Welcome to 2024’s final edition of the Sidley Antitrust and Competition Bulletin — thoughts on topics that are top of mind for Sidley’s global Antitrust and Competition team and why they may matter to you.
- We bring you Part 2 of our Trump Transition coverage as the President-elect names new antitrust leadership at the Department of Justice (DOJ) and the Federal Trade Commission (FTC).
- New UK merger control thresholds come into force on New Year’s Day.
- The European Commission (Commission) signals its interest in potential post-closing challenges to pharmaceutical “killer acquisitions” and withdraws its 2021 guidance on below-threshold deals.
- Finally, the outgoing FTC majority announced two major actions over Republican objections in 3–2 votes: withdrawing from the Antitrust Guidelines for Collaborations Among Competitors and bringing the first litigated Robinson-Patman (RP) case in almost 40 years.
Read more and how this news can affect your business below …
SPECIAL BULLET - ELECTION 2024
President-Elect Trump Names Nominees to the DOJ Antitrust Division and the FTC
Find Part 1 of our coverage of the Trump transition here in our November Bulletin.
President-elect Donald Trump announced his nominations of Gail Slater and Andrew Ferguson to lead the DOJ’s Antitrust Division and the FTC, respectively. He also announced the appointment of Mark Meador as a third Republican FTC Commissioner.
Slater recently served as an adviser to Vice President-elect JD Vance and as a tech policy adviser at the National Economic Council. She has also worked in the private sector (for Fox Corp. and Roku) and held several positions in the FTC. She would follow Jonathan Kanter, who announced his resignation effective Friday, December 20, 2024.
Ferguson is currently one of the FTC’s five commissioners and has a “proven record of standing up to Big Tech censorship, and protecting Freedom of Speech,” according to the President-elect. Prior to his tenure at the FTC, Ferguson was a clerk for Supreme Court Justice Clarence Thomas and later served as a congressional aide, including as chief counsel to Kentucky Republican Sen. Mitch McConnell. He has called for the rolling back of some measures put in place during Chair Lina Khan’s tenure, but with the announcement of the new Hart-Scott-Rodino form requirements, Ferguson ultimately concurred with the controversial new regulations, described at the time as a “rare, bipartisan compromise.”
Meador was a staffer to Utah Republican Sen. Mike Lee and is now a partner at Kressin Meador Powers in Washington, D.C. Meador gave voice to a new trend on the Antitrust Right, bucking traditional conservative anti-interventionism in favor of a more expansive view of individual liberty as obtained by reining in big businesses.
The appointments of Slater, Ferguson, and Meador likely confirm that the crackdown on Big Tech will remain a bipartisan effort. Each of President-elect Trump’s social media posts announcing his nominees, and Ferguson’s X post in response, reemphasized the coming administration’s anticipated focus on Big Tech. Even traditionally conservative media outlets are praising Slater and emphasizing her predicted continued efforts against that politically popular target industry.
Outside of Big Tech, we see hints of a return to pre-Biden-era enforcement. While Trump’s mention of Big Tech issues garnered media attention in his announcement of Slater, there has been less emphasis on what might prove to be an equally important part of his statement, namely that competition laws would be enforced with “clear rules that facilitate, rather than stifle, the ingenuity of our greatest companies.”
Other transition-related coverage: You can find our Sidley colleagues’ views on the President-elect’s transition with respect to many other issues at the links below, including the following:
- On trade and tariffs, private equity and mergers and acquisitions, banking, capital markets, investment funds, tax, foreign direct investment, crypto and blockchain, and artificial intelligence (“Post-Election Landscape: New Risks, New Opportunities,” November 26, 2024);
- On oil and gas (“Expect Surging Oil And Gas Industry Under New Trump Admin,” November 20, 2024)
- On shareholder activism (“Shareholder Activism Under a New Trump Administration,” November 21, 2024; “Why Activist Investors are Rooting for Donald Trump to Win,” November 1, 2024)
- Advice for fund directors (“What Will Second Trump Administration Mean for Fund Directors?” November 13, 2024)
New UK merger control thresholds applicable as of January 1, 2025: At the end of November 2024, the UK government passed necessary secondary legislation confirming that both the digital and competition parts of the Digital Markets, Competition and Consumers Act (DMCCA) will come into force on January 1, 2025. The Competition and Markets Authority (CMA) will be able to review transactions where the target’s UK turnover is £100 million or more (increased from £70 million). In addition, there will be a new merger control threshold that will provide the CMA with jurisdiction where one party has a share of supply of 33% or more in the UK (or a substantial part of it) and its UK turnover exceeds £350 million, and another party has some nexus to the UK. Crucially, however, no overlap between the parties is required for this new threshold. There will also be mandatory reporting of certain transactions for digital firms designated with strategic market status.
Why it matters: Why it matters: The UK merger control regime remains voluntary, but the DMCCA expands the CMA’s jurisdictional powers by introducing an acquirer-focused threshold to capture more transactions — including those coined “killer acquisitions.” This change will grow the number of transactions falling within CMA’s jurisdiction. (See related our Sidley Update here).
Commission’s ex-post evaluation of “killer acquisitions” in the pharmaceutical sector: Due to the ever-increasing concern among competition authorities relating to companies in the pharmaceutical sector’s buying innovative startups with the main purpose of eliminating future competition and stifling innovation, the Commission published an in-depth report on pharmaceutical transactions at the end of November 2024. The report included two parts: (i) a fact-finding section assessing the phenomenon of killer acquisitions and (ii) an ex-post evaluation of deals that might have involved killer acquisitions along with the legal framework within which the Commission operates.
Why it matters: The study findings highlight that (i) competition authorities’ concerns in this space remain valid, and (ii) there have been a number of research-and-development projects or acquisitions that resulted in discontinuation of pipeline products. The study also suggests that even though the Commission already monitors transactions in the pharma sector, a “light touch” registry of deals and postdeal developments may increase the Commission’s ability to identify relevant transactions ex-ante. It is also likely that Teresa Ribera, Executive Vice President of the Commission for a Clean, Just, and Competitive Transition, will leverage the study findings to further enhance antitrust enforcement in the pharmaceutical space.
Commission withdraws its 2021 guidance on below-threshold deals: The Commission has withdrawn its 2021 guidance on the application of Article 22 of the EU Merger Regulation, which allowed member states to refer mergers for the Commission’s review even if they did not meet national merger control thresholds. The decision follows a judgment by the Court of Justice of the European Union, which clarified that member states can make such referrals only if they are competent to review the transactions under their own national merger rules (see our Sidley Update here). The Commission emphasized that this withdrawal does not preclude future initiatives targeting small and medium-size enterprise transactions or those below jurisdictional thresholds that may significantly affect competition.
Why it matters: This withdrawal highlights the challenges regulators face in addressing potential anticompetitive effects of smaller transactions, particularly in highly innovative or fragmented markets. In addition, one of the focuses of Executive Vice President of the Commission for a Clean, Just, and Competitive Transition, Teresa Ribera, will be modernizing EU competition policy, which could include a revised approach to capture below-threshold transactions.
Outgoing FTC majority withdraws Antitrust Guidelines for Collaborations Among Competitors, over Republican objection: The FTC (with a 3–2 vote) and DOJ jointly announced the withdrawal of the Antitrust Guidelines for Collaborations Among Competitors, originally issued in April 2000. The agencies cited the need for updated guidance that reflects significant legal developments and modern business practices. The withdrawal aims to prevent businesses from “mistakenly relying” on flawed guidance and encourages them to review relevant statutes and case law to assess the legality of collaborations. Commissioner Ferguson dissented, as did Commissioner Melissa Holyoak, both criticizing the timing of the withdrawal, which occurred just 40 days before a presidential transition. Ferguson argued that the existing guidelines should remain in place to ensure transparency and predictability during the transition period. He emphasized the need for an orderly transition rather than pushing through significant changes at the end of the current administration. Commissioner Alvaro M. Bedoya defended the withdrawal, arguing that the outdated guidelines did not account for recent Supreme Court and federal court decisions, and thus the FTC was failing in its duty to provide accurate guidance.
Why it matters: In short, it should not. The withdrawal of the guidelines plainly provides no insight into the enforcement priorities of the incoming administration (Trump’s nominee for FTC Chair himself objecting to the withdrawal), and it should have no effect on how courts would be expected to rule on competitor collaborations.
2025 will see the first litigated RP Act case since Ronald Reagan was President: In a 3–2 vote, over Republican objections, the FTC has brought what would be the first RP federal enforcement action to be litigated since 1988. To put this in perspective: when the last litigated complaint was brought, Reagan was president, the Union of Soviet Socialist Republics was still a country, and the No. 1 song on Billboard was “Call Me” by Blondie. The lawsuit accuses Southern Glazer of providing discriminatory price discounts and rebates for alcohol purchases in favor of large national and regional chains and at the expense of “independent mom and pop” businesses. The lawsuit is brought under Section 2(a) of RP (price discrimination) but does not include claims under Section 2(d) (improper promotional allowances).
Why it matters: A 3–2 vote for a resumed FTC RP enforcement antitrust intervention might, at first, appear to be an effort that would end upon the changing of administrations. However, both Commissioner Ferguson’s dissent and very recent public comments by Trump nominee Meador suggest a new majority/consensus at the FTC — two Republicans and two Democrats who appear ready to revive RP enforcement. This FTC enforcement comes on the heels of recent developments in private RP 2(a) and 2(d) enforcement, as seen in the Ninth Circuit’s 2023 decision in U.S. Wholesale Outlet & Distr. v. Innovation Ventures, LLC (9th Cir. 2023), for which SCOTUS denied a petition for certiorari.
We at Sidley were gratified when our colleague Tim Muris was cited numerous times across the majority opinion and the two dissents. The dissents pulled heavily from Muris’s paper “Neo-Brandeisian Antitrust: Repeating History’s Mistakes.”
There may be certain matters that Sidley cannot comment on herein based on our work for clients.
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