The long-awaited remedy phase of United States v. Google concluded on September 2, 2025, when U.S. District Judge Amit P. Mehta delivered a carefully calibrated ruling following his August 2024 finding that Google illegally monopolized search. The decision stops short of breaking up the company yet aims to curtail anti-competitive behavior via behavioral constraints.

Key Remedies Imposed

Despite Google’s resounding defeat last year in the U.S. Department of Justice’s case targeting its search monopoly, Judge Mehta only handed down a mixed bag of remedies aimed at propping up search engine rivals and limiting the exclusive nature of its distribution contracts Judge Mehta’s decision imposes several targeted limitations while allowing Google and its partners like Apple to retain significant benefits:

1. Ban on Exclusive Deals
   GOOGLE may no longer enter or maintain exclusive contracts for distributing Google Search, Chrome, Google Assistant, or the Gemini app.
   This curtails Google’s ability to lock competitors out through tied default arrangements.
2. Conditional Revenue-Share Restrictions
   Agreements conditioning revenue-share benefits on distribution or placement of Google’s apps beyond one year are barred. This means Apple and Google can enter annual contracts and maintain the same relationship.
3. No Divestiture of Chrome or Android
   The court rejected calls to mandate a sale of Chrome or Android, finding such remedies too disruptive and poorly tailored to the offending conduct.
4. Allowed Payments Remain in Place
   Google can still pay partners for preloading and default placement, avoiding what the court saw as potentially harmful disruptions to the broader ecosystem.
5. Data Sharing Mandate
   Google must share certain search index and user-interaction data with “qualified competitors,” though not advertising data.
6. Syndication Services for Rivals
   Competitors can buy search and text-ads syndication from Google on commercial terms, though scope and duration are narrower than DOJ sought.
7. No Choice Screens Required
   The court ruled against mandating user-facing choice screens, citing poor precedent and lack of proven pro-competitive effect.
8. No Keyword Bidding or Granular Ads Data Required
   Google won’t be forced to restore exact-match bidding or share granular ad data with advertisers.
9. Transparency in Auctions Required
   Google must publicly disclose material changes to its ad auction systems, enhancing visibility into pricing practices.
10. Rule-Out of Public Education or Publisher Policy Remedies
    Proposals such as nationwide campaigns or forced changes to publisher policies were rejected as unrelated to monopolistic acts.
11. No Anti-Retaliation or Self-Preferencing Clauses
    The judge found these provisions vague or unsupported in evidentiary record.
12. Technical Committee and Timeline
    A six-year remedy term will take effect 60 days after the final judgment, with a Technical Committee appointed immediately to oversee enforcement.

At-a-Glance Table

Analysis

1. “Slap on the Wrist”?

Google avoids structural break-ups and retains flexibility to pay for placement—meaning its dominance in search is likely to persist.

2. But Not Toothless

The restrictions on exclusive contracts and the mandated data sharing add meaningful friction to entrenched practices. These could empower startups and AI-based rivals to gain footholds.

3. Generative AI Changes the Equation

Judge Mehta explicitly noted that the rise of generative AI—such as ChatGPT and Perplexity—factors into the calculus, making overly drastic remedies more dangerous and unnecessary.

4. DOJ and Advocates Push Back

Though the DOJ hailed the ruling as a critical step toward reigniting competition, advocates like DuckDuckGo CEO Gabriel Weinberg critiqued it as inadequate, warning consumers will still “suffer.”

Meanwhile, groups like the American Economic Liberties Project lambasted the court’s approach as a failure of enforcement.

5. Echoes of Microsoft Case

The ruling evokes the 2001 Microsoft settlement: no breakup, but behavioral constraints plus a compliance committee.

Conclusion

Judge Mehta’s remedies against Google represent a measured middle ground — disrupting key anti-competitive behaviors while preserving existing infrastructure. Whether this balance suffices to revive competition in search hinges on how well rivals can leverage access to Google’s data and syndication offerings—and whether antitrust enforcers and Congress step in if results disappoint.

Google and the DOJ may appeal, but the decision allows both sides to claim a victory. It could be years before the remedies take full effect. And, as an aside, Apple, who benefits from sharing revenue with Google can also claim victory.

Andre Barlow

abarlow@dbmlawgroup.com

202-589-1838

On August 8, 2025, the U.S. Department of Justice (DOJ) announced a landmark proposed settlement with Greystar Management Services LLC, the largest landlord in the United States, to address allegations of anticompetitive practices in the rental housing market. This settlement targets Greystar’s use of algorithmic pricing schemes that allegedly stifled competition and drove up rents for millions of American renters. This blog post explores the background of the lawsuit, the details of the settlement, and the key lessons learned from this significant enforcement action.

Background on the Lawsuit

Greystar, headquartered in Charleston, South Carolina, manages nearly 950,000 rental units across the country, making it the largest residential property manager in the U.S. The DOJ’s Antitrust Division, alongside several state attorneys general, filed a lawsuit accusing Greystar and five other major landlords of engaging in algorithmic price-fixing through the use of RealPage’s revenue management software. The complaint alleged that these landlords shared competitively sensitive data, such as pricing strategies and rental rates, to generate pricing recommendations that aligned competitors’ rents, effectively reducing competition.

The lawsuit highlighted how RealPage’s algorithms incorporated anticompetitive features, enabling landlords to coordinate pricing strategies and avoid lowering rents, even in softening markets. This practice, according to federal prosecutors, led to artificially inflated rents, with one apartment complex reportedly boasting a 25% rent increase in a single year by using RealPage’s system. The DOJ argued that such coordination, whether through direct communication or algorithms, violated antitrust laws by harming consumers through higher rental costs.

The Settlement

The proposed consent decree, filed on August 8, 2025, in the U.S. District Court for the Middle District of North Carolina, outlines several key requirements for Greystar to restore competitive practices in the rental market. If approved, Greystar must:

• Cease Using Anticompetitive Algorithms: Greystar is prohibited from using any pricing algorithms that rely on competitors’ sensitive data or incorporate anticompetitive features.
• Stop Sharing Sensitive Information: The settlement bans Greystar from exchanging competitively sensitive information with other landlords.
• Accept Monitoring for Third-Party Algorithms: If Greystar uses a third-party pricing algorithm, it must be certified as compliant with the settlement terms, and a court-appointed monitor will oversee its use.
• Avoid RealPage-Hosted Competitor Meetings: Greystar is barred from participating in RealPage-hosted meetings with competing landlords to prevent further coordination.
• Cooperate with DOJ’s Case Against RealPage: Greystar is required to assist the DOJ in its ongoing monopolization claims against RealPage, the software provider central to the alleged scheme.

The settlement, pending court approval following a 60-day public comment period as required by the Tunney Act, also aligns with a separate class-action lawsuit settlement Greystar reached with renters, which includes “significant” monetary damages to be presented for court approval as early as October 2025. Greystar has denied wrongdoing but agreed to the settlements to clarify legal standards and focus on its business operations.

Lessons Learned

This settlement marks a pivotal moment in addressing the impact of technology on market competition, particularly in the housing sector. Several key lessons emerge:

1. Algorithmic Accountability: The case underscores the growing scrutiny of algorithms in business practices. While technology can optimize operations, its misuse to coordinate pricing or suppress competition can lead to significant legal and financial consequences.
2. Consumer Protection in Housing: The DOJ’s action reflects a broader commitment to protecting working-class Americans from practices that inflate essential costs like rent. As Attorney General Pamela Bondi emphasized, free-market competition is critical to making housing affordable.
3. Collaboration Between Regulators and Industry: Greystar’s cooperation with the DOJ’s case against RealPage highlights the importance of industry players working with regulators to address systemic issues, potentially leading to broader reforms in rental pricing practices.
4. Transparency and Oversight: The requirement for a court-appointed monitor for third-party algorithms signals the need for robust oversight to ensure compliance with antitrust laws, particularly as technology becomes more embedded in business operations.
5. Impact on Renters: While the settlement does not quantify the direct relief for renters, the class-action settlement’s promise of monetary damages suggests that affected tenants may see some financial recourse, emphasizing the role of collective action in addressing widespread harm.

Conclusion

The DOJ’s proposed settlement with Greystar is a significant step toward curbing anticompetitive practices in the U.S. rental market. By targeting algorithmic price-fixing, the settlement aims to restore competition and protect renters from inflated costs. As the case against RealPage and other landlords continues, this action sets a precedent for how regulators will address the intersection of technology and market fairness. For renters, industry stakeholders, and policymakers, this settlement serves as a reminder that competition, not coordination, should drive affordability in housing.

Andre Barlow

202-589-1838

abarlow@dbmlawgroup.com

On August 7, 2025, the U.S. Department of Justice (DOJ) Antitrust Division, along with state co-plaintiffs from Maryland, Illinois, New Jersey, and New York, announced a proposed settlement to resolve their challenge to UnitedHealth Group Incorporated’s $3.3 billion acquisition of Amedisys Inc. This settlement, which requires the divestiture of 164 home health and hospice facilities across 19 states, marks a significant step in addressing antitrust concerns in the healthcare sector. This post explores the background of the lawsuit, the rejected remedies, the details of the divestiture, and the lessons learned about the DOJ’s preference for structural remedies.

Background of the Lawsuit

In June 2023, UnitedHealth’s subsidiary Optum agreed to acquire Amedisys, a leading home health and hospice provider based in Baton Rouge, Louisiana, for $3.3 billion. UnitedHealth, headquartered in Eden Prairie, Minnesota, is a vertically integrated healthcare giant, operating as an insurer, provider, pharmacy benefit manager, and healthcare software vendor. The acquisition raised red flags for the DOJ, particularly because UnitedHealth had acquired Amedisys’s primary competitor, LHC Group, in 2023 for $5.4 billion. The DOJ, joined by four states, filed a lawsuit in November 2024 in the U.S. District Court for the District of Maryland to block the merger, arguing it would significantly reduce competition in the home health and hospice markets.

The DOJ’s concerns centered on the potential for UnitedHealth to dominate the market, controlling 30% or more of home health or hospice services in eight states and expanding into five additional states for the first time. The lawsuit claimed the merger would harm hundreds of thousands of vulnerable patients by limiting access to affordable, high-quality care and reducing wage competition for thousands of nurses. The DOJ labeled the deal “presumptively anticompetitive and illegal,” citing its potential to consolidate nearly 800 local home health and hospice markets.

In addition, the DOJ forced UnitedHealth to abandon acquisitions plans for other providers.

Rejected Remedies

To address the DOJ’s concerns, UnitedHealth and Amedisys proposed multiple divestiture plans, but at least two were publicly rejected. The first, proposed in the summer of 2024, involved selling assets to VCG Luna, a subsidiary of Texas-based VitalCaring Group. The DOJ rejected this plan, deeming VCG Luna an unreliable buyer to maintain competition in the affected markets. The second attempt, in spring 2025, involved divestitures to BrightSpring Health Services and The Pennant Group. This proposal was also rejected, as it failed to fully address the DOJ’s concerns about market consolidation. These rejections underscored the DOJ’s rigorous standards for ensuring that divestitures restore competition effectively.

The Approved Divestiture and Remedy

The proposed settlement, filed on August 7, 2025, resolves the DOJ’s concerns by requiring UnitedHealth and Amedisys to divest 164 home health and hospice locations, including one palliative care facility, across 19 states. These facilities generate approximately $528 million in annual revenue, making this the largest divestiture of outpatient healthcare services to resolve a merger challenge. The divested assets will be sold to BrightSpring Health Services and The Pennant Group, with BrightSpring acquiring 115 sites and Pennant acquiring 49, primarily home health facilities.

The settlement includes several key provisions to ensure competitive balance:

• Additional Divestitures: UnitedHealth must divest eight additional locations if regulatory approval for the initial 164 facilities is not obtained.
• Oversight: A monitor will supervise the divestiture process and ensure compliance with the consent decree.
• Support for Buyers: The agreement provides buyers with the assets, personnel, and relationships needed to compete effectively against UnitedHealth in overlapping markets.
• Antitrust Compliance: Amedisys will pay a $1.1 million civil penalty for falsely certifying compliance with the Hart-Scott-Rodino Act and must train its leadership on antitrust compliance.

The divestitures, concentrated in the Southeast where UnitedHealth’s LHC Group has a strong presence, aim to preserve competition for patients and nurses. The settlement also requires UnitedHealth to divest stakes in 10 joint ventures and includes protections to prevent interference with the buyers’ ability to compete. The proposal is subject to a 60-day public comment period under the Tunney Act, after which a Maryland district judge will determine if it serves the public interest.

Lessons Learned: The DOJ’s Preference for Structural Remedies

The UnitedHealth-Amedisys settlement highlights the DOJ Antitrust Division’s strong preference for structural remedies over behavioral ones in merger cases. Structural remedies, such as divestitures, physically alter the market by transferring assets to new competitors, ensuring long-term competition without ongoing oversight. In this case, the DOJ rejected earlier proposals that did not sufficiently restore competition, opting instead for a robust divestiture of 164 facilities to established players like BrightSpring and Pennant. The DOJ’s insistence on structural remedies reflects its belief that competition in healthcare is critical to protecting vulnerable patients and workers. By requiring divestitures across 19 states, the DOJ ensures that the home health and hospice markets remain competitive.

Andre Barlow

202-589-1838

abarlow@dbmlawgroup.com

Allegations in the Biden DOJ’s Complaint

The DOJ’s lawsuit, filed in the U.S. District Court for the Southern District of New York, alleged that the proposed acquisition would harm competition in the market for business travel management services, particularly for global and multinational companies in the United States. Key points from the complaint include:

1. Market Concentration and Oligopolistic Structure:
   • The DOJ claimed that the merger would combine Amex GBT, the largest business travel management company globally (with $28.2 billion in transaction volume in 2023), and CWT, the third-largest (with $14 billion in transaction volume), significantly reducing competition in an already concentrated market. The complaint described the market as “oligopolistic,” with Amex GBT, CWT, and BCD Travel (the second-largest player) controlling at least 70% of the market for travel management services for global companies with annual travel budgets of at least $30 million.
   • The DOJ argued that the merger would reduce the number of major players from three to two in this segment, giving the combined firm a dominant share and limiting competitive options for large businesses.
2. Harm to Competition:
   • The complaint highlighted that Amex GBT and CWT were fierce competitors, particularly for large businesses with complex travel needs. CWT had recently pursued innovative strategies to improve service and reduce prices, winning significant bids against Amex GBT. The DOJ alleged that the merger would eliminate this head-to-head competition, leading to higher prices, reduced choices, and stifled innovation for U.S. businesses.
   • The DOJ emphasized that few other companies could provide travel management services at the scale required by global and multinational firms, making the loss of CWT as an independent competitor particularly harmful.
3. History of Consolidation:
   • The lawsuit noted that this would be Amex GBT’s fifth acquisition of a travel management company since 2018, further consolidating an already concentrated market. The DOJ argued that this pattern of acquisitions exacerbated anticompetitive effects.
4. Narrow Market Definition:
   • The DOJ defined the relevant market narrowly, focusing on travel management services for global and multinational companies with significant travel budgets (e.g., over $30 million annually). This definition excluded smaller travel management companies and online tools, which the DOJ argued were not viable substitutes for the specialized services provided by Amex GBT and CWT. Amex GBT criticized this as a “gerrymandered” and “contrived” market definition, arguing it failed to account for broader competition in the evolving travel industry.

Context of the Case

• Timing and Political Context: The lawsuit was filed on January 10, 2025, just 10 days before the transition from the Biden administration to the Trump administration on January 20, 2025. Amex GBT described the filing as a “politically motivated” move by the Biden DOJ to push one final anti-merger challenge, noting that the transaction was not set to close until March 2025, giving the incoming Trump administration time to review it. Interestingly enough, the Biden DOJ did not challenge Capital One/Discover or HPE/Juniper even though the waiting period for HPE/Juniper was set to expire in January of 2025.
• Amex GBT’s Defense: Amex GBT argued that the DOJ’s complaint relied on outdated market views, ignoring post-pandemic changes in the travel industry, such as the rise of online tools and competitors like BCD Travel and Navan Inc. The company asserted that the merger would enhance innovation, create synergies, and provide greater value to customers, suppliers, and employees.
• International Scrutiny: The UK’s Competition and Markets Authority (CMA) also reviewed the merger, initially raising concerns about competition for multinational clients with travel budgets over $25 million. However, by February 2025, the CMA provisionally concluded that the deal posed no significant competition concerns, reinforcing Amex GBT’s position that the DOJ’s case was flawed.

Dismissal of the Case

On July 29, 2025, the DOJ moved to dismiss the lawsuit, exercising its “prosecutorial discretion” in a court filing before Judge Jed Rakoff in New York. The trial, scheduled for September 2025, was thus avoided, and the merger was allowed to proceed. Several factors contributed to the dismissal:

1. Change in Administration:
   • The case transitioned to the Trump administration, with Gail Slater appointed as head of the DOJ’s Antitrust Division. The Trump administration is perceived as more business-friendly and less aggressive on antitrust enforcement compared to the Biden administration. The dismissal aligned with a potential shift in priorities, as the Trump DOJ viewed the merger as less harmful or prioritized other enforcement activities. “The Antitrust Division, alone, made the decision to dismiss the case after a robust investigation,” Assistant Attorney General Gail Slater said in a statement. “The Division must also consider the enforcement trade-offs inherent to thoughtful and effective use of its limited taxpayer-funded resources.”
   • DOJ’s antitrust lawyers reviewed the transaction after Slater joined the agency in March. That review determined that new technologies are emerging to challenge travel suppliers like Amex GBT and CWT, making the merger less likely to harm competition.
2. Prosecutorial Discretion and Resource Allocation:
   • The DOJ cited “prosecutorial discretion” in its filing, with Antitrust Division head Gail Slater stating that the decision followed a “robust investigation” and considered “enforcement trade-offs” due to limited taxpayer-funded resources. This suggests the DOJ may have determined that pursuing the case was not the best use of resources, especially if the evidence of anticompetitive harm was less compelling under further review.
3. Weakness of the Case:
   • Arguably, the DOJ’s case was “flimsy” due to its narrow market definition. The market for travel management services has evolved, with online tools and new competitors like Navan Inc. increasing competition. Amex GBT’s claim that at least six travel management companies could serve large customers as effectively as CWT may have undermined the DOJ’s argument that the market was being reduced from three to two players. Indeed, the DOJ’s complaint indicates that the top three players only have 70% or the market so clearly other competition exists.
   • The UK CMA’s provisional clearance of the merger in February 2025 likely bolstered Amex GBT’s argument that the deal did not significantly harm competition, putting pressure on the DOJ to reconsider its stance.

Conclusion

The Biden DOJ’s lawsuit against the Amex GBT-CWT merger centered on allegations that it would reduce competition in a concentrated market for global business travel management, risking higher prices and less innovation, which could have impacted large global corporation customers. Large global enterprise customers with over $30 million travel budgets, however, have numerous options and can typically take care of themselves. The case was dismissed in July 2025 by the Trump DOJ, citing prosecutorial discretion and resource considerations. The dismissal was likely influenced by a combination of a weaker case upon further review by Slater’s team, which was supported by the UK CMA’s findings and a shift in administration priorities.

Andre Barlow

202-589-1838

abarlow@dbmlawgroup.com

The settlement aimed to restore competition by ensuring that key assets, such as HPE’s Instant On business and Juniper’s AI Ops for Mist source code, remained available to competitors. The divestiture of the Instant On business to a DOJ-approved buyer within 180 days and the licensing of Mist AI software were designed to maintain competitive dynamics in the wireless local area network (WLAN) market, preventing the merged entity from dominating over 70% of the market alongside Cisco Systems. Industry perspectives, including comments from solution providers, suggest that these measures were seen as minor concessions that preserved the deal’s benefits while fostering competition, particularly against Cisco, by enabling a stronger, AI-driven networking portfolio for HPE.

To be sure, the effectiveness of these measures in fully restoring competition depends on the execution of the divestitures and licensing, as smaller competitors may still face challenges matching the scale of the merged HPE-Juniper or Cisco. That said, the licensing Juniper’s Mist AI software source code to independent competitors is a notable concession in the DOJ’s settlement with HPE and Juniper. This move was designed to facilitate new entry and maintain competition in the wireless local area network (WLAN) market.

The Mist AI software is a key component of Juniper’s portfolio, powering its cloud-managed, AI-driven networking solutions that optimize wireless performance and user experience. By requiring HPE to license this source code to competitors, the DOJ aimed to lower barriers for new or smaller players to develop competitive WLAN solutions, potentially fostering innovation and preventing the merged HPE-Juniper entity (with over 70% market share alongside Cisco) from stifling competition. This licensing could theoretically enable entrants to build or enhance AI-driven networking products without the need to develop comparable technology from scratch—a significant hurdle given the complexity and cost of AI-driven network management systems.

The effectiveness hinges on how accessible and affordable the licensing terms are in the future so the DOJ’s oversight will be very important. New entrants will likely need more that just access to the source code, they will need the technical expertise, infrastructure, and market reach to capitalize on the code. The settlement also required HPE to divest its Instant On wireless business to a DOJ-approved buyer within 180 days. This divestiture ensures that a standalone competitor retains a foothold in the market, potentially amplifying the competitive impact of the Mist AI licensing by giving an existing player immediate market presence. Fortunately, many of the competitors in the WLAN enterprise grade are actually significant competitors already.

This is clearly a strategic compromise that preserves HPE’s ability to compete with Cisco and globally while addressing DOJ concerns in the domestic market. The licensing of Mist AI could indeed spur innovation by enabling competitors to offer AI-driven solutions, potentially leading to new entrants or strengthening existing ones like Extreme Networks, Arista, Fortinet, or Ruckus. In short, giving up the Mist AI source code is a significant concession in that it creates an opportunity for new entry by lowering a key technological barrier. Whether it truly restores competition depends on how competitors leverage this access and navigate the broader market challenges. It’s a step toward leveling the playing field, but not a guaranteed win for new entrants against the industry’s heavyweights.

Lessons Learned

The recent settlement in the HPE-Juniper merger case offers insights into the DOJ’s approach to antitrust enforcement. Although the allegations in the complaint lacked a clear resolution, the settlement reflects a pragmatic decision by the DOJ to accept an imperfect remedy for a case with weak grounds for a full challenge.  The DOJ hailed the settlement as a victory, describing it as a novel approach to addressing unique challenges in merger cases. Notably, the DOJ considered the procompetitive benefits of the merger, particularly in the context of global competition. The agreed-upon remedy includes HPE’s divestiture of its global Instant On campus and branch WLAN business and at least one perpetual, non-exclusive license to Juniper’s Mist source code. This remedy modestly reduces market share in the enterprise-grade WLAN solutions market, but allows for new entrants to expand their enterprise grade WLAN offerings.  In addition, the divestiture and licensing must be completed within 180 days, with the possibility of 60-day extensions if needed, indicating the DOJ’s flexibility in finalizing the agreement.  This is also a departure from recent practice.  

Assistant Attorney General Slater’s stance against accepting inadequate remedies may still hold when a challenge is strongly supported by evidence. However, in this case, she demonstrated willingness to negotiate a less-than-ideal remedy for a merger that likely did not warrant being blocked. This decision aligns with the investigating staff’s view that the deal should not have been challenged initially.  The decision to settle rather than litigate, despite a weak legal case due to Juniper’s modest 6.5% market share, reflects a strategic choice to preserve agency credibility while enabling the merger and also aligns with the Trump administration’s “America First” agenda.

The key takeaways are that the DOJ is open to settling weaker cases with tailored remedies; the DOJ will consider procompetitive benefits, such as global market competitiveness so that can influence outcomes in future deals; and the DOJ is willing to use flexible timelines and pragmatic remedies reflecting a balanced approach to antitrust enforcement.    

Andre Barlow

202-589-1838

Under the Biden administration, U.S. antitrust agencies, particularly the Department of Justice Antitrust Division (DOJ) and the Federal Trade Commission (FTC), took a hardline stance against negotiated merger remedies. Instead of settling, they often challenged mergers outright or allowed deals to close without formal conditions, expressing doubts about the effectiveness of remedies like structural divestments.

The Trump administration, however, signals a return to a more business-friendly approach, favoring settlement agreements with divestiture remedies to resolve anticompetitive concerns without litigation. Recent weeks have seen the clearance of five major transactions, each with tailored remedies, highlighting this shift.

Recent Examples of Merger Remedies

1. HPE/Juniper: Rather than litigate, the DOJ entered into a settlement agreement with HPE that required it to divest its Instant On wireless networking business and license Juniper’s Mist AI software.
2. Synopsys/Ansys: The FTC required Synopsys and Ansys to divest assets to Keysight Technologies to address concerns in software tools markets critical for semiconductor design and light simulation devices. This “mix-and-match” remedy involves assets from both parties.
3. Keysight/Spirent: The DOJ mandated Keysight to divest Spirent’s high-speed ethernet testing, network security testing, and RF channel emulation businesses to Viavi, addressing competition concerns in specialized communications test equipment markets.
4. Safran/Collins: To resolve DOJ concerns, Safran must sell its North American actuation business to Woodward, preventing higher prices, reduced quality, and stifled innovation in actuation and flight control markets.
5. Alimentation Couche-Tard (ACT)/Giant Eagle: The FTC required ACT to divest 35 gas stations to Majors Management to mitigate higher fuel costs in certain U.S. states. ACT must also notify the FTC before acquiring “competitively significant” stations in affected areas for ten years.
6. Omnicom/IPG: Unlike the structural divestments above, this global advertising deal involved behavioral remedies. The FTC imposed provisions to prevent Omnicom from directing advertising away from media publishers based on political or ideological viewpoints, a rare but market-specific solution.

Common Themes in Recent Remedies

• Upfront Buyers: In most of the structural divestiture cases, the parties were required to produce an upfront buyer to ensure remedy effectiveness, a standard U.S. agency practice.
• Innovation Concerns: In Synopsys/Ansys, Keysight/Spirent, and Safran/Collins, agencies cited potential reductions in innovation alongside price increases, reflecting a growing focus on innovation as a competition parameter.
• Global Coordination: These cases involved cooperation with international authorities (e.g., EU, UK, Japan, South Korea), aligning remedies and timing. For instance, the UK’s Competition and Markets Authority approved remedies in Safran/Collins on the same day as the DOJ.

FTC Leadership on Remedies

FTC head Andrew Ferguson has championed negotiated settlements, arguing they preserve procompetitive merger benefits while addressing anticompetitive concerns. Settlements are cost-effective, leveraging agencies’ limited resources and avoiding complex litigation where parties might propose remedies in court (“litigating the fix”). However, Ferguson cautions against inadequate or unworkable settlements, particularly behavioral remedies, and emphasizes the need for rigorous standards. The FTC plans to release a detailed policy statement on merger remedies soon.

Lessons Learned

The Trump administration’s antitrust agencies are now open to negotiating settlement agreements that fully resolve anticompetitive concerns, a practice welcomed by businesses and enforcement agencies alike. Companies pursuing mergers should proactively propose robust remedies early, clearly articulating procompetitive benefits like innovation, growth, and investment to align with this more collaborative enforcement approach.

Andre Barlow

The decision followed a bench trial that began in September 2024 and lasted 15 days, with closing arguments in November 2024. It marks the second major antitrust loss for Google in less than a year, following a separate ruling on its search monopoly.

Remedy Trial Timeline

The remedies phase, which will determine how to address Google’s anticompetitive behavior, is scheduled to begin as a bench trial on September 22, 2025, in the same court before Judge Brinkema. Both parties proposed this date shortly after the liability ruling, and it was confirmed by the court in early May 2025. The trial is expected to focus on evidence and arguments for specific remedies, with a decision potentially following in the months after.

Proposed Remedies to Resolve the Judge’s Concerns

The remedies aim to dismantle Google’s integrated ad tech monopoly, restore competition, and prevent future anticompetitive practices as outlined in the ruling (e.g., tying, exclusive deals, auction manipulation, and data advantages). Proposals from the U.S. Department of Justice (DOJ) and plaintiff states are more aggressive, emphasizing structural changes, while Google’s counterproposals focus on behavioral adjustments. Key proposals include:

• DOJ and States’ Proposals (Structural and Behavioral Remedies):
  • Divestiture of Key Assets: Force Google to sell off significant portions of its ad tech business, such as Google Ad Manager (which includes the DFP ad server and AdX exchange). This would break up the “walled garden” that gives Google end-to-end control over ad transactions.
  • Data and Bidding Restrictions: Ban Google from using first-party data from its own products (e.g., YouTube, Search, or Android) to gain unfair advantages in ad bidding or pricing. This addresses concerns about Google’s ability to leverage its ecosystem for preferential treatment.
  • Auction and Pricing Reforms: Prohibit manipulative practices like “last look” advantages in auctions (where Google could adjust bids after seeing competitors’) and require fair, non-discriminatory auction rules to prevent rigging.
  • Interoperability and Non-Exclusivity: Mandate that Google’s tools be compatible with rivals’ products, end exclusive contracts with publishers and advertisers, and allow easier switching to competitors.
  • Oversight and Compliance: Implement monitoring by a court-appointed trustee for up to 10 years, with potential fines for violations.
• Google’s Counterproposals (Primarily Behavioral):
  • Avoid divestitures, arguing they exceed the scope of the ruling and could harm innovation and users. Instead, propose tweaks to auction mechanics (e.g., “rigging ad auctions a little less”) and limited changes to product tying without breaking up assets.
  • Focus on transparency enhancements, such as better data sharing with competitors or minor adjustments to fee structures, to mitigate monopoly effects without structural separation.

The DOJ argues that behavioral remedies alone have proven insufficient in past cases (e.g., Microsoft’s antitrust settlement), necessitating divestitures to fully resolve the integration that fueled Google’s monopoly. The court will weigh these during the September trial, with potential appeals likely regardless of the outcome.

Facing a tight deadline before Slater’s confirmation, the DOJ filed suit to block the deal arguing it would harm competition in the enterprise-grade wireless local area network (WLAN) market.  While the DOJ’s intent to protect customers is a worthy goal, its case rests on a flawed premise, resting on a narrow view of the market that ignores robust competition and the broader strategic imperatives at play. Far from stifling innovation or choice, this acquisition would strengthen a key American player to rival Cisco domestically and, critically, counter Huawei globally.  For those reasons, DOJ’s litigation stance should be reconsidered.

Flawed Antitrust Concerns

The DOJ’s claim that the merger would overly concentrate the enterprise-grade WLAN market misreads the competitive landscape. The complaint paints HPE and Juniper as the second- and third-largest players behind market leader, Cisco, alleging their combination would leave just two firms controlling over 70% of enterprise-grade WLAN solutions. This analysis oversimplifies the competitive dynamics of the industry.

First, the European Commission and the UK’s Competition and Markets Authority, which both cleared the merger in 2024 after determining it posed no realistic threat to competition, confirm that the transaction does not raise competition concerns. In addition, the Biden Administration could have sued to block the merger but chose not to do so.

Second, the product market definition alleged by the DOJ is much too narrow.  Even the UK’s CMA did not find any functional or technical differences between WLAN products sold to large or smaller enterprises.

Third, the WLAN market is not a cozy oligopoly but a battleground where multiple players are vying for share. Cisco is more than twice as large as a combined HPE-Juniper with over 50% share for the past ten years.  Indeed, Juniper’s share is in the single digits and the combined firm’s share is less than 25%.  Companies like Extreme Networks, Arista, Fortinet, CommScope, and Ubiquiti, which make up approximately 25-30% of the DOJ’s narrowly defined market, have the technological muscle to reposition themselves, scale, expand, and rapidly grow share. Extreme Networks, for instance, powers WLAN for major enterprises like Kroger and universities, delivering secure, high-performance networks that rival those of HPE and Juniper. These firms are well-capitalized with proven deployments and R&D pipelines poised to exploit any opportunity. If HPE-Juniper raises prices or slacks on innovation, these competitors are ready to provide real choice to large enterprises including hospitals, campuses, and retailers.

Fourth, the DOJ’s focus on market share also ignores how enterprise WLAN works in practice. Large customers routinely solicit bids from multiple vendors, pitting solutions against one another in competitive request for proposals. This process keeps pricing in check and forces innovation, regardless of who merges with whom.  Juniper’s Mist platform and HPE’s Aruba have indeed competed head-to-head, but so have they with Cisco, Extreme, and others.

Fifth, the DOJ’s complaint includes a litany of inflammatory quotes from HPE’s executives’ documents, but not one deal document was cited. Notwithstanding their provocative nature, these statements have little grounding in the reality of competition.  Documents only matter if they are reliably predictive and relevant. The selective quoting of internal documents may suggest head-to-head competition, but any suggestion that the documents demonstrate that the merger would harm competition contradicts reality.  In reality, customers of HPE and Juniper may choose between the two companies as well as an entire host of alternatives including Cisco, Extreme Networks, Fortinet, and Arista.  The idea that merging HPE and Juniper would suddenly let them dictate terms overlooks the technological strength of the competitors and the bidding process. If anything, combining HPE’s scale with Juniper’s AI-driven tools could drive sharper pricing and faster feature rollouts to fend off these hungry rivals.

Finally, the DOJ is challenging this acquisition in the same district court where it lost its challenge to Oracle’s acquisition of Peoplesoft in 2014 because evidence that Oracle and PeopleSoft competed aggressively against each other was not enough to prove anticompetitive effects and that they competed in a three firm market was too narrow.

National Security and Global Competitiveness

The DOJ’s case overlooks the significant national security stakes involved in this merger. Huawei, the Chinese tech giant banned in the United States over espionage concerns since 2019, continues to dominate global telecom infrastructure markets with state-backed pricing strategies. HPE CEO Antonio Neri has framed this acquisition as essential to creating a robust U.S.-based alternative to Huawei.  A stronger HPE-Juniper would create a number-two player with the muscle to challenge Cisco at home while taking the fight to Huawei in global markets. The deal would create a “full stack” U.S. alternative to Huawei, combining HPE’s servers, storage, and Aruba networking with Juniper’s AI-native routing and telco expertise.  Integrating AI, security, and networking is a procompetitive move that bolsters national security by offering a robust Western option for global telcos and enterprises in AI driven and 6G markets. Without this deal, the U.S. risks ceding ground to Huawei, especially in emerging markets where 6G and IoT are reshaping connectivity.  Moreover, HPE and Juniper power critical U.S. infrastructure by supporting the Department of Defense and Department of Energy making the combination a matter of “core tech” that strengthens America’s technological sovereignty.

Unlocking Innovation

HPE and Juniper bring complementary strengths that could unlock significant efficiencies post-merger. HPE’s expertise in cloud computing and hybrid IT solutions pairs seamlessly with Juniper’s AI-native networking tools. Together, they could deliver unified platforms that simplify IT management for enterprises while accelerating advancements in AI-driven infrastructure. These aren’t abstract savings; they’re the kind of edge U.S. firms need to outpace Huawei’s one-stop-shop model.

A Call for Reevaluation

Blocking this merger risks weakening a U.S.-based champion at a time when global tech leadership and national security are at stake.  Slater should use her fresh perspective to reevaluate this litigation with an eye toward getting the antitrust analysis right and balancing competition policy with broader strategic imperatives. Blocking HPE’s acquisition of Juniper Networks is counterproductive because it risks reinforcing Cisco’s dominance, undermining U.S. competitiveness against global rivals, and stifling innovation. Slater should reconsider the DOJ’s litigation decision to ensure that antitrust enforcement facilitates not hinders the ingenuity of American companies.  Importantly, the acquisition does not substantially lessen competition because Extreme Networks and others are ready to fill any void for those customers looking for another source of enterprise grade WLAN products.  In conclusion, the DOJ should let this deal proceed for the sake of innovation, competition, and national security.

Andre Barlow

202-589-1838

The Northern District’s opinion stated that “[t]he argument misses the point of plaintiff’s alleged injury: Plaintiff alleges she suffered depressed wages.” The court added that “[p]laintiff’s claim is akin to a supplier who sells at a reduced price due to the anti-competitive behavior of a cartel of buyers.”  The court also found that complaint sufficiently supported the claim that the policy’s effects could be isolated from broader economic conditions like the unemployment rate.  The court added that “[p]laintiff’s causation allegations are plausible due to basic principles of economics.”  Indeed, “[i]f fewer employers compete for the same number of employees, wages will be lower than if a greater number of employers are competing for those employees.”  So, the case will move forward.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

The lawsuit seeks to preserve competition in the North American market for rolled aluminum sheet for automotive applications, commonly referred to as aluminum auto body sheet.  This marks the first time the Antitrust Division has used its authority under the Administrative Dispute Resolution Act of 1996 (5 U.S.C. § 571 et seq.) to resolve a matter.

“This first-of-its-kind arbitration has allowed us to resolve the dispositive issue in this case efficiently, saving taxpayer and private resources, while providing critical time-certainty,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “The Antitrust Division looks forward to the arbitrator’s opinion, and will study this matter both to assess the circumstances in which arbitration may be appropriate and to identify possibilities for further streamlining the process.  We will continue to examine ways to enforce our competition laws in a manner that maximizes the Division’s scarce enforcement resources to protect American consumers.”

On Sept. 4, 2019, the Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the Northern District of Ohio seeking to block Novelis Inc.’s proposed acquisition of Aleris Corporation.  Prior to filing the complaint, the Antitrust Division reached an agreement with defendants to refer the matter to binding arbitration if the parties were unable to resolve the United States’ competitive concerns with the defendants’ transaction within a certain period of time.

As described in Plaintiff United States’ Explanation of Plan to Refer this Matter to Arbitration, filed on the district court’s docket, fact discovery proceeded under the supervision of the district court.  Following the close of fact discovery, the matter was referred to binding arbitration to resolve a single issue: whether aluminum auto body sheet constitutes a relevant product market under the antitrust laws.

If the United States prevails, the United States will then file a proposed final judgment that requires Novelis to divest certain agreed-upon assets to preserve competition in the relevant market.   If the defendants prevail, the United States will seek to voluntarily dismiss the complaint.  Novelis has held separate the agreed-upon divestiture assets pursuant to a hold separate stipulation and order entered by the district court, and defendants are permitted to close the transaction pursuant to this order.

Complaint

The DOJ alleges that the acquisition would substantially lessen competition in the North American market for rolled aluminum sheet for automotive applications, commonly referred to as aluminum auto body sheet.  The complaint explains that steel companies are developing lighter, high strength steel varieties for the auto industry. But as Novelis has observed, high strength steel “is largely replacing existing mild steel” and “cannibalizing the existing material” (i.e., traditional steel). The threat of substitution from aluminum to high strength steel is, as Aleris confirms, “limited.”  The price of aluminum auto body sheet is three or four times more expensive than traditional steel.  The complaint further alleges that the transaction would combine two of only four North American producers of aluminum auto body sheet.  The other two suppliers’ capacity is mostly committed to automakers.  Thus, other automakers rely on Novelis and Aleris to produce aluminum body sheet for automobiles to make cars lighter, more fuel-efficient, safer and more durable.

For years, Novelis was operating in a three firm market where it was the price leader.  It had the ability to increase prices without a loss of sales.  DOJ alleges that in 2016, Aleris entered the North American market as an aggressive competitor, which had an immediate impact on pricing and services.  Indeed, Novelis’ documents show that it decreased prices and increased the quality of its services in response to Aleris’ entry.

Novelis’s acquisition of Aleris would eliminate a rival it described as “poised for transformational growth.”  The complaint quotes other internal presentations to the Board of Directors and emails describing an anticompetitive rationale for the transaction:

• Novelis worried that Aleris could be sold to a “[n]ew market entrant in the US with lower pricing discipline” than Novelis, and that an “[a]lternative buyer [was] likely to bid aggressively and negatively impact pricing” in the market.
• “[A]n acquisition by us as the market leader will help preserve the industry structure versus a new player . . . coming into our growth markets and disturbing the industry structure to create space for himself, while hurting us the most.”
• Novelis should acquire Aleris because there is a “disincentive for market leader [i.e., Novelis] to add capacity and contribute to a price drop” and an acquisition of Aleris “prevents competitors from acquiring assets and driving less disciplined pricing.”

If this deal were allowed to proceed without a remedy, Novelis would lock up 60 percent of projected total domestic capacity and the vast majority of uncommitted capacity of aluminum body sheet, enabling the company to raise prices, reduce innovation and provide less favorable terms of service to the detriment of automakers and ultimately American consumers.

Novelis Contends That DOJ Suit Ignores The Full Scope Of Automotive Body Sheet Competition

It says that the DOJ lawsuit is based on the contention that the only relevant competition among automotive body sheet providers is that among aluminum manufacturers such as Novelis and Aleris. It ignores competition from steel automotive body sheet, even though steel automotive body sheet is currently used for nearly 90 percent of the market.

Novelis says that aluminum automotive body sheet attempts to take share from steel automotive body sheet.  And argues that for the DOJ to prevail in its lawsuit, it needs to prove that there is a distinct “relevant market” for aluminum automotive body sheet, which means that steel automotive body sheet does not significantly constrain the price and quality of aluminum automotive body sheet. Novelis further states that the DOJ does not deny that steel automotive body sheet usually competes with aluminum automotive body sheet, but instead contends that the constraint from steel is absent from some procurements (where an automotive manufacturer has supposedly already decided between steel and aluminum). Novelis believes that by focusing on just a small slice of steel-aluminum competition and ignoring the broader competitive process, the DOJ’s theory contravenes well-established principles of market definition.

Novelis further contends that the DOJ also disregards the extraordinary bargaining power of the automotive manufacturers and their ability to generate bid processes that will ensure competitive pricing for automotive body sheet.

Lessons Learned:

Here, the transaction is presumptively anticompetitive because a large dominant player with 60% of a concentrated market is acquiring a new disruptive entrant.  What is noteworthy is the use of the arbitration procedure agreed to by Novelis and the DOJ.  The DOJ and Novelis clearly are debating the product market definition.  If the DOJ is right on the product market definition, the merger is anticompetitive in the North American market for aluminum auto body sheet and it would require a fix.  The merging parties can then negotiate a divestiture remedy that would resolve the competitive concerns.  As Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division put it, “[t]his arbitration would allow the Antitrust Division to resolve the dispositive issue of market definition in this case efficiently and effectively, saving taxpayer resources.” He added that “[a]lternative dispute resolution is an important tool that the Antitrust Division can and will use, in appropriate circumstances, to maximize its enforcement resources to protect American consumers.”  

This complaint also demonstrates that the DOJ will use merging parties’ own words against them when challenging their deal.  Historically, “hot docs” provide an easy way to capture the interest of a judge by saying this case is simple and all you have to do is examine the merging parties’ own words.  The DOJ routinely cites “hot docs” in its complaints.  The DOJ focuses on “hot docs” when they exist because these documents are very helpful in explaining whether a transaction is anticompetitive.  This case demonstrates why corporate executives must be mindful about what they write as careless and inappropriate language in company documents can have an extremely negative effect on a merger review.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

What is a no-poach agreement? 

A no-poach agreement is essentially an agreement between two companies not to compete for each other’s employees, such as by not soliciting or hiring them. No-poach agreements, or agreements not to approach other companies’ employees to hire, are generally considered illegal under the antitrust laws.  When companies make agreements not to compete for each other’s employees, they are restraining commerce because they are not allowing working people to freely change jobs to potentially make more money or move to another location if they wish to. It is illegal for companies or other entities to make these agreements, but it happens more often than you would think – just like the case with Seaman v. Duke University.

 What happened in Seaman v. Duke University?

Dr. Seaman is an assistant professor at Duke University’s (Duke) medical school. Duke made an anti-poaching agreement with its competitor, the University of North Carolina (UNC). Dr. Seaman and others, who were faculty at Duke and UNC medical schools, filed a class action lawsuit against Duke claiming that Duke violated the Sherman Act when it entered into the agreement to “prevent lateral hiring of certain medical employees in order to eliminate competition and suppress compensation.” See Seaman v. Duke University and Duke University Health System, Case No. 1:15-cv-000462-CCE-JLW (M.D.N.C.).

In March, the Department of Justice (DOJ) got involved in the case by filing a Statement of Interest. This allowed the DOJ to intervene to influence and actually enforce an outcome that prevents anti-poaching agreements in the future.

In the end, the parties settled the case. In the settlement agreement, it was decided that Duke would pay Dr. Seaman and faculty members $54,500,000, along with attorney’s fees, reimbursement for costs, and a service award. What is interesting is that the federal district court in North Carolina presiding over the case went a step further and allowed the DOJ to enforce the injunctive relief provisions of the settlement agreement. The injunctive relief provisions of the settlement agreement prohibit Duke from entering into any anti-poaching agreements for five years and require Duke to take steps to ensure this does not happen in the future. Such steps include enacting notification and compliance policies within the University.

Lessons Learned:

The DOJ continues to scrutinize no poaching agreements.  Given the DOJ’s focus on no poach agreements, it has become increasingly important for employers in all industries to learn about the risks of entering into agreements that limit their competition for employees.  In its ability to enforce these provisions, the DOJ will be keeping a close eye on Duke, while simultaneously using Duke as an example to other companies and entities. The DOJ’s goal is to be proactive in enforcing antitrust laws that prohibit these kinds of agreements between employers and to protect the American worker.  The courts and the DOJ are sending clear signals to employers that they are cracking down on anti-poaching agreements.  It is important for employers to make sure they are not making employment contracts that break the law.  Employers need to take anti-poaching agreements seriously.  It is time for employers to sort through and re-examine contracts and make sure they are legal.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

The notion that antitrust enforcement is motivated by politics has hung over the Trump administration since the Department of Justice’s failed attempt to block AT&T’s acquisition of CNN’s owner, Time Warner and some antitrust experts might point out that the Obama administration also influenced the DOJ’s decisions to sue or settle cases.

While politics has always played a role in setting the antitrust agenda, typically antitrust investigations and enforcement decisions are based on the facts.  Indeed, there is no credible evidence that the big tech firms have engaged in unlawful monopolization or that they have stifled innovation.  In fact, Iowa’s Attorney General Tom Miller, who is well known for his role of leading 20 states in the DOJ’s antitrust suit against Microsoft, said this past July that “[w]e are struggling with the law and the theory,” to bring a case against the big tech firms.

But, this didn’t stop the state AGs from entering the fray.  Republicans are concerned that the tech platforms have suppressed conservative viewpoints, Democrats are worried that these tech companies are simply too big and powerful.  But the announcements of the state AG investigations into Google and Facebook have two things in common: a lack of substance as they can point to no consumer harm and publicity to tout their efforts.

The latest announcement of the state AGs’ investigation of Google – from the steps of the Supreme Court no less – demonstrates just how political antitrust enforcement is becoming.  This type of high-profile activism may benefit state AGs’ political aspirations, but it could impose enormous costs on consumers.  Indeed, the mere threat of numerous investigations could have a chilling effect on innovation and competition for as long as these probes last.

Some state AGs appear to be conflating antitrust and other politically popular pet causes, raising the specter of using antitrust enforcement for political gain.  On the same day of his announcement of the Google investigation, Texas Attorney General Ken Paxton sent a fundraising request in an email to his supporters touting his efforts to take on “Silicon Valley titans.” And, according to a copy of the email shared with POLITICO, Paxton asserts “Texans are put at risk” by Google because of the company’s market dominance and privacy practices, and because its “executives clearly display anti-conservative and anti-Republican bias, subtly controlling what Americans see when they search for information about national political issues.”  But political concerns have no place in an antitrust investigation and using antitrust investigations to punish speech raises profound First Amendment concerns.

As the federal antitrust authorities and the state AGs begin their investigations, they must be mindful that companies like Google and Facebook have delivered a tremendous amount of innovation enabling the launch of new products and services that have resulted in many benefits to consumers such as free online search, email, messaging, and artificial intelligence services all while competing in a highly competitive advertising market with the likes of AT&T, Disney, CBS, and Comcast/NBCU.  These multichannel competitors have been locked in the stone age for years, are now finally innovating to compete against the new digital advertising entrants such as Google, Facebook, and Amazon.

In addition to competing with the large entertainment companies for users’ eyeballs and time, Google fiercely competes with Facebook, Amazon, and Apple in various ways, including the development and launch of new products and services such as digital assistant devices, internet of things platforms, and virtual reality products, providing consumers with an abundance of choices and convenience.  In short, the big tech platforms are not successful because they are big and powerful – they are big and powerful because they have been successful.  And that success stems from the nature of a free market economy that provides incentives of firms to innovate and grow.

Without question, this type of efficiency and competition should be preserved.  What’s more, utilizing antitrust enforcement as a political tool is a threat to the rule of law.  Antitrust enforcement should not be turned into a political enterprise to police unrelated, and unsubstantiated, “harms” based on subjective moral and social judgments.  Instead, it must continue to be primarily based on sound theories, objective economic criteria, and evidence of consumer harm.  For years, enforcement decisions were based on the consumer welfare standard – not on populist standards that change with the political winds.

Remember the antitrust laws are focused on consumers and whether any company is disadvantaged by Google’s business practices is not at issue – the central issue to a court will be, do consumers pay more.  And although there may be pockets of disgruntled rivals, there is little to no evidence that consumers have paid more because of the way that Google conducts its business.

Andre Barlow

202-589-1838

Background

In a letter to Makan Delrahim, the head of the DOJ’s Antitrust Division, Senators Richard Blumenthal (D-CT) and Amy Klobuchar (D-MN) described the ticket industry as “broken” and they lamented the “exorbitant fees and inadequate disclosures” in the ticket buying process.

According to their letter, Live Nation’s acquisition of Ticketmaster in 2010 has resulted in the merged firm obtaining too much control over the concert business.  “The Ticketmaster-Live Nation merger has contributed to consumers’ difficulties in the ticketing market,” the two senators wrote in the letter.  In approving the Live Nation/Ticketmaster merger, the DOJ entered into a 10-year consent decree with Live Nation prohibiting the firm from certain behaviors like using its power over concerts to force venues to use Ticketmaster.  Over the years, a number of competitors have complained that Live Nation has been violating the terms of the consent decree or at the very least the spirit of the decree.

Senators Blumenthal and Klobuchar are asking the DOJ to conduct a “retrospective study on the effects of past consolidation” and to consider extending the decree past its expiration next year.  Though the DOJ has previously investigated claims that Live Nation had violated its consent decree, the DOJ has never taken action.  In an August 28 statement, Live Nation said the senators’ letter is “based on a fundamental misunderstanding of our consent decree and general ticketing industry dynamics.”  Further, “…Live Nation and Ticketmaster have always complied with their obligations under the consent decree.  We do not force anyone into ticketing agreements by leveraging content, and we do not retaliate against venues that choose other ticketing providers.”  Thus, according to the statement, “[t]here is no cause for further investigations or studies.”

The Antitrust Division has been investigating whether Live Nation has engaged in anti-competitive exclusionary behavior and is adhering to its 2010 consent decree.

Thoughts

The Obama administration was very lenient in its review of Live Nation’s acquisition of Ticketmaster.  The deal raised serious horizontal and vertical concerns and should have been blocked.  Yet, the DOJ opted to accept a weak settlement that included behavioral conditions prohibiting Live Nation from engaging in certain conduct.  The DOJ put itself in the position having to police Live Nation’s corporate behavior and third parties in the position of having to report bad behavior to the DOJ.  These types of behavioral conditions that cannot be effectively enforced are not useful.  In reality, there was probably no behavioral or structural remedies that could solve the anticompetitive concerns raised by the merger.  Behavioral remedies require ongoing monitoring of Live Nation’s and Ticketmaster’s conduct.  The settlement agreement was a quick win, but a settlement agreement that requires ongoing monitoring is not very effective unless it is enforced.  Clearly, Live Nation/Ticketmaster is a monopolist in the primary ticketing service market. The high market share is indicative of it having market power. However, there is nothing illegal about having a monopoly.  The question is whether Live Nation/Ticketmaster is engaging in any activity to maintain its monopoly such as exclusionary conduct or violating the express conditions in the 2010 decree.

The DOJ’s most recent investigation into Live Nation’s conduct without any enforcement action to date highlights the limitations of behavioral conditions in past consent decrees. DOJ Antitrust Division Assistant Attorney General Makan Delrahim is not in favor of behavioral decrees because they are regulatory and require monitoring and supervision.  The DOJ under his leadership has strengthened the terms of consent decrees making them easier to enforce.  For the DOJ to bring a case on an older consent decree violation or to force modifications of the Live Nation decree, it must meet a very high clear and convincing standard.  Unfortunately, there is so much wiggle room in past settlement agreements that contain behavioral restrictions that merging parties can devise strategies that may be within the letter of the settlement agreement but violate the spirit of the decree.  In short, the DOJ would need to uncover evidence that Live Nation has actually violated the decree before it can bring an enforcement action or force an extension of the decree.  Delrahim has expressed the view that Congress did not intend for the Antitrust Division or the courts to be overseers of corporate behavior.  He has argued that “antitrust is law enforcement, not regulation,” and that antitrust enforcers should seek to block anticompetitive transactions, rather than allow them to proceed subject to behavioral conditions.  The Live Nation/Tickemaster is a prime example of why the DOJ must sometimes decide to block a merger rather than negotiate a settlement with ambiguous behavioral conditions.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

Complaint

The DOJ alleges that Sabre and Farelogix compete head-to-head to provide booking services to airlines.  Booking services are IT solutions that allow airlines to sell tickets and ancillary products through traditional brick-and-mortar and online travel agencies to the traveling public.  The DOJ alleges that the acquisition would eliminate competition that has substantially benefited airlines and consumers in both the traditional and online markets.  The complaint further alleges that the transaction would allow Sabre, the largest booking services provider in the United States, to eliminate a disruptive competitor that has introduced new technology to the travel industry and is poised to grow significantly.

As alleged in the complaint, Sabre is the dominant provider of booking services in the United States with over 50% of airline bookings through travel agencies.  Sabre operates a global distribution system (“GDS”), which is a digital platform that provides booking services to airlines in addition to other functionality.  The DOJ characterizes Farelogix as an innovative technology company that has stepped in to address the needs of airlines and their customers.  The DOJ says that Farelogix has injected much-needed competition and innovation into stagnant booking services markets by developing new technology {new distribution capability} that empowers airlines to make a wider array of offers to travelers who book tickets through travel agencies.  This new technology enables airlines to make more varied and personalized offers to consumers who book through travel agents, including bundles of ancillary products such as wi-fi, lounge passes, entertainment options, and meals – choices not available to travelers through Sabre’s legacy technology.

The DOJ also points to some hot docs in its complaint.  The DOJ alleges that Sabre executives acknowledged that acquiring Farelogix would eliminate a competitive threat and further entrench Sabre in booking services.  For example, on the day Sabre announced its intention to buy Farelogix, Sabre’s chief sales officer texted a colleague that one major U.S. airline would “hate” it.  The colleague replied, “Why, because it entrenches us more?”  Similarly, a Farelogix executive observed that buying the company would allow Sabre to “tak[e] out a strong competitor vs. continued competition and price pressure.”  Sabre’s internal documents show that Sabre’s attempt to acquire Farelogix follows many other attempts by Sabre to neutralize its competitor, including a campaign to “shut down Farelogix.”  Indeed, Farelogix has long complained about Sabre’s tactics, alleging that Sabre has sought to stifle competition.  For example, in 2013, Farelogix’s Chief Executive Officer alleged that “Sabre has wielded its monopoly power in an attempt to destroy Farelogix and prevent competition….”  Moreover one Sabre sales executive noted after the announcement of the acquisition that the airline’s “FLX [Farelogix] bill is going up big time.”

The DOJ’s complaint alleges that Sabre has used a broad range of contractual and technical barriers to prevent entry or expansion by suppliers that could threaten its control over bookings through travel agencies. For instance, Sabre’s contracts include provisions that inhibit airlines’ use of an alternative supplier like Farelogix, even when doing so would be less expensive for airlines.  As recently as 2018, Farelogix denounced these restrictions, complaining that airlines’ GDS contracts “effectively prohibit working with third parties or make doing so cost prohibitive.”  In January 2019, a Sabre senior vice president acknowledged that airlines view Sabre’s restrictions as “abusive but there’s nothing they can do because they need the distribution and they are tied with a contract.”

The DOJ alleges that the two relevant markets are highly concentrated but acknowledges that Farelogix’ share is very small.  The DOJ alleges, however, that Farelogic’s market share understates its competitive significance in the current and in future markets.

In summary, the DOJ alleges that Sabre controls over 50 percent of bookings through traditional and online travel agencies in the United States, so airlines must sell tickets through Sabre to reach a broad set of U.S. travelers. Sabre has used this power to suppress Farelogic’s entry and expansion.  Nevertheless, Farelogix’s presence in these markets has led to lower prices and increased innovation that would be lost if the merger is not blocked.

Lessons Learned

The DOJ’s block of Sabre’s proposed purchase of Farelogix demonstrates that it is willing to challenge large dominant companies that seek to acquire small nascent rivals in technology markets that are highly concentrated.  Sabre’s proposed acquisition of Farelogix is a dominant firm’s attempt to take out a disruptive competitor that is an important source of competition and innovation.  The DOJ is taking the position that acquisitions of small disruptive rivals in highly concentrated markets can result in higher prices, reduced quality, and less innovation regardless of the target’s low market share.  The DOJ views the transaction as part of an emerging trend of large technology firms acquiring nascent competitors to keep them from emerging as full-fledged rivals.

This complaint also demonstrates that the DOJ will use merging parties’ own words against them when challenging their deal.  Here, the hot docs in Sabre’s text messages, documents, emails, and corporate filings support the DOJ’s decision to block the merger. Historically, “hot docs” provide an easy way to capture the interest of a judge by saying this case is simple and all you have to do is examine the merging parties’ own words.  The DOJ routinely cites “hot docs” in its complaints because they catch the interest of the media and, particularly, the judge.  The DOJ will focus on supposed “hot docs” to support its case because the buyer appears to be touting the intended anticompetitive consequences of the acquisition.  This case demonstrates why corporate executives must be mindful about what they write as careless and inappropriate language in company documents can have an extremely negative effect on a merger review.  A good rule of thumb is to write every document so that neither you nor the company would be embarrassed if it appeared on the front page of the Wall Street Journal.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

On the same day, Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice (“DOJ”) said the DOJ is working with a group of more than a dozen state attorneys general as it investigates the market power of major technology companies.  Delrahim said at a tech conference that the government is studying acquisitions by major tech companies that were previously approved as part of a broad antitrust review announced in July of major tech firms with significant market power.  “Those are some of the questions that are being raised… whether those were nascent competitors that may or may not have been wise to approve,” he said.

On July 23, the DOJ said it was opening a broad investigation into whether major digital technology firms engaged in anticompetitive practices, including concerns raised about “search, social media, and some retail services online.”  The investigations appear to be focused on Alphabet Inc.’s Google, Amazon.com, Inc. and Facebook, Inc. (“Facebook”), as well as potentially Apple Inc.

More than a dozen states are expected to announce in the coming weeks that they are launching a formal probe.  “I think it’s safe to say more than a dozen or so state attorneys general (that) have expressed an interest in the subject matter,” Delrahim said.  In July, eight state AGs met with U.S. Attorney General William Barr to discuss the effect of big tech companies on competition, and various antitrust actions.

On August 19, the New York Attorney General’s office said it is continuing to “engage in bipartisan conversations about the unchecked power of large tech companies.”  North Carolina Attorney General Josh Stein is also “participating in bipartisan conversations about this issue,” his office said.  The DOJ is looking not only at price effects, but also at innovation and quality, and the next steps in its broad antitrust review would be seeking documents and other information.  Delrahim also said that after the July announcement, the companies under investigation “immediately reached out to work with us in a cooperative manner to provide information that we need as far as the investigation.  In June, the FTC told Facebook it had opened an antitrust investigation.  Last month, the FTC resolved a separate privacy probe into Facebook’s practices after the company agreed to pay a $5 billion penalty.

Thoughts

The states joining the DOJ’s and FTC’s investigations are not a surprise.  As many as 39 states have been raising antitrust concerns about the big tech firms with both the DOJ and FTC.  They have similar concerns regarding big tech as the federal antitrust agencies.  The issues relate to whether the markets for online advertising, search, social media, app sales and certain retail sectors are currently competitive.  The state AGs involvement in these investigations adds another layer of complexity for Google, Facebook, and Amazon.  This action by the state AGs should remind everyone that sound antitrust enforcement is not just a federal affair.  Indeed, many of the seminal antitrust cases including cases creating key principles of monopolization and merger law were brought by state attorneys generals.

State attorneys generals use the power under federal and their own state statutes to protect consumers against anticompetitive and fraudulent conduct in credit card, pharmaceutical, computer and many other markets crucial to consumers.

States have significant advantages over federal enforcers.  They are closer to the market and consumers and recognize the direct harm to consumers.  They have the ability to secure monetary damages.  States are often customers and victims of anticompetitive behavior.  State enforcers can bring combined antitrust and consumer protection cases.  And although each state has limited antitrust and consumer protection resources, states increasingly are using multi-state task forces to investigate and prosecute unlawful conduct.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

The HSR Act requires companies to notify the DOJ and the Federal Trade Commission (FTC) of certain mergers and acquisitions, allowing the agencies to review transactions for potential anticompetitive effects before they close. For transactions meeting specific size thresholds, parties must file an HSR notification and observe a mandatory waiting period while the agencies evaluate the deal. If the waiting period expires or is terminated early, the parties may proceed. However, if the DOJ or FTC issues a “second request” for additional documents and information, the transaction is paused until compliance is met, a process that can be time-consuming and costly. In some cases, the agencies may block the transaction entirely.

To evade the HSR Act’s waiting period, Canon and Toshiba created a special purpose company to conceal the transaction. This allowed Toshiba to quickly improve its financial statements following the public disclosure of financial irregularities.

To settle the charges, Canon and Toshiba each agreed to pay a $2.5 million fine, implement HSR compliance programs, and adhere to inspection and reporting requirements, among other obligations.

Lessons Learned

The DOJ views HSR Act violations as a serious matter. The Act’s notification and waiting period requirements are essential for enabling the DOJ and FTC to review and challenge potentially anticompetitive mergers before they are finalized. This enforcement action underscores the Antitrust Division’s commitment to upholding the HSR process and ensuring compliance.

The staff attorneys who run investigations and negotiations at the Commission are out of the office, which means that parties are simply waiting while everything is on hold.  HSR waiting periods will continue to run during a government shutdown.  DOJ and FTC staff will continue to review premerger filings and conduct investigations to determine whether to challenge reported transactions under the antitrust laws.  Second Requests will continue to be issued and, if engaged in merger litigation, FTC and DOJ attorneys will notify opposing parties and the courts of the government shutdown and attempt to negotiate timing extensions and suspensions. If such relief is not available, they will continue to litigate the matter.

The DOJ and the FTC both issued contingency plans indicating that certain employees connected to antitrust enforcement within the Antitrust Division of the DOJ and the Bureau of Competition at the FTC will be excepted from the furlough and will continue to conduct antitrust enforcement activities.

While difficult to predict, there may be delays in review of certain strategic transactions (including increased risk of a “pull and refile” scenario, or a higher likelihood of a Second Request being issued). Transactions with substantive antitrust issues will likely still receive scrutiny by the agencies, and the shutdown is unlikely to decrease the likelihood of a Second Request or challenge if the agencies believe circumstances warrant such action. If anything, some parties who file during the shutdown may be more likely to get a Second Request than they would have been if there was no government shutdown because they will not have the full 30 days to provide information to address an agency’s initial questions.

In the current DOJ Contingency Plan, of the 655 Antitrust Division employees, a total of 264 (40%) are excepted from furlough in the case of a government shutdown. In the current FTC Contingency Plan, of the 306 total Bureau of Competition employees, a total of 132 (43%) are excepted from the furlough. Moreover, within the Bureau of Economics, of the 105 employees, 10 (9%) are excepted from the furlough.

The FTC is suspending all Second Request and non-merger investigations currently underway during the shutdown. According to the DOJ contingency plan, the DOJ will operate with limited staffing to those employees necessary to launch or continue merger investigations or litigation where it cannot obtain a continuance or extension of a statutory deadline.  

At the FTC, Second Requests will be issued and, once issued, the staff will go back to being furloughed. The five Commissioners are still working.  There is not much merging parties can do to speed up the process so the FTC investigations will be delayed. The DOJ is operating at more strength and the front office is still at work.  Both agencies, however, will try to work to achieve certain transaction deadlines.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

Speedy Antitrust Approval

DOJ’s announcement of the settlement agreement is noteworthy because of the speed at which Disney was able to negotiate a remedy to a combination that raised a number of antitrust issues.  Though the parties received second requests on March 5, 2018, and Disney had only recently entered into a new agreement with 21CF on June 20, 2018, the DOJ and Disney were able to negotiate a divestiture worth approximately $20-23 billion within 6 months of review and 4 months after issuing information requests.  The dollar value of the Disney/21CF divestiture will likely double what the DOJ characterized as the largest divestiture in history in Bayer/Monsanto.

Disney was in a hurry to obtain antitrust approval because it is involved in bidding war with Comcast for the 21CF assets.  Indeed, Disney upped its offer on June 20^th because Comcast had started a bidding war for the 21CF assets on June 13^th.  Comcast has its own antitrust issues with its acquisition, but it was hoping to be on a level playing field with Disney in terms of the antitrust reviews at the DOJ. Indeed, Comcast said as much when it made its bid as it indicated that it had already provided documents and information to the DOJ in response to its civil investigative demand regarding the acquisition of 21CF assets.

Comcast was banking on the DOJ conducting a long drawn out second request investigation for Disney’s deal.  But, rather than conducting a lengthy review of the Disney/21CF deal, the DOJ entered into a quick settlement agreement.  This was surprising because the Disney/21CF deal raised a number of horizontal and vertical issues including increasing the size of its motion picture business, content library and cable programming, which would increase its bargaining leverage in negotiations with movie theatres and TV programmers on licensing fees, Multichannel programing distributors (MVPDs) and virtual MVPDs over affiliate fees for its channels, and video streaming services over licensing fees.  Moreover, Disney is taking control of Hulu and launching a number of subscription streaming businesses with the intent on foreclosing its content from rivals such as Netflix.  It could be that none of these issues amount to actual antitrust problems, but certainly they warrant some investigation.

Despite all of these other issues, the DOJ quickly focused on the overlap in cable sports programming.  The DOJ said in its Press Release that “to streamline agency clearance, Disney agreed to divest the 22 RSNs rather than continue with the Antitrust Division’s ongoing merger investigation.”  Anyone who has visited Disney World knows the value of fast passes.  Disney understands the value of time so it used a cooperative approach to get the greenlight for what appears to be the largest divestiture in history without an upfront buyer in record time.

Understanding that the DOJ’s major concern was the overlap in cable sports programming, Disney decided not to challenge that contention or negotiate a lesser divestiture, which would have lengthened the second request investigation many more months.  Disney likely could have argued that ESPN channels and local RSNs really do not compete head to head at all.  ESPN has market power as do the local RSNs to obtain increases in affiliate fees already.  Moreover, watching ESPN is no substitute for watching your home town team on the local RSN.  Disney, however, gave up on those arguments and agreed to a hefty structural remedy that took the issue off the table.

Makan Delrahim’s Editorial in the Washington Times Defending DOJ’s Fast Review

On July 12, 2018, Makan Delrahim wrote an editorial defending the speed in which Disney was able to negotiate a divestiture with the DOJ.  He noted that the divestiture agreement was a “victory for American consumers and should be heralded as an example of merger parties working effectively with Division investigators to resolve antitrust concerns.”  Delrahim noted that “each merger poses unique facts requiring unique market analysis.” He correctly stated that the pace of any review is largely in the hands of the merging parties, who control the timing of their Hart-Scott-Rodino (“HSR”) filings, as well as the pace and timing of compliance with the Division’s information requests.” He added that “parties can accelerate the review by pointing the Division to relevant information early in the investigation, promptly scheduling interviews, and remaining open to timely divestitures that resolve antitrust concerns.”

Competition Concern

The DOJ alleged that without the divestiture the acquisition would likely result in higher prices for cable sports programming licensed to MVPDs in each of the local markets that the RSNs serve.  As the DOJ explained, Disney (ESPN properties) and 21CF’s (RSNs) cable sports programming competed head to head.  The DOJ alleged that the ESPN properties and the 21CF’s RSNs compete to sell cable sports programming to MVPDs in various local markets across the United States.  Because of this competition, the complaint alleges that the proposed acquisition would likely result in MVPDs paying higher prices for cable sports programming in those local markets.

No Allegation of “Must Have” Programming

Interestingly, the DOJ did not allege that Disney or 21CF had “must have” programming.  Arguably, ESPN channels and RSNs would be considered “must have” programming for MVPDs and VMVPDs.  It could be that given Judge Leon’s Opinion in AT&T/Time Warner that the DOJ has given up on being able to prove that certain programming is “must have”.

No Upfront Buyer

Another interesting point is that the DOJ did not require an upfront buyer.  There could be good reasons for why no upfront buyer was necessary. Upfront buyers are usually required when the DOJ is not sure that any appropriate buyers exist or if all of the assets need to be divested to one buyer.  Here, there are numerous buyers and the DOJ decided that the RSNs can be sold to multiple buyers not to a single buyer.  In that scenario, Comcast could be a buyer for some RSNs located in geographic areas where it is not the incumbent cable provider; AT&T and Charter have very little in the RSN space and may want to buy other properties to gain a larger footprint; Discovery has international sports rights so they may be interested in some RSNs; Liberty Media has owned RSNs in the past; Youtube, Facebook, and Amazon may want to dip their toes into the RSN space; and Sinclair, which has a strong local presence in many markets and currently owns the Tennis Channel could be interested in some of the RSNs.

Lessons Learned

The DOJ’s quick settlement demonstrates that the DOJ is willing to streamline investigations if merging parties propose substantial structural fixes upfront.  The settlement and Mr. Delrahim’s editorial reminds merging parties that they control the timing and length of merger investigations.  Merging parties control how fast they file their HSR submissions and when they comply with the DOJ’s second requests.  Some merging parties take their time to comply, hold back submission of documents and information and delay offering any real significant divestitures until exhausting all of their economic arguments.  While the government gets a lot of blame for long antitrust reviews, merging parties are always in control of the timing.  This settlement agreement also demonstrates that the DOJ is willing to work with merging parties that are willing to cooperate in negotiating  a complete solution to a competition concern.  Consistent with its recent enforcement action in Bayer/Monsanto, the DOJ is willing to approve deals with significant divestitures.  Here, the divestitures are worth approximately $20-23 billion—more than double the size of the Bayer divestiture.  Finally, the settlement shows that the DOJ is willing to approve settlements without upfront buyers in situations where multiple buyers can acquire the divested assets, a single buyer is not necessary, and a number of potential buyers exist.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

The DOJ permitted the merger of the two largest global brewers, which without a remedy threatened to reduce head-to-head competition between Anheuser Busch InBev SA/NV’s (“ABI”) and MillerCoors in local markets throughout the country.  The DOJ alleged that the elimination of competition between ABI and MillerCoors would increase ABI’s incentive and ability to disadvantage its remaining rivals – in particular, brewers of high-end beers that serve as an important constraint on ABI’s ability to raise its beer prices – by limiting or “impeding the distribution” of their beers, likely resulting in increased prices and fewer choices for consumers.   This allegation is significant because “effective distribution is important for a brewer to be competitive.”

To resolve these competitive concerns, the DOJ’s Proposed Final Judgment required the divestiture, which permanently cemented a duopoly where two suppliers exert control over approximately 85-90% of the distributors in the United States.  The DOJ further acknowledged in its Competitive Impact Statement (“CIS”) that ABI and Molson Coors have business arrangements and contacts throughout the world and that the divestiture may actually facilitate coordination.  Because of the increased likelihood of coordinated anticompetitive effects, the DOJ alleged that the merger “would increase ABI’s incentive and ability to disadvantage its beer rivals by impeding the distribution of its beers.”  Accordingly, the DOJ sought behavioral remedies, which are designed to keep beer distribution independent and open as well as to level the playing field for ABI’s high end rivals.

The Court now must determine whether the MPFJ is in the public interest, as mandated by the “Tunney Act”.  Specifically, the district court must determine whether the remedy secured in the MPFJ adequately restores competition.  For the MPFJ to be meaningful, the DOJ and the federal court need to have the tools to effectively enforce the decree.  So careful scrutiny by the court is important.

The court’s job is very difficult because the consent decree/settlement contains numerous behavioral remedies that require the DOJ and a monitoring trustee to police ABI’s conduct going forward.  Third parties including the Brewers Association, National Beer Wholesalers Association, Yuengling, the Teamsters, and consumer groups, however, raised concerns that careful scrutiny of the details of the settlement agreement are important because as drafted ABI may be capable of creating new strategies designed to harm rival brewers while also following the letter of the decree.  These third parties identified ambiguities in the decree and provided numerous recommendations.  Both changes in the language of the decree and strong oversight is needed to ensure that ABI does not devise new strategies and engage in conduct that could slip through the cracks and harm competition and consumer choice.

The DOJ summarily rejected all third-party arguments and defended its settlement agreement.  At the same time, the Trump DOJ modified and strengthened the decree by adding three new provisions that improve the enforceability of the Division’s consent decree.  First, the DOJ included language that lowers its burden of proof should ABI violate the decree and the DOJ move for contempt.  The DOJ included a “preponderance of the evidence” standard in the decree, which is a lower standard than the “clear and convincing evidence” standard the U.S. antitrust agencies have been held to in the past.  Second, the DOJ included a provision on fee shifting that requires ABI to reimburse the DOJ if the DOJ starts an investigation into a consent decree violation.  Third, the DOJ included a provision that allows for a one-time extension of the term of the decree, if ABI is found to violate the decree.  All three provisions allow for meaningful and effective enforcement of the behavioral decree and should encourage ABI to comply with it.  The good news for consumers is that the DOJ did not walk away from the behavioral remedies even though the head of the DOJ, Makan Delrahim is adamantly opposed to them.  He believes that antitrust is about law enforcement and behavioral remedies are are fundamentally regulatory, which requires the monitoring of what otherwise should be free markets.

As part of the negotiations to include the provisions that strengthened the decree, the DOJ agreed to reduce the time period for the decree, which was originally ten years down to approximately 8 years.  While the DOJ’s efforts in obtaining additional provisions that should meaningfully improve the enforceability of the decree should be applauded, the DOJ should not be short-changing consumers with a shorter time period because of the DOJ’s 20-month delay in this Tunney Act proceeding especially when the DOJ itself has concerns that the divestiture to Molson Coors could result in coordinated conduct in the future.  The reason the DOJ entered into a settlement agreement is because the transaction was anticompetitive under the antitrust laws.  The DOJ should not be rewarding ABI when it designed incentive programs that impeded the growth of rival craft brewers in the not too distant past.  At the ABA Fall Forum, the DOJ’s own Makan Delrahim said that “a short-term remedy is a band-aid, not a fix”.   In other words, “the relief at best only delays the merged firm’s exercise of market power.”  Accordingly, the district court should could consider whether a longer-term band-aid is a better outcome for consumers.

The Honorable Judge Emmet Sullivan is the one who is tasked to make this decision.  He has an enormous responsibility.  Because the MPFJ includes numerous behavioral conditions, the Final Judgment must be absolutely clear to avoid any confusion or ambiguities.  The DOJ defends its MPFJ without recognizing the need for any substantive modifications proposed by the various amicus briefs.  But, Judge Sullivan is statutorily empowered to take into account the competitive landscape to determine whether the MPFJ is in the public interest and is adequate to, at the very least, resolve the anticompetitive concerns identified by the DOJ in its Complaint and CIS.  Given the complexities involved in drafting a behavioral decree as well as the third-party concerns about the numerous ambiguities within the decree that directly impact them, Judge Sullivan should hold a hearing before making his final decision.

 Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

First, T-Mobile and Sprint argue that they need the deal to compete with the Big Two (AT&T and Verizon) – the combined firm would be able to take advantage of efficiencies and economies of scale to bring technological innovations (5th generation (5G)) to the market faster to provide customers with better broadband services at a lower cost.  Thus, customers would benefit from the merger through lower prices and investments to their network.  The parties basically acknowledge that it is a four to three deal.

Second, the parties argue that the wireless market is no longer as concentrated because an abundance of competition exists or will exist in the near future as cable companies, Google, and others are increasingly entering this space. Even using current technologies, Comcast has rolled out low-cost wireless service to its cable customers that rides on Verizon’s network.  So the argument goes that this isn’t a case of going from 4 to 3 wireless companies – there are now at least 7 or 8 big competitors in this converging market.  There is a lot of reasons why long time staffers at the FCC and DOJ might be skeptical of this claim.

Third, the merged firm is pledging to spend $40-50 billion to bring 5G to the United States.  Ultimately, the reasoning behind this transaction is to establish a “strong third” player.  Merging T-Mobile and Sprint would grant the combined company more scale, which could help it compete against AT&T and Verizon.  That is the argument that Sprint made to regulators in 2014 and it is part of the argument the companies are making today.  Promises, Promises?

In 2014, Bill Baer, then head of the Antitrust Division, told the New York Times: “It’s going to be hard for someone to make a persuasive case that reducing four firms to three is actually going to improve competition for the benefit of American consumers.”

But on June 1, 2018, the current head of the Antitrust Division, Makan Delrahim, declined to support the Obama administration’s firm backing of the need for four U.S. wireless carriers.  Delrahim told reporters, “I don’t think there’s any magical number that I’m smart enough to glean.”  He also said the DOJ would look at Sprint and T-Mobile’s arguments that the proposed merger was needed for them to build the next generation of wireless, referred to as 5G, but that they had to prove their case.

Besides new leadership at the FCC and the Antitrust Division in the form of FCC Chairman Ajit Pai and DOJ’s Delrahim, respectively, not much else has changed so as to make a deal more palatable this time around.  Like then as now, the Big Four still make up 98% of a wireless market that is important to just about all U.S. consumers.  Nevertheless, both Pai and Delrahim agree that there is no magic number.

Unlike the last time around, the Trump administration will hear the merging parties out before pre-judging the deal.  So third parties and consumer groups will have their work cut out for them.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com