Antitrust and Unfair Competition Law

E-BRIEFS, NEWS AND NOTES: December 2022

Antitrust and Unfair Competition Law Section Antitrust in the News

WELCOME to the DECEMBER 2022 edition of E-Briefs, News and Notes.

This edition has a variety of content:

  • In SECTION NEWS, we feature a Message from the Chair of Membership & Engagement Lee Brand (Pillsbury Winthrop Shaw Pittman LLP). Mr. Brand reminds us all to sign up for another year of membership and to take advantage of that membership in the coming year!   You are also invited to the UCL Institute in Los Angeles!  Please plan to attend. Full Details and Registration: https://calawyers.org/event/the-ucl-institute/
  • E-BRIEFS will feature three blockbuster cases.  These cases include a major victory for the DOJ, an analysis of “expert hot-tubbing” and an examination of the “additional plus” factors needed to state a claim in an amended complaint.
  • ENFORCEMENT AGENCY PRESS RELEASES highlight the enforcement activities of the Antitrust Division, DOJ, FTC, and California AG’s office. Reading the press release is a quick way to keep on top of major developments.
  • IN CASE YOU MISSED IT re-posts numerous articles and other matters of interest to antitrust and unfair competition lawyers. Curated by Bob Connolly.  

Thanks to all the contributors to this edition. If you have any suggestions for improvement, or an interest in contributing to E-Briefs, please contact Editors Betsy Manifold (Manifold@whafh.com) and James Dallal (JDallal@cpmlegal.com).

Section News

Message from the Chair of Membership & Engagement

Dear Section Members:

In addition to the holiday season, it is also the slightly less festive but equally important State Bar and California Lawyers Association membership renewal season!  Signing up for another year of membership is easy.  You can renew your membership two ways: if you are renewing your license, on the “California Lawyers Association” page, make sure to check the “Antitrust and UCL Section” button, or go to the Your Account page of calawyers.org. We encourage you to not only renew your membership in the Antitrust & UCL Section for 2023, but also to take full advantage of that membership in the coming year. 

First and foremost, membership means inclusion in the largest community of attorneys practicing antitrust, unfair competition, and trade regulation law in California.  Our Section prides itself on including a wide array of thought leaders working as private plaintiff and defense attorneys, government enforcers, in-house counsel, economic consultants, and academics.  The Section also works hard to create and foster greater diversity in this community, as well as to support and encourage the next generation of antitrust and UCL attorneys.

Members receive subscriptions to the Section’s publications and newsfeed:

  • Antitrust and Unfair Competition Law Daily Newsstand via Lexology (publishing over 500 articles every day from 900+ leading law firms and service providers)
  • Competition (the Section’s scholarly law journal)
  • Antitrust and UCL E-Briefs, News and Notes (the Section’s electronic newsletter)

Members also receive discounts on the Section’s popular products and programs:

  • The Section’s In-Person Events:
    • Golden State Antitrust and Unfair Competition Law Institute (the Section’s annual day-long CLE event)
    • Antitrust Lawyer of the Year Award (the Section’s annual reception, ceremony, and dinner)
    • UCL Institute
    • Celebrating Women in Competition Law in California
    • Other networking events and mixers
  • High quality MCLE content in multiple formats (webinars, podcasts, videos, and self-study articles)
  • Access to Fastcase Legal Research (a collection of cloud-based software for lawyers to quickly and efficiently accomplish research goals and complete tasks).  

Members can advance their careers through the Section by:

  • Becoming part of the community of leading antitrust and UCL practitioners in California
  • Becoming one of the leaders of or contributing to the Section’s five standing committees:  Diversity Committee, Education Committee, Publications Committee, Treatise Committee, and UCL Committee

If you have any questions or would like more information about any of the above, please don’t hesitate to reach out to me at lee.brand@pillsburylaw.com. 

Happy renewal season, and we look forward to welcoming you back for another great year in 2023!

Lee Brand (Pillsbury Winthrop Shaw Pittman LLP)

You Are Invited to the UCL Institute in Los Angeles!

January 12, 2023, 1:00 p.m. to 7:00 p.m.

Only $25! Earn 4 Hours MCLE Credit (including 1 Hour Legal Ethics)

The Antitrust & Unfair Competition Law Section’s UCL Institute will feature opening remarks from the FTC’s Tom Dahdouh, a networking reception with cocktails and hors d’oeuvres, and panels on state and federal government enforcement priorities (Maricela Segura, Nicklas Akers, Tom Papageorge, Steve Vieux), emerging UCL issues (Anna McLean, Roland Tellis, Michael Mallow, Christina Tusan), practical advice for UCL litigation (Gayle Jenkins, Tracy Hughes, Hoon Chun, Lee Brand), and ethics for UCL lawyers (Wendy Patrick).

Full Details and Registration: https://calawyers.org/event/the-ucl-institute/

E-Briefs

DOJ Blocks the Penguin Random House/Simon & Schuster Deal

By Lee F. Berger, Partner at Steptoe & Johnson LLP, and Travis West, Associate at Steptoe & Johnson LLP

In United States v. Bertelsmann SE, No. CV 21-2886-FYP, 2022 WL 16949715 (D.D.C. Nov. 15, 2022), the District Court of the District of Columbia blocked Penguin Random House’s $2.18 billion purchase of rival publisher Simon & Schuster.  The opinion endorses the Department of Justice’s (“DOJ”) monopsony theory of the case, and completely rejects the defendants’ counterarguments.  After a string of defeats, the case marks the first trial win for the DOJ under the Biden administration in a litigated merger challenge.

Penguin Random House and Simon & Schuster are two of the largest book publishers in the United States.  In November 2020, Penguin Random House agreed to buy Simon & Schuster in a deal that would make the merged company the largest publisher in the United States with a market share nearly three times that of its closest competitor. The DOJ sued to block the merger under Section 7 of the Clayton Act, arguing that the combined entity would tend to create monopsony power that would result in lower advance payments to authors.  An author’s agent will often shop a book to multiple publishers to achieve the greatest advance for their client.  The DOJ argued that by reducing the number of publishers, the deal would decrease the dollar amount of advances to authors, harming their ability to write books and reducing output.

In ruling for the DOJ, Judge Florence Y. Pan considered the defendants’ three primary arguments, that: (1) the DOJ’s use of a $250,000 threshold for defining the relevant market was arbitrary, (2) a price threshold, standing alone, should not be the market definition’s lynchpin since publishers value books along a continuum, and (3) that the transaction would have no anticompetitive effects if the market were defined at various other dollar thresholds.  In rejecting these arguments, Judge Pan noted that the Clayton Act prohibits mergers that may substantially lessen competition “in any line of commerce or in any activity affecting commerce.”  Thus, the court adopted the view that all attempts at defining a market require some degree of artificial line-drawing that cannot be measured “by metes and bounds” and, accordingly, should not stand in the way of examining the competitive effects of a transaction.  Indeed, she noted that there was precedent for focusing on the “high end” of a market, as it would likely be distinct from the other potential submarkets.

Second, Judge Pan observed that the industry has increasingly concentrated over the past four decades, but had reached a point of stability in the past three years that this merger threatened to undermine.  She also noted that none of the non-Big Five publishers had increased their market share and the aggregate share for the Big Five was “essentially flat.”  This counseled toward assigning more weight to the market shares of the merging companies, which reflected the dominance the combined entity would possess.  She also stated that the recent stability of the Big Five’s market shares demonstrated that the major publishers were already benefitting from diminished competition, and that new entrants like Amazon and Disney had not yet successfully entered and had no short-term plans to make a strong competitive entry. 

Judge Pan also found significant the competitive harms that would result from the merger.  For instance, Penguin Random House and Simon & Schuster were often each other’s most significant competitor and their separate presence in auctions for publishing rights could drive advances higher.  She also noted that there was some evidence of existing parallel behavior in the market as publishers could theoretically compete with each other by offering better contract terms for rights such as audiobooks, but had appeared to tacitly agree to compete only on advances, as the other terms were demanded on uniform terms more favorable to the publishers.

Finally, the court seemed skeptical of the defendants in general, as they made several arguments that she found “incredible,” “unsupportable,” “unreliable,” or even a “sleight of hand.”   For example, the court based its acceptance of the DOJ’s proffered “GUPPI models” (a “gross upward pricing pressure index” calculated to evaluate a merger’s potential for unilateral anticompetitive effects) in part on the fact that defendants’ economists had similarly used GUPPI models during the pre-complaint investigation.  The court criticized the defense’s efforts to present the independent publishers as a bulk 9% of the market, rather breaking out those publishers individually.  Judge Pan rejected as unenforceable—and suggestive of a “consciousness of guilt”—the unilateral promise by Penguin Random House’s CEO to allow Simon & Schuster legacy imprints to compete with Penguin Random House when there is no external bidder.  In all, Judge Pan’s opinion represents a comprehensive victory for the DOJ and breaks the Biden administration’s losing streak in merger trials.

The “Expert Hot Tub” Approach in Google’s Recent Class Certification Decision
Thomas Burt and Rourke Donahue

By Thomas Burt and Rourke Donahue (Wolf Haldenstein)

In In re Google Play Store Antitrust Litig., No. 21-md-02981-JD, 2022 U.S. Dist. LEXIS 213670 (N.D. Cal. Nov. 28, 2022), U.S.D.J. James Donato certified Consumer Plaintiffs’ class certification motion under Rule 23(b)(3), but denied the motion pursuant to Rule 23(b)(2).[1]  Court also denied Google’s motion to exclude Plaintiffs’ economics expert testimony under Fed. R. Evid. 702 after adopting the “hot tub” approach (putting the opposing experts head to head to parse out the critical differences in their analyses). 

Facts: Plaintiffs allege that Google illegally monopolizes the Android app distribution market with anticompetitive practices in the Google Play Store.  Alleged anticompetitive acts include requiring manufacturers and mobile network operators to preinstall and prominently place the Play Store on Android devices and prohibiting developers who sell their apps through the Play Store from providing any apps that would allow consumers to download a competing app distribution store.

Plaintiffs asserted that Google’s monopoly power allows it to charge a “supra-competitive commission of up to 30% on the price of apps purchased through the Google Play Store and in-app purchases,” id. at *22, which helps Google reap immense profits, including $38 billion from the Play Store in 2020. Id. at *21-22. This, in turn, harms consumers who are forced to pay artificially inflated prices for apps and in-app purchases. Id. at *23.

Plaintiffs’ claims arise under Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2; the California Cartwright Act, Cal. Bus. & Prof. Code § 16700 et seq; and the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. The requested relief consists of treble damages, restitution under the UCL, and a conduct injunction. In re Google, 2022 U.S. Dist. LEXIS 213670, at *23.

Analysis:

First, addressing Google’s motion to exclude Plaintiffs’ expert testimony, the Court held that “Google has not demonstrated that unreliability or invalidity warrant exclusion.” Id. at *39.  To aid the Daubert and class certification analyses, the court held an “expert hot tub,” whereby the court moderated a debate between both parties’ experts, pursuant to a joint submission by the experts identifying their top areas of disagreement. Id. at *26. The court “has used the hot tub procedure in other cases, and has found it to be an invaluable tool for vetting Daubert issues and determining questions of class certification, among other uses.” Id. (citing cases). Google’s main Daubert objection was to Plaintiffs’ expert’s pass-through formula.

High points of the parties’ expert testimony include:

  • Plaintiffs’ expert, Dr. Hal J. Singer posited that “‘Google sets a take rate or commission imposed directly on developers,’ and the ‘pass-through rate’ is the ‘portion of the supracompetitive cost imposed on developers through the take rate [that] is passed through to consumers.’” Id. at *34 (citation omitted). In the ‘hot tub’, Dr. Singer stated that “‘92.4 percent of the transactions in the database were all at that headline 30 percent rate,’” and that, as a result, there was no “‘before and after’” period for the challenged conduct. Therefore, a traditional regression analysis was not possible. Id. (citation omitted).   He adopted the logit model to determine the pass through rate because he needed “‘an economic model of consumer demand that would allow [him] to make predictions of how an app developer would change its price in response to a change in the take rate, given the nature of the demand that that app developer faced.’” Id. at *35 (citation omitted).
  • Google’s expert Dr. Michelle M. Burtis critiqued the “‘methodology for the pass-through rates,’” mainly because, while she conceded that the logit model was a well-established developer technique, she thought it was “‘not standard’” in this application and had “‘never seen it before’” in an analogous circumstance. Id. at *37. The court dismissed this critique because “Rule 702 does not forbid new methodologies and analyses” and “general acceptance of a method is no guarantee of reliability.” Id.

Second, in conducting its Rule 23(b) (3) analysis the Court considered Google’s main contention that the lack of common proof of pass-through barred certification. Id. at *45. Google analogized its relationship to consumers to the traditional, vertical supply chain in Ill. Brick Co. v. Ill., 431 U.S. 720 (1977) to show that Plaintiffs could not pursue an antitrust claim based on a pass-through of the anticompetitive overcharge. Judge Donato, however, cited Apple Inc. v. Pepper, 139 S. Ct. 1514 (2019) to show that this theory has been definitively held not to apply to online app markets that do not operate as “‘traditional, vertical supply chain[s]’” like the Play Store. Id. at *45-47. 

Third, addressing the typicality and adequacy prongs, (Rule 23(a) (3), (4)), the court rejected Google’s challenges that the Joint Prosecution Agreement, which divvied up the representation of the various states between the consumer plaintiffs and the State Attorneys General, allegedly forced class counsel to “‘continue to have a financial interest in the claims of consumers they no longer seek to represent.’” Id. at *63 (citation omitted). The court responded that “the government and private actors are marching arm-in-arm toward a common victory over Google” and that their claims, evidence, and interests will be the same. Id. at *63-64.  Accordingly, the court granted Plaintiffs’ certification pursuant to Rule 23(b) (3).

Lastly, the court swiftly denied Plaintiffs’ motion to certify the class pursuant to Rule 23(b) (2). “‘Class certification under Rule 23(b) (2) is appropriate only where the primary relief sought is declaratory or injunctive.’” In re Google, 2022 U.S. Dist. LEXIS 213670, at *66 (citing Ellis v. Costco Wholesale Corp., 657 F.3d 970, 986 (9th Cir. 2011), quoting Zinser v. Accufix Rsch. Inst., Inc., 253 F.3d 1180, 1195 (9th Cir. 2001)). The primary relief Plaintiffs request here is monetary. Consequently, certification of a Rule 23(b)(2) class was denied.

[1]Plaintiffs entered into a Joint Prosecution Agreement with the Attorneys General of thirty-eight states and the District of Columbia, who are plaintiffs in State of Utah et al. v. Google, No. 21-cv-05227-JD (another constituent case in this MDL), whereby they agreed that plaintiffs would not pursue certification on behalf of state residents represented in the Attorneys General case. In re Google, 2022 U.S. Dist. LEXIS 213670, at *24. Accordingly, the proposed class here includes the twelve states, plus five U.S. territories, not represented in that case. Id. at *25.

Talking Turkey: Sufficient Circumstantial Evidence Alleged with Additional “Plus Factors”
Cheryl Johnson

By Cheryl Johnson

In the Turkey Antitrust Litigation, Plaintiffs alleged that Agri Stats which provided non-public pricing and supply information to the turkey industry, together with turkey suppliers controlling eighty percent of the U.S. turkey market, conspired to exchange competitive information.  The conspiracy was challenged on both a rule of reason and per se basis.  The court dismissed the per se challenge, finding it conclusory and not plausible, while allowing the conspiracy claim to proceed under a rule of reason standard. After discovery, plaintiffs filed an amended 600-page complaint, with one claim attacking the information-exchange conspiracy on a rule of reason basis, and a second claim alleging a per se price fixing conspiracy.  Defendants moved to dismiss the amended per se claim, which Judge Kendall in Chicago rejected after finding that the pleadings alleged sufficient circumstantial evidence of the price fixing conspiracy, with parallel conduct and additional “plus factors” indicative of an agreement. In re Turkey Antitrust Litigation, No. 19 C8318, 2022 WL 17093359, *6-7, 11 (N.D. Ill. Nov. 21, 2022).

Despite a conceded lack of “direct evidence” of a conspiracy, Defendants (save one) were each alleged to have participated in coordinated turkey supply reductions followed by increased prices; neither simultaneous nor similar manners of restricting supply were required to sufficiently allege parallel conduct. Id. at *7. The court also rejected the suggestion that plaintiffs’ substantial completion of discovery at the time their complaint was amended should alter the pleading stage standard used in analyzing a dismissal motion. Id. at*9.

For “plus factors,” plaintiffs alleged frequent and direct information exchanges on turkey pricing and production cuts, encouragements of codefendants to reduce turkey productions, and the “central role” played by Agri Stats that distributed an unusual amount of private information about industry pricing and output while noting specific increased pricing opportunities. Id. at *10.  Defendants’ atypical trade association participation was also cited as a ‘plus factor’, particularly given that the trade association hired Agri Stats to report on industry expectations, and created a Turkey Demand Enhancement Team with some defendant members with the assistance of Agri Stats to urge members to substitute “coopetition” for competition and to maintain historic profit levels in the industry. Id. at *3, 4, 10. 

Agency Updates

This feature includes excerpts from selected press releases issued by the Antitrust Division, USDOJ, the Federal Trade Commission and the California Attorney General’s Office. It does not include all press releases issued by those offices. This appears to be a truly transitional time in antitrust enforcement and reading the press releases can be very helpful to stay on top of changes.

ANTITRUST DIVISION, US DEPARTMENT OF JUSTICE

To link to all Antitrust Division, DOJ press releases, go to:  https://www.justice.gov/atr/press-releases.   Highlights include the following:

Criminal Charges Unsealed against 12 Individuals in Wide-Ranging Scheme to Monopolize Transmigrante Industry and Extort Competitors near U.S.-Mexico Border

Charges Include Use of Violence, Threats and Extortion to Fix Prices, Allocate the Market and Eliminate Competition

Press Release, December 6, 2020

DOJ unsealed of an 11-count indictment charging 12 individuals in a long-running, multi-faceted conspiracy to monopolize the transmigrante forwarding industry in the Los Indios, Texas, border region near Harlingen and Brownsville, Texas. Transmigrantes are individuals who transport used vehicles and other goods from the United States through Mexico for resale in Central America. Transmigrante forwarding agencies are businesses that provide services to transmigrante clients, including helping those clients complete the customs paperwork required to export vehicles into Mexico. The criminal indictment alleges defendants implemented price-fixing agreements and created a centralized entity known as “The Pool” to collect and divide revenues among the conspirators.

Transmigrante agency owners and industry participants who refused to charge the fixed prices, pay into the pool or pay an extortion tax were subjected to threats, intimidation and acts of violence against themselves and their families, employees, associates and businesses, according to the charges.

 â€œThe indictment charges that defendants monopolized an industry through horrific violence and threats of violence,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “The department will use all the tools at its disposal – including Section 2 of the Sherman Act – to target anticompetitive conduct that undermines our country’s economic vitality and freedom.”

The Justice Department’s Antitrust Division and the Criminal Division’s Organized Crime and Gang Section, and the U.S. Attorney’s Office for the Southern District of Texas are prosecuting the case.

FEDERAL TRADE COMMISSION

To link to all FTC press release, see https://www.ftc.gov/news-events/news/press-releases.

FTC Seeks to Block Microsoft Corp.’s Acquisition of Activision Blizzard, Inc.

FTC Press Release, December 8, 2022

FTC alleges that maker of Xbox would gain control of top video game franchises, enabling it to harm competition in high-performance gaming consoles and subscription services by denying or degrading rivals’ access to its popular content. “The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises such as Call of Duty, alleging that the $69 billion deal, Microsoft’s largest ever and the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”

“In a complaint issued today, the FTC pointed to Microsoft’s record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer”  â€œMicrosoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, Director of the FTC’s Bureau of Competition.   FTC seeks to stop “Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

FTC Secures Monetary Judgment in Deceptive Energy Savings Claims Case

Kansas-based defendants misled consumers in ads for coatings

FTC Press Release, November 18, 2022

In response to a Federal Trade Commission complaint, the U.S. District Court for the District of Kansas ordered Superior Products International II, Inc. and the company’s CEO Joseph E. Pritchett to permanently halt the deceptive energy-efficiency claims they had been making about coating products sold for houses and other buildings.

The court issued a permanent injunction prohibiting Superior Products and Pritchett from misrepresenting the coatings’ insulating or energy-saving capabilities and imposed a monetary judgment of $14,182.95 against them.

The FTC’s complaint against the Kansas-based Superior Products and its officer, J.E. Pritchett, alleged that they market their Super Therm and Sunshield roof and wall coatings using deceptive energy-savings claims. Specifically, the complaint states the defendants falsely claim that the products provide significant energy savings of “between 40% and 70%” for consumers when applied to a home or other building.

In issuing the opinion and order the court found that Superior Products and Pritchett violated the FTC Act by deceptively selling Super Therm and Sunshield by misrepresenting their energy-savings capabilities. The order permanently prohibits the defendants from misrepresenting the energy savings capabilities of their products, and misrepresenting the existence, conclusions and interpretations of any test or study.

It further prohibits them from failing to comply with the FTC’s R-Value Rule, which covers the labeling and advertising of home insulation.

FTC, States Sue Google and iHeartMedia for Deceptive Ads Promoting the Pixel 4 Smartphone

Ads featuring made up testimonials by radio personalities aired nearly 29,000 times, agency alleges

FTC Press Release, November 28, 2022

The Federal Trade Commission and state attorneys general announced lawsuits against Google LLC and iHeartMedia, Inc. for airing nearly 29,000 deceptive endorsements by radio personalities promoting their use of and experience with Google’s Pixel 4 phone in 2019 and 2020. The proposed FTC orders and the state judgments settling the allegations bar Google and iHeartMedia from similar misrepresentations, and the state judgments also require them to pay $9.4 million in penalties.

According to the FTC, in 2019, Google hired iHeartMedia and 11 other radio networks in ten major markets to have on-air personalities record and broadcast endorsements of the Pixel 4 phone. Google provided iHeartMedia with scripts that included lines about the Pixel 4 phone like, “It’s my favorite phone camera out there, especially in low light, thanks to Night Sight Mode,” “I’ve been taking studio-like photos of everything,” and “It’s also great at helping me get stuff done, thanks to the new voice activated Google Assistant that can handle multiple tasks at once.” However, the on-air personalities were not provided with Pixel 4s before recording and airing the majority of the ads and therefore did not own or regularly use the phones.

*          *          * 

The agency’s administrative complaint alleges that the companies’ misrepresentations violated the FTC Act.

Enforcement Action

The proposed orders settling the FTC’s charges are designed to address the Google and iHeartMedia’s allegedly illegal conduct. Among other things, they:

  • Prohibit Google from misrepresenting that an endorser has owned or used, or about their experience with, certain products;
  • Prohibit iHeartMedia from misrepresenting that an endorser has owned or used, or about their experience with, any consumer product or service;
  • Require Google and iHeartMedia to distribute the order to certain people, file compliance reports with the Commission, and keep records to allow the FTC to ensure compliance.

CALIFORNIA DEPARTMENT OF JUSTICE

To link to All California Department of Justice press releases, see https://oag.ca.gov/media/news.

Attorney General Bonta Issues Statement on Supreme Court Order Denying R.J. Reynolds’ Attempt to Block California’s Flavored Tobacco Ban from Taking Effect

Press Release, 12, 2022

California Attorney General Rob Bonta issued the following statement on the Supreme Court’s order denying R.J. Reynolds’ emergency application for a writ of injunction to prevent SB 793, California’s ban on flavored tobacco products, from taking effect later this month. 

“Flavored tobacco products have hooked a new generation of young smokers at a time when tobacco is already the number one preventable killer in the United States,” said Attorney General Bonta. “I applaud the Supreme Court for denying Big Tobacco’s latest attempt to block California’s commonsense ban on flavored tobacco products. The voters of California approved this ban by an overwhelming margin in the November election and now it will finally take effect. I look forward to continuing to defend this important law against any further legal challenges.” 

A copy of the State’s opposition to the emergency application is available here. The Supreme Court’s order is available here.

Attorney General Bonta Files Motion to Block Albertsons’ $4 Billion Payout, Continues Fight to Protect Competition in Grocery Industry

Press Release, November 30, 2022

California Attorney General filed a motion for a preliminary injunction to block Albertsons’ planned $4 billion payment of a “special dividend” to shareholders. “Earlier this month, the attorneys general filed a lawsuit against Albertsons amid concerns that the payment would dramatically hamper the company’s ability to compete with Kroger while regulatory review of the proposed merger between the companies is ongoing. Albertsons and Kroger collectively own nearly 800 stores in California, serving households in every corner of the state and providing jobs to nearly 48,000 California workers.

” * * *

“Right now, Albertsons seems more concerned with prematurely putting cash back into the hands of its shareholders than protecting consumers’ access to fresh and affordable food, and frankly, I find that more than a little alarming. We’re going back to court to stop this $4 billion handout, and we’re not going to stop fighting to make sure that the proposed merger doesn’t harm California families, workers, and farmers.” 

 *   *   *  *

In today’s motion, the attorneys general ask the court to prohibit Albertsons from moving forward with the special dividend while regulatory review of the proposed merger is ongoing, arguing that state and federal antitrust law forbids parties from entering into agreements that substantially lessen competition or unreasonably restrain trade.

A copy of the motion is available here. 

In Case You Missed It

Curated by Bob Connolly

Katie Paul and Diane Bartz, Reuters, December 8, 2022

The Biden administration accused Meta Platforms Inc (META.O) of trying to buy its way to dominance in the metaverse, kicking off a high-profile trial to try to prevent the Facebook parent from buying virtual reality app developer Within Inc. The FTC sued in July to stop the deal, saying Meta’s acquisition of Within would “tend to create a monopoly” in the market for virtual reality (VR) fitness apps. It has asked the judge to order a preliminary injunction that would halt the proposed transaction.

Mike Scarcella, Reuters, December 7, 2022

Two former in-house attorneys at Amneal Pharmaceuticals LLC have asked a U.S. federal judge to block a demand for their personal phone records sought by Value Drug Co, which is suing Amneal and other generic drugmakers for alleged antitrust violations.

Ronn Blitzer, FOXBusiness, December 7, 2022

“In a letter, the House members likened one organization to a ‘cartel’ that advances its ESG agenda.”

David McCabe, NY Times, December 7, 2022

As the Federal Trade Commission prepares to face off in court against Meta over a V.R. start-up deal, the agency is testing a novel argument as part of a strategy to push antitrust law.

Brian Fung, CNN December 7, 2022

A threat by Facebook owner Meta to remove news content from its platforms appears to have been averted — for now — after US lawmakers omitted an antitrust bill it opposed from the text of an annual defense spending bill released late Tuesday evening.  Meta warned that if Congress passed the competition bill as part of the larger legislation — temporarily allowing digital news publishers to negotiate collectively against tech platforms for a larger share of ad revenues — then the social media giant “will be forced to consider removing news from our platform altogether.”

Catherine Douglas Moran, Grocery Dive  December 6, 2022

Kroger announced Tuesday that the Federal Trade Commission has requested more details about the grocer’s proposed $24.6 billion merger with Albertsons — an indication that the agency is taking a closer look at how the deal would impact competition.

Mike Scarcella Reuters, December 5, 2022

A U.S. appeals court on Monday appeared poised to thwart a $185 million legal fee award to law firm Quinn Emanuel Urquhart & Sullivan, as a judge questioned the lower court’s order and also criticized an attorney at the firm for what she called an “aggressive” tone.

Anne Stych, Staff Writer, Bizwomen, Dec 5, 2022

Taylor Swift fans have filed an antitrust lawsuit against Live Nation Entertainment Inc. in connection with what they call “unlawful conduct” by Ticketmaster during a presale for Swift’s upcoming “The Eras Tour.”

  • Deutsche bank, Rabobank hit with EU antitrust charge over bond cartel

Foo Yun Chee, Reuters, December 6, 2022

BRUSSELS, Dec 6 (Reuters) – Deutsche Bank (DBKGn.DE) and Rabobank (RABO.UL) were charged by EU antitrust regulators on Tuesday of taking part in a government bond cartel, the latest move against a sector which has racked up millions of euros in fines for various competition violations.

Nate Raymond November 30, 2022  Reuters

The Democratic-led U.S. Senate on Wednesday expanded the number of federal district courts dominated by women judges to 10 as it voted to confirm a Boies Schiller Flexner litigator to become a judge in upstate New York.

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