October Antitrust and Competition Bulletin: Top-of-Mind Global Antitrust Issues

Welcome to this month’s 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. The U.S. Federal Trade Commission (FTC) published final amendments to premerger notification filings submitted under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). The U.S. Department of Justice (DOJ) reiterated that exchanging competitively sensitive information can violate U.S. antitrust laws even in the absence of an actual agreement to fix prices. Courts around the world continue to scrutinize Google’s business practices and chip away at its business model. In one of the cases, the European Court of Justice (CJEU) paved the way for strict enforcement against self-preferencing abuses by dominant companies in the European Union. The European Commission (EC) is consulting on its proposed enforcement framework against exclusionary abuses. And an EC-commissioned report on the future of Europe’s competitiveness has been published that may influence competition policy in the next European Commission. Interested? Keep reading.…

The FTC published its final amendments to the disclosure requirements in HSR filings: On October 10, the FTC published the long-awaited final amendments to HSR filings that were initially announced in July 2023. The new rules are likely to become effective in mid-January 2025. Among the key changes are that filers will now be required to (i) draft narratives regarding a transaction’s strategic rationale as well as the parties’ business overlaps and certain supply relationships; (ii) provide additional information about co-investors, minority shareholders, and officers and directors; (iii) produce additional documents including ordinary-course strategic documents; and (iv) provide information about customers, agreements between the parties, foreign subsidies, and foreign merger control filings. For a more detailed description of the final rules as well as other key takeaways, see our Sidley Update here.

Why it matters: Although the final rules pare back the initial proposals, the FTC acknowledged that preparation time will increase two to four times compared with the current procedure. Frequent filers may want to seek guidance before the new rules become effective to understand the impact of the changes and ease the burden of filing preparations.

DOJ states that information sharing alone can violate antitrust laws: On October 1, the DOJ filed a statement of interest in In Re Pork Antitrust Litigation, No. 0:18-cv-01776-JRT-JFD (D. Minn. Oct. 1, 2024) (Statement), a multidistrict litigation in which plaintiffs allege that pork producer defendants exchanged detailed, competitively sensitive, and nonpublic information about prices, capacity, and sales volumes through an information-sharing service that provided benchmarking reports to the pork producers that allowed them to control supply and price. The DOJ filed the Statement to reiterate its position that (i) information sharing alone can violate the federal antitrust laws, even without an agreement to fix prices, if it meets certain other requirements and (ii) information exchanges that report only aggregated data are not shielded from the antitrust laws. The defendants’ response (available here), among other things, notes the DOJ’s recognition that “information exchanges must be analyzed under the rule of reason when the claim challenges the exchange of information itself as unlawful.”

Why it matters: Many companies rely on benchmarking services and participate in trade associations that have historically facilitated the lawful exchange of information for procompetitive purposes. The DOJ’s Statement serves as a reminder that the agencies pay close attention to the facilitation of information exchanges among competitors, even where such information is aggregated and anonymized by a third party before being reported out to the contributors. Critically, the DOJ takes the position that the aggregation or anonymization of such data may not be sufficient to mitigate a potential violation of federal antitrust laws. Consequently, companies may want to seek guidance whenever disclosing or exchanging competitively sensitive information, whether with third-party aggregators or in connection with mergers and acquisitions.

Google is facing calls to overhaul both its app store and search businesses: U.S. District Judge James Donato issued a permanent injunction order in Epic Games, Inc. v. Google LLC. Much of the injunction has been temporarily stayed pending the appellate court’s resolution of stay requests filed there. Under the injunction originally effective November 1 and lasting for three years, Google must permit third-party options for downloading applications on Android phones. Additionally, Google is prohibited from offering financial incentives to (i) original equipment manufacturers to preinstall the Google Play Store on Android phones and (ii) app developers conditioned on launching an app first or exclusively in the Google Play Store. In addition, Google may not require apps to use Google Play Billing or prohibit use of third-party payment methods. On October 8, the DOJ filed a Proposed Remedy Framework in the District Court for the District of Columbia following Judge Amit Mehta’s August 4 decision in U.S. and Plaintiff States v. Google LLC finding Google liable for maintaining monopolies in the markets for general search services and general search advertising. The DOJ’s remedy proposals include (i) limiting or prohibiting default search or preinstallation agreements with carriers; (ii) releasing Google’s data used for search, features, and ads, including underlying ranking signals; (iii) requiring Google to allow websites to opt out of appearing in Google-owned artificial intelligence products; and (iv) licensing or syndicating Google’s ad feed or allowing Google search advertisers access to information such as Search Query Reports related to search text ads auction and ad monetization.

Why it matters: Google’s business model is being fly-specked and adjusted through the courts. If these remedies stick, they will demonstrate the courts’ willingness to become more involved in behavioral remedies than they have been in recent years.

EU courts continued focus on Google’s market practices: The CJEU recently rejected Google’s appeal of a €2.42 billion fine imposed by the EC in 2017 for deliberately favoring its own comparison shopping service on its general search webpage and discriminating against competing comparison services. The CJEU emphasized Google’s market power and the high entry barriers in the general search market, ruling that the self-preferencing behavior was discriminatory and fell outside competition on the merits. In contrast, in a separate case, the General Court recently ruled in favor of Google, annulling a €1.49 billion fine related to its AdSense practices. The General Court determined that the EC failed to consider sufficiently the duration of certain contractual clauses that restricted competition, leading to the reversal of the EC decision.

Why it matters: The CJEU judgment may embolden the EC to approach enforcement of potential abuses of dominant positions in unprecedented ways (see our Sidley Update here), while the General Court’s decision reflects a need for precise assessments in competition cases.

EC publishes draft guidelines related to abusive exclusionary conduct by dominant undertakings: The EC published its first draft set of comprehensive Guidelines on exclusionary abuses of dominance (Draft Guidelines). The Draft Guidelines set out the criteria and evidentiary burden applicable to finding such abuses under Article 102 of the Treaty of the Functioning of the European Union. The EC propose to introduce a two-step test for evaluating whether the conduct in question (i) departs from competition on the merits and (ii) is capable of having exclusionary effects. The EC invites all stakeholders to provide feedback to the Draft Guidelines by October 31. The final Guidelines are expected to be published in the course of 2025.

Why it matters: The Draft Guidelines adopt a presumptive approach for certain types of behavior, such as exclusive dealing and exclusivity rebates, tying, and bundling. If adopted in their current form, the EC could merely presume that these behaviors depart from competition on the merits and are capable of having exclusionary effects. Although it remains to be seen whether the General Court and CJEU will endorse or instead limit presumptions of anticompetitive effects to a more limited set of practices, this is a bold step toward more strict enforcement by the EC.

Draghi’s report on the future of European competitiveness released: Mario Draghi, former Italian Prime Minister and former European Central Bank president, recently published a report, commissioned by the EC, highlighting that Europe should focus on three areas to reignite sustainable growth:

• a. increasing security and reducing dependencies in light of current geopolitical risks (e.g.,, Europe should diversify its supplier portfolio of critical raw materials)
• b. closing the innovation gap with the U.S. and China
• c. preparing a joint plan for decarbonization and competitiveness

Draghi also advocates for the competition frameworks to be revamped to allow for a more forward-looking and agile approach. For example, he proposes an “innovation defense” for merger control analyses, which would allow transactions in certain sectors to clear if they lead to an increased incentive to innovate.

Why it matters: The report was published shortly before the nomination of Spain’s Teresa Ribera for the post of Executive Vice President of the EC for a Clean, Just, and Competitive Transition. If appointed, she will also be responsible for competition policy. The mission letter from the President of the EC, Ursula von der Leyen, aligns with the recommendations made in Draghi’s report and emphasizes that Ribera’s mission will be to modernize the EU’s competition policy and to support innovation. All von der Leyen’s appointees — including Ribera — are now undergoing vetting by committees and require approval from the European Parliament at confirmation hearings in November 2024. Once approved by the European Parliament, the new Commission will be formally appointed by the European Council and sworn in by the CJEU.

Read more Antitrust and Competition Bulletins here.

*At the time of publication, the FTC has not yet published the total number of HSR filings submitted in September 2024.