Antitrust and Unfair Competition Law

E-BRIEFS, NEWS AND NOTES: JULY 2024

SECTION ANNOUNCEMENTS

The Antitrust and Unfair Competition Law Section is thrilled to announce the reopening of nominations for the New Lawyers to Watch award for 2024!

We are reaching out to encourage you to submit a nomination for an eligible new lawyer you believe should receive this award!

This prestigious award recognizes exceptional achievements by lawyers in their first eight years of practice within the fields of antitrust and unfair competition. Last year, we honored five outstanding New Lawyers, and we’re eager to celebrate more trailblazers this year. Nomination criteria:

  • Admitted to practice law in California;
  • In good standing with the State Bar;
  • Within their first 8 years of practice;
  • Members of the Section (Note: you can become a member as a part of the application process); and
  • Practicing Antitrust or Unfair Competition Law

Applications must be submitted by 11:59pm Pacific Time on August 9, 2024.

New Lawyers can nominate themselves, or be nominated by another individual.
Please submit the nomination form along with supporting documents such as a resume, letters of support, list of reported cases or successful projects, and publications.

Please submit applications either by email (antitrust@calawyers.org) or through the online form here. For any questions or concerns, please contact antitrust@calawyers.org.

Thank you,

Caeli A. Higney & Anthony Leon
New Lawyers Chair & CLA New Lawyers Liaison
Antitrust and Unfair Competition Law Section
California Lawyers Association

Caeli A. Higney & Anthony Leon

The July LA Mixer:  A Great View from Above!

Los Angeles mixer

The highlights of the Section’s summer events include our two summer mixers held in San Francisco and Los Angeles. On July 11, 2024, the Section held its July Mixer at LA Perch, a glamorous rooftop setting. A great mix of young attorneys and more seasoned antitrust practitioners enjoyed networking with small plates in hand while imbibing fun cocktails with an incredible view of the city as a backdrop.

happy people at the mixer

For fun, the Section organized a ‘speed’ mixer with young attorneys moving around the venue to meet various groups of antitrust practitioners. Thanks to Caeli Higney, the New Lawyers Section Chair, for organizing and directing this ice-breaker speed mixer – a fun and successful exchange for all involved.

happy people at the mixer

All had a great net-working time! The Young Lawyers Section event was well-received by the approximately fifty attendees. Marquette University law student Sam Smith highlighted the wonderful experience the mixer provided by saying, “The mixer was a great time and provided a fun environment to meet and talk to both experienced and young attorneys who practice in antitrust, as well as other law students with an interest in antitrust.”

Section President Aaron Sheanin attended and welcomed the group to the event, summarized the many Section advantages and invited all to join the Section and participate!

Section President Aaron Sheanin with a mixer attendee

Thanks to all who contributed to the summer’s extraordinarily successful young lawyer mixers!

Job Postings

  • Supervising Deputy Attorney General, Antitrust Section, California Department of Justice | Apply Here
  • Deputy Attorney General, Antitrust Section, California Department of Justice | Apply Here
  • Trial Attorney (Senior Litigation Counsel), Antitrust Division, Department of Justice | Apply Here

E-Briefs

L.A. Superior Court Dismisses AG’s Insulin Pricing UCL Action on Statute of Limitations Grounds, For Now
People of the State of California v. Eli Lilly and Company, No. 23STCV00719 (L.A. Super. Ct.)
By Amal Abdelhalim and Lee Brand
Amal Abdelhalim and Lee Brand

On June 18, 2024, Judge David S. Cunningham III of Los Angeles County Superior Court granted demurrers to the California Attorney General’s complaint alleging a price gouging conspiracy in the insulin market carried out via artificially inflated list prices and secret rebates.  The complaint brought two causes of action: (1) violation of California’s Unfair Competition Law (the “UCL”), including under the UCL’s unfair, unlawful, and fraudulent prongs; and (2) unjust enrichment. The Superior Court agreed with defendants that the Attorney General’s claims were barred by the applicable statutes of limitations but granted leave to amend to bolster the complaint’s allegations of applicable equitable exceptions to those limitations’ periods. The Court agreed with the People, however, that the complaint otherwise sufficiently alleged a UCL claim, rejecting defendants’ various contentions to the contrary, including based on the UCL’s safe harbor provision. The court also rejected the Attorney General’s unjust enrichment claim on the grounds that it is not a standalone cause of action but indicated that an amended claim for restitution based on unjust enrichment would be permitted.

Background

As alleged in the complaint, three manufactures make nearly all the insulin sold in the United States and three pharmacy benefit managers (“PBMs”) negotiate with those manufacturers on behalf of insurers to purchase over 75% of that insulin. The Attorney General contends that the practices of these dual oligopolies have led to a 600% increase in list prices of insulin over the last two decades, an increase that outpaces inflation and is not otherwise justified. Specifically, the suit claims that the manufacturers provide rebates to the PBMs of up 70% off list price, that the PBMs obscure these rebates from the ultimate payors, and that these practices undercut list price competition and thereby increase costs for many consumers. In short, manufacturers increase list prices to offset rebates paid to PBMs, effectively forcing uninsured and underinsured consumers, who do not benefit from rebates, to pay artificially inflated prices.

Statute of Limitations

On demurrer, defendants argued that the People were aware of the conduct alleged in the complaint for at least six years prior to filing suit, including based on a civil investigation into insulin pricing initiated by the California Attorney General, a simultaneous investigation by the Minnesota Attorney General leading to a 2018 lawsuit, and other similar lawsuits dating back to February 2017.  Given the four-year limit applicable to UCL claims and the three or four-year limit applicable to unjust enrichment claims (depending on the underlying wrong), defendants argued that the suit was barred in its entirety on statute of limitations grounds.

In response, the Attorney General argued that the complaint was saved by one or more of three equitable statute of limitations exceptions: (1) the last-overt-act rule, which prevents the limitations period for a conspiracy-based claim from beginning to run until the conspiracy’s “last overt act” has been completed; (2) the continuing-violation doctrine, which applies where acts beginning outside but continuing within the limitations period are justifiably treated as an indivisible course of conduct actionable in its entirety; and (3) the continuous-accrual doctrine, which does not reach back to acts outside of the limitations period but holds that a new cause of action accrues—and new statute of limitations begins to run—when similar acts recur within the limitations period. 

The Court considered each exception, but ultimately held that none was sufficiently pleaded for the complaint to survive demurrer. Although the complaint generally alleged conduct continuing to the present, it included a chart showing “prices flatlining since 2018,” over four years prior to the 2023 filing date, and lacked “an explicit allegation that identifies an explicit overcharge that occurred on a date within the last four years.”  Ruling Re: Manufacturer Defendants’ Demurrer at 13; see also Ruling Re: PBM Defendants’ Demurrer at 5. Nevertheless, the Court dismissed the claims without prejudice so that the Attorney General could “pursue discovery to develop the facts related to the alleged conspiracy” and “provide amended allegations to address this discrepancy.”  Ruling Re: Manufacturer Defendants’ Demurrer at 13, 30; see also Ruling Re: PBM Defendants’ Demurrer at 5.

UCL Claim

Safe Harbor

Defendants also argued that their conduct was protected by the UCL’s “safe harbor” provision, which shields a party from liability where its conduct is specifically permitted by state or federal legislation. Specifically, defendants identified provisions of the federal Social Security Act setting reporting requirements for PBMs, excluding rebates from list prices, and requiring manufacturers to offer rebates to the states. Defendants also identified a provision of California’s Health and Safety Code giving manufacturers certain pricing discretion, including to negotiate rebates, as well as a provision of the state’s Business and Professions Code addressing PBM reporting requirements. The Attorney General rejected any such safe harbor, arguing that such statutes acknowledging the existence of certain rebate and pricing practices do not provide blanket immunity for the use of such practices to artificially inflate insulin prices. The Court agreed, explaining that the Attorney General’s theory of the case was not merely that list prices deceptively exclude rebates, which could potentially be protected on safe harbor grounds, but rather that defendants participated in related price-inflation and rebate conspiracies and that such conspiracies would still be unlawful even if rebates were disclosed alongside list prices.  The Court also noted that although defendants only raised safe harbor as a defense to the complaint’s claim under the UCL’s unfair prong, to the extent there is safe harbor, several courts have assumed it also applies to claims under the UCL’s unlawful and fraud prongs.

Unfair-Prong Claim

As a separate challenge to the People’s unfair-prong claim, defendants argued that simply raising prices does not constitute an unfair business practice under the UCL. The Superior Court rejected this argument too, explaining that the Attorney General is not merely challenging defendants’ price increases as unfair, but rather defendants’ alleged exploitation of an oligopoly to collusively inflate prices and disguise rebates. As such, the complaint’s allegations were sufficient to satisfy all three tests used to assess claims under the unfair prong of the UCL. First, the complaint satisfied the balancing test, which weighs harm to the consumer against the utility of the business practice, because access to insulin is a matter of life and death but the alleged collusion offers minimal utility. Second, for the same reasons, the complaint satisfies the FTC test, which considers consumer injury, countervailing consumer benefit, and consumers’ ability to avoid injury. Third, the complaint satisfied the tethering test, which requires an unfair prong claim to be tethered to codified public policy, because it alleged price collusion that “either ‘violates the policy or spirit of the antitrust laws’ or ‘otherwise significantly threatens or harms competition.’”  Ruling Re: Manufacturer Defendants’ Demurrer at 25 (quoting People’s Choice Wireless, Inc. v. Verizon Wireless, 131 Cal. App. 4th 656, 662 (2005)). The Court also recognized that although courts are split on the proper test among these three, the trend favors the FTC test.

Unlawful-Prong Claim

The complaint alleged an unlawful-prong claim predicated on a violation of the portion of California’s Consumer Legal Remedies Act (“CLRA”) set forth in Civil Code section 1770(a)(13), which prohibits false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions.

Regarding the manufacturer defendants, the complaint challenged statements claiming that (1) their prices were justified because net prices were decreasing; (2) they offered coupons and other programs to help consumers afford insulin, and (3) they would quickly bring authorized generic insulin to market. The manufacturers argued that these statements are not actionable based on section 1770(a)(13) because they are neither false nor about price reductions. The Court agreed that the first and third statement did not clearly address price reductions. While the second statement was “a close call,” it ultimately supported an unlawful-prong claim because, read broadly, it could suggest the wide availability of cheaper prices via coupons and other programs that most consumers would not actually qualify for and thus was an allegedly misleading statement about price reductions. The Court also indicated it was “willing to grant leave to amend to give the Attorney General an opportunity to add details to all three statements – or include new statements – to render them actionable under subsection (a)(13) and the UCL.”  Ruling Re: Manufacturer Defendants’ Demurrer at 27.

As for the PBM defendants, the complaint challenged statements claiming that (1) they negotiate for lowest-net cost; (2) their mission is to make prescription drugs more affordable; and (3) they negotiate for the best drug prices. The PBMs argued that they do not transact with consumers and thus fall outside the ambit of the CLRA and, like the manufacturers, that these statements did not address price reductions. The Court agreed with both arguments, also pointing out that the first and second alleged misstatements had occurred in 2017 and were thus time-barred. Nevertheless, the Court found that the complaint stated an unlawful-prong claim against the PBM defendants based on its civil conspiracy allegations. And the Court once again granted “leave to amend to give the People an opportunity (if they want) to include new statements under subsection (a)(13) and/or facts showing violations of a different underlying statute, common law, etc.”  Ruling Re: PBM Defendants’ Demurrer at 10.

Fraud-Prong Claim

The manufacturer defendants argued that the complaint failed to state a fraud-prong claim because it failed to demonstrate any specific misrepresentation related to list prices or rebates. The Superior Court firmly rejected this argument based on the three manufacturer statements discussed above in connection with the unlawful prong. These statements constituted alleged misrepresentations and/or omissions regarding price inflation and rebate practices that supported a claim under the fraud prong.

The PBMs challenged the complaint’s fraud-prong claim on the basis that manufacturers unilaterally set and properly reported list prices, and for failure to allege the materiality of or any duty to disclose rebates. The Superior Court quickly rejected this argument as well, explaining that the People had alleged a civil conspiracy between the PBMs and manufacturers resulting in the challenged list price inflation, and that these allegations also gave rise to a duty to disclose the challenged rebates.

Unjust Enrichment Claim

Defendants demurred to the Attorney General’s unjust enrichment claim as duplicative of the UCL claim and on the basis that it does not constitute an independent cause of action under California law. The Superior Court recognized conflicting authority as to whether unjust enrichment is a standalone cause of action and elected to follow the line of cases holding it is not. Nevertheless, the Court granted leave to amend so that the Attorney General could instead “assert a common count for restitution based on unjust enrichment as an alternative in case the UCL cause of action gets dismissed down the road.”  Ruling Re: Manufacturer Defendants’ Demurrer at 30; Ruling Re: PBM Defendants’ Demurrer at 11.

Conclusion

In sum, the Superior Court’s order calls into question the ability of state and private enforcers to challenge longstanding pricing practices in a given industry, particularly where the conduct at issue was already investigated or litigated. This potential roadblock to deferred enforcement may be lessened if the Attorney General is ultimately able to amend around the statute of limitations issue. Nevertheless, the government may now be more eager to avoid this issue altogether by seeking tolling agreements where an investigation ends without immediate action but there are lingering concerns about the practices at issue.

In re January 2021 Short Squeeze Trading Litigation, 105 F.4th 1346 (11th Cir. 2024)
By Eric A. Rivas and Liam Grah at Latham & Watkins LLP
Eric A. Rivas and Liam Grah at Latham & Watkins LLP

On June 26, 2024, the Court of Appeals for the Eleventh Circuit affirmed the dismissal of an antitrust suit brought against the retail brokerage firm, Robinhood, and one of its market makers, Citadel, alleging a conspiracy to deflate the price of certain securities. In re Jan. 2021 Short Squeeze Trading Litig., 105 F.4th 1346 (11th Cir. 2024). Plaintiffs brought a claim under § 1 of the Sherman Act arguing that Robinhood restricted its users’ ability to sell “meme stocks” in order to reduce the price of the relevant securities and protect Citadel from massive losses it would otherwise incur because of its short positions on the stocks. Id. at 1349. The Eleventh Circuit’s decision reminds us that it does not suffice for an antitrust plaintiff to allege anticompetitive harm in any market; rather, that alleged harm must result in a relevant market in which a defendant competes.

Background

Robinhood is a retail brokerage firm that allows customers to buy and sell securities in Robinhood’s mobile application. Robinhood routes customers’ trade orders to market makers, including Citadel. Id. at 1350. The market makers then execute the orders, either by routing the order to a stock exchange or by taking the other side of the transaction and filling the order itself. Id. Robinhood relies on the symbiotic relationship it shares with its market makers to maintain profitability. Id. at 1351–52.

In the weeks preceding January 28, 2021, many retail investors took long positions in GameStop (“GME”), AMC Entertainment (“AMC”), and various other meme stocks, so-called because of their popularity in online trading forums. Id. at 1352. The long positions caused these securities’ prices to skyrocket. Id. For example, between January 21 and 27, the price of GME went from $43.03 to $380. Id. The price surge exposed Citadel and institutional investors to massive potential losses because they had taken short positions on the meme stocks. Id.

On January 28, 2021, in response to the meme stock surge and perceived market volatility, Robinhood removed its users’ ability to purchase GME and AMC shares. Id. Though many of the restrictions were lifted the next day, the stock prices of GME and AMC fell dramatically after the purchase restrictions were imposed. Id. at 1353. Plaintiffs claimed that Robinhood’s restriction caused the collapse of the relevant securities’ prices. Id. While Robinhood prevented its customers from selling their meme stock positions, institutional investors had exclusive access to alternative “dark pool” security exchanges. Id. Citadel benefited from the meme stocks’ price reduction by selling its short positions in dark pools, thereby avoiding losses it would have faced if prices had not declined. Id. Plaintiffs alleged that Robinhood restricted trading to maintain its profitable relationship with Citadel and protect Citadel from losses on its short positions. Id.

Procedural History

Plaintiffs sought to represent a class of Robinhood users allegedly injured by Robinhood’s meme stock purchase restriction. Id. at 1350. Plaintiffs alleged that Robinhood, Robinhood’s subsidiaries, and Citadel conspired to restrict trading of the meme stocks in violation of § 1 of the Sherman Act. Id. at 1353. The district court dismissed Plaintiffs’ antitrust claim on the grounds that they failed to allege a conspiracy between Citadel and Robinhood, and even if they had, that Plaintiffs did not plausibly allege that Defendants unreasonably restrained trade in a relevant market. Id. at 1354. Plaintiffs appealed to the Eleventh Circuit. Id.

Discussion

The court of appeals assumed, without deciding, that Plaintiffs successfully alleged a conspiracy and considered only whether they plausibly alleged an unreasonable restraint of trade. Id. at 1355.

Plaintiffs alleged two relevant markets: (1) the “No-Fee Brokerage” market and (2) the “Payment for Order Flow” market. Plaintiff alleged that Robinhood operated in the first market, which consists of no-fee brokerages that “offer a user-friendly mobile app to retail investors to place orders to buy and sell stocks” and “receive payment for order flow from market makers.”  Id. at 1351 n.4.  Citadel allegedly operates in the “Payment for Order Flow” market, which consists of market makers “that pay brokerage firms to route their clients’ trades to that market maker.”  Id. at 1351 n.5. 

In evaluating whether Plaintiffs alleged harm in either market, the court observed that Citadel and Robinhood are not competitors because the markets in which they allegedly operate are vertically related. Id. at 1356. Therefore, the court applied the rule of reason. Id.

The court found that Plaintiffs failed at the first step of the rule of reason because they did not plausibly allege anticompetitive effects in either market. Id. The court reasoned thatPlaintiffs did not claim competitors in the No-Fee Brokerage market raised prices to use their apps, that they reduced the number of services offered to customers, or that the quality of services in the No-Fee Brokerage market suffered because of the conspiracy. Id. at 1356–57. Plaintiffs also failed to plausibly allege anticompetitive effects in the Payment for Order Flow market. Id. at 1356.

The court also rejected Plaintiffs’ argument that Robinhood’s purchase restriction reduced supply of the meme stocks and caused the price collapse. The court noted that “[w]hile these may be anticompetitive effects, they are not anticompetitive effects in a relevant market defined by [Plaintiffs’] Amended Complaint.”  Id. at 1357. Even if Plaintiffs identified the stock market as a relevant market, some courts hold that stock market transactions fall outside of Section 1 of the Sherman Act. Id. at 1357 n.12 (noting that the Third Circuit has held that transactions in a particular stock fall outside of Section 1). Because Plaintiffs failed to allege anticompetitive harm in either alleged market, Plaintiffs did not plausibly allege an unreasonable restraint of trade under the Sherman Act. Id. at 1357. Therefore, the Eleventh Circuit upheld the district court’s dismissal of Plaintiffs’ complaint. Id. at 1358.

Court Upholds Jury Verdict in Favor of Epic
IN RE GOOGLE PLAY STORE ANTITRUST LITIGATION, No. 20-CV-05671-JD, 2024 WL 3302068 (N.D. Cal. July 3, 2024)
By Nathan Kahn
Nathan Kahn

In the multidistrict antitrust litigation between Epic Games Inc. (“Epic”) and Google LLC (“Google”), the court upheld the jury’s verdict in favor of Epic. Google’s motions for judgment as a matter of law and for a new trial were denied. The order provided a detailed explanation for that decision (slip op. at 1).

Background

Epic, a prominent video game and software developer, distributed its popular Fortnite game through the Google Play Store. Epic objected to Google’s requirement that it use Google’s billing system and pay a 30% fee on all in-app purchases. Epic implemented a “hotfix” to use its own payment system, prompting Google to remove Fortnite from the Play Store. Epic then filed a lawsuit alleging that Google’s conduct violated the Sherman Act, the California Cartwright Act, and the California Unfair Competition Law (slip op. at 1). Google counterclaimed, alleging breach of the Developer Distribution Agreement (DDA). This case was consolidated with similar antitrust complaints into multidistrict litigation (slip op. at 1-2). Following a 15-day trial, the jury unanimously found in favor of Epic. Google had moved for judgment as a matter of law during the trial, which the Court denied. Google renewed the motion post-verdict under Rule 50(b), with a motion in the alternative for a new trial under Rule 59. (slip op. at 1-2).

Android-Only Relevant Markets

Issue Preclusion

Google argued that Epic should not have been permitted to argue for Android-only relevant markets due to the preclusive effect of Epic Games, Inc. v. Apple Inc. (“Apple I”), 559 F. Supp. 3d 898 (N.D. Cal. 2021) and Epic Games Inc. v. Apple Inc. (“Apple II”), 67 F.4th 946 (9th Cir. 2023), cert. denied, 144 S. Ct 682 (2024). The court rejected this argument, noting that the market definition issues litigated in the Apple cases were different from those in the Google case (slip op. at 4). Epic did not advocate for aftermarkets for iOS or Android app distribution derived from a foremarket for smartphone operating systems. Instead, Epic presented different evidence about relevant markets, focusing on Android-only markets (slip op. at 4).

In Apple II cases, Epic “proposed two single-brand markets: the aftermarkets for iOS app distribution and iOS in-app payment solutions, derived from a foremarket for smartphone operating systems.” Apple II, 67 F.4th at 970 (emphasis omitted). In this matter, Epic did not “argue for aftermarkets for Android app distribution and Android in-app payment solutions, derived from a foremarket for Android devices.” Instead, Epic offered different evidence about relevant markets than that offered in Apple II. The court noted that the jury was presented with substantial evidence supporting the existence of Android-only markets, including testimony from Epic’s economics expert, Professor Douglas Bernheim, who concluded that Apple and Android do not compete in the same market for app distribution (slip op. at 5).

Aftermarket Theory

Google’s argument that Epic was proposing a “single-brand aftermarket” theory was found to be without merit. Android, unlike iOS, is not a single brand but an operating system used by multiple original equipment manufacturers (“OEMs”). The court highlighted that Google did not provide evidence to support its claim that multiple brands of Android devices should be treated as a single brand (slip op. at 6). Furthermore, the evidence showed that Android app stores other than Google Play exist and compete, contrary to the situation in Apple I and Apple II (slip op. at 7).

Epic’s expert, Professor Douglas Bernheim, testified that while Apple and Android compete in the market for smartphones, they do not compete in the same market for app distribution. Bernheim’s analysis, based on a SSNIP test and other widely accepted analytical tools, concluded that the Apple App Store does not compete in the same relevant market as the Google Play Store (slip op. at 5). Google’s CEO, Sundar Pichai, testified that each Android OEM had the potential to have an app store that would compete with Google Play (slip op. at 6).

Jury Instructions re Rule of Reason

Step One

Google contended that the jury instructions improperly allowed the jury to conclude that individually lawful acts were unlawful in the aggregate. The court clarified that the jury was instructed to consider each type of conduct separately and determine whether it was consistent with competition on the merits, provided consumer benefits, and made business sense apart from excluding competition (slip op. at 8-9). The jury was directed to answer separately for each type of agreement whether it was an unreasonable restraint of trade (slip op. at 9).

The jury instructions emphasized that it was not unlawful for Google to prohibit the distribution of other app stores through the Google Play Store, and the jury should not infer or conclude that doing so was unlawful in any way. For the anticompetitive conduct required for Epic’s Section 2 claim, the jury was instructed to determine whether Google’s conduct was consistent with competition on the merits, whether it provided benefits to consumers, and whether it made business sense apart from any effect it had on excluding competition or harming competitors (slip op. at 8).

Step Two

Google argued that the jury should have been instructed to consider cross-market justifications. The court noted that the Ninth Circuit had not mandated such an instruction and that there was no legal requirement to consider cross-market justifications (slip op. at 10). In the Apple II case, the Ninth Circuit addressed the issue of cross-market justifications but declined to decide whether they were legally cognizable. Consequently, there was no legal mandate to require the jury to consider cross-market justifications, such as Google’s competition with Apple in smartphones (slip op. at 10).

Step Three

Google’s assertion that the court improperly invited the jury to balance competitive effects was dismissed. The Ninth Circuit precedent requires balancing competitive harms against procompetitive benefits, and the jury was correctly instructed on this point (slip op. at 11).

Sufficiency of Evidence Supporting Jury Verdict

Google challenged the sufficiency of the evidence supporting the jury’s verdict on several grounds.

Relevant Market:

Limitation to Android In-App Payments

The jury found that out-of-app payment systems were not reasonable substitutes for in-app payment systems due to increased friction and the complexity of the process. Testimonies from Dr. Tadelis and Google executives supported this conclusion, demonstrating that web purchases involved significantly more steps, leading to a higher likelihood of drop-off (slip op. at 12-13).

Epic’s expert, Dr. Steven Tadelis, testified that web purchases are not a viable substitute for in-app purchases because of the increased friction involved in the process. While in-app purchases can be completed in two to three steps, web store purchases require at least eight steps, leading to increased drop-off where users do not complete the purchase (slip op. at 12-13). Google executive Purnima Kochikar described the sideloading experience as “abysmal” due to the number of steps involved, which created a bad user experience and increased the likelihood of users abandoning the process (slip op. at 13).

Geographic Scope

The jury’s finding of a worldwide geographic market excluding China was supported by testimonies from experts Dr. Bernheim and Dr. Tadelis, who explained that competitive conditions were largely similar globally, except in China where Google Play is not available (slip op. at 14). Dr. Bernheim testified that the appropriate geographic boundary for the relevant market was global, excluding China, because Google’s challenged conduct was global in nature, and competitive conditions in different countries were largely similar. Dr. Tadelis agreed with this analysis, noting that China was unique because Google Play and Google’s challenged conduct did not apply there (slip op. at 14). The jury also heard testimony from Google witnesses who confirmed that Google Play is not permitted in China and is not preinstalled on smartphones distributed there (slip op. at 15).

Anticompetitive Effect of Google’s Conduct

The jury found substantial evidence of Google’s anticompetitive conduct, including Project Hug agreements designed to prevent developers from launching competing app stores, and restrictive MADA and RSA agreements with OEMs that limited the distribution of alternative app stores. Testimony and internal documents revealed Google’s efforts to maintain its monopoly by suppressing competition (slip op. at 15-16).

Project Hug agreements were designed to prevent developers from launching their own app stores by offering significant payments from Google in exchange for agreements not to launch apps first or exclusively on any competing Android distribution platform. For example, Google offered Activision Blizzard King (ABK) a $360 million Project Hug deal to prevent it from launching its own app store, which could have posed a significant competitive threat to Google Play. Similar agreements with Riot Games and other developers further demonstrated Google’s efforts to suppress competition (slip op. at 16).

Google’s agreements with OEMs, specifically the MADA and RSA agreements, also had anticompetitive effects. The MADA required OEMs to place Google Play on the default home screen of their Android devices, making it difficult for alternative app stores to gain traction. The RSA 3.0 agreements offered OEMs revenue share payments in exchange for agreeing not to install any app store other than Google Play, further limiting competition. Internal Google documents and testimonies from executives revealed that these agreements were designed to protect Google’s market dominance and prevent the emergence of competing app stores (slip op. at 16-17). The court found that the jury’s findings on Google’s anticompetitive conduct were well supported by the evidence presented at trial. Id.

Tying

The jury found that Google unlawfully tied the use of Google Play Store to Google Play Billing. Evidence showed that developers were required to use Google Play Billing for in-app purchases, and alternative billing solutions were not allowed. This coercion was demonstrated through testimonies and internal documents, revealing Google’s business justifications as pretextual (slip op. at 17-18).

Epic presented substantial evidence that Google Play Store and Google Play Billing are separate products. Witnesses testified that developers were required to use Google Play Billing for any digital content sold within their apps on the Google Play Store. This requirement was enforced through the DDA, which prohibited the use of third-party payment methods. The jury found that this tying arrangement was coercive, and that Google’s business justifications were pretextual, as developers selling digital content outside of the app or physical goods were exempted from using Google Play Billing (slip op. at 18). The court found that the jury had an ample evidentiary basis for rejecting Google’s business justification defense and concluding that the tying arrangement was unlawful. Id.

Substantially Less Restrictive Alternatives

The jury concluded that Epic had identified less restrictive alternatives to Google’s practices that would achieve the same objectives without significantly increased cost. Testimony from experts and internal documents supported the view that Google’s restrictions were motivated by anticompetitive reasons rather than legitimate business concerns (slip op. at 19-20).

The evidence presented at trial showed that Google’s exclusionary provisions in the MADA and RSA agreements were designed to suppress competition rather than achieve legitimate business objectives. For example, internal Google documents revealed that Google used revenue share agreements to prevent OEMs from preloading competing app stores, and that these provisions were included to protect Google from competitive threats. Similarly, Google’s increased friction and scare screens for sideloading were found to be disproportionate to the actual security risks and could have been accomplished through less restrictive means (slip op. at 20).

Epic’s expert, Dr. James Mickens, testified that legitimate security benefits could have been achieved through fewer screens or a notarization process that differentiated among the types of security risks presented by different apps or companies. The jury found that Google’s restrictive practices were not justified by legitimate business concerns and that less restrictive alternatives were available (slip op. at 20).

Evidentiary Rulings and Adverse Inference Instruction

Google Employees’ Use of Attorney-Client Privilege

The court allowed Epic to question witnesses about Google’s misuse of attorney-client privilege, revealing a practice of marking communications as privileged to avoid disclosure. This was supported by testimonies from Google’s CEO and other employees (slip op. at 21-22).

Google’s CEO, Sundar Pichai, testified that he marked emails privileged not because he was seeking legal advice, but to indicate that they were confidential. This practice of “fake privilege” was confirmed by Google’s in-house attorney, Emily Garber, who testified that employees believed including a lawyer would make an email privileged, even if it was not a legitimate use of the privilege (slip op. at 21). The court found no error in allowing Epic to present evidence of Google’s misuse of attorney-client privilege and make arguments to the jury about it. Id.

Preclusion of Outcome of Apple I and Apple II

Google’s argument to introduce evidence related to the outcome of Apple I and Apple II was rejected, as the court found it irrelevant to the issues at hand in the Google case (slip op. at 23). The court noted that the market definitions and issues litigated in the Apple case were different from those in the Google case. Consequently, the outcome of the Apple litigation was not relevant to the determination of the relevant markets and anticompetitive conduct in the Google case. The court found that introducing this evidence would not have been helpful to the jury’s understanding of the issues at hand (slip op. at 23).

Adverse Inference Instruction

The court’s permissive inference instruction was justified by Google’s willful failure to preserve relevant communications. Evidence from the trial showed a systemic culture of suppressing evidence within Google (slip op. at 24-25). The court had previously found that Google willfully failed to preserve relevant Google Chat communications, and additional evidence at trial further demonstrated Google’s misconduct. Witnesses testified about Google’s practice of turning off chat history to avoid creating a trail of discussions about sensitive topics. Internal documents and testimonies revealed a widespread understanding within Google that discussions should be conducted in a way that evaded preservation (slip op. at 25).

The court held an evidentiary hearing and considered testimony from Google’s chief legal officer, Kent Walker, who showed little awareness of the preservation issues and had not investigated them. Based on this record, the court found that a permissive adverse inference instruction was appropriate, allowing the jury to make an adverse inference if it found the evidence credible. The court’s instruction was a conservative approach, given the volume of evidence of Google’s misconduct (slip op. at 25).

Advisory Jury

Google’s argument that the jury’s verdict should be treated as advisory was dismissed. The court found that Google had consented to a jury trial through its pretrial filings and active participation in jury-related proceedings. Google’s last-minute attempt to withdraw consent was untimely and prejudicial to Epic (slip op. at 26-27).

The court noted that Google had consented to a jury trial both expressly and impliedly through its participation in the proceedings. The parties’ Joint Submission re Trial Proposal stated that all claims by all plaintiffs were triable to a jury, except certain claims under California’s Unfair Competition Law and other state laws. The record showed that the court and the parties contemplated a jury trial for years without objection from Google (slip op. at 27).

Google’s attempt to withdraw consent one day before jury selection and two court days before the start of trial was far too late. Allowing Google to withdraw its consent at such a late stage would have caused immense prejudice to Epic, which had spent many months preparing for a jury trial. The court found that a jury trial was proper, and that the jury’s verdict should be treated as binding (slip op. at 27).

In re Revlimid and Thalomid Purchaser Antitrust Litigation
No. 19-7532 (ES) (MAH), consolidated No. 21-20451 (ES) (MAH), 2024 WL 2861865 (D.N.J. June 6, 2024)
By Cheryl Johnson
Cheryl Johnson

Insurer and Payer Plaintiffs sued Celgene, the manufacturer of two dangerous but potentially life-saving drugs, Revlimid and Thalomid, for anticompetitive conduct thwarting generic competition to the drugs’ $8 billion annual sales. The conduct alleged included: (1) citing safety concerns as a pretext for withholding from rivals Revlimid samples necessary to apply for generic entry; (2) entering a reverse payment agreement; (3) listing in the Orange Book patents obtained with fraud, misstatements, or withholding of known prior art; (4) bringing sham lawsuits on invalid or noninfringed patents; and (5) making unlawful donations to fund co-pays of Revlimid. 2024 WL 2861865, at *2, 38. The court dismissed all the claims in the 100-page plus complaints for failure to plausibly allege any Sherman Act claims or any state claims. Id. at *113.

After finding the insurer and assignee plaintiffs had standing to bring their claims and had adequately pled injury in fact (id. at *29-30), the court dismissed their RICO claims with prejudice. Because the plaintiffs were all indirect purchasers, the Third Circuit’s unequivocal ruling that the Illinois Brick precepts applied to civil RICO claims precluded RICO standing for them as indirect victims. Id. at *35.

Celgene’s refusal to provide drug samples to generic rivals was found protected by Trinko’s “general no-duty-to-deal rule” and its emphasis that Sherman Act liability for a refusal to deal is “at or near the outer boundary of [Section] 2 liability.” (Id. at *40-1, 51). Likewise, the only Trinko exception was held inapplicable as Celgene had not terminated any dealing with the generic competitors, or otherwise suggested a willingness to forsake short-term profits to achieve an anticompetitive end. Id. at *41-45.

Plaintiffs claimed that Celgene’s settlement with generic drugmaker Natco with a royalty free, limited volume license, an acceleration clause and delayed entry, was an unlawful reverse payment agreement in which Celgene purchased a delay in full-fledged Revlimid competition that was worth about $3.6 billion to Natco. Id. at *54-56. The decision deemed the pleadings implausible and held, inter alia, that the volume limit didn’t allow Natco to charge supracompetitive prices, the royalty free license didn’t plausibly transfer value to Natco since royalties were not mandatory, and the agreement did not disincentivize Celgene from launching an authorized generic or prevent other generics competition from entering the market. Id. at *56-63. The judge noted that the acceleration clause did not disincentivize later generics from filing for ANDAs, and effectively increased competition if a single generic entered the market. Id. at *65-67.

Celgene was also accused of procuring and knowingly enforcing patents that were invalid, not infringed, weak or dubious. Id. at *81 However, because “all it would have taken is one valid and infringed patent to preclude the generics from entering the market,” plaintiffs had no delayed generic entry or antitrust injury from the patent litigation unless they could plausibly allege that Celgene had no patents that would lawfully bar generic entry. Id. at *83-84. Likewise, plaintiffs’ sham litigation allegations failed because they “could not identify a clear-cut reason” that Celgene should have been certain that its lawsuits would fail at the time of their filing or that its litigation as a whole was objectively baseless. Id. at *92, 97.

As to the overall course of anticompetitive conduct alleged, the court held the acts alleged taken singly did not violate Sherman Act 2, and thus, they were not cumulatively anticompetitive. Id. at *106. However, one further amendment was allowed. Because the federal antitrust claims were dismissed, the court declined to exercise supplemental jurisdiction over the state claims. Where diversity jurisdiction existed, the court summarily dismissed all the other state claims, holding state antitrust statutes were to be interpreted according to federal law, failed antitrust claims precluded claims under state unfair competition laws, and that the other state claims were deficiently pled and often merely listed the statutes without explanation of the claimed violation. Id. at *107-110.

N.D. of Illinois Lowers Attorney Fees after Seventh Circuit Remand
By Sam Smith
Sam Smith

In a recent opinion following a Seventh Circuit decision to vacate and remand, Judge Thomas M. Durkin addressed attorney fees given by the Northern District of Illinois for In re Broiler Chicken Antitrust Litigation. No. 16 C 8637, 2024 U.S. Dist. WL 3292794, at *1 (N.D. Ill. July 3, 2024). Objector John Andren had appealed the initial attorney fee award amounting to one-third of certain settlement recoveries. Id. The Seventh Circuit vacated and remanded with the following instructions:  

(1) “bids that class counsel made in auctions around the time this litigation began in September 2016 would ordinarily be good predictors of what ex ante bargain would have been negotiated,” (2) “it was an abuse of discretion to rule that bids with declining fee structures should categorically be given little weight in assessing fees” and “it was error to suggest that [the Seventh Circuit] has cast doubt on the consideration of declining fee scale bids in all cases,” and (3) “the district court should not have categorically assigned less weight to Ninth Circuit cases in which counsel was awarded fees under a mega fund rule…. [because] continued participation in litigation in the Ninth Circuit is an economic choice that informs the price of class counsel’s legal services and the bargain they may have struck,”

Id. (citations omitted). The Court additionally found that attorney fees of one-third of recoveries was the market rate for complex class actions like the current case, but that courts must determine how the Seventh Circuit’s instructions and the Payment Card fee award and Interest Rate Swaps fee agreement factor in. Id.

Since filing this case, Class Counsel made two declining fee schedule bids at 13.5%, 17%, and a flat rate bid at 20% to become lead counsel in three other complex antitrust cases. Id. at *2. Andren argued that this is evidence of what the market rate should be and advocated for attorney fees of 20%. Id.The Court dismissed that argument by stating the three cases are not like the current case because they were all filed in the wake of criminal investigations. Id. Awards given for cases with prior government involvement often have much lower awards because of the decreased risk and work that goes into litigating the case. Id.

The Court addressed Ninth Circuit cases by stating that the Seventh Circuit has repeatedly rejected the Ninth Circuit’s mega fund rule that imposes a general cap on large recoveries of 25%. Id. Even though Class Counsel has consistently litigated in the Ninth Circuit in the past, Ninth Circuit awards provide information most useful to understanding the supply-side of the legal services market, but the Court does not believe that it is useful for figuring out the market rate. Id. at *2, 3. The fact that the Ninth Circuit has imposed a 25% cap, and the Seventh Circuit’s observation that it is counsel’s own choice to litigate where counsel may receive below the market rate, provides evidence that the Ninth Circuit is imposing a fixed rate lower than the market rate. Id. at *2. The Court stated that because outside the Ninth Circuit where there is no mega fund cap, and other data indicates a market rate of 30% for fees, Ninth Circuit data is not highly relevant. Id. at *3. Conversely, when litigating in the Ninth Circuit, awards outside the Ninth Circuit become less relevant. Id.

Andren next argued that the awards given in the Interest Rate Swaps case is highly probative because it is one of the few ex ante awards negotiated by a sophisticated client. Id. The Court agrees that the Interest Rate Swap case is a good comparator despite the differences that Class Counsel pointed out. Id. However, the Court found that the Interest Rate Swaps casedealt with financial institutions that generally have greater assets than food industry defendants, and financial institutions have a greater ability to pay larger settlements than food industry companies. Id. at *4. The Court noted that the possible damages in the current case and the Interest Rate Swaps caseare similar, but without knowing the court ordered award amount the likely explanation that the declining fee schedule was negotiated is because the potential settlement value in Interest Rate Swaps was substantially higher. Id. The Interest Rate Swaps settlement was likely closer to the $1.8 billion and $2 billion settlement against other financial institutions settled prior to the Interest Rate Swaps casethan the total potential settlement here. Id.

The Court reviewed data of 49 awards between $100 million and $1 billion and included twelve awards from the Ninth Circuit. Id. at *5. Ten of the awards are from the Interest Rate Swaps case, at a rate of 26.6%. Id. at *4. The average rate was 28.995% and the median was 31% for awarded fees. Id. at *5.

The Court lastly dismissed all studies that Andren submitted to support denial of any award over 26.6%. Id. *5-6. The first study was dismissed because the study only used settlements from 2006-2007 and is therefore too narrow. Id. at *5. The Court rejected the second and third studies because they considered all settlements over $100 million, an approach that leaves in settlements that far exceed the settlement in this case. Id. And the Court rejected the last study Andren relied on because it cites an average settlement percentage within the Seventh Circuit of 31.6%, which is even higher than what the Court concluded and is averse to his argument. Id. *5-6.

Although Andren is correct that ex ante awards should be given more weight than ex post awards, there is minimal volume of ex ante awards. Id. at *6. Andren presented no ex post award examples to support his argument that a fee between 20% and 26.6% is appropriate. Id.

The Court ultimately decreased the Class Counsel’s award to 30% of the settlement fund, consistent with the rates the Court had studied. Id.

Northern District of Texas Enjoins FTC’s Recent Non-Compete Rule in Ryan LLC v. Fed. Trade Comm’n, No. 3:24-CV-00986-E, 2024 WL 3297524 (N.D. Tex. July 3, 2024)
By David Lerch and Lora Faraj
David Lerch

On July 3, 2024, the United States District Court for the Northern District of Texas granted a motion for stay of effective date and preliminary injunction regarding the Federal Trade Commission’s (FTC) recent Non-Compete Rule. See Ryan LLC v. Fed. Trade Comm’n, No. 3:24-CV-00986-E, 2024 WL 3297524, at *1 (N.D. Tex. July 3, 2024). The decision highlights how courts may interpret agency actions in light of Loper Bright Enterprises v. Raimondo,No. 22-1219, 2024 WL 3208360 (U.S. June 28, 2024), the Supreme Court’s June 2024 decision overturning Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, (1984). In Ryan, the Court held that: (i) plaintiffs are likely to succeed on the merits; (ii) irreparable harm will result without the issuance of injunctive relief; and (iii) the balance of harms and public interest weigh in favor of granting injunctive relief against the Federal Trade Commission. Ryan, 2024 WL 3208360, at *5.

Loper Bright Enterprises et al. Raimondo

In Loper Bright Enterprises et al. v. Raimondo, No. 22-451 (June 28, 2024) the Supreme Court granted certiorari as to whether to overturn Chevron (providing for judicial deference to administrative agency interpretations of regulation in certain situations) in the context of a dispute overregulating foreign fishing vessels in international waters just off of the United States.

The National Marine Fisheries Service enacted a regulation in 2020, with respect to the Atlantic herring fishery and the Rule created an industry funded program that aims to ensure observer coverage on 50 percent of trips undertaken by vessels with certain types of permits (slip op. at 2). Under this program, vessel representatives must “declare into” a fishery before beginning a trip by notifying NMFS of the trip and announcing the species the vessel intends to harvest (slip op. at 4). If NMFS determines that an observer is required, but declines to assign a Government-paid one, the vessel must contract with and pay for a Government-certified third-party observer (slip op. at 4).

Petitioners argued that the MSA does not authorize NMFS to mandate that they pay for observers required by a fishery management plan, and the Court granted cert as to the question of whether Chevron should be overruled or clarified for the purposes of interpreting the NMFS regulation. To answer that question of statutory interpretation, the Court articulated and employed a now familiar two-step approach broadly applicable to review of agency action (slip op. at 19). The first step was to discern “whether Congress ha[d] directly spoken to the precise question at issue.” Id., at 842. The Court explained that “[i]f the intent of Congress is clear, that is the end of the matter,” id., and courts were therefore to “reject administrative constructions which are contrary to clear congressional intent.,” Id., at 843, n.9. To discern such intent, the Court noted, a reviewing court was to “employ [] traditional tools of statutory construction.” Id. Without mentioning the APA, or acknowledging any doctrinal shift, the Court articulated a second step applicable when “Congress ha[d] not directly addressed the precise question at issue.” Id., at 843. In such a case—that is, a case in which “the statute [was] silent or ambiguous with respect to the specific issue” at hand—a reviewing court could not “simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation.” Id. (footnote omitted). A court instead had to set aside the traditional interpretive tools and defer to the agency if it had offered “a permissible construction of the statute,” id., even if not “the reading the court would have reached if the question initially had arisen in a judicial proceeding.,” id., n.11. (slip op at 19).

The Supreme Court contrasted Chevron deference with Skidmore deference, which does not result in the delegation of judicial review to an administrative agency contrary to Congressional intent:

In an agency case in particular, the court will go about its task with the agency’s “body of experience and informed judgment,” among other information, at its disposal. Skidmore, 323 U. S., at 140. And although an agency’s interpretation of a statute “cannot bind a court,” it may be especially informative “to the extent it rests on factual premises within [the agency’s] expertise.” Bureau of Alcohol, Tobacco and Firearms v. FLRA, 464 U. S. 89, 98, n. 8 (1983). Such expertise has always been one of the factors which may give an Executive Branch interpretation particular “power to persuade, if lacking power to control.” Skidmore, 323 U. S., at 140; see, e.g., County of Maui v. Hawaii Wildlife Fund, 590 U. S. 165, 180 (2020); Moore, 95 U. S., at 763.

The Supreme Court concluded that Chevron with inconsistent with the plain language of the Administrative Procedures Act, stating that:

Chevron defies the command of the APA that “the reviewing court”—not the agency whose action it reviews—is to “decide all relevant questions of law” and “interpret . . . statutory provisions.” §706 (emphasis added). It requires a court to ignore, not follow, “the reading the court would have reached” had it exercised its independent judgment as required by the APA. Chevron, 467 U. S., at 843, n. 11.

Slip op. at 21. The Court stated that “delegating ultimate interpretive authority to agencies is simply not necessary to ensure that the resolution of statutory ambiguities is well informed by subject matter expertise” and that “[t]he better presumption is therefore that Congress expects courts to do their ordinary job of interpreting statutes, with due respect for the views of the Executive Branch” (slip op 25). The Court concluded that:

Chevron is overruled. Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires. Careful attention to the judgment of the Executive Branch may help inform that inquiry. And when a particular statute delegates authority to an agency consistent with constitutional limits, courts must respect the delegation, while ensuring that the agency acts within it. But courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.

(slip op at 35).

Ryan v. FTC

Background

On April 23, 2024, the FTC adopted a Non-Compete Rule which prohibits employers from entering into non-compete clauses with most workers and requires their employers to rescind existing non-compete clauses no later than the rule’s compliance date. Id. at *3 (quoting 16 C.F.R. § 910). The plaintiff, Ryan LLC, and plaintiff-intervenors, Chamber of Commerce, Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce alleged that the FTC’s actions in promulgating the Rule were unlawful because: (i) the FTC acted without statutory authority; (ii) the Rule is the product of an unconstitutional exercise of power; and (iii) the FTC’s acts, findings, and conclusions were arbitrary and capricious. Plaintiffs brought these causes of action under the Administrative Procedure Act (APA), which “empowers a reviewing court to hold unlawful and set aside certain agency actions, findings, and conclusions.” Id. at *4 (quoting 5 U.S.C § 706(2)).

Preliminary Injunction Enjoining the FTC from Enforcing the Rule

To obtain a preliminary injunction, a movant must establish: (1) a substantial likelihood of success on the merits; (2) a substantial threat of irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in the movant’s favor; and (4) that the injunction serves the public interest. Id. at *5.

The same standards apply under the APA. Id. Under the APA, courts must set aside agency actions found to be arbitrary and capricious; contrary to constitutional right, power, privilege, or immunity; or in excess of statutory jurisdiction, authority, or limitations. Id. at *6. Plaintiffs alleged that the FTC’s Non-Compete Rule meets all of the above. Id. The FTC responded that the plaintiffs are unlikely to succeed on the merits because: (i) the FTC has statutory authority to implement the final rule; (ii) the FTC has properly determined that all non-competes are “unfair methods of competition;” (iii) Congress has delegated authority to the FTC to make the Rule; (iv) Section 6(g) of the FTC Act’s removal restrictions are lawful; (v) the Rule is not unlawfully retroactive; and (vi) the Rule is not arbitrary and capricious. Id. The Court ruled in favor of the plaintiffs after finding that the FTC lacked statutory authority to promulgate the Rule and that the Rule was arbitrary and capricious. Id. at *12.

Likelihood of Success on the Merits

Statutory Authority

Plaintiffs challenged whether Section 6(g) confers substantive rulemaking power to the FTC. Id. at *8 (emphasis added). The FTC asserted that Section 6(g) and 15 U.S.C. § 57a empower it with substantive rulemaking authority. The Court held that while the FTC has some authority to promulgate rules aimed at precluding unfair methods of competition, it lacks the authority to create substantive rules through the alleged statutes. Id. The Court held that Section 6(g) of the FTC Act is a “housekeeping statute” that does not “expressly grant” the FTC substantive rulemaking authority. Id. The Court reasoned that because the alleged rulemaking power was placed in the latter portion of the statute, there is no indication of Congress’s intent to confer such power to the FTC. Id. at *9. It suggested that Congress would have placed such substantial power in a primary, independent section if its intention was to confer substantive rulemaking power through Section 6(g). See id. The plaintiffs also alleged that the lack of a statutory penalty for violating rules under Section 6(g) points to the agency’s lack of substantive rulemaking power. Id. at *8. The Court agreed with the plaintiffs and pointed to Congress’s historical prescription of sanctions for violations of rules meant to create substantive obligations. Id. Furthermore, the Court reasoned that Congress’s amendments to the FTC Act in 1967 and 1968 would have been superfluous if Section 6(g) had already given the FTC substantive rulemaking power. Id.

Arbitrary and Capricious

The Court held that there is a substantial likelihood the Non-Compete Rule is arbitrary and capricious because it is overbroad without a reasonable explanation. Id. at *11. According to the Court, in its implementation of the Rule, the FTC relied on studies that examined the economic effects of state policies toward non-competes. The Court reasoned that because no state has ever enacted a non-compete rule as broad as this one (noting elsewhere that the Rule was broad with exceptions for bona fide sales of businesses, circumstances where a claim accrued prior to the effective date, circumstances where a person has a good-faith basis to believe the Rule is inapplicable, and with a distinction between senior executives and other workers), the FTC was not justified in imposing a categorical ban, or “sweeping prohibition.” Id. The Court rejected the FTC’s argument that case-by-case adjudication of the enforceability of non-competes would undermine the FTC’s objective to combat the anticompetitive effects of non-competes, holding that the FTC had not adequately considered alternatives to the Rule. Id. at *12. In its rejection of the FTC’s justifications for not considering alternatives to the Rule, the Court concluded that the plaintiffs were likely to succeed on the merits. Id.

Irreparable Harm

The Court stated that under Fifth Circuit precedent, the “nonrecoverable costs of complying with a putatively invalid regulation typically constitute irreparable harm.” Rest. L. Ctr., 66 F.4th at 597; see also Louisiana v. Biden, 55 F.4th at 1034 (“[C]omplying with a regulation later held invalid almost always produces the irreparable harm of nonrecoverable compliance costs.”) Id. at 23-24. The Court noted that Plaintiff-Intervenors claim the harm from the implementation of the Rule will be immediate and severe. Id. at 25. Plaintiff-Intervenors argue that businesses will not be able to rely on their existing non-competes or enter into new ones. Id. at 25. Plaintiff-Intervenors claim that, on the effective date, “millions of workers and businesses will instantly lose bargained-for contractual protections,” forcing employers to expend significant time and costs to counteract the effects. Id. at 25. Plaintiff-Intervenors aver that businesses and workers alike will be unable to “protect investments in specialized training” or able to “avoid free-riding by competitors.” Id. at 25. In addition, the Court noted that Ryan argues that if the Rule takes effect, Ryan’s non-competes with present and former principals would be invalidated, Ryan would be barred from entering into new non-competes, and Ryan would have to inform its workers that its non-compete agreements are now invalid.  Id. at 24. Ryan asserts the Rule would result in irreparable harm as this will “increase the risk that departing workers may take Ryan’s intellectual property and proprietary methods to its competitors”—which cannot be effectively mitigated by trade secret laws and non-disclosure agreements. Id. at 24. Accordingly, the Court found that the rule results in irreparable harm.

Balance of Equities and the Public Interest

The Court concluded that on this record, it is evident that if the requested injunctive relief is not granted, the injury to both the Plaintiffs and the public interest would be great. Granting the preliminary injunction serves the public interest by maintaining the status quo and preventing the substantial economic impact of the Rule, while simultaneously inflicting no harm on the FTC. Id. at 27-28.

Scope of the Injunctive Relief

As to the scope of the injunctive relief, the Court noted that Ryan appears to request nationwide injunctive relief and the FTC argues that relief should be tailored. Id. at 29. The Court noted that the Plaintiffs have offered virtually no briefing (or basis) that would support “universal” or “nationwide” injunctive relief. Id. at 31. The Plaintiff-Intervenors in this proceeding appear to seek associational standing on behalf of their respective member entities but did not brief associational standing. Id. at 31. Therefore, the Court declined to grant nationwide injunctive relief.

Aftermath: Eastern District of Pennsylvania Reaches Opposite Conclusion in ATS Tree Services v. FTC

On July 23, 2024, the United States District Court for the Eastern District of Pennsylvania issued a conflicting opinion, denied a plaintiff’s motion for stay and preliminary injunction against the Non-Compete Rule in ATS Tree Services, LLC, v. Fed. Trade Comm’n, No. CV 24-1743, 2024 WL 3511630, at *1 (E.D. Pa. July 23, 2024). In its introduction, the Court stated that Section 6(g) grants rulemaking power to the FTC by enumerating twenty-six occasions where the FTC promulgated rules that “were not procedural in nature but substantive.” Id. at *5. The Court additionally pointed to the 1975 Amendments as codifying “certain procedures relating to the FTC’s authority to conduct rulemaking.” Id. As to irreparable harm, the Court held that the plaintiff failed to establish irreparable harm and denied the plaintiff’s motion on that finding alone. Id. at *8. The plaintiff, ATS, argued that it would be harmed by the Rule because: (i) it would incur “nonrecoverable efforts” to comply with the Rule; and (ii) it would lose “the contractual benefits from its existing non-compete agreements.” Id.

The Court followed Third Circuit precedent, holding that “monetary loss and business expenses alone are insufficient bases for injunctive relief.” Id. at *9 (citing A. O. Smith Corp. v. Fed. Trade Comm’n, 530 F.2d 515, 527 (3d Cir. 1976). The Court also held that the “non-quantifiable” efforts of having to scale back training programs as a result of the Rule was too “attenuated to constitute an immediate, irreparable harm.” Id. at *10. It similarly rejected the plaintiff’s argument that the loss of contractual rights constituted irreparable harm. Id. at *11. Finally, as to likelihood of success on the merits, the Court held that even if ATS could establish irreparable harm, it would be unable to demonstrate a likelihood of success on the merits. Id. The Court held that Section 6(g) is complimentary to Section 5 and that the language empowering the FTC to “make rules and regulations” encompasses both procedural and substantive rules “as is necessary to prevent unfair methods of competition.” Id. at *13. It went on to reject the plaintiff’s remaining alternative arguments regarding the FTC’s lack of substantive rulemaking power. Id.

Warranty Tying Suit Survives Tesla’s Motion to Dismiss in Northern District of California
By Lillian Grinnell
Lillian Grinnell

This case concerns causes of action under Sections 1 and 2 of the Sherman Act, as well as California state claims under the Cartwright Act and UCL. Plaintiffs alleged that Tesla forces an illegal tie between its electric vehicles and its aftermarkets – Tesla Repair Services and Tesla Compatible Parts. The primary way consumers are forced into this tie arises from Tesla’s warranty language, which vaguely threatened to void or exclude coverage based on ‘‘improper maintenance, service, or repairs,’ effectively prevents owners from repairing their own vehicles or using independent service-providers.” Slip op. at 3. Judge Trina Thompson agreed, denying Tesla’s motion to dismiss except with regard to a portion of a single claim that was conceded by plaintiffs which relied on repair services as a tying product, but not where the EVs or Compatible Parts were the tying product.

Because of Tesla’s restrictions, Tesla or Tesla-approved centers perform virtually all repair services on Tesla vehicles, except for certain basic maintenance such as tire rotations. Further, Tesla owners become locked in to using specially designed Tesla car parts compatible with Teslas. Since Tesla requires exclusivity agreements with the suppliers who make those parts, Tesla can restrict their availability. Tesla also, allegedly, ignores parts requests from independent service providers and has the possession of a unique tool to code and activate Tesla parts.

The Court found that both Tesla Repair Services, and Tesla Compatible Parts were cognizable single-brand aftermarkets. Defendants argued that the several-factor test of the recent decision Epic Games, Inc v. Apple, 67 F.4th 946, 975 (9th Cir. 2023) should apply, but since the plaintiffs were able to show that Tesla had significant power (at a 65% to 80% market share) in the electronic vehicle foremarket, the Court here held that these factors did not apply due to Tesla’s market power in the EV foremarket. All of the markets alleged in this case were economically distinct.

Furthermore, the plaintiffs adequately pled that consumers are unaware of the aftermarket restrictions, making lifecycle pricing near impossible, and due to the high price of the cars themselves switching costs are incredibly high, locking consumers into the Tesla aftermarket. The court found these allegations sufficient to satisfy the four Epic factors to establish a single brand after market, even if they were applied.

Notably, the main mechanism of the tying in this case was Tesla’s warranty, as plaintiffs alleged “Tesla forces consumers to purchase the tied product by threatening to void warranties if consumers use non-Tesla certified service providers or if they use non-OEM parts.” Slip op at 27. The Court likened this scenario to that of Eastman Kodak: “In Eastman Kodak, the plaintiffs were forced to receive services from only Kodak due to unique machine parts, similarly, Tesla EV owners are limited in their options to receive service and parts due to Tesla’s market power in the EV submarket and Tesla’s own conduct.” Id., citing 504 U.S. 451, 482. The fact that the constraints here were explicated through a warranty held by the consumer, rather than a company policy like that in Eastman Kodak, did not make a difference – because the warranty acted to constrain customers into shopping for Tesla parts only within Tesla’s repair centers, it was an unlawful tie.

Apple Fined 1.8 Billion Euros by the European Commission for Anti-Steering Provisions
Case AT.40437 – Apple App Store Practices (music streaming)
By Wesley Sweger
Wesley Sweger

On March 4, 2024, the European Commission adopted a decision—which it published on July 6, 2024—concluding Apple violated Article 102 of the Treaty on the Functioning of the European Union (“TFEU”) and Article 54 of the European Economic Area Agreement. Article 102 prohibits abusive behavior by companies holding a dominant position in each market. The Commission took issue with certain anti-steering provisions preventing music streaming service providers (such as Spotify) from informing iOS users about alternative (and often cheaper) subscription possibilities existing outside iOS apps and from allowing iOS users to exercise an effective choice between alternative subscription possibilities.

The Commission ordered Apple to end these anti-steering practices in the European Economic Area (“EEA”) and issued a 1.8 billion euro fine (or less than 10% of Apple’s worldwide turnover).

Procedural Background

Since 2013, Spotify had been in contact with the Commission regarding Apple’s anti-steering practices. The Commission began investigating Apple’s conduct. On March 11, 2019, Spotify submitted a formal complaint to the Commission. Spotify alleged, inter alia, that Apple prevented Spotify from advertising the existence of its Premium option within the app, thus effectively restricting the promotion of cheaper subscription possibilities outside the iOS environment to iOS users.

On April 30, 2021, the Commission adopted its first statement of objections—a procedural mechanism in which the Commission presents facts, its preliminary objections, and relevant legal analysis. On February 28, 2023, the Commission adopted a replacement statement of objections (“RSO”) in which it preliminarily concluded that Apple held a dominant position in the EEA market for music streaming apps. According to the RSO, “as a result of this dominant position, Apple has a special responsibility to ensure . . . that it does not impose unfair trading conditions on music streaming app developers.” The Commission preliminarily concluded that Apple’s anti-steering provisions constituted unfair trading conditions within the meaning of Article 102 since: (1) they were unilaterally imposed by Apple; (2) they were detrimental to the interests of iOS users (consumers), as well as to the interests of music streaming service providers (competitors); and (3) they were not necessary for the achievement of a legitimate objective. The RSO also informed Apple of the Commission’s preliminary intention to impose a fine, taking into account the turnover generated by Apple in the EEA from the App Store commission fees paid by music streaming providers to Apple as well as the revenues that Apple generated with Apple Music in the EEA during the last full business year of the infringement.

On December 6, 2023, the Commission issued a “Letter of Facts” informing Apple of “additional factual elements and evidence on which the Commission may rely to further support its preliminary conclusions in the RSO.” The Commission stated no longer intended to rely on its preliminary finding of detriment of developers of music streaming apps. However, since this would lower the fine, the Commission informed Apple that it might consider applying an additional lump sum to ensure the fine imposed a sufficient deterrent.

Apple’s Rights of Defense

Parties have “rights of defense” in the EU. For several reasons, Apple alleged that its rights of defense had been breached. The overseeing Hearing Officer, however, disagreed. Some notable arguments are as follows:

First, Apple argued the Commission’s Letter of Facts amounted to a material alteration of the RSO’s theory of harm and evidence since the Commission dropped its detriment to competitors’ theory. Apple argued this left the Commissions remaining objection unclear. The Hearing Officer disagreed, reasoning the Commission preliminarily concluded that both consumers and competitors were victims of abusive conduct, and each of those conducts, taken in isolation, fulfilled the legal test established in the RSO.

Second, Apple argued the RSO “fails to meet the burden of proof by relying on outdated and incomplete information and data,” and claimed that the Commission “has not undertaken any new investigative measures before adopting the RSO.” The Hearing Officer disagreed and noted it is for the Commission (which takes on both an investigative and decision-making role) to decide whether evidence collected meets the standard of proof required to adopt a prohibition decision, not for the Hearing Officer.

Third, Apple claimed that 29 minutes of calls and meetings in the file only provide “a brief summary of the subjects addressed during the meeting which is manifestly insufficient detailed” for a proper record. Some of these summaries were recorded years after the call or meeting took place. The Hearing Officer found that of those calls/meetings either concerned purely technical or procedural aspects of the investigation that did not collect information pertaining to the subject-matter of the investigation, or Apple had access to supplementary documents reflecting the content of these calls/meetings.

Apple raised various other procedural arguments, but the Hearing Officer found Apple’s rights of defense were respected.

CORRECTION TO JUNE 2024 E-BRIEF: 9th Cir. Reverses Sutter Health Trial Victory and Remands for New Trial in Antitrust Suit as follows: On June 4, 2024, in an opinion by Judge Koh, the Ninth Circuit reversed and remanded a final judgment that was found in favor of Sutter Health.

Agency Updates

This feature includes excerpts from selected press releases issued by the Antitrust Division, US DOJ, 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

https://www.justice.gov/atr/press-releases.
Highlights include the following:

A jury convicted Gregory and David Melton yesterday in the U.S. District Court in Savannah, Georgia, for their role in a conspiracy to fix prices, rig bids and allocate markets for sales of ready-mix concrete in Georgia and South Carolina. The conspiracy, which began as early as 2010 and continued until about July 2016, involved coordinating price-increase letters to customers, allocating specific jobs in the coastal Georgia area, and submitting bids to customers at collusive and noncompetitive prices.

Including yesterday’s verdicts, this investigation resulted in five criminal convictions and one deferred prosecution agreement. Defendants James Pedrick, Timothy Strickland and Strickland’s company, Evans LLC, previously pleaded guilty as a part of the same conspiracy. Pedrick’s former employer, Argos USA LLC, previously entered into a deferred prosecution agreement with the Antitrust Division, admitted to its participation in the conspiracy and agreed to pay a $20 million criminal penalty.

“Concrete is essential to our nation’s infrastructure,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Today’s guilty verdicts reflect the Antitrust Division’s commitment to holding individuals accountable for cheating American consumers out of the opportunity to purchase necessary building materials free of corruption and collusion. The division and its law enforcement partners will continue to prioritize their work prosecuting individuals responsible for this illegal and unethical conduct.”

“Customers expect to receive fair value for construction materials – not to enrich unscrupulous vendors who collude to unfairly increase their profits,” said U.S. Attorney Jill E. Steinberg for the Southern District of Georgia. “This verdict makes it clear that our office and law enforcement partners will hold accountable those who violate the law to pad their bottom line.”

Leaders of Justice Department, Federal Trade Commission, European Commission and U.K. Competition and Markets Authority Issue Joint Statement on AI Competition

Tuesday, July 23, 2024 Press Release

Today, Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division, Chair Lina M. Khan of the Federal Trade Commission, Executive Vice President Margrethe Vestager of the European Commission and Chief Executive Sarah Cardell of the U.K. Competition and Markets Authority issued a joint statement on competition in generative AI foundation models and AI products.

Through this joint statement, the four antitrust enforcers pledged to use their available powers to promote effective competition in AI to ensure the public reaps the full benefits of these technologies. The statement is available at www.justice.gov/atr/media/1361306/dl?inline.

UnitedHealth Group Abandons Two Acquisitions Following Antitrust Division Scrutiny

Thursday, July 25, 2024 Press Release

Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division released the following statement after UnitedHealth Group abandoned its proposed acquisitions of Stewardship Health Inc. and a related company following scrutiny from the Antitrust Division.

“When you ask Americans what keeps them up at night, affording and accessing quality health care is too often at the top of their list. These transactions are among UnitedHealth Group’s latest proposed provider-related acquisitions, and they raised questions about quality of care, cost of care and working conditions for doctors, nurses, and other healthcare providers. I am grateful for the Antitrust Division’s lawyers, economists, paralegals, and professional staff who are tireless in their commitment to identify and address pressing antitrust problems in healthcare markets.”

FEDERAL TRADE COMMISSION

https://www.ftc.gov/news-events/news/press-releases  
Highlights include the following:

FTC Takes Action Against Online Used Car Dealer Vroom for Deceiving Customers, Failing to Deliver on Time and Provide Required Disclosures

Proposed court order would require Vroom to turn over $1 million for consumer redress.

July 2, 2024 Press Release

The Federal Trade Commission has taken action against online used car dealer Vroom for misrepresenting that it thoroughly examined all vehicles before listing them for sale and failing to obtain consumers’ consent to shipment delays or provide prompt refunds when cars weren’t delivered in the time Vroom promised.

Texas-based Vroom has agreed to a proposed settlement that would require the company to pay $1 million to refund consumers harmed by the company’s conduct and prohibit the company from further misleading consumers and failing to provide required disclosures.

“Vroom promised the fast deliveries of thoroughly inspected cars, but sped right past compliance,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Online car dealers and other Internet sellers must provide required disclosures just like any brick-and-mortar businesses that comply with the law.”

In its complaint against Vroom, the FTC alleges that the company failed to follow the Used Car Rule, the Pre-Sale Availability Rule and the Mail, Internet, and Telephone Order Rule (MITOR).

*       *       *

Under the terms of the proposed settlement, Vroom will be required to pay $1 million to the FTC to be used to provide refunds to consumers who were harmed by the company’s unlawful practices.

The settlement also prohibits the company from making misleading claims to consumers about inspections or shipping, and requires Vroom to document all claims about promises it makes about shipping times to consumers, as well as requiring Vroom to follow the requirements of MITOR, the Used Car Rule, and Pre-Sale Availability Rule.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 5-0. The FTC filed the complaint and final order in the U.S. District Court for the Southern District of Texas.

FTC Warns Companies to Stop Warranty Practices That Harm Consumers’ Right to Repair

Letters to eight companies warn about tying warranty to use of branded parts and affixing “warranty void if removed” stickers to their products

July 3, 2024  Press Release

Federal Trade Commission staff sent warning letters to eight companies about their warranty practices that may be standing in the way of consumers’ right to repair products they have purchased.

The warning letters inform the companies of FTC staff’s concerns that their practices violate the Magnuson-Moss Warranty Act (MMWA), a law that governs consumer product warranties and is enforced by the FTC.

“These warning letters put companies on notice that restricting consumers’ right to repair violates the law,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The Commission will continue our efforts to protect consumers’ right to repair and independent dealers’ right to compete.”

The letters to five of the companies warn that FTC staff has concerns about the companies’ statements that consumers must use specified parts or service providers to keep their warranties intact. Unless warrantors provide the parts or services for free or receive a waiver from the FTC, such statements are generally prohibited by the MMWA. Similarly, such statements may be deceptive under the FTC Act.

These letters were issued to air purifier sellers aeris HealthBlueairMedify Air, and Oransi, along with treadmill company InMovement.

Letters to three other companies warn against their use of stickers containing “warranty void if removed” or similar language that are placed in locations on products that hinder consumers’ ability to perform routine maintenance and repairs on their products.

These letters were issued to ASRockZotac, and Gigabyte, companies that market and sell gaming PCs, graphics chips, motherboards, and other accessories.

FTC staff has urged each company to review its promotional and warranty materials to ensure that such materials do not state or imply that warranty coverage is conditioned on the use of specific parts or services. The letters state that FTC staff will review the companies’ websites after 30 days and that failure to correct any potential violations may result in law enforcement action.

FTC Takes Action to Ensure Franchisees’ Complaints are Heard and to Protect Against Illegal Fees

New policy statement and guidance warn that franchisor contract provisions that cut off communications with government and undisclosed junk fees are unlawful.

July 12, 2024, Press Release

Today, the Federal Trade Commission and its staff took a suite of actions to address growing concern about unfair and deceptive practices by franchisors—to ensure that the franchise business model remains a ladder of opportunity to owning a business for honest small business owners.

Among the actions being announced today by the FTC include a policy statement that warns that franchisors’ use of contract provisions, including non-disparagement clauses that prohibit franchisees’ communications with the government, violate the law. The statement emphasizes that franchisee reports and voluntary interviews are a critical part of FTC investigations and franchisees’ reluctance or inability to file reports and discuss their experiences may hamper the agency’s work to protect franchisees. Threats of retaliation against a franchisee for reporting potential law violations to the government are unlawful.

* * *

All of these franchise resources can be found at the newly launched FTC franchise website. Prospective and current franchisees and franchisors can use the website as a single resource for the FTC’s latest franchising materials.

The Commission voted 3-2 to adopt the policy statement. Commissioners Melissa Holyoak and Andrew N. Ferguson voted no and each issued dissenting statements.

CALIFORNIA DEPARTMENT OF JUSTICE

https://oag.ca.gov/media/news    
Highlights include:

Attorney General Bonta Leads Multistate Amicus Brief in Support of Drug Pricing Transparency

Monday, July 15, 2024 Press Release

OAKLAND – California Attorney General Rob Bonta today led 21 attorneys general in filing an amicus brief in Pharmaceutical Res. & Manufacturers of Am. v. Stolfi in support of laws that increase drug price transparency. The amicus brief, filed before the Ninth Circuit Court of Appeals, supports Oregon’s defense of House Bill 4005, an Oregon law that requires pharmaceutical manufacturers to report certain information about specific new prescription drugs and historical information about pricing for existing drugs. Oregon’s House Bill 4005 is similar to a 2017 California law, Senate Bill 17.

“As prescription drug prices continue to escalate across our country, the need for state-level action to protect residents from predatory pricing practices has never been more urgent,” said Attorney General Bonta. “That’s why today I’m leading a multi-state coalition of attorneys general nationwide to support Oregon’s drug price transparency law. High prescription drug prices threaten peoples’ access to care, and can result in worsening medical conditions, declining health outcomes, and even death. Together, we can create a healthcare system that prioritizes the well-being of our people over the profits of pharmaceutical companies.”

Oregon’s House Bill 4005, passed in 2018, aims to increase transparency in drug pricing, to hold pharmaceutical companies accountable for price hikes, and to help control the rising cost of prescription drugs for Oregon residents. The Pharmaceutical Research and Manufacturers Association (PhRMA), a trade association representing some of the largest drug manufacturers in the United States, filed a lawsuit in federal district court in Oregon, challenging the constitutionality of House Bill 4005. The district court ruled, in part, in favor of PhRMA, and Oregon appealed to the Ninth Circuit.

California has a similar law, Senate Bill 17, which aims to protect consumers from drastic increases in the price of pharmaceutical drugs. SB 17 similarly requires that manufacturers report specified information when there is an increase in a drug’s list price. Using data obtained under SB 17, the California Department of Managed Health Care evaluates the impact that prescription drug costs have on health plan premiums. And, both California state agencies and the Department of Justice have been utilizing this law in enforcement matters. Laws like Oregon’s House Bill 4005 and California’s SB 17 help to hold pharmaceutical manufacturers accountable for increases in the price of prescription drugs and allow States to collect and analyze relevant data to inform solutions to contain the prices of drugs necessary to our residents’ health.

*****

In filing today’s amicus brief, Attorney General Bonta was joined by the attorneys general of Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Vermont, Washington, and the District of Columbia. 

A copy of the amicus brief can be found on the AG’s website.

Attorney General Bonta Issues Consumer Alert to Protect California’s Military Community from Common Scams and Fraud

Monday July 8, 2024 Press Release

OAKLAND — In recognition of Military Consumer Month, Attorney General Rob Bonta today issued a consumer alert to help protect California service members, veterans, and their family members from targeted common scams and fraud. Scammers often target the military community: According to the Federal Trade Commission, military consumers nationwide reported over 93,700 fraud complaints last year, including 42,766 imposter scams that reportedly cost them and their families over $178 million.

A copy of the alert can found be on the AG’s website.

Be sure to check out the valuable research available in our Section Treatise at https://plus.lexis.com/api/permalink/afea6eda-b461-4f39-b2fa-cc080b2d535d/?context=1530671

Want to connect? Contact the Antitrust and Unfair Competition Law Section at Antitrust@CAlawyers.org and the Section Leadership here.


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