Antitrust and Unfair Competition Law

Competition: Spring 2021, Vol 31, No. 1


By Shana Wallace1 and E. Kate Patchen2


A. FTC v. Qualcomm3

The Ninth Circuit reversed Judge Koh’s decision in the district court that Qualcomm’s conduct related to its cellular standard essential patents (SEPs) and its monopolies in CDMA and premium LTE chips had violated the antitrust laws.4 Qualcomm’s SEPs are crucial to our modern day cellular existence and the manufacturers that make that existence possible. Although Qualcomm’s licensing of its cellular SEPs is profitable, the Ninth Circuit explained that Qualcomm is "no one-trick pony"—which is fortunate for Qualcomm because its ability to charge supracompetitive prices on its SEPs is at least somewhat circumscribed by the fact that they are subject to licensing on fair, reasonable, and nondiscriminatory ("FRAND") terms.5 Qualcomm could, however, arguably shore up its dominant position in chip sales (where it arguably faced at least some competition, even if mostly prospective) by charging all customers a fee for the use of any chips (whether Qualcomm’s or a competitor’s chips) that incorporated its SEPs, which Qualcomm dubbed a "patent royalty."6

A "patent royalty," the Ninth Circuit opined, "sounds in patent law, not antitrust law."7 To the extent such facially neutral fees harm Qualcomm’s customers was of no moment, explained the panel, as harms to mere "customers, not [Qualcomm’s] competitors . . . are not ‘anticompetitive’ in the antitrust sense."8 And, according to the Ninth Circuit, customers fall outside "the area of effective competition" with which antitrust is concerned.9 The Federal Trade Commission recently filed a Petition for Rehearing En Banc.10 The petition was denied.

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B. Supreme Court Decision on Available Remedies in FTC Enforcement Actions

A split between the Seventh and Ninth Circuits addressing available remedies in FTC enforcement actions, as well as a recent Supreme Court decision (Liu v. SEC, 140 S. Ct. 1936 (2020)), have thrown the federal antitrust agencies’ ability to seek the equitable relief of disgorgement into doubt.

The Supreme Court granted a writ of certiori11 to consider FTC v. Credit Bureau Center12 and FTC v. AMG Capital Management.13 The Seventh Circuit in Credit Bureau Center held that FTC Act Section 13(b)’s language authorizing the FTC to seek "a permanent injunction" does not permit a court to exercise its authority to award the further equitable relief of disgorgement.14 The Ninth Circuit in AMG Capital Management, on the other hand, held that federal courts do have authority to order disgorgement.15 After the cert petitions were filed, the Supreme Court issued a narrow ruling in the securities law context holding that federal courts only had the authority to award the equitable relief of disgorgement in SEC enforcement actions because Securities Exchange Act Section 78u(d)(5) specifically authorized the SEC to seek "equitable relief."16 (Federal courts had ordered disgorgement numerous times in SEC actions based upon their "inherent equity power" prior to the 2005 addition of the "equitable relief" statutory language; the Supreme Court’s reasoning thus implied that those courts had apparently been acting ultra vires.)17

Although the Supreme Court appeals in Credit Bureau and AMG Capital Management have yet to be decided, Liu was sufficient authority for the Third Circuit to agree with the Seventh Circuit’s conclusion and reverse a historic district court award of $448 million in disgorgement in the antitrust case, FTC v. AbbVie, Inc.18 The AbbVie panel reasoned that as "Section 13(b) does not explicitly empower district courts to order disgorgement," and the statutory language is only forward looking, a backward-looking remedy like disgorgement is out-of-bounds.19 If these tea leaves are accurate for the FTC, then the DOJ Antitrust Division’s ability to seek disgorgement will likely fare no better. Admittedly, the Division has only rarely sought such a remedy. But when it has, the Division has appealed to the reasoning in SEC cases and to federal courts’ "inherent equitable powers."20

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C. T-Mobile/Sprint Merger

Federal and certain state regulators took different approaches to their challenge of T-Mobile’s merger with Sprint: the Attorneys General for New York, California, Connecticut, the District of Columbia, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Oregon, Pennsylvania, and Virginia moved under Section 7 of the Clayton Act to enjoin the merger altogether,21 whereas the US Department of Justice ultimately petitioned for a final judgment that would allow the merger to proceed on the condition that the newly-merged T-Mobile would divest to DISH Network Corp. Sprint’s prepaid wireless business and certain spectrum licenses.22 The Southern District of New York denied the states’ Clayton Act challenge,23 and the District of Columbia granted the US DOJ’s request for a final judgment.24

D. Seventh Circuit Reinstates Aspen Skiing Refusal-to-Deal and Tying Claims

In Viamedia, Inc. v. Comcast Corp.,25 the Seventh Circuit reversed the district court judgments in favor of Comcast, which had dismissed Viamedia’s Section 2 refusal-to-deal claim and granted summary judgment on Viamedia’s tying claim.26 The dispute stemmed from access to regional "interconnects" that had previously been jointly owned and operated by regional cable companies and which were crucial to cable companies’ ability to appeal to regional and national advertisers.27 The court outlined the industry history: (i) that Comcast had fought for decades against the entry of cable competition in the form of overbuilders and wireline telephone companies; (ii) that Comcast had simultaneously embarked on a buying spree of hundreds of local cable companies-swearing to antitrust enforcers and the FCC that it had no intention of interfering with its cable competitors’ access to the cooperative interconnects; and (iii) that once Comcast had become the country’s dominant cable provider, it promptly cut off access to the interconnects, claiming them as a source of its own competitive dominance.28 The only way that Comcast would permit its cable competitors (e.g., RCN, WOW!) to access the cooperative interconnects and the make-or-break ad revenue streams that flowed through them, was if Comcast’s cable competitors would fire their ad representative, Viamedia, and turn over their entire inventory of national, regional, and—totally unnecessary for the interconnects—local advertising inventory to Comcast.29 Comcast, with one swoop, thus made itself privy to the financial inner workings of its competitors, including ensuring advance notice of their promotions and ad revenue streams, and left local advertisers with no competition for the placement of local cable ads.30

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Per the Seventh Circuit, Comcast’s course of conduct, and its refusal to allow Viamedia access to the Interconnects on behalf of Comcast’s cable competitors, fit squarely within the framework of Aspen Skiing.31 The Supreme Court had expressly declined in recent years to overrule Aspen Skiing, instead deeming it to stand at the outer boundary of sanctionable conduct under Section 2.32 The Seventh Circuit explained that unless by "outer boundary" the Court meant "limited to ski slopes," there was no meaningful way to distinguish Comcast’s conduct—particularly at the motion to dismiss stage.33 As to the tying claim, Viamedia had offered up substantial factual evidence that Comcast had indeed conditioned its competitors’ (and the competitors’ ad representative’s) access to the interconnects on the competitors’ agreement to turn all of their advertising inventory and a portion of that revenue over to Comcast.34 It was therefore inappropriate at the summary judgment stage for the district court to weigh Comcast’s unsubstantiated claims of efficiencies and procompetitive benefits flowing from such conduct against Viamedia’s evidence, and grant summary judgment for Comcast.35 Judge Brennan dissented, opining that he would have reversed the district court on the refusal-to-deal claim, but affirmed summary judgment on the tying claim.36 Comcast has filed its petition for writ of certiorari with the Supreme Court.37

E. Novelis/Aleris Merger

The Department of Justice Antitrust Division used its authority under the Administrative Dispute Resolution Act of 199638 for the first time to elect binding arbitration to resolve a merger challenge filed in the Northern District of Ohio to block Novelis Inc.’s proposed $2.6 billion acquisition of Aleris Corporation.39 The arbitration was limited to the sole issue of product market definition. The parties stipulated at the outset that if the DOJ won on product market definition, the parties would have to divest certain facilities, and if the parties won on product market definition, the Division would dismiss the complaint. The Division ultimately prevailed. As a result, and under the arbitration agreement, the merging parties had committed to the divestiture that was the result of the arbitration.

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A. Discovery and Class Action Plaintiffs: In re Williams-Sonoma, Inc., 947 F.3d 535 (9th Cir. 2020)

In In re Williams Sonoma, Inc.,40 the Ninth Circuit held that litigants cannot use "discovery to find a client to be the named plaintiff before a class action."41

Plaintiffs’ counsel had filed against Williams Sonoma a putative class action under California law in which a Kentucky resident served as the named plaintiff.42 After a pre-certification ruling that Kentucky law applied to the named plaintiff’s claims, the district court granted a motion to compel discovery for the "sole purpose" of finding a new lead plaintiff from California.43 Williams Sonoma petitioned for a writ of mandamus to the Ninth Circuit to vacate the order.44

Recognizing that a writ of mandamus is a "drastic and extraordinary" remedy, the Ninth Circuit issued the writ principally on the ground that it was "clear error" for the district court to have found that "seeking discovery of the name of a class member (here an unknown person, who could sue Williams-Sonoma)" was "relevant to any party’s claim or defense" under Federal Rule of Civil Procedure 26((b)(1).45 The Court briefly touched on the remaining four factors germane to issuing writs of mandamus: the first two factors favored Williams Sonoma because it had no other adequate means of relief and would incur damage not correctable on appeal, while the remaining two factors counseled against issuing the writ because the error was not "oft-repeated," and was not a "novel issue."46

B. Article III Standing and the Award of Damages in Class Actions

In Ramirez v. TransUnion LLC,47 the Court held as a matter of first impression in the Ninth Circuit that "every member of a class action certified under Rule 23 must demonstrate Article III standing at the final stage of a money damages suit when class members are to be awarded individual money damages."48

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Defendant TransUnion appealed a jury verdict in favor of a class of consumers who accused TransUnion of willfully violating the Fair Credit Reporting Act ("FCRA") in connection with its inaccurate labeling of thousands of Americans as potential terrorists, drug dealers, and threats to national security.49 TransUnion argued, inter alia, that (a) every class member must have Article III standing; and (b) no class member apart from the lead plaintiff had Article III standing.50 The Court agreed with TransUnion that, specifically for the "final judgement stage" in a suit for monetary damages,51 each class member must have Article III standing.52 However, the Court found that each plaintiff had standing because the practices that lead to TransUnion’s inaccurate reporting "exposed all class members to a material risk of harm."53


A. Agencies’ Joint Antitrust Statement Regarding COVID-19

On March 24, 2020, the Department of Justice, Antitrust Division and the Federal Trade Commission issued a joint statement setting out certain guidelines for businesses to follow during the COVID-19 pandemic.54 The Agencies’ statement listed a number of collaborative activities designed to improve the health and safety response to the pandemic that would not violate the antitrust laws, including: firm collaboration on research and development; sharing technical know-how; joint development of suggested standards for patient management developed to assist providers in clinical decision making; most joint purchasing arrangements among healthcare providers; and joint private lobbying addressed to the use of federal emergency authority. The Agencies also said they would account for "exigent circumstances" in evaluating efforts to address the spread of COVID-19 and would allow, for example, health care facilities to work together in providing resources and services to vulnerable communities or businesses temporarily combining production, distribution, or service networks to facilitate production and distribution of COVID-19-related supplies. The FTC further published guidance on how businesses could seek expedited advisory opinions from the FTC on proposed conduct.

The DOJ has issued three Covid-related Business Review Letters:

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  • On April 4, the DOJ announced that it would not challenge an arrangement among a group of medical supplies distributors to collaborate in providing personal protective equipment.55
  • On May 15, the DOJ announced that it would not challenge collaborative efforts between the National Pork Producers Council and the U.S. Department of Agriculture to respond to a pork supply shortage.56
  • On July 23, the DOJ announced that it would not challenge a proposed collaboration among pharmaceutical companies to share information about developing antibody treatment for COVID-19.57

However, the Agencies have also warned that they would not hesitate to seek to hold accountable individuals or businesses who tried to use the pandemic as an opportunity to subvert competition or otherwise violate the antitrust laws, and signaled their willingness to prosecute rulebreakers. The agencies have emphasized that they will enforce the antitrust laws against such conduct, and they have specifically called out employer collusion on salaries or other employment terms that could disadvantage frontline workers, such as doctors, nurses, first responders, and grocery store and pharmacy employees.

B. DOJ Antitrust Statement Regarding CIDs and Depositions

On September 10, 2020, the DOJ announced that all Civil Investigative Demand forms moving forward will state that information provided by a recipient may be used in other civil, criminal, administrative, or regulatory cases, and that individuals may refuse to produce documents or answer questions under the Fifth Amendment.58 DOJ attorneys taking depositions will also ask deponents at the outset of depositions to confirm that the deponent understands the ways in which the information they provide can be used by DOJ.

C. Vertical Merger Guidelines

On June 30, 2020, the FTC and DOJ released their long-awaited update of the Vertical Merger Guidelines.59 The Guidelines were last updated 1984. The Guidelines outline the types of competitive harm that can result from vertical transactions and provide guidelines for how the agencies will evaluate them.

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D. Antitrust Criminal Penalty Enhancement and Reform Act (ACPERA) Reauthorized

On October 1, a continuing resolution that contains the Antitrust Criminal Penalty Enhancement and Reform Permanent Extension Act was signed into law.60 The Act reauthorizes the Antitrust Criminal Penalty Enhancement and Reform Act (ACPERA) and repeals its sunset provision. ACPERA releases a leniency recipient from the treble damages and joint-and-several liability that would otherwise apply in private civil claims related to its self-reported cartel conduct.

E. FTC: Merger Filing Rulemaking

FTC issued a Notice of Proposed Rulemaking and an Advance Notice of Public Rulemaking relating to the Hart-Scott-Rodino Antitrust Improvements Act.61

The FTC has proposed two changes to the premerger notification rules: (1) requiring merger filers to disclose additional information about their associates and to aggregate acquisitions in the same issuer across those entities; and (2) introducing a rule that would exempt the acquisition of 10 percent or less of an issuer’s voting securities unless the acquiring person already has a competitively significant relationship with the issuer.

The Advance Notice seeks to gather information on seven topics that will help determine the path for future amendments to the HSR rules and interpretations of those rules. Some of the topics include: the calculation of the size of transactions; real estate investment trusts; non-corporate entities; acquisitions of small amounts of voting securities; and influence outside the scope of voting securities.

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1. Professor Shana Wallace teaches at Indiana University’s Maurer School of Law. She spent over a decade in the Antitrust Division of the United States Department of Justice, representing the government in an appellate capacity, serving as an advisor to the Directors of Criminal and Civil enforcement, and investigating mergers and anticompetitive conduct. In 2016, Wallace was awarded the Attorney General’s Award for Distinguished Service for her contributions to the United States v. Apple litigation.

2. Kate Patchen is the Director and Associate General Counsel of Litigation at Facebook, Inc. Previously, she was the Chief of the San Francisco Office for the United States Department of Justice Antitrust Division. Kate also serves as an Advisor to the Antitrust and Unfair Competition Law Section after having spent years on the Executive Committee.

3. FTC v. Qualcomm, 969 F.3d 974 (9th Cir. 2020).

4. Id. at 1005.

5. Id. at 983.

6. Id. at 985-87.

7. Id. at 999.

8. Id. at 999-1000 (emphasis in original).

9. Id. at 992-93.

10. Petition of the Federal Trade Comm’n for Rehearing En Banc, FTC v. Qualcomm, No. 19-16122 (9th Cir. Sept. 25, 2020) (Dkt. No. 256).

11. See Fed. Trade Comm’n v, Credit Bureau Ctr., LLC, Case No. 19-825, 2020 WL 3865251 (U.S. S. Ct. July 9, 2020); AMG Capital Mgmt. v. Fed. Trade Comm’n, Case No. 19-508, 2020 WL 3865250 (U.S. S. Ct. July 9, 2020).

12. 937 F.3d 764 (7th Cir. 2019).

13. 910 F.3d 417 (9th Cir. 2018).

14. 937 F.3d at 767.

15. 910 F.3d 417.

16. Liu v. SEC, 140 S. Ct. 1936, 1940 (2020).

17. Id. at 1952 (Thomas, J., dissenting).

18. 976 F.3d 327 (3rd Cir. 2020).

19. Id. at 376.

20. U.S. v. Keyspan Corp., 763 F.Supp.2d 633, 638-39 & n.4 (S.D.N.Y. 2011) (quoting Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946)); see also Antitrust Division U.S. Dep’t of Justice, Merger Remedies Manual 4 n. 11 (2020), available at ("In appropriate circumstances, the Division may consider seeking disgorgement in consummated merger challenges instead of or in addition to unwinding the transaction.").

21. New York v. Deutsche Telekom AG, 439 F. Supp. 3d 179, 187 (S.D.N.Y. 2020).

22. United States v. Deutsche Telekom AG, No. 19-cv-2232, 2020 WL 1873555, at *2-3 (D.D.C. April 14, 2020).

23. 439 F. Supp. 3d 179, 249 (S.D.N.Y. 2020).

24. No. 19-cv-2232-TJK, 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020).

25. 951 F.3d 429 (7th Cir. 2020).

26. Id. at 485.

27. Id. at 434-35.

28. Id. at 436-46.

29. Id. at 444-46.

30. Id. at 446-449.

31. Id. at 454.

32. Id. at 458.

33. Id. at 458-60.

34. Id. at 466-74.

35. Id. at 474.

36. Id. at 487-502.

37. Petition for Writ of Certiorari, Comcast Corporation, et al. v. Viamedia, Inc., Case No. 20-319 (U.S. S. Ct. Sept. 4, 2020).

38. 5 U.S.C. § 571 et seq.

39. United States v. Novelis Inc. and Aleris Corp., Case No. 1:19-cv-02033-CAB (N.D. Ohio).

40. 947 F.3d 535 (9th Cir. 2020).

41. Id. at 540.

42. Id. at 537.

43. Id. at 537-38.

44. Id. at 538.

45. Id. at 538-540.

46. Id. at 540.

47. 951 F.3d 1008 (2020).

48. Id. at 1017.

49. Id. at 1016-17.

50. Id. at 1022-23.

51. The Court distinguished this ruling from constitutional standing requirements in class actions that request only injunctive relief, as well as class actions at the certification or other, earlier, stages of the case. Id. at 1023, n.6.

52. Id. at 1023-24.

53. Id. at 1029-30.

54. Joint Antitrust Statement Regarding COVID-19 (Mar. 24, 2020), available at

55. Department of Justice Issues Business Review Letter to Medical Supplies Distributors Supporting Project Airbridge Under Expedited Procedure for COVID-19 Pandemic Response (Apr. 4, 2020), available at (last updated Apr. 21, 2020).

56. Department of Justice Supports National Pork Producers Council’s Ability to Combat Meat Shortage, (May 15, 2020), available at (last updated June 4, 2020).

57. Department of Justice Issues Business Review Letter to Monoclonal Antibody Manufacturers to Expedite and Increase the Production of Covid-19 Mab Treatments, (July 23, 2020),

58. Antitrust Division Announces Updates To Civil Investigative Demand Forms And Deposition Process (Sep. 10, 2020, available at

59. The guidelines are available at

60. H.R. 7076, 116th Congress (2020), available at; S. 3377, 116th Congress (2020), available at

61. FTC and DOJ Seek Comments on Proposed Amendments to HSR Rules and Advanced Notice of Proposed HSR Rulemaking, Fed. Trade Comm’n (Sept. 21, 2020), available at

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