victims, DirecTV was the specific target of the conspiracy, denying it a remedy would likely “leave a significant antitrust violation undetected.” On speculation, DirecTV’s existing agreements and the parties’ “longstanding history of reaching agreements every three years” provided a benchmark for damages. On duplicative recovery, no other Multi-channel Video Programming Distributors had brought similar claims.

Implications

DirecTV is the first circuit-level decision finding that a non-purchaser “priced out of the market” plausibly alleged antitrust standing. The Ninth and Tenth Circuits had recognized the theoretical possibility but declined to find standing on their facts. This decision signals that plaintiffs need not be limited to overcharge theories when challenging horizontal price-fixing, particularly in industries with bilateral negotiations between concentrated sellers and sophisticated buyers with documented transactional histories.

The Dissent

Judge Sullivan dissented, finding “serious defects” under the first and third efficient-enforcer factors. On directness, he emphasized that DirecTV was a non-purchaser whose harm occurred “much further down the causal chain,” and whose losses “in no way enriched” the defendants, underscoring the “attenuated nature of the causal chain.”

On speculation, Judge Sullivan identified multiple assumptions underlying DirecTV’s damages theory: whether parties would have agreed absent collusion; whether subscribers would have stayed; how many cancellations were attributable to blackouts rather than broader market trends; and whether lost revenues were offset by unpaid fees. He found the majority’s reliance on the parties’ “longstanding history” unpersuasive, noting the complaint described only one prior negotiation and that DirecTV’s parent had been “hemorrhaging customers” for years before the alleged conspiracy. He concluded that the indirect and “highly speculative” nature of DirecTV’s injury rendered it an “inefficient engine of enforcement.”

No. 22-cv-00237-HSG, 2025 WL 3654114 (N.D. Cal. Dec. 17, 2025)

By Anna Ali

In this litigation, Plaintiffs allege LinkedIn unlawfully monopolized the professional social networking market in violation of Section 2 of the Sherman Act. No. 22-cv-00237-HSG, 2025 WL 3654114, at *1. Plaintiffs allege that LinkedIn protects its monopoly through “data centralization, machine learning models, and resulting trove of inferred data,” without which “a new entrant could not viably compete with LinkedIn.” Id. Defendant allegedly maintains its monopoly by engaging in two forms of anticompetitive conduct: 1) Defendant offers potential rivals access to its private user data through application programming interfaces (“APIs”), on the condition that those rivals do not compete with Defendant; and 2) Defendant integrated its user data with parent company Microsoft’s Azure cloud computing system, “tying up and driving up prices for scarce hardware resources.” Id.

I. Settlement Background

On December 17, 2025, the Northern District of California denied Plaintiffs’ unopposed motion for preliminary approval of class action settlement of their case against LinkedIn (“Defendant”). No. 22-cv-00237-HSG, 2025 WL 3654114, at *1. The parties entered into a settlement agreement after participating in mediation in December 2024. Id. The settlement agreement included a term prohibiting Defendant from including Non-Use of LinkedIn’s API Provisions in any future API Agreement for three years from the date the settlement became effective. Id. Defendant also agreed not to enforce already existing API Provisions for at least three years from the settlement effective date. Id. The settlement agreement further provided for incentive awards for named Plaintiffs for $5,000 and attorneys’ fees and costs in the amount of $4 million and $100,000, respectively. Id. at *2.

III. The Court Refused to Grant Preliminary Approval in light of Lenovo Factors.

The court refused to preliminary approve the settlement because Plaintiffs did not convince the court that the settlement was fair or reasonable, especially since the agreement included high attorneys’ fees while providing class members with only limited injunctive relief. Id. at *3. The court found that courts may preliminary approve a settlement and notice plan to the class if the proposed settlement: (1) appears to be the product of serious, informed, non-collusive negotiations; (2) does not grant improper preferential treatment to class representatives or other segments of the class; (3) falls within the range of possible approval; and (4) has no obvious deficiencies. Id., citing In re Lenovo Adware Litig., No. 15-md-02624-HSG, 2018 WL 6099948, at *7 (N.D. Cal. Nov. 21, 2018).

In this case, the court weighed the relevant factors and found that the proposed settlement agreement was not fair or reasonable. 2025 WL 3654114, at *3. The court rejected Plaintiffs’ claim that the settlement agreement was all they could hope to achieve at trial and found that Plaintiffs’ counsel sacrificed the class members’ damages claims before attempting to certify a damages class. Id.

III. The Court held that the Settlement was not Within the Range of Possible Approval.

The court first analyzed why the settlement was not within the range of possible approval. The court “consider[ed] plaintiffs’ expected recovery balanced against the value of the settlement offer.” Lenovo, 2018 WL 6099948, at *8. This required the court to evaluate (1) the value of the offer; and (2) the strength of Plaintiffs’ case. 2025 WL 3654114, at *3. The court rejected Plaintiffs’ argument that the class obtained essentially all the injunctive relief sought for three reasons. Id. at *4-5. First, the court found there was little evidence or explanation as to why the period of three years of injunctive relief was appropriate and that it did not provide essentially all the injunctive relief sought. Id. at *4.

Further, Plaintiffs did not persuade the court that the relief addressed the class members’ alleged harm. Id. Plaintiffs alleged that Defendant locked up its biggest competitive threats by offering them privileged access to valuable LinkedIn user data and conditioning the use of the data on agreement not to compete in LinkedIn’s principal lines of business. Id. The court found that there was nothing in the settlement agreement stopping Defendant from selling the data to potential competitors in the first place. Id. While Defendant represented that it anticipated continuing to enter partnerships and had already entered into agreements without contractual restrictions, the court remained unconvinced of the actual value of the injunctive relief. Id.  

Moreover, the court took issue with Plaintiffs’ claim that it would quantify the value of the injunctive relief at final approval as it held that parties must “provide enough information to allow the district court to carefully evaluate the strength of the claims, the risks of litigating those claims all the way through, and the value of the relief each class member will receive from the settlement.” Id. at *5, citing Cotter v. Lyft, Inc., 193 F. Supp. 3d 1030, 1037 (N.D. Cal. 2016). The court also reiterated that it found Plaintiffs’ abandonment of the damages claim troubling especially in light of the limited injunctive relief. 2025 WL 3654114, at *5.

Finally, in analyzing the strength of Plaintiffs’ case, the court found that Plaintiffs did not clearly explain the strength of their case, the risks and costs of trial, or the possible relief at trial. Id. Instead, the court found that the Plaintiffs presented generic arguments, largely restating the elements of an antitrust case and the remaining steps in litigation. Id. The court also rejected Plaintiffs’ efforts to compare the settlement to other cases approving injunctive-only relief because the class members in this case appeared to have given up substantially more than the cited cases. Id. at *6.

IV. The Court Held there were Markers of Potential Collusion.

The court found there was evidence of collusion or other conflicts of interest. Id. The Ninth Circuit directed district courts to look for “subtle signs of collusion,” which include whether counsel will receive a disproportionate distribution of the settlement, whether the parties negotiate a “‘clear sailing’ arrangement,” and whether the parties agree to a reverter that returns unclaimed funds to the defendant. Roes, 1-2 v. SFBSC Mgmt., LLC, 944 F.3d 1035, 1049 (9th Cir. 2019).

In this case, the court held that the settlement agreement included both a clear sailing arrangement and disproportionately high attorneys’ fees. 2025 WL 3654114, at *7. The court found $4 million in attorneys’ fees and $100,000 in costs particularly concerning in light of the early stage of the case, the limited non-monetary relief, and the absence of any monetary relief. Id. The court was skeptical of Plaintiffs’ claim that the approximate value of the injunctive relief was greater than—or anywhere close to—$16 million, especially since Plaintiffs failed to provide the court with their expert report. Id. Further, the court held that Plaintiffs did not demonstrate that the settlement agreement represented all the relief they realistically could have obtained in settlement or at trial. Id. As a result, the court held the markers of potential collusion and conflicts weighed against preliminary approval. Id.

V. Preferential Treatment did not Weigh Against the Court’s Refusal to Grant Preliminary Approval.

The court held that the settlement agreement did not provide preferential treatment to any class member. Id. at *8. The Ninth Circuit instructed that district courts must be “particularly vigilant” for signs that counsel have allowed the “self-interests” of “certain class members to infect negotiations.” Id.,citing In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 947 (9th Cir. 2011). Here, the court found that the incentive awards were not per se unreasonable since incentive awards are fairly typical in class action cases. 2025 WL 3654114, at *8. Thus, the court held that this factor weighed in favor of preliminary approval. Id.

VI. Conclusion.

Weighing all the factors, and due to the other obvious deficiencies found in the settlement agreement, the court denied preliminary approval. Id. The court ended its order setting a case management conference to discuss how the case would proceed in light of the denial. Id.  

Heckman et al. v. Live Nation, Case No. 2:22-cv-00047-GW-(DSRx) (C.D. Cal. Dec. 3, 2025)

By Sam Smith

On December 3, 2025, a class of plaintiffs was certified against Live Nation and Ticketmaster. Heckman et. al v. Live Nation, Case No. 2:22-cv-00047-GW-(DSRx), *1 (C.D. Cal. Dec. 3, 2025). The class is defined by, “All purchasers in the United States who directly purchased a primary ticket and paid associated fees for primary ticketing services for an event at a major concert venue in the United States from Ticketmaster or one of its affiliated entities owned, directly or indirectly, by Live Nation Entertainment, Inc. at any point since 2010.” Id. at *2. Plaintiffs have brought claims under Sections I and II of the Sherman Act. Plaintiffs asserted their class should be certified because they have met all requirements under Fed. R. Civ. P. 23(a) and then those of Fed. R. Civ. P. 23(b)(3).

Under Rules 23(a)(1) and (2), numerosity and commonality, Defendants did not challenge that Plaintiffs had satisfied both requirements, and the Court found Plaintiffs had satisfied both. Id. *3-4. For typicality, the Plaintiffs argue the named Plaintiffs and the proposed class are all direct purchasers that have used Defendants’ primary ticketing services and paid fees to the Defendants. However, Defendants contend that at least 30% of the class members are subject to an arbitration agreement and class action waiver. The Defendants relied on Ninth Circuit case law that held class certification that included subclasses of individuals bound to arbitration agreements was counter to typicality. Id. at *6. The Court held Defendants’ argument was ill-suited because the Court was not persuaded that any part of the proposed class remained subject to arbitration because the Defendants’ terms of use that apply to Plaintiffs are updated when Defendants enacted them. Id. at*7. Lastly, the Court found Plaintiffs and Plaintiffs’ counsel satisfied the adequacy requirement. Id. at *9.

Next, the Court considered whether the class of Plaintiffs could be certified under Rule 23(b)(3), whether the proposed class satisfied predominance and superiority inquiries. To prove predominance, the Court must determine if the common questions of law – (1) antitrust violation, (2) antitrust injury, and (3) measurable damages – can be established through a common body of evidence applicable to the whole class. Id. at *10. Plaintiffs believe the common issues that predominate are: (1) market definition and power; (2) Defendants’ anticompetitive conduct; (3) antitrust impact; and (4) damages.

Defendants first argue that predominance has not been established to prove an antitrust violation. Defendants argue that Plaintiffs’ expert, Dr. Pathak, geographic market was too broad and did not consider if the market was more regional compared to his determination that the market was the entire United States. Id. at *14. However, the Court was satisfied that Plaintiffs presented sufficient evidence that could prove the relevant geographic market was the entire U.S., and while Defendants’ arguments may prevail, that is not for the Court to decide at this stage. Id. at *14-15. The Court was satisfied that Plaintiffs also presented enough evidence that the Defendants held relevant market power in the relevant markets. Lastly, the Defendants argued the Plaintiffs’ alleged anticompetitive conduct – exclusive dealing, coercive tying arrangements, and economic threats and coercions – must be proven per venue, and the Class cannot prove predominance. Ultimately, the Court held that while Defendants did produce some evidence that suggested some venues were not subject to any coercion, Defendants tying or coercion of specific venues does not differ by Class member, nor does it affect whether fans suffered overcharges. Id. *20-21.

Next, for antitrust injury, Defendants challenged Dr. Pathak’s economic analysis on the general basis that: (1) Dr. Pathak in his “but-for” model did not use another market with the same features but without the alleged anticompetitive conduct, (2) Dr. Pathak believed fees would be set at-cost in a competitive world, and (3) Dr. Pathak applies the same percentage reduction at all venues. However, the Court determined Dr. Pathak model is capable of proving antitrust injury on a class-wide basis and Defendants’ arguments go to the persuasiveness of his model. An argument to be heard by the jury. Id. *25-27. The Court additionally held the Plaintiffs and Defendants arguments over Dr. Pathak’s fixed cost estimate and Dr. Pathak not accounting for individual venues’ role in setting fan-facing fees are both arguments for a jury. Id. *27-30. Defendants point to specific issues with Dr. Pathak’s model having false positives, but the Court agreed with the Plaintiffs that the Defendants have not shown these purported false positives undermine Dr. Pathak’s findings of class wide impact. Id. at *32.

Lastly, regarding damages, Defendants argue that the formula that Dr. Pathak created to determine individual class members damages is flawed because it uses an aggregate cost/price guestimate and applies the same percentage. Id. at *35. Overall, the Court agreed that Dr. Pathak’s model demonstrated market-wide effects of the alleged inflated fees on all tickets, even ones sold below cost, and the mere fact that some tickets were sold below cost does not require the class not to be certified. Id. *36-37. Additionally, the Court concluded the exclusive dealing, tying, and coercion are not distinct theories of harm and subject to the decision in Comcast (holding damages could not be calculated because it aggregated four theories of harm and only one was upheld by the Court). Id. *37. Defendants also argued that the individualized issue regarding statute of limitations defeated predominance because the issue is if there was fraudulent concealment of multiple anticompetitive acts, and not just one. However, the Court was unpersuaded by Defendants’ argument. Id. *38. Therefore, now satisfying all requirements of predominance.

For the second element of Rule 23(b)(3), superiority, the Court quickly found that the non-exclusive superiority factors all weighed in favor for the class to be certified. Id. at *39-40.

In conclusion, the Court preliminarily certified the proposed class because they have met the requirements of 23(a) and 23(b)(3).

U.S. v. Hewlett Packard Enterprise Co., Case No. 25-cv-00951-PCP, 2025 WL 3454834 (N.D. Cal. Dec. 1, 2025)

By Cheryl Johnson

The DOJ filed suit to block Hewlett Packard’s acquisition of its smaller but innovative rival, Juniper Networks, as harming competition in the market of wireless networking systems for large enterprises. Six months later, the DOJ sought court approval of a merger settlement. Id. at *1. After news posts reported the settlement followed lobbying by those close to the President, California and twelve states and DC (the states) moved to intervene to determine if the merger settlement was in the public interest. On Dec. 1, 2025, Judge Casey Pitts denied the states’ motion to intervene as of right in the DOJ’s action, but granted them permissive intervention. Id. at **1, 8.

The states satisfied three elements of a Rule 24(a) intervention as of right, in that: (1) their intervention motion was timely filed within a few months of learning the U.S. would not adequately protect their interests (id. at **3-4); (2) the states had a significant interest and special role in protecting their citizens from antitrust violations as recognized in the nation’s antitrust statutes (id. at *4); and (3) the U.S. conceded at argument that it was committed to the merger’s approval (id. at *6). Further, the Judge noted any “presumption” that the U.S adequately represents the public interest in antitrust suits was specifically rejected by the Tunney Act’s enactment in response to President Nixon’s meddling in IT&T antitrust cases. Id. at *6. Despite this, intervention by right was denied as the states could not show that a decision in the DOJ action would impair an independent state action against the merger. Id. at *5.

However, permissive intervention under Federal Rule 24(b)(1) was available as the states’ intervention motion was timely and not prejudicial. Id. at *6. Moreover, the states having adopted the DOJ’s complaint as their own, presented common questions of law or fact with the DOJ action as to the lawfulness of the merger and adequacy of the proposed remedies. Id. at **6-8. While the states’ participation might make the approval process more burdensome, the Tunney Act was “far more interested in ensuring a full adjudication of the merit of any proposed consent decree than in streamlining the required approval proceedings and minimizing burdens on the parties.” Id. at *7.

Epic Games, Inc. v. Apple Inc., No. 25-2935 (9th Cir. Dec. 11, 2025)

By David Lerch

In an opinion issued on December 11, 2025, in Epic Games, Inc. v. Apple Inc., Ninth Circuit No. 25-2935, the Ninth Circuit panel affirmed the District Court’s finding of contempt following a previous District Court injunction against Apple, in part based on a 27% commission that Apple placed on purchases outside its App Store, which was designed to evade the spirit of the injunction, prohibiting limits on purchases outside the App Store.  The Ninth Circuit, however, found that certain parts of the contempt sanctions order were overbroad, and reversed and remanded in part.  The Court also rejected a series of other arguments that Apple set forth, including that the District Court had improperly imposed a nationwide injunction.

The Panel Affirmed the District Court’s Contempt Finding

The Ninth Circuit affirmed the District Court’s contempt findings, concluding that the district court did not abuse its discretion.  The panel concluded that the District Court did not improperly rely on the injunction’s spirit rather than the literal terms of the injunction.  In particular, the Court noted that under Institute of Cetacean Research v. Sea Shepherd Conservation Society, 774 F.3d 935 (9th Cir. 2014), courts can “look to the spirit of the injunction when a litigant applies a dubiously literal interpretation of the injunction, particularly where that interpretation is designed to evade the injunction’s goals.” Epic Games, Inc. v. Apple Inc. (Epic III), 781 F. Supp. 3d 943, 990-91 (N.D. Cal. 2025).

The panel also found that it was proper to consider Apple’s bad faith in the course of the contempt finding, and found no clear error in the District Court’s conclusion that Apple had acted in bad faith, relying upon: (1) a finding that Apple hid its decision-making process from the Court regarding its compliance plan following the injunction; (2) Apple’s choice to maintain an anticompetitive revenue stream; and (3) Apple’s decision to hire the Analysis Group to recommend a commission rate after Apple had already picked the rate (Op. at 23-24).  The Court also noted that Apple “willfully chose to ignore the Injunction, willfully chose to create and impose another supracompetitive rate and new restrictions, and thus willfully violated the Injunction” (Op. at 24).

The Ninth Circuit also concluded that the District Court properly considered materials that Apple contended were protected by the attorney-client privilege.  The Ninth Circuit pointed to In re Grand Jury, 23 F.4th 1088 (9th Cir. 2021), in which the Court had stated that “that the primary-purpose test applies to attorney-client privilege claims for dual-purpose communications,” id. at 1092, and “[u]nder the ‘primary purpose’ test, courts look at whether the primary purpose of the communication is to give or receive legal advice, as opposed to business or tax advice.” Id. at 1091. The Court had left open whether legal advice must be “the primary purpose” or just “a primary purpose,” as the D.C. Circuit concluded in In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014).   The Court declined to apply the Kellogg test to dual-purpose communications, noting that “[n]one of [its] other sister circuits have openly embraced Kellogg yet.” In re Grand Jury, 23 F.3d at 1094. In addition, the Court reasoned that the “Kellogg test would only change the outcome of a privilege analysis in truly close cases, like where the legal purpose is just as significant as a non-legal purpose,” id. at 1095, and Apple has not presented a close privilege call, given that legal advice was not the primary purpose of the communications.

The panel concluded that Apple’s civil contempt was shown by clear and convincing evidence.  The District Court’s previous injunction prevented Apple from prohibiting developers from including links to third parties outside Apple’s App Store in their apps and their metadata buttons.  The Ninth Circuit concluded that charging a 27% commission on purchases from those third parties outside the Apple store had a prohibitive effect and violated the injunction.  The Court cited M’Culloch v. Maryland, 17 U.S. 316, 317–18 (1819) for the proposition that the commission was equivalent to a prohibition on purchases outside of the Apple App store (Op. at 27). 

The Court also concluded that Apple violated multiple parts of the injunction. First, the Court noted that the injunction requires Apple to allow developers to use both links and buttons, and Apple did not allow buttons, but it allowed developers to use a “plain button,” in which the alleged “button” is invisible (Op. at 29). 

Second, the injunction requires Apple to permit “other calls to action,” and Apple did not do so. Developers can use only five different templates, and these templates are essentially link, with each including a single phrase like “Lower price offered.” The Court concluded that by limiting developers to particular limited templates, Apple violated the injunction. 

Third, Apple requires that external purchase links not be displayed on any page that is part of an in-app flow to merchandise or initiate a purchase using in-app purchase. As a result, external purchase links never appear where users naturally expect to see their purchase options and would find them most useful: at the time of purchase.  The Ninth Circuit stated that in practical effect at least, this restriction prohibited linked-out purchases outside the App store.

Fourth, Apple deployed a so-called “scare screen.” Before users could use an external purchase link, they would be warned in large, bold font that they were “about to go to an external website” and that “Apple is not responsible for the privacy or security of purchases made on the web.” The Court stated that the record confirms that Apple designed the scare screen to prevent external purchases outside the App store (Op. at 30).

Fifth, Apple required developers to use static URLs rather than dynamic URLs which can automatically log a user into their account. The Court concluded that this flies in the face of the injunction’s spirit and as the district court found, “Apple’s sensitivity analyses of breakage reveal that Apple was modeling precisely the amount of friction needed in a transaction to ensure that link-out transactions were not viable for a developer.” Epic III, 781 F. Supp. 3d at 994.

The panel noted that the District Court found that Apple’s privacy and security justifications were pretextual, and there was no clear error in its ruling. See Epic III, 781 F. Supp. 3d at 972 (Op. at 31).

The Court Reversed and Remanded in Part as to Civil Contempt Sanctions

Apple argued that the restrictions imposed by the District Court were inherently punitive and cannot be imposed using the non-punitive civil contempt power, regardless of the court’s findings (Op. at 33).  As to limits on developer links (designed to provide a link from the Apple Store to developers) Apple argued that if there are no limits to developer links, developers can create link-out mechanisms that elevate the external link over Apple’s—e.g., by putting an external link in large and noticeable font.  The Ninth Circuit stated that the existing District Court injunction provides that Apple cannot undermine developers’ right to offer linked-out purchases, but this does not entitle developers to trample Apple’s payment option either (Op. at 34). Therefore, the Ninth Circuit modified the contempt order so that, where both Apple and a developer offer a purchase option, Apple may restrict the developer from placing its buttons, links, or other calls to action in more prominent fonts, larger sizes, larger quantities, and more prominent places than Apple uses for its own buttons, links, or other calls to action, but Apple must let developers place their buttons, links, or other calls to action in at least the same fonts, sizes, quantities, and places as Apple’s (Op. at 34). 

In addition, because the District Court found that excluding certain developers from using external links did not violate the injunction, it concluded that requiring Apple to provide access without explanation was an abuse of discretion, and remanded for the District Court to consider whether the exclusion violated the injunction, or whether enjoining the exclusion was necessary to protect and give life to the injunction (Op. at 35-36).  The Ninth Circuit concluded that the District Court’s action in requiring neutral messaging when leaving the App Store to prohibit “scare screens” was properly limited to coercing compliance with the injunction. The Court also noted that because Apple’s static-link restriction violates the injunction, this restriction does nothing more than more specifically enjoin what the injunction already generally enjoined (Op. at 36).

As for the commission, in its contempt order, the District Court stated that Apple could not impose any commission or any fee on purchases that consumers make outside an app.  Epic III, 781 F. Supp. 3d at 1003.  The Ninth Circuit agreed with Apple’s argument that the District Court’s sweeping new zero-commission rule is not tailored to Epic’s claimed harm and improperly imposes a punitive sanction. 

The Court stated that the contempt order functioned more like a punitive criminal contempt sanction than a civil contempt sanction, and permanently prohibits the compensation that Apple can receive for linked-out purchases of digital products, regardless of whether the commission is itself prohibitive  (Op. at 37).  The Court stated that to be a civil contempt sanction, the commission prohibition must either: (i) compensate Epic for Apple’s willful noncompliance with the injunction; or (ii) coerce Apple into complying with the injunction moving forward, and the order did neither, given that the injunction only enjoins prohibitive commissions or fees (Op. at 38-39).  The panel remanded, stating that the District Court could: (i) modify the commission prohibition to be a conditional civil contempt sanction; or (ii) rather than imposing a contempt sanction, the District Court could restrict Apple from imposing a prohibitive commission by modifying the injunction (Op. at 40).

The Ninth Circuit remanded to the District Court to: (1) consider whether Apple’s exclusion of developers violated the injunction; and (2) to amend the contempt order’s commission prohibition as either a purgeable civil contempt sanction or properly tailored clarification or modification of the injunction.  The panel also recommended possible courses of action to the District Court regarding an appropriate commission or fee limitation on remand: (a) Apple should be permitted to charge a commission on linked-out purchases based on the costs that are genuinely and reasonably necessary for its coordination of external links for linked-out purchases; (b) Apple is entitled to some compensation for the use of its IP; (c) Apple should receive no commission for the security and privacy features it offers to external links, and its calculation of its necessary costs for external links should not include the cost associated with the security and privacy features; (d) Apple should not be able to charge any commission for linked-out purchases until the District Court has approved a fee; and (e) the District Court may determine how best to make this determination including inviting the parties to provide expert testimony or establish a technical committee (Op. at 42).

The Ninth Circuit Rejected Apple’s Remaining Challenges to the District Court Order

The panel concluded that the District Court’s order did not impose price controls (with respect to the commission rate) requiring equitable abstention under California’s Unfair Competition Law (Op. at 43-45), citing California Grocers Association v. Bank of America, 22 Cal. App. 4th 205 (1994) (California court determined that it could not resolve whether service fees charged by banks are too high and should be regulated).

The Ninth Circuit concluded that the order did not constitute a regulatory taking by forbidding Apple from charging a commission on linked-out purchases, concluding that “Apple had no expectation that it would be able to charge commissions, much less anticompetitive commissions, on linked-out purchases when investing into its iOS system because it previously prohibited such transactions” (Op. at 46). 

The Court also rejected Apple’s argument that the order violated Apple’s First Amendment rights because it effectively compelled Apple to engage in expressive activity by allowing developers to engage in speech that it may not agree with (Op. at 46-47). 

The Ninth Circuit also rejected Apple’s due process argument because the District Court could have instituted proceedings to modify the injunction, but instead issued a contempt order, stating that Apple had an opportunity to be heard before the contempt order (Op. 48).

The panel rejected Apple’s argument that there was a conflict between the judgment in this case and the California Court of Appeal’s new decision in Beverage v. Apple, Inc., 101 Cal. App. 5th 736 (2024).  The Ninth Circuit noted that Beverage pertained to situations where the same conduct found immune from antitrust liability by the Colgate doctrine is also alleged to violate the unfair prong of the UCL, but here, Apple has violated the “unfair” prong of the UCL, and Apple has not identified when its conduct was found immune from antitrust liability pursuant to the Colgate doctrine (Op. at 49).  In addition, Apple had previously told the California Supreme Court that it should not review the Court of Appeal’s decision in Beverage because it did not conflict with this court’s prior opinion.

Apple also argued that the Supreme Court’s recent ruling on nationwide injunctions in Trump v. CASA, Inc., 606 U.S. 831 (2025), clashed with the District Court’s injunction, but the panel concluded that CASA did not undermine this court’s prior analysis of the injunction’s scope, and the District Court’s injunction was not an impermissible nationwide injunction (Op. at 52).  The panel noted that it had already determined that the scope of a permanent injunction following a finding of antitrust liability is not comparable to that of a preliminary injunction on a constitutional question, and that nationwide prohibitions in an antitrust or UCL case fit squarely within the District Court’s large discretion to craft equitable antitrust remedies (Op. at 52).

Finally, the Ninth Circuit rejected Apple’s argument that the case should be reassigned to a different judge on remand, noting that Apple sought reassignment based solely on the District Court’s rejection of its arguments and its determination that Apple willfully violated the court’s order (Op. at 53).  The Ninth Circuit stated that Apple may disagree with those outcomes, but they supply no basis for reassignment (Op. at 53).

Today, the Department of Justice’s Antitrust Division and the Federal Trade Commission (FTC) launched a joint public inquiry regarding potential additional guidance on collaborations among competitors. The joint inquiry seeks input on the value and potential content of guidance concerning the range of collaborations utilized to drive innovation and promote competition in the modern economy.

This public inquiry will help the Antitrust Division and FTC (together, the Agencies) with their effort to develop up-to-date guidance to the business community, building on the previous 2000 Antitrust Guidelines for Collaborations Among Competitors (2000 Collaboration Guidelines). The guidelines explain how the Agencies analyze various antitrust issues raised by such collaborations. The 2000 Guidelines were withdrawn in December 2024.

“Vigorous and effective enforcement can only exist when the rules of the road are clearly outlined,” said Acting Assistant Attorney General Omeed A. Assefi of the Justice Department’s Antitrust Division. “Procompetitive collaborations are not only permissible but also encouraged in a complex and dynamic economic environment. The abrupt withdrawal of the prior guidelines left stakeholders without guidance in this important area. Replacing the withdrawn guidelines is key to promoting certainty, allowing American businesses to work together effectively and lawfully, and enabling the private antitrust bar to enhance compliance in this area.”

“In an everchanging economy, businesses need transparency and predictability from enforcers more than ever. These times may require the federal government to update its guidelines,” said FTC Chairman Andrew N. Ferguson. “The previous administration decided, at the 11th hour, however, to withdraw the 2000 Antitrust Guidelines for Collaborations Among Competitors. This decision, made entirely out of spite and resentment, left millions of businesses in the dark.”

Many collaborations and joint ventures among competitors are procompetitive and benefit the economy and consumers by allowing expansion into new markets, enabling investment into innovation, and lowering production and other costs. However, some collaborations carry potential risk to competition. The 2024 withdrawal of the prior guidelines left the industry without guidance in this important area.  

In recent years, new types of competitor collaborations, joint ventures, and alliances, including those facilitated by new technologies, have led to increased requests for clarity regarding their treatment under the antitrust laws.

Some of the specific areas of inquiry on which the Agencies are seeking public input and information include:

• What topics would benefit from additional guidance — for example, joint licensing arrangements? Conditional dealing with competitors? Other topics?
• What new technologies and business models would benefit from additional guidance — for example, algorithmic pricing, information and data sharing, or labor collaborations?
• What significant legal, economic, or technological developments should be considered in any revisions to the prior competitor collaboration guidelines?

The public comments will help enforcers to consider reintroducing guidance built on the prior guidelines. Such guidance will provide businesses with the predictability and confidence they need to collaborate and grow while avoiding anticompetitive conduct that risks raising prices or stifling innovation. The guidance will help increase antitrust compliance by guiding the market on antitrust law and policy in this important area. An unfettered free market safeguards competition to the benefit of the American people.

Comments, no longer than 18 pages each, can be submitted at www.regulations.gov/docket/ATR-2026-0001/document and must be received no later than April 24, 2026. The information will be used by the Agencies to consider updated guidance.

The Antitrust Division today announced its first-ever whistleblower reward: a $1 million reward to a whistleblower who provided information that led to EBLOCK Corporation resolving criminal antitrust and fraud charges through a deferred prosecution agreement, under which it has agreed to pay a $3.28 million criminal fine.

EBLOCK Corporation offers an online auction platform for used vehicles. In November 2020, EBLOCK acquired Company A, another online auction platform for used vehicles. According to the Criminal Information and Deferred Prosecution Agreement filed today in the U.S. District Court for the Central District of California, EBLOCK did not take immediate action after the acquisition to end the bid-rigging conspiracy and fraud at Company A. From November 2020 to February 2022, individuals at Company A conspired with individuals at Company B to suppress and eliminate competition for used vehicles sold on Company A’s online auction platform, in violation of the Sherman Act, 15 U.S.C. § 1. EBLOCK also did not take immediate action to end “shill bidding” on Company A’s platform, resulting in the placement of fake bids intended to artificially increase the sales prices for used vehicles, in violation of 18 U.S.C. § 1343.

“Whistleblowers serve as the Justice System’s greatest disinfectant against criminal antitrust conspiracies,” said Deputy Assistant Attorney General Omeed A. Assefi of the Justice Department’s Antitrust Division. “A car is the second largest purchase most Americans will make in their lifetimes. This whistleblower helped expose a brazen $16 million scheme that made it more expensive for hardworking Americans to afford second-hand cars across the country. This $1 million reward not only recognizes a whistleblower for bravely stepping forward to report crimes to the Antitrust Division, but also underscores the indispensable role whistleblowers will continue to play in the Division’s criminal enforcement program. Remember, the first company in an antitrust cartel that reports its collusion to the Antitrust Division might receive Leniency — but the race is faster now, because employees and their attorneys are incentivized to blow the whistle and beat their companies to the Division’s doorstep.”

“Today’s reward shows that the Antitrust Division leverages whistleblower reports to drive forward our investigations,” said Acting Director of Criminal Enforcement Daniel Glad of the Justice Department’s Antitrust Division. “If a whistleblower provides new information that ultimately assists the Antitrust Division in bringing charges, the whistleblower might receive a significant award — even if the criminal activity has already ended.”

“Whistleblowers play a critical role in helping law enforcement to identify and investigate a wide variety of criminal activities,” said Acting Assistant Director Mark Remily of the FBI’s Criminal Division. “In this case, information from a whistleblower led to the identification and dismantlement of a criminal antitrust conspiracy, that if unreported, would have continued to harm American consumers who were unknowingly overpaying for automobiles.”

“In this case, the defendant used the U.S. Mail to send documentation related to the scheme; a scheme that valued illegal profits over protecting unsuspecting car buyers. The Postal Inspection Service does not tolerate this abuse of the U.S. Mail or its customers and will pursue these types of criminals wherever they are,” said Chief Postal Inspector Gary Barksdale. “This $1 million dollar award comes only six months after the Whistleblower Rewards Program first started. This award shows the commitment the U.S. Postal Service and the Antitrust Division to support those who provide accurate, actionable intelligence about antitrust and related competition crimes with a connection to the U.S. Mail.”

As described in the court documents, legacy employees at Company A conspired with employees at Company B to share bidding information and agree on the maximum amount Company A or Company B would bid on certain vehicles. Company A employees provided special access and user permissions to Company B that enabled it to view the confidential bidding information of other buyers and sellers on its auction site. The co-conspirators maintained a shared inventory of vehicles purchased pursuant to the bid rigging scheme, and they coordinated to relist those vehicles and place shill bids with the intention of artificially increasing the prices paid by legitimate buyers. They also misrepresented the numbers and identities of these fake bidders during the online auctions by commissioning the development of software that would automatically place shill bids under the names of actual auto dealerships without those dealerships’ consent. The co-conspirators pooled and split the profits from the scheme. During the course of these actions, various documents in support of the scheme were sent via U.S. Mail.

In addition to the $3.28 million fine, the deferred prosecution agreement requires EBLOCK to undertake remedial measures, including implementing an appropriate compliance program and cooperating with the Justice Department’s ongoing criminal investigation and any resulting prosecutions.

Federal law protects employees who report criminal antitrust violations from retaliation by their employers. At all times, the Antitrust Division will take reasonable steps to protect whistleblowers and minimize risks that use of the information will lead to public identification. More information on confidentiality and anti-retaliation protections is on the Confidentiality page.

The Antitrust Division works with its law enforcement partners the U.S. Postal Inspection Service and the U.S. Postal Service Office of Inspector General to pay rewards to whistleblowers. Whistleblowers who voluntarily report original information about antitrust and related offenses that result in criminal fines or other recoveries of at least $1 million may be eligible to receive a whistleblower reward. Whistleblower awards can range from 15 to 30 percent of the money collected. For more information on the Antitrust Whistleblower Rewards Program, including a link to submit reports, visit www.justice.gov/atr/whistleblower-rewards.

The Federal Bureau of Investigation and the U.S. Postal Inspection Service investigated the case. Trial Attorneys Melanie Krebs-Pilotti and Patrick Hallagan, and Assistant Chief Kristina Srica for the Antitrust Division’s Washington Criminal Section, are prosecuting the case.

February 17, 2026 Press Release

The Federal Trade Commission finalized a consent order involving the Boeing Company’s (Boeing) acquisition of Spirit AeroSystems Holdings, Inc. (Spirit).

The FTC previously accepted the consent order, subject to final approval, on December 2, 2025.

The consent order requires Boeing to divest significant Spirit assets. The consent order also requires Boeing and Spirit to continue to provide aerostructures and aerostructure services to competing contractors for military aircraft programs. The FTC’s final consent order includes a modification which clarifies the procedure for Boeing to submit compliance reports.

The consent order resolves FTC allegations that Boeing’s acquisition of Spirit would give Boeing the ability and incentive to raise the cost of or degrade Airbus’s access to inputs for its competing commercial aircraft. The order also resolves FTC allegations that the acquisition could give Boeing the ability and incentive to limit rival military aircraft companies’ access to Spirit’s aerostructure products and technologies.

The FTC’s action will help protect competition in the large commercial and military aircraft markets, which are critical to American commercial travelers and national security.

Following a public comment period, the Commission voted 2-0 to approve the final order.

OAKLAND — California Attorney General Rob Bonta today issued a consumer alert to remind Californians that they can send one request to more than 500 registered data brokers to delete their personal data by using a new, easy-to-use online tool. The Delete Request and Opt-out Platform (DROP), developed by the California Privacy Protection Agency (CalPrivacy), gives Californians more control over their personal information and helps limit the information that data brokers sell. Attorney General Bonta encourages Californians to consider using this free tool to protect their privacy and delete their personal information in three easy steps. 

“Data brokers store and sell so much information about our daily lives — who you are, how you live, and where you go — but in California there is now an easy-to-use tool to take back control over your data,” said Attorney General Rob Bonta. “By using DROP, consumers can tell data brokers to delete and not sell their personal information, decreasing both the amount of data circulating around and the risk that this data is leaked or hacked. I commend CalPrivacy for developing this critical tool and remind data brokers that my office stands ready and fully committed to enforce compliance. For more information and to use DROP, visit privacy.ca.gov/drop.” 

“In less than six weeks of its availability, over 225,000 Californians have already signed up for DROP,” said Tom Kemp, Executive Director of CalPrivacy. “This shows that Californians want to limit the personal information data brokers collect and sell about us and is yet another example of the tech policy innovation that is happening here first in California.”

“Californians have been very clear that they want to reclaim control over their personal information, and this law gives them a new tool to do that,” said Senator Josh Becker (D-Menlo Park). “The incredible success of the Delete Act and DROP demonstrates that strong privacy laws are practical, popular, and effective. It shows that if we make it easy, people will take advantage and delete their data.”

Data brokers collect and maintain troves of personal information like email addresses, phone numbers, online browsing history, interests, health-related information, geolocation, and more. Data brokers package and sell this information to various entities, typically without a consumer even knowing. Preventing third parties from receiving this information is a key step to stopping the proliferation of your data in the online ecosystem.  When you submit a DROP request, you tell data brokers to delete your personal information and not sell it

With the launch of DROP earlier this year, Californians have a safe and secure way to protect their privacy. The tool — made possible by the Delete Act (Becker, 2023) — transmits a single deletion request telling over 500 registered data brokers to delete all the personal information they have about you and to not sell your data going forward. Consumers can sign up for DROP now, and starting August 1, 2026, data brokers must start deleting your data. Those who fail to comply may face penalties and administrative fines.

Californians can delete their personal information in three safe and secure steps:

• Confirm that you are a California resident. You are a resident if you live in California, or domiciled in California, even if you are temporarily outside the state.
• Create your profile. Give basic information about yourself that is immediately encrypted and secure. It’s your choice what information to provide. The more information you enter, the more likely your data will be deleted.
• Submit your request. DROP lets you send a single deletion request to over 500 registered brokers. Data brokers are required to match you to their records based on the data you choose to submit through DROP. 

For more information about DROP and how Californians can submit a deletion request, visit: privacy.ca.gov/drop.

OAKLAND — California Attorney General Rob Bonta today announced a settlement with the Walt Disney Company (Disney), resolving allegations that the company violated the California Consumer Privacy Act (CCPA) by failing to fully effectuate consumers’ requests to opt-out of the sale or sharing of their data across all devices and streaming services associated with consumers’ Disney accounts. Under today’s settlement, Disney must pay $2.75 million in civil penalties and must implement opt-out methods that fully stop Disney’s sale or sharing of consumers’ personal information. 

“Consumers shouldn’t have to go to infinity and beyond to assert their privacy rights. Today, my office secured the largest settlement to date under the CCPA over Disney’s failure to stop selling and sharing the data of consumers that explicitly asked it to,” said Attorney General Bonta. “California’s nation-leading privacy law is clear: A consumer’s opt-out right applies wherever and however a business sells data — businesses can’t force people to go device-by-device or service-by-service. In California, asking a business to stop selling your data should not be complicated or cumbersome. My office is committed to the continued enforcement of this critical privacy law.”

The California Department of Justice’s investigation into Disney stems from a January 2024 investigative sweep of streaming services for potential CCPA violations. Effective opt-out is one of the bare necessities of complying with CCPA. The investigation found that Disney’s opt-out processes did not allow a consumer — even when logged into their account — to completely opt-out of and stop all sale or sharing of their data, in violation of the CCPA. Specifically, the investigation found that each of the methods Disney provided had key gaps that allowed Disney to continue to sell and share consumers’ data, including: 

Opt-Out Toggles: If a user requested to opt-out of the sale or sharing of their data via an opt-out toggle in Disney’s websites and apps, Disney only applied the request to the specific streaming service the user was watching, and often only the specific device the consumer was using. This meant that in most instances, using the toggle would not stop selling or sharing from other devices or services connected to the consumer’s account.

Webform: If a user opted out using Disney’s webform, Disney only stopped the sharing of personal data through the company’s own advertising platform and offerings. However, Disney continued to sell and share consumer data with specific third-party ad-tech companies whose code Disney embedded in its websites and apps. Disney also failed to provide an in-app, opt-out method in many of its connected TV streaming apps, instead directing consumers to its webform, effectively leaving consumers with no way to stop Disney’s selling and sharing from these apps.

The Global Privacy Control: For consumers who opted out via the Global Privacy Control (GPC), Disney limited the request to the specific device the consumer was using, even when the consumer was logged into their account. The GPC is an easy-to-use ‘stop selling or sharing my data switch’ that is available on some internet browsers or as a browser extension. 

The California Consumer Protection Act

The CCPA has opened up a whole new world of privacy protection and increased privacy rights for California consumers, such as the right to know how businesses collect, share, and disclose their personal information. The CCPA vests California consumers with control over the personal information that businesses collect about them, including the right to request that businesses stop selling or sharing their personal information. To learn more about opting out, please see here.

Attorney General Bonta is committed to the robust enforcement of California’s nation-leading privacy law. Today’s settlement represents the seventh enforcement action under the CCPA. Attorney General Bonta has also announced settlements with Sephora and DoorDash as well as mobile app gaming company, Jam City; streaming service, Sling TV; website publisher, Healthline.com; and entertainment company, Tilting Point Media. In order to monitor the businesses’ compliance with the CCPA, Attorney General Bonta has conducted investigative sweeps related to location data, streaming apps and devices, employee information, and surveillance pricing.

For more information about the CCPA, visit oag.ca.gov/ccpa. To report a violation of the CCPA to the Attorney General, consumers can submit a complaint online at oag.ca.gov/report.

OAKLAND — California Attorney General Rob Bonta joined a bipartisan coalition of 23 attorneys general and a group of state-level bank regulators, including the California Department of Financial Protection and Innovation, in opposing a pair of rules proposed by the Office of the Comptroller of the Currency (OCC) that would preempt state laws that require national banks to pay minimum interest on mortgage-escrow accounts. In states across the country, including California, national banks are required to pay minimum interest on mortgage-escrow accounts to comply with consumer protection laws. These laws are designed to prevent lenders from profiting from interest-free deposits at the borrower’s expense, are consistent with limitations enacted by Congress, and have been found lawful by the U.S. Supreme Court.  

“States play a crucial role in consumer financial protection. California has laws protecting consumers from abusive lending practices by Big Banks, including when it comes to holding money in a mortgage escrow account. Now, the federal government is attempting to preempt these important laws and leave consumers in the dust,” said Attorney General Bonta. “Alongside a bipartisan coalition of attorneys general, I’m standing up for states’ rights to enforce state laws that protect consumers from financial exploitation.”

California law requires financial institutions, including banks, to pay at least 2% annual interest on funds deposited in mortgage escrow accounts. Funds in an escrow account can be used by lenders to ensure timely payment of property taxes and insurance. These state minimum escrow interest laws are a simple and important consumer protection. Before the escrow interest laws were enacted, some lenders would collect significantly more in escrow than was needed to timely pay taxes and insurance, and would not pay any interest to the borrower, giving the lender essentially an interest-free loan at the borrower’s expense. The minimum escrow interest laws help ensure that borrowers are treated fairly and reduce the incentive for lenders to collect excessive funds in escrow. At least 13 other states have similar laws in place to protect consumers.

In the letter, the attorneys general argue that the OCC’s proposed rules will deprive states of their legitimate, constitutional authority to protect their consumers, including in their interactions with national banks. The attorneys general urge OCC to abandon the proposals because: 

• Congress has never interfered with states’ abilities to mandate minimum interest payments on mortgage-escrow accounts, going back to 1864 when the National Bank Act was passed.
• In the Dodd-Frank Act, Congress has expressly limited the scope of bank preemption to state laws that significantly interfere with bank operations.
• State minimum interest mandates do not significantly interfere with national bank operations and therefore are not preempted.
• They are contrary to law and therefore, unlawful.

In sending the letter, Attorney General Bonta joins the attorneys general of New York, Arizona, Colorado, Connecticut, Delaware, Hawai’i, Illinois, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Oklahoma, Oregon, Rhode Island, Vermont, Virginia, Washington, the District of Columbia, as well as a group of state-level bank regulators including the California Department of Financial Protection and Innovation.

Attorney General Bonta is committed to protecting consumers from unfair and abusive practices in the financial system. Last month, Attorney General Bonta filed a lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB) Acting Director’s unlawful decision not to fund the agency’s operations, preventing it from performing legally mandated functions. Shortly after taking office, the Trump Administration launched a campaign of destruction and systemic shuttering of the CFPB, threatening catastrophic harm to hardworking families and consumer financial markets nationwide.  

After submitting an amicus brief in the case, in 2024 Attorney General Bonta celebrated the U.S. Supreme Court’s decision in Cantero v. Bank of America after it found that a lower court failed to apply the proper standard for evaluating whether a New York state law that requires mortgage lenders to pay a 2% minimum interest rate on funds held in mortgage escrow accounts is preempted by the National Bank Act. The decision clearly allowed states to enforce state consumer financial protection laws against both state and national banks so long as the state law does not prevent or significantly interfere with the exercise of power by national banks.