FTC Loses Preliminary Injunction Bid In Challenge Of Technology Company’s Acquisition Of Virtual Reality Fitness App Maker
On January 31, 2023, the United States District Court for the Northern District of California denied the Federal Trade Commission’s (“FTC”) request for a preliminary injunction to block a technology company’s (the “Company”) acquisition of a virtual reality fitness app maker (the “Fitness App”. The Court found that the FTC failed to show that the Company was reasonably likely to enter the virtual reality dedicated fitness app market absent the deal. Federal Trade Commission v. Meta Platforms Inc. et al., No. 5:22-CV-04325-EJD (N. D. Cal. Feb. 3, 2023).
Maryland District Court Denies DOJ’s Attempt To Halt Merger Based On Competition For A Single NSA Contract
On October 11, 2022, Judge Catherine C. Blake of the United States District Court for the District of Maryland denied the U.S. Department of Justice’s (“DOJ”) motion to preliminarily enjoin the $440 million acquisition of a company with expertise in specialized software development, cyber, and analytics by a larger consulting firm. Ruling that DOJ failed to show that the proposed transaction would cause anticompetitive harm in violation of federal antitrust laws, the Court was unwilling to grant the “extraordinary remedy” of blocking the merger and permitted the parties to close the transaction. United States v. Booz Allen Hamilton Inc. et al., No. 1:22-cv-01603 (D. Md. Oct. 11, 2022).
United States District Court For The District Of Columbia Dismisses Antitrust Challenge To Healthcare Company’s Acquisition Of Company That Provides Healthcare-Related Data Solutions
On September 19, 2022, Judge Carl Nichols of the United States District Court for the District of Columbia dismissed the Department of Justice and attorneys general of Minnesota and New York lawsuit to block UnitedHealth Group’s proposed acquisition of Change Healthcare. The Court found that the Government failed to meet its burden of proving that the transaction is likely to substantially lessen competition in any relevant healthcare market. United States, et al. v. UnitedHealth Group Incorporated, et al., No. 1:22-cv-0481 (D.D.C, Sep. 19, 2022).
Seventh Circuit Reverses Dismissal Of Monopolization Claim, Holding That Plaintiff Adequately Pled A Relevant Geographic Healthcare Market Under The “Hypothetical Monopolist” Test
On July 8, 2022, the United States Court of Appeals for the Seventh Circuit reversed the district court’s dismissal of a monopolization claim against an integrated healthcare provider, concluding that plaintiff had pled facts sufficient to support a plausible geographic market as required to establish a claim under section 2 of the Sherman Act and section 7 of the Clayton Act. Vasquez v. Indiana Univ. Health, Inc., No. 21-3109, 2022 WL 2582368 (7th Cir. July 8, 2022).
Eleventh Circuit Affirms That Seller Does Not Have Antitrust Claims Against Buyer For Post-Closing Conduct That Avoided Earnout Payment
On January 4, 2022, the United States Court of Appeals for the Eleventh Circuit affirmed a district court’s dismissal of an antitrust suit filed by the sellers of a healthcare risk adjustment service company. Ekbatani et al. v. Cmty. Care Health Network, LLC et al., No. 21-12322 (11th Cir. Jan. 4, 2022). The sellers alleged that the buyer, who was a direct competitor, violated federal antitrust laws by intentionally reducing the company’s revenue after closing. That conduct, allegedly, resulted in the sellers’ loss of an “earnout” payment that was contingent upon the company’s performance post-closing. The three-judge panel affirmed that plaintiffs, the previous owners of the acquired business, did not have antitrust standing to bring their Clayton Act claim.
Collusion In Telescope Market Was Clear To See, Finds Ninth Circuit
On December 6, 2021, Judge Ronald M. Gould of the Ninth Circuit Court of Appeals affirmed jury verdicts against defendant-telescope manufacturers and distributors. Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd., et al., No. 2:20-cv-15940 (9th Cir. 2021). Plaintiff alleged that defendants conspired to fix prices on telescopes and monopolize the market in violation of the Sherman Act, the Clayton Act, and California antitrust and competition laws. The Court largely affirmed the district court jury’s decisions, vacating and remanding only as to the amount of the settlement set-off.
Dual Facebook Enforcement Actions Dismissed In District Of Columbia
On June 28, 2021, Judge James E. Boasberg of the United States District Court for the District of Columbia dismissed dual enforcement actions brought by the Federal Trade Commission (“FTC”) and the attorneys general of 46 states and the District of Columbia (the “state enforcers”) against Facebook, Inc. (“Facebook”). See FTC v. Facebook, Inc., No. 1:20-cv-03590-JEB (D.D.C. June 28, 2021), ECF 73 (the “FTC Action”); State of New York et al. v. Facebook, Inc., No. 1:20-cv-03589-JEB (D.D.C. June 28, 2021), ECF 137 (the “States’ Action”).
FTC’s Cancer Detection Antitrust Suit Transferred To California Southern District
On April 20, 2021, the United States District Court for the District of Columbia granted defendants’ motion to transfer a motion for preliminary injunction brought by the Federal Trade Commission (“FTC”) alleging that defendants’ plans to enter into a merger agreement violated Section 5 of the FTC Act and Section 7 of the Clayton Act. Federal Trade Commission v. Illumina, et al., No. 21-873 (D.D.C. 2021). The Court found that the U.S. District Court for the Southern District of California was a more appropriate venue for litigation of the case on the basis that it would be easier for most of the witnesses to get to that district, among other factors. Preliminary injunction hearings are currently set for August 24, 2021.
Revised Market Definition For Patents Still Fails To State Plausible Claims Against Investment Manager
On January 6, 2020, Judge Edward M. Chen of the United States District Court for the Northern District of California granted defendants’ motion to dismiss. Intel Corp., et al. v. Fortress Investment Group LLC, et al., No. 19-cv-07651-EMC (N. D. Ca. 2021). Plaintiffs alleged that defendants conspired to aggregate and assert essential patents against plaintiffs, which harmed competition in 13 alleged markets for patented technologies. Plaintiffs asserted this conduct violated Sherman Act § 1, Clayton Act § 7, as well as unfair competition law under state and FTC statutes. The Court dismissed plaintiffs’ complaint with prejudice as to the FTC Act claim as well as the other claims as they related to several product markets. It dismissed without prejudice claims as to the other markets to the extent plaintiffs could further amend their claims.
Federal Trade Commission Orders Otto Bock To Unwind Consummated Merger
On November 6, 2019, the Federal Trade Commission (“FTC” or “Commission”) unanimously upheld an Administrative Law Judge’s decision requiring Otto Bock HealthCare North America, Inc. (“Otto Bock”) to unwind its consummated acquisition of Freedom Innovations (“Freedom”).The Commission concluded that the transaction resulted in anticompetitive harm in the market for microprocessor-equipped prosthetic knees (“MPKs”), which offer certain improvements over conventional, mechanical prosthetic knees.The decision represents the first time that the current slate of Commissioners has ordered the unwinding of a consummated transaction.
United States District Court For The Northern District Of California Focuses On Information Sharing To Magnify Anticompetitive Conspiracy In Antitrust Suit Against Telescope Manufacturers
On March 29, 2019, Judge Edward J. Davila of the U.S. District Court for the Northern District of California denied a motion to dismiss, finding that plaintiff Orion Telescopes & Binoculars (“Orion”) had sufficiently pled that defendants Ningbo Sunny Electronic Co., Ltd. (“Ningbo”) and Celestron, LLC (“Celestron”) had conspired to divide the market for low- to medium-end telescopes and block a competing manufacturer’s acquisition that would have enabled expansion and broader supply-side competition. Optronic Technologies, Inc., v. Ningbo Sunny Electronic Co., Ltd., No. 16-CV-6370 (N.D. Cal. Mar. 29, 2019). Judge Davila cited plaintiff’s specific allegations of: (a) a division among competitors of the low-end (to Ningbo) and high-end (to Celestron) telescope markets (facilitated in part by a transfer of intellectual property to Ningbo); and (b) Celestron’s advance knowledge of Ningbo’s interest in the merger. Celestron settled prior to the litigation, but Orion and Ningbo will continue into discovery.
Ninth Circuit Upholds Dismissal Of Antitrust Suit Against The Anheuser-Busch InBev And SABMiller Merger
On August 8, 2018, the United States Court of Appeals for the Ninth Circuit upheld a dismissal of an antitrust class action by beer consumers that challenged the acquisition of SABMiller (“SAB”) by Anheuser-Busch InBev (“ABI”). In an opinion by Judge Margaret McKeown, the Ninth Circuit held that the beer consumers failed to state a claim under Section 7 of the Clayton Act because: (1) ABI did not actually acquire a competitor in the U.S. beer market; (2) ABI did not acquire a “potential competitor” in the U.S. beer market; and (3) the consumers’ concern that the acquisition would significantly increase the threat of post-merger coordination between the last remaining market players, ABI and Molson Coors Brewing Company (“Molson”), was speculative.
United States District Court For The District Of Columbia Rejects DOJ Challenge To AT&T-Time Warner Merger
On June 12, 2018, following a six-week-long bench trial, Judge Richard J. Leon of the United States District Court for the District of Columbia ruled that AT&T’s proposed acquisition of Time Warner does not violate the antitrust laws, rejecting the United States Department of Justice’s (DOJ) challenge to the merger. United States v. AT&T Inc
., Civil Case No. 17-2511 (RJL) (D.D.C. June 12, 2018). This case—the first vertical merger challenge tried by the Justice Department since 1977—demonstrates the difficulty in challenging mergers where a competitor is not eliminated by the transaction.