International News: Spotlight on Competition Law - McDermott Will & Emery

International News: Spotlight on Competition Law



In line with the evolution of the economy and the ongoing growth of online business and global trade, we’re seeing a corresponding increase in competition regulation and a rise in enforcement across all authorities.

The growth of the online economy has triggered the US Federal Trade Commission’s (FTC) update of its 20 year old .com Disclosures: How to Make Effective Disclosures in Digital Advertising guide, and the development of an analytical framework for all digital distribution across the European Union. In just one seismic shift under the new EU Vertical Block Exemption Regulation 2022/720, dual-pricing, i.e., setting different wholesale prices for online/offline sales by the same distributor, is no longer considered a hardcore restriction unless its purpose is to prevent the effective use of the internet to sell the goods or services.

In the United States, there is an increased focus on anticompetitive mergers and acquisitions (M&A). The Biden Administration, the Department of Justice Antitrust Division, and the FTC have all stated that the regulatory landscape needs to be reshaped to better reflect dynamic markets, and their priority is the aggressive pursuit of litigation against offending parties rather than the granting of consent decrees. The tendency to “sin first and beg forgiveness later” will emphatically no longer work, as a recent French gun-jumping case demonstrates.

Both the United States and the European Union have also turned their attention to investigating wage fixing and no-poach labour market violations that are not connected with M&A or business collaborations. It’s clear that competition/antitrust authorities are determined to expand their remit.

Please contact the authors directly if you have any comments on our articles, or would like to discuss any of the issues raised.


Unique Gun-Jumping Case Sanctioned by French Competition Authority

Frédéric Pradelles

A new European gun-jumping decision, following the European Court of Justice 2022 Marine Harvest judgment, sends a very strong message to companies that initially acquire minority, and gradually acquire controlling, interests in targets.

In April 2022, the Autorité de la concurrence, the French Competition Authority (FCA), fined the Compagnie Financière Européenne de Prises de Participation (Cofepp) up to €7 million, for having closed its takeover of Marie Brizard Wine & Spirits without first notifying the deal to the FCA and prior to the FCA granting authorisation.

The decision helpfully provides some clarification of the tipping point between absence of control and control, and therefore between no notification and mandatory notification.

Read the full article here, and watch Frédéric Pradelles take us through some key highlights below.

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Dot Com Disclosures and Dark Patterns

Lesli C. Esposito | Marisa E. Poncia

The Federal Trade Commission (FTC) is considering updating and reissuing its guidance document on digital advertising, with the aim of tightening legislation against online consumer manipulation.

The FTC recently requested comments on potential updates to its .com Disclosures: How to Make Effective Disclosures in Digital Advertising guide, which aims to ensure online advertisers disclose information clearly and conspicuously on websites or mobile applications to avoid deceptive statements that may harm consumers.

The FTC issued the guide in 2000 to address illegal online advertising and marketing practices that impact companies and consumers globally. The guide was revised in 2013 and, although its principles are timeless, much has changed in the digital advertising environment in the last two decades, requiring additional considerations and input from the Commission and the public. Specifically, the FTC seeks input on addressing “dark pattern” designs and advertising used to manipulate consumers on websites and mobile applications; hyperlink use and labelling; determining online disclosure adequacy when there are multiple webpages consumers must pass through; mobile device and space-constrained advertising; multi-party selling arrangements (online markets, website referrals, etc.); and social media sponsorships and promotions.

Read the full article here.

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United States Antitrust Enforcement Agencies Seek to Overhaul Regulatory Approach to Anticompetitive Mergers and Acquisitions

Gregory E. Heltzer | Graham J. Hyman

At a high level, the Department of Justice (DOJ) Antitrust Division and the Federal Trade Commission (FTC) have laid out clear intentions to reform the antitrust regulatory regime. Their stance has serious implications for the success of future transactions.

It is no secret to commentators and stakeholders that the Biden Administration has ushered in a period of antitrust enforcement that is notably aggressive when compared with past administrations. In a speech delivered on 18 January 2022, Assistant Attorney General (AAG) Jonathan Kanter stated that DOJ’s overarching goal is to reshape the regulatory landscape to better reflect dynamic markets.

The agencies have laid out an aggressive enforcement plan both in their conduct and public comments which includes i) aggressively regulating mergers and acquisitions (M&A) generally ii) increasing scrutiny of private equity transactions, and iii) pursuing litigation against merging parties rather than consent decrees.

Read the full article here.

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President Biden’s Activist Antitrust Agenda Increases Challenges of Navigating the Merger Review Process

Lisa P. Rumin

As noted in the previous article, under the Biden Administration, the US has a new antitrust playbook intended to create uncertainty, heighten risk, and raise the transaction costs of doing deals.

The purpose of the new playbook is to slow the pace of US M&A, and perhaps prevent companies and investors from even getting in the game in the first place.

A primary tool the US antitrust agencies are using to accomplish this goal is challenging transactions outright rather than negotiating a remedy. It is enlightening to review the transactions challenged by the FTC and the DOJ from January 2021 to July 2022, either through the filing of a complaint and subsequent litigation, or the threat of litigation following an investigation, to identify patterns and the overall direction of agency enforcement.

Read the full article here, and watch Fred Lisa Rumin take us through some key highlights below.

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The European Commission’s Revised “Vertical Competition Rules” in a Nutshell

Hendrik Viaene

The new Vertical Block Exemption Regulation 2022/720 (VBER) and accompanying 2022 Vertical Guidelines (replacing the 2010 Vertical Guidelines) impact all types of distribution in and into the European Union, at all levels of the distribution chain.

The long-awaited revised VBER and Vertical Guidelines entered into force in June 2022. The VBER provides a competition law “safe harbor” for vertical agreements falling within its scope. If a vertical agreement is covered by the VBER, no further competition law analysis is required, and the agreement is enforceable throughout the European Union.

Click here to read the full article, and watch Hendrik Viaene take us through some key highlights below.

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The Nash Equilibrium and The Challenge of Simultaneous-Move Price-Setting

Frédéric Pradelles | Carlo Serrano, Trainee

The Nash equilibrium, a decision-making theorem within game theory, offers an interesting insight into the dynamics of price leadership maneuvering between businesses, and how this interacts with antitrust law.

The Nash equilibrium is commonly cited as a strategy for achieving an optimal balance in non-co-operative situations, such as price-setting. Recent research has, however, demonstrated how the achievement of Nash equilibrium can be seen as tacit co-operation between businesses.

Companies reacting independently to market trends, without collusion, is the most desirable market dynamic. True equilibrium occurs when, at a given market price, neither firm has an advantage in adopting another strategy. This means that the firms have independently reached the position they would have undertaken by agreement, without actually co-operating; according to John Nash: “each player’s strategy is the best response to the other player’s strategy”.

Read the full article here.

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Labour Market Investigations: The US And European Perspectives

Justin P. Murphy | Frédéric Pradelles

The focus of an antitrust cartel investigation has traditionally been on alleged conspiracies relating to pricing, sales, products, or geographic areas. Antitrust authorities on both sides of the Atlantic are now expanding their focus to direct attention to the labour markets.

In the United States and Europe, antitrust enforcers are aggressively pursuing novel theories of liability for “naked” (standalone, not related to an M&A deal or other business collaboration) wage fixing and no-poach labour market violations, and enforcement actions are increasing. Importantly, enforcers continue to signal strongly that labour market investigations will remain a core focus into the future.

Read the full article here.

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