|Altria Group / JUUL Labs
||Part 3 Administrative Proceeding
||Closed-system electronic cigarettes
JUUL « dominated » the relevant market with 70% market share; Altria was the second-largest player
|Did Altria’s investment in JUUL and agreement to exit the e-cigarette market eliminate a competitive threat to JUUL?
||The FTC filed a Part 3 administrative complaint against Altria Group and JUUL Labs, seeking to unwind a series of agreements between the companies whereby Altria allegedly agreed to cease competing in the e-cigarette market in exchange for a 35% stake in JUUL. The FTC alleges that JUUL was the dominant player in the e-cigarette market at the time of the agreements, and that the agreements harmed competition by securing Altria’s exit from the market. According to the FTC, consumers lost the benefit of current and future head-to-head competition between Altria and JUUL, and between Altria and other competitors.
The FTC proceeding has been stayed multiple times due to the COVID-19 pandemic, and the evidentiary hearing is currently scheduled for April 2021.
|Arch Coal / Peabody Energy
||FTC Administrative Complaint / US District Court for the Eastern District of Missouri
||Coal mining operations in the southern Powder River Basin in northeastern Wyoming
Top two producers with combined share of 60%
|Should the product market be limited to Powder River Basin coal production or include competition from natural gas and other alternative fuels?
||The FTC filed a complaint against a proposed joint venture between Arch Coal and Peabody Energy on February 26, 2020. The FTC also sought a temporary restraining order and preliminary injunction from the US District Court for the Eastern District of Missouri. The FTC alleges that the merger would eliminate head-to-head competition between the two largest coal mining companies in the United States, who control 60% of all coal mined in the southern Powder River Basin of Wyoming. The parties argue for a wider product market definition, to include natural gas and other alternative fuels.
The federal court hearing took place in July and August, and the FTC administrative trial began on August 11, 2020.
|Jefferson Health / Albert Einstein Healthcare Network
||FTC / Pennsylvania Attorney General
||FTC Administrative Complaint / US District Court for the Eastern District of Pennsylvania
||Inpatient general acute care hospital services and inpatient acute rehabilitation services in Philadelphia and Montgomery Counties, Pennsylvania
Alleged combined shares of between 45% and 70% in different service lines in north Philadelphia and Montgomery County
|Will the merger eliminate competitive pressure that has driven quality improvements and lowered rates, or will the merger result in price efficiencies and cost synergies?
Is the relevant geographic market confined to the northern Philadelphia and Montgomery County areas?
|The FTC sued to block the merger of Jefferson Health and Albert Einstein Healthcare Network, two hospital systems in Pennsylvania. The FTC argues that Jefferson and Einstein compete to improve quality and service by upgrading medical facilities and investing in new technologies. The FTC believes that together, the parties would control 60% of inpatient general acute care hospital services in north Philadelphia and 45% in Montgomery County, and 70% of inpatient acute rehabilitation services in Philadelphia.
The FTC also filed for a temporary restraining order and preliminary injunction in the US District Court for the Eastern District of Pennsylvania. The administrative trial is scheduled to begin on January 5, 2021. The FTC issued several stays of the proceedings in response to the COVID-19 pandemic and set a new scheduling order on July 13, 2020.
|Axon Enterprise, Inc. / VieVu
||FTC Administrative Complaint / US District Court for the District of Arizona
||Sale of body-worn cameras and digital evidence management systems to large metropolitan police departments
Merger of two close competitors
|Is the body-worn camera product market limited to large police departments (500 or more sworn officers)? Can other video technology companies enter the body-worn camera market?
Does the US Constitution allow the FTC to challenge consummated transactions in its own internal administrative proceedings?
|The FTC filed an administrative complaint challenging Axon Enterprise, Inc.’s consummated acquisition of VieVu from Safariland, LLC. The FTC also challenged noncompete agreements that Axon and Safariland signed in connection with the acquisition. The FTC alleged that VieVu was Axon’s closest competitor in the sale of body-worn cameras and digital evidence management systems to large metropolitan police departments. By defining a narrow « price discrimination market » around a specific category of customer, the FTC determined that large metropolitan police departments have distinct requirements for these products that differ from other law enforcement organizations.
In response, Axon filed a complaint in the District of Arizona, arguing that the FTC’s administrative process is unconstitutional, and alleging that the structure of the FTC is unconstitutional due to the limited ability to remove FTC commissioners. Axon sought a preliminary injunction to place the administrative matter on hold. On March 10, 2020, Judge Dominic Lanza issued a tentative ruling stating that the court lacks subject matter jurisdiction and the issues should be raised during the administrative process, and if necessary, appealed to the US Court of Appeals for the Ninth Circuit. In the second quarter, on April 8, 2020, Judge Lanza finalized his order and dismissed Axon’s constitutional claims. On April 13, 2020, Axon filed a notice of appeal to the Ninth Circuit.
The administrative trial was originally scheduled to begin May 19, 2020, but was stayed due to the COVID-19 pandemic. The administrative trial is now scheduled to begin on October 13. Discovery is ongoing.