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Antitrust Law and Effects on Innovation, Quality and the Labor Market

Antitrust law debates usually emphasize price effects while other elements of competition get less attention.  Three recent writings by leading antitrust thinkers, however, explore the interaction between antitrust law and competition, on the one hand, and innovation, quality and long-term labor markets, respectively, on the other.  As summarized below, each piece discusses an attribute of competition other than price that might be used to provide a more accurate description of the dynamic competitive effects in any market.

Professors Spencer Weber Waller and Matthew Sag of Loyola University Chicago School of Law discuss competition law and Promoting Innovation in the Iowa Law Review.  (A [...]

State Regulation or Merely a “Gauzy Cloak”: A Preview of the North Carolina Board Oral Argument in the Supreme Court

On October 14, the Supreme Court will hear oral arguments in North Carolina Board of Dental Examiners v. FTC, the latest in its long line of cases interpreting the state action exemption to the antitrust laws.  Dozens of amici have written briefs supporting both parties.  Those briefs reveal significantly different opinions about the costs and benefits of state licensure boards and how their actions should be treated under the antitrust laws.

The state action exemption can be quickly summarized:  bona fide state regulation of the economy, even if anticompetitive, is exempt from the federal antitrust laws.  Such a quick summary, however, belies the complexities explored in numerous Court [...]

Proposed Settlement Rejected in FTC Challenge to Georgia Hospital Combination; Matter Returns to Administrative Litigation

The FTC’s challenge to the now-consummated combination of Phoebe Putney Health System, Inc.—the operator of Phoebe Putney Memorial Hospital—and rival Palmyra Park Hospital, Inc. in Albany, Georgia, is headed back to administrative litigation. More than a year after announcing a tentative settlement in the case, the FTC has refused to grant final approval to the proposed consent order. On Friday, the Commission issued an order, returning the matter to Part III litigation to determine whether the acquisition reduced competition in the market for acute-care hospital services sold to commercial health plans in a six-county area, as alleged in the agency’s 2011 complaint.

The proposed settle [...]

FTC/DOJ Workshop on Conditional Pricing Practices – Good as Far as It Goes

On June 23, 2014, the U.S. Federal Trade Commission and Department of Justice Antitrust Division held a workshop on “conditional pricing practices”—loyalty discounts, bundled discounts and similar pricing techniques.  Many economists, academic experts and practitioners, some of them even hailing from outside the Beltway, opined on the rationale for and against antitrust legality of such common marketing practices.  The agencies are to be congratulated for leading this discussion and advancing the thinking on this important topic; still, real-world businesses continue to look for clearer guidance than what has been provided by the agencies and courts to date, but the conference promis [...]

Is the FTC Changing Its Intellectual Property Rights Policy?

Commissioner Josh Wright of the U.S. Federal Trade Commission certainly is the gift that keeps on giving to antitrust commentators.  Rarely do many weeks go by without a Wright speech or dissenting opinion that cogently takes on an interesting competition issue, often one captured in an action by his fellow commissioners.  Last month’s example was a speech to the New York City Bar Association provocatively titled, “Does the FTC Have a New IP Agenda?”  Wright believes the answer to his question is “yes,” and that the shift is not helpful.  Much of the support for Wright’s assertion of a change comes from two FTC matters that predate his tenure and alarmed the business communit [...]

Enforcers Update Spring Meeting Attendees on Latest Antitrust Developments

In case you missed some of those morning sessions at the American Bar Association Section of Antitrust Law Spring Meeting last week, here are some of the highlights from the updates with federal and state enforcers.

Agency Update with the Deputy Assistant Attorneys General

There were some new faces on the panel this year at the Section’s annual update from the Department of Justice Antitrust Division. In addition to changes in leadership, over the last year the Antitrust Division has seen an increase in hiring that will support its continued enforcement activities, the enforcers reported during the March 26 session.

David Gelfand and Brent Snyder are the newest deputy assistant attorneys gen [...]

Why the FTC’s McWane Opinions Raise More Questions Than They Answer

The Federal Trade Commission is meant to be, and is, an expert body on antitrust laws.  So, when a case like McWane—that raises both collusion and exclusion issues—is in front of the FTC, it seems reasonable to expect to receive guidance that is more helpful than we might get from a jury or generalist judge on two questions important to those of us who counsel clients daily.  Unfortunately, the two opinions in this matter raise more questions than they answer.

McWane, Inc. is the only U.S. producer of ductile iron pipe fittings and one of a small number of sellers of the product in the country.  McWane was accused by the FTC both of excluding its few rivals from the domestically-produ [...]

Combination of Idaho’s Largest Health System and Largest Physician Practice Must Be Unwound

Within the span of about two weeks, each of the federal antitrust agencies has been handed a major win in their merger enforcement efforts.

Last Friday, it was the Federal Trade Commission’s turn. The U.S. district court in Boise ordered St. Luke’s Health System, Ltd.—the largest health care system in Idaho—to divest Saltzer Medical Group—the state’s largest independent, multi-specialty physician practice—after concluding that St. Luke’s 2012 acquisition of Saltzer violated Section 7 of the Clayton Act and the Idaho Competition Act. In that matter, the FTC and the State of Idaho joined a challenge initiated by private plaintiffs.

On January 8, the federal district court in San Fr [...]

FTC at a Crossroads: The McWane Case

Anyone familiar with the antitrust newstream realizes there is a tremendous amount of controversy about the Federal Trade Commission’s administrative litigation process. Unlike the Antitrust Division which fights its litigation battles in Federal Court, the FTC has a distinct home court advantage. FTC antitrust cases are typically litigated administratively with a trial conducted before an FTC administrative law judge, who issues an initial decision, followed with an appeal to the full Commission for a final decision. I have authored a couple of recent articles as have others that question the fairness of the FTC acting as both prosecutor and judge. These concerns have only been amplified [...]

Is the FTC Picking on the Pharmaceutical Industry Through New HSR Rules?

Effective December 16, 2013, Hart-Scott-Rodino (HSR) coverage of exclusive licenses of patents will change. As HSR practitioners know well, the Federal Trade Commission’s Premerger Notification Office (PNO) has long-interpreted HSR to cover exclusive licenses as a reportable acquisition (assuming all other requirements are met) if the licensor did not retain any rights to “make, use or sell” under the patent. Now, the PNO’s formal rules will consider a patent license a reportable acquisition even if the licensor retains the right to manufacture—but solely for the licensee—or if the licensor retains the right to co-market, but, again, solely with the licensee. The PNO’s thinking [...]

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