United States: Developments in Competitive Scrutiny and Growing Scepticism over Tech Companies

This is an Insight article, written by a selected partner as part of GCR's co-published content. Read more on Insight

In 2023, the US Department of Justice (DOJ) and the US Federal Trade Commission (FTC) (collectively, the US Antitrust Agencies) continued to increase their scrutiny on technology and digital services companies.[2]

Leadership within the US Antitrust Agencies, namely FTC chair (Chair) Lina Khan and DOJ Antitrust Division Assistant Attorney General (AAG) Jonathan Kanter, believe that traditional antitrust laws such as the ‘consumer welfare standard’ are inadequate to address modern challenges facing the technology sector,[3] and they are increasingly unified in developing ‘multidimensional’ approaches to challenging anticompetitive conduct and mergers in technology and digital services spaces, including deals that are neither horizontal nor vertical and are instead ‘ecosystem-driven, concentric, or conglomerate’ deals.[4]

As a result of these views, one of the key developments of 2023 was the DOJ’s and the FTC’s release of proposed merger guidelines (the Proposed Merger Guidelines) to replace the 2010 Horizontal Merger Guidelines and the 2020 Vertical Merger Guidelines (the Merger Guidelines).[5] The Proposed Merger Guidelines differ from prior releases in several substantive ways. Instead of separate guidelines for horizontal and vertical mergers, they combine enforcement priorities into one comprehensive set of 13 guidelines. They reflect the Antitrust Agencies’ desire to view markets and competition in a multidimensional manner, creating new theoretical approaches or reviving seemingly dated avenues to challenge more mergers, especially those deemed as ecosystem-driven, concentric or conglomerate mergers.[6] As at October 2023, US Antitrust Agencies were still assessing and considering comments on the Proposed Merger Guidelines. It is estimated that the Proposed Merger Guidelines will go into effect in Q1 2024.

This new approach to antitrust enforcement drives a strategic vision that aims to bring and win big cases against major technology companies while developing new and creative ways to do so. Importantly for technology and digital services companies, the Proposed Merger Guidelines seek to address issues commonly associated with recent technology and digital services transactions, such as issues relating to multi-sided platforms, nascent competitors, moat-building strategies and vertical foreclosure.

In addition to announcing the proposed changes to the Merger Guidelines, AAG Kanter and Chair Khan have continued their aggressive enforcement to address what they believe to be ‘modern market realities’ in technology and digital services acquisitions. AAG Kanter and Chair Khan have remained true to the vision they outlined at the outsets of their tenure:[7]

  • to closely scrutinise acquisitions of nascent competitors in digital markets, even if they are not ‘purely vertical or horizontal’, and consider concepts beyond foreclosure and exclusion when developing theories of harm in acquisitions of emerging rivals;[8]
  • to assess ‘moat-building strategies’ and examine the ‘whole course of exclusionary conduct by dominant platforms’,[9] rather than as separate actions in isolation;
  • to focus on discriminatory strategies that digital platforms use to maintain their monopoly power, such as self-preferencing, restrictions on interoperability, data aggregation and unreasonable pricing for access;[10] and
  • to develop early and swift remedies that prevent bad actors from achieving an early lead or locking up certain parts of the market.

Beyond this, the US Antitrust Agencies have proposed and implemented several changes in the merger review and remedy process, including scrutiny of certain transactions that traditionally would not be scrutinised, more in-depth second requests, longer agency investigation periods (which implicate financing considerations and closing timelines) and refusal to consider divestitures in some instances.

Notably, on 27 June 2023, the FTC, with the concurrence of the Antitrust Division of the DOJ, issued a Notice of Proposed Rulemaking (the Proposed HSR Rules) to amend the Hart-Scott-Rodino (HSR) Form and Instructions.[11] The Proposed HSR Rules would be the most sweeping changes to the HSR Form for US premerger notification filings (HSR Filings) in 45 years. The changes would apply for every HSR-reportable transaction – and, if finalised, would significantly increase the burden of and time to prepare HSR filings.

Despite this renewed focus and attention on technology and digital platform enforcement, serious questions remain about the capacity for US Antitrust Agencies to fulfil their vision. A key issue has been the lack of resources for the agencies to bring and win large and complex cases. In 2022, lawmakers from both parties and in both chambers of the US Congress introduced antitrust legislation signalling bipartisan appetite for legislative antitrust reform to target tech companies and digital platforms. In December 2022, US President Joe Biden signed into law the Consolidated Appropriations Act 2023, which includes the Merger Filing Fee Modernization Act of 2022, which changes the filing fees for reportable transactions under the HSR Act for the first time in 20 years. The new law applies to deals that closed on or after 27 February 2023, establishes six filing fee thresholds (there were three thresholds previously) based on the size of a proposed transaction, and increases the filing fees for the largest deals – US filing fees for the largest deals (any deal with a total value of US$5 billion or more) will be US$2.25 million, nearly a tenfold increase when compared with the previous highest merger filing fee of US$280,000.[12] The fees are expected to increase resources for the US Antitrust Agencies to pursue their aggressive enforcement agendas.

In summary, the leadership of the US Antitrust Agencies have adopted and implemented a more aggressive vision for antitrust enforcement, especially in the technology and digital realms, and despite their resource constraints, they are moving towards achieving their policy visions.

White House policy initiatives and developments

As US President Joe Biden’s term enters its second half, the administration has doubled down in bringing increased attention and cohesiveness to competition policy, with efforts to strengthen and coordinate antitrust enforcement across the US federal government. Over two years ago, on 9 July 2021, the White House issued the landmark Executive Order on Promoting Competition in the American Economy.[13] The Order directed several government agencies – beyond the DOJ and the FTC – to adopt rules and regulations to accomplish the competition-enhancing goals set forth in the Order.[14]

The Order addresses the administration’s concerns about purported increased consolidation and abuse of market power.[15] Among other initiatives, it encourages the DOJ and the FTC to challenge consummated mergers – including technology and digital platform mergers – that prior administrations did not challenge. It also encourages agencies to focus enforcement on a perceived lack of competition in labour markets, agricultural markets, healthcare markets and technology markets.[16]

The Order establishes the White House Competition Council, which is tasked with implementing a ‘whole-of-government’ approach to competition policy.[17] The White House Competition Council has been in force for a year, and since its establishment, it has brought unprecedented levels of coordination across the US federal government on competition policy. For example, in January 2022, the DOJ and the US Department of Agriculture released a statement of principles and commitments to ‘protect against unfair and anticompetitive practices’ in the agriculture sector.[18]

In March 2022, the DOJ and the United States Department of Labor signed a memorandum of understanding designed to ‘protect workers from employer collusion, ensure compliance with the labour laws and promote competitive labour markets and worker mobility.’[19] In May 2022, the US Treasury Department’s Office of the Comptroller of the Currency announced efforts to work with the DOJ and other US federal banking agencies to review frameworks to analyse bank mergers.[20]

The White House Competition Council has also continued to advance the notion that new frameworks are warranted to address ‘new industries and new technologies – including the challenges posed by the rise of the dominant Internet platforms’.[21] In remarks celebrating the one-year anniversary of the launch of the White House Competition Council, Brian Deese, Chair of the White House Competition Council and Director of the National Economic Council, emphasised that a ‘key area is promoting competition in the tech sector’.[22]

In July 2023, the White House Competition Council announced several new initiatives. First, the Department of Agriculture launched a partnership with over two dozen State Attorneys General to use legal enforcement tools to lower food prices and promote competition in agricultural markets. Second, the White House Competition Council furthered its efforts to crack down on rental junk fees to lower costs for renters.[23] This initiative includes increased transparency. Zillow, Apartments.com and AffordableHousing.com have responded to the President’s request to provide consumers with complete cost information on rental properties. This initiative also includes legislative action in several states, including Connecticut and California.[24]

Antitrust and competition continue to remain crucial to the White House’s policy initiatives. The key pillars of ‘Bidenomics’, President Biden’s plan to fundamentally change the economic direction of the United States includes promoting competition in order ‘to lower costs and help entrepreneurs and small businesses thrive’.[25] According to the White House, the focus on promoting competition has created opportunities for innovative new products to come to the market and lower costs for consumers. The inclusion of competition in Bidenomics suggests that competition policy and enforcement will remain a priority for the remainder of the administration and will serve as a key agenda item as President Biden begins to campaign for his second term.[26]

DOJ and FTC policy changes and initiatives

Buttressed by the White House Competition Council, the US Antitrust Agencies have implemented a number of policy changes and initiatives targeting technology companies. As noted above, the DOJ and the FTC announced Proposed Merger Guidelines in July 2023.

The Proposed Merger Guidelines combine enforcement priorities into one comprehensive set of 13 guidelines, instead of setting forth separate guidelines for horizontal and vertical mergers. Notably, the Proposed Merger Guidelines alter the presumptions used to identify mergers that may be found to substantially lessen competition, which will result in an increase in the number of transactions that could be found anticompetitive. For example, the Proposed Merger Guidelines provide that any merger with a market share over 30 per cent and a change in post-merger Herfindahl-Hirschmann Index of 100 from pre-merger levels would be presumptively unlawful. Second, the Proposed Merger Guidelines directly address issues relating to multi-sided platforms, nascent competitors, moat-building strategies and vertical foreclosure. Third, the Proposed Merger Guidelines make clear that the agencies are prioritising protecting competition in labour markets. The Proposed Merger Guidelines state that any reduction in labour market competition may lead to anticompetitive harm such as lower wages, slower wage growth and reduction in workplace quality. Fourth, the Proposed Merger Guidelines show greater antitrust scrutiny of private equity and other institutional investors. Several provisions in the Proposed Merger Guidelines will have a direct impact on private equity sponsors. Finally, the Proposed Merger Guidelines seek to strengthen the presumptions of illegality under Section 7 of the Clayton Act. For example, the Proposed Merger Guidelines target transactions between parties who are head-to-head competitors, even where market shares may be difficult to measure. The Proposed Merger Guidelines also set forth a high bar for merging parties to demonstrate cognisable efficiencies.[27]

In June 2023, the FTC, with the concurrence of the DOJ, also issued Proposed HSR Rules to amend the HSR Form and Instructions. The Proposed Rules would be the most significant changes to the HSR Form in the past 45 years and, if implemented, would significantly increase the burden of preparing HSR filings. Notably, the revised HSR Form under the Proposed Rules would add a competition analysis section seeking submission of narrative responses explaining competitive overlaps and other relationships among the parties. This section would require disclosure of the parties’ top customers. Further, the new HSR Form would expand the scope of 4(c)/(d) documents that must be produced. The Proposed Rules require production of documents prepared by or for the ‘supervisory deal team leads’ for the transaction, which would include individuals other than officers or directors of a company who ‘functionally lead or coordinate the day-to-day process for the transaction at issue’. The Proposed Rules also make disclosure of foreign merger control filings voluntary, deviating from the current voluntary standard. The FTC has stated that these changes are intended to ensure that government agencies have adequate information when evaluating a proposed transaction and ensure that US disclosure requirements in merger filings meet the more rigorous standards imposed by foreign antitrust authorities such as the European Commission.[28]

Consistent with the Order, the DOJ and FTC have also continued their aggressive approach towards merger enforcement by signalling a strong preference for litigation and less appetite for settlement with divestitures.[29] The agencies have demonstrated an increased interest in challenging vertical transactions (e.g., in December 2022, the FTC filed a complaint to block Microsoft from acquiring Activision Blizzard for US$69 billion), and private equity transactions in the technology sector continue to attract heightened scrutiny.[30] There has also been a recent wave of reinvigorated enforcement of Clayton Act Section 8, which prohibits persons from being an officer or a director at competing corporations. Historically, this has been a quiet area of antitrust enforcement, but in the past year, there has been a notable uptick of enforcement by the DOJ, especially with respect to private equity firms, companies active in mergers and acquisitions, and companies active in nascent or quickly evolving technology markets.[31]

More generally, the US Antitrust Agencies have announced other policy changes that, while not specific to technology companies, will nonetheless have an impact. For example, the FTC recently rescinded the 1995 FTC policy statement that removed the requirement for prior approval as a matter of course. This policy meant that the FTC would issue only prior approval notice for cause. Now, however, the FTC is using this tool to target more conduct, especially in digital markets, as the rescinding of this policy could require a lengthy prior approval process even for transactions that would not be reportable under the HSR Act.

In prior years, for example, in September 2021, the FTC issued a statement announcing that it would make the Second Request process ‘more streamlined and more rigorous’ to help the agency cope with surges in merger filings.[32]

Legislative developments

In 2022 and 2023, both houses of the US Congress proposed a raft of potential new bills to address competition in the digital arena. However, the proposed bills have mostly stalled. While the desire for reform came from Republicans and Democrats in Congress, the bills have not received any traction. The following is a summary of key legislation that has been introduced that would have an impact on digital markets:

  • Protect Working Musicians Act: This bill aims to empower independent music creator owners to collectively negotiate with dominant online platforms regarding the terms on which their music may be distributed. Under the proposed law, an ‘individual music creator owner’ shall not be held liable under the antitrust laws for agreeing with other ‘individual music creator owners’ to collectively negotiate music licensing terms with a ‘dominant online music distribution platform’ or a company engaged in development or deployment of generative artificial intelligence or agreeing with other ‘individual music creator owners’ to collectively refuse to license their music to a ‘dominant online music distribution platform’ or a company engaged in development or deployment of generative artificial intelligence.[33]
  • Digital Consumer Protection Commission Act of 2023: This bill would establish the Digital Consumer Protection Commission to regulate digital platforms. This Commission would have concurrent jurisdiction with the DOJ and FTC. Regarding competition, the bill would (1) ban abuses of dominance committed by big technology firms, such as self-preferencing, tying arrangements, pre-dispute arbitration agreements and class-action waivers, non-compete agreements and no-poach agreements; (2) authorise prospective and retrospective review of big technology mergers; and (3) prohibit conflicts of interest.[34]
  • Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: This bill would require some of the most dominant social media platforms to make user data portable and their services interoperable with other platforms.[35]
  • American Innovation and Choice Online Act: This bill would prohibit certain large online platforms from engaging in self-preferencing, unfairly limiting the availability on the platform of competing products from another business or discriminating in the application or enforcement of the platform’s terms of service among similarly situated users. The bill proposes restricting a platform’s use of non-public data obtained from or generated on the platform and prohibits the platform from restricting access to platform data generated by the activity of a competing business user.[36]
  • Digital Platform Commission Act: This bill would establish a commission responsible for assuring ‘the fairness and safety of algorithms on digital platforms’ as well as promoting competition. It would also have the authority to conduct investigations, impose penalties and set new rules, such as those that ensure moderation transparency and the protection of consumers.[37]
  • Journalism Competition and Preservation Act of 2023: This bill would allow eligible digital journalism providers to form joint negotiation entities to negotiate with covered platforms over the terms of access to digital news content. Under this bill, eligible digital journalism providers will not violate antitrust laws if they participate as a member of a joint negotiation entity and, as part of the negotiations, jointly withhold content from a covered platform. ‘Eligible digital journalism providers’ are publishers with fewer than 1,500 full-time employees and one or more publications or broadcasters that engage in standard practices and disclose ownership to the public. ‘Covered platforms’ are platforms with at least 50 million monthly active users in the United States, are controlled by a person with a net annual sales or market capitalisation greater than US$550 billion or not fewer than one billion worldwide active users and are not labelled as charitable organisations according to Section 501(c)(3) of the Internal Revenue Code.[38]
  • Advertising Middlemen Endangering Rigorous Internet Competition Accountability (AMERICA) Act: This bill would restore and protect competition in digital advertising by eliminating conflicts of interest that have allowed the leading platforms in the market to manipulate advertisement auctions and impose monopoly rents on a broad swathe of the US economy.[39]

Of these bills, the American Innovation and Choice Online Act, sponsored by US Senator Amy Klobuchar (Democratic) and co-sponsored by US Senator Chuck Grassley (Republican) and other Republican and Democratic senators, continues to receive the most traction, as the bill was recently reintroduced in June 2023.[40]

Trends in decisional practice, including key investigations against tech companies

The DOJ and the FTC have continued their sceptical and aggressive approach against technology and digital services companies. This trend is exemplified in several key lawsuits from 2023. Some key cases will be summarised in this chapter.

The first is United States v. Google, which was brought by the DOJ and several states against Google on 20 October 2020. The DOJ alleges that Google has engaged in anticompetitive behaviour in search services and search advertising.[41] In particular, the DOJ has focused on the use of self-preferencing in advertising on Google’s search results, as well as an alleged web of exclusivity agreements that tied users’ mobile searches to Google.[42] The trial for the case started in September 2023.

The FTC has also sued Meta Platforms (formerly known as Facebook), alleging that Meta holds monopoly power in an alleged market for ‘personal social networking services’.[43] On 19 August 2021, a US district court dismissed the FTC’s complaint as vague and lacking facts sufficient to support its allegations. On 8 September 2021, the FTC filed an amended complaint alleging the same product market.[44] The US district court did not dismiss the amended complaint, and as of October 2022, the case is still in discovery.

On 1 August 2022, the court ordered FTC to categorise for Meta the features or activities available on Facebook, Instagram, WhatsApp and Messenger that are included or excluded from the FTC’s definition of ‘personal social networking’, and to supplement its response if it takes a different position on any such feature or activity in the future.[45]

Most recent is the FTC’s lawsuit to block Meta’s acquisition of Within Unlimited on 27 July 2022. The FTC set forth two theories of harm. In February 2023, the United States District Court for the Northern District of California denied the FTC’s motion for preliminary injunction seeking to block the acquisition. The FTC argued that the acquisition would substantially lessen potential competition. The District Court considered the nascency and volatility of the market for virtual reality (VR) dedicated fitness apps, as well as new entrants, barriers to entry and price competition. The District Court noted that it was ‘inclined to find’ that defendants had not rebutted the FTC’s prima facie case, but found that the FTC had not satisfied other elements of the potential competition theories it had brought. The District Court found that, as a result, it did not need to determine whether the defendants’ showing was sufficient to rebut the FTC’s prima facie case on substantial concentration. The FTC also claimed that the acquisition would lessen competition under the ‘actual potential competition’ (or ‘actual potential entrant’) doctrine. The District Court found that the FTC had failed to establish a likelihood that it would succeed on the merits as to its claim based on actual potential competition theory. The District Court found that it was not ‘reasonably probable’ that Meta would enter the market for VR dedicated fitness apps if it were unable to complete the acquisition and that the FTC had not met its burden for showing that the alleged potential entrant must have ‘available feasible means’ to enter the relevant market other than by acquiring the target company.[46] In February 2023, the FTC withdrew the matter from its in-house adjudication.[47] On 8 February 2023, Meta announced its acquisition of Within, noting that Meta had ‘complied with all regulatory requirements for closing’.[48]

In late September 2023, the FTC and 17 states sued Amazon, alleging that Amazon ‘engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging’.[49] The FTC’s complaint alleges that Amazon’s alleged conduct occurs in both the ‘online superstore market that serves shoppers’ and ‘the market for online marketplace services purchased by sellers’.[50]

In addition to these tech merger cases, there are several non-horizontal merger decisions with implications for technology and digital markets.

For example, in March 2021, the FTC filed an administrative complaint to block the acquisition of GRAIL by Illumina, alleging that this transaction would reduce competition for certain key cancer therapies.[51] The FTC alleged that the merger would give Illumina the incentive and ability to disadvantage GRAIL’s multi-cancer testing competitors by raising their costs for, or by foreclosing them from, accessing Illumina’s must-have technologies. The parties maintained that this transaction would bring more innovation to the cancer market and would increase patient access to advanced cancer therapies and tests.[52] The parties decided not to wait for clearance from the FTC before closing and closed the deal on 18 August 2021.[53] The trial began in August 2021, and on 1 September 2022, the administrative law judge (ALJ) issued an initial decision dismissing the FTC’s challenge.[54] The ALJ found the FTC’s alleged evidence unconvincing with regard to Illumina’s acquisition of GRAIL substantially lessening competition or providing Illumina with an incentive to act in an anticompetitive way.[55]

Even if this was true, the ALJ argued that Illumina’s actions would be effectively constrained by a binding ‘open letter’ (supply contract) it has with all its customers, including current GRAIL rivals, that provides substantial enforcement mechanisms to prevent Illumina from withholding supplies or ending relationships with competitors.[56] Moreover, the ALJ noted that Illumina actually has an incentive to maintain positive relationships with GRAIL’s competitors since they could stop choosing to invest in Illumina’s platform, which would limit the further growth of Illumina’s sales.[57] The FTC heard the parties’ oral arguments in December 2022. In March 2023, the FTC issued an order reversing the ALJ’s initial decision and entering an order requiring Illumina to divest GRAIL.[58]

In December 2021, the FTC sued to block US chip supplier NVIDIA’s US$40 billion acquisition of Arm Ltd semiconductor chips. The FTC alleged that the transaction would give one of the world’s largest chip suppliers control over key computing technology and design that rival firms rely on to develop their own competing chips. The FTC also alleged that the transaction would stifle innovation in next-generation technologies, including those used to power data centres and driver assistance systems in cars. In February 2022, the parties terminated the transaction.

In December 2022, the FTC filed a complaint seeking to block Microsoft’s acquisition of Activision Blizzard, Inc (Activision), alleging that the transaction would enable Microsoft to suppress competition for Xbox gaming consoles, subscription content and cloud-based gaming business.[59] In July 2023, the Northern District of California denied the FTC’s action seeking a preliminary injunction to block the proposed acquisition. The District Court found that the FTC had not shown a likelihood that it would prevail on its claim that the merger would substantially lessen competition. The District Court noted that Microsoft had committed in writing to keep Call of Duty on PlayStation for 10 years on parity with Xbox, and that Microsoft had made an agreement with Nintendo to bring Call of Duty to Switch. The District Court found that the evidence pointed to more consumer access to Call of Duty and other Activision content.[60] In July 2023, the FTC suspended its administrative challenge seeking to block the transaction.[61] By late September 2023, the FTC announced that it would be bringing back its lawsuit challenging the acquisition.

In February 2023, the DOJ began preparing an antitrust lawsuit seeking to block the acquisition of Figma Inc (Figma) by Adobe Inc (Adobe). The DOJ was concerned that the deal would decrease the number of options for design software available to creative professionals.[62]

In March 2023, the FTC filed an administrative complaint challenging Intercontinental Exchange, Inc’s (ICE) proposed acquisition of Black Knight, Inc (Black Knight). Black Knight’s Empower is the country’s second largest loan origination system (LOS). The FTC’s administrative complaint alleged that the proposed deal would combine Empower with ICE’s Encompass, which is the dominant LOS in the country. Further, Black Knight owns the Optimal Blue product pricing and eligibility engine (PPE), a software used by lenders to identify loan rates for a borrower, determine a borrower’s eligibility for a particular loan and finalise the terms of a loan. The FTC’s complaint alleged that Optimal Blue was the industry leader, with ICE’s Encompass Product and Pricing Service PPE ranked at number two. The FTC alleged that the proposed transaction would result in the combination of Optimal Blue PPE with Encompass Product and Pricing Service PPE, leading to anticompetitive effects. The complaint alleged that the proposed acquisition would make it more likely that ICE would limit rival PPE providers’ access to the Encompass LOS. The FTC alleged that the proposed acquisition would allow ICE to raise costs to lenders, resulting in higher fees to homebuyers.[63] In August 2023, the FTC approved a proposed consent order. The proposed settlement ensures Black Knight’s divestiture of Empower and Optimal Blue.[64]

In May 2023, in its first legal challenge to a pharmaceutical buyout in 14 years,[65] the FTC filed a complaint seeking a temporary restraining order to enjoin the proposed acquisition of Horizon Therapeutics plc (Horizon) by Amgen Inc (Amgen). The complaint alleged that Horizon had a monopoly on medicines used to treat thyroid eye disease and chronic refractory gout, and that if the proposed transaction were to move forward, Amgen would be able to leverage its portfolio of blockbuster drugs to foreclose competition for Horizon’s medications, thereby lessening competition for the sale of medicines used to treat thyroid eye disease and chronic refractory gout. The complaint alleged that Amgen would be able to accomplish this through cross-market rebating and bundling. In September 2023, the FTC entered a settlement agreement with Amgen, allowing the company to move forward with its acquisition of Horizon Therapeutics.[66] Under the proposed consent order, Amgen may not bundle an Amgen product with either of Horizon’s medications used to treat thyroid eye disease or chronic refractory gout. Additionally, Amgen may not condition any product rebate or any contracts terms relating to an Amgen product on the sale or positioning of either of Horizon’s medications used to treat thyroid eye disease or chronic refractory gout. Further, the proposed order prohibits Amgen from using any product rebate or contract term to exclude any or disadvantage any product that would compete with either of Horizon’s medications used to treat thyroid eye disease or chronic refractory gout.[67]

These cases signal an appetite for bringing vertical challenges and show that the US Antitrust Agencies will not shy away from alleging vertical theories of harm when assessing digital markets.

In addition to these cases, a number of other cases have been brought by private litigants against tech and digital market companies. These cases may have a bearing on other tech litigation and investigations initiated by the US Antitrust Agencies, as they could influence how the authorities view relevant product markets, competitive theories of harm and effects on innovation.


Notes

1 George L Paul is a partner, Daniel Sokol is a senior adviser and Gabriela Baca is an associate at White & Case LLP. Any views expressed in this publication are strictly those of the authors and should not be attributed in any way to White & Case LLP. The authors gratefully acknowledge the contributions of Rucha Phadtare and Bala Venkatakrishnan, associates at White & Case LLP.

2 For an overview of enforcement policy in 2023, see, for example, Mark Gidley, George Paul, Rebecca Farrington et al., ‘U.S. Antitrust Agencies Propose Sweeping Changes to Merger Guidelines – 5 Key Things You Need to Know’, 20 July 2023, available at https://www.whitecase.com/insight-alert/us-antitrust-agencies-propose-sweeping-changes-merger-guidelines-5-key-things-you; Rebecca Farrington, George Paul, Mark Gidley, Martin Toto, Heather Greenfield, Gabriela Baca and Tejaswini Gupta, ‘You’re gonna need a bigger boat: Stormy waters ahead as the FTC proposes far-reaching changes to HSR Form’, 30 June 2023, available at https://www.whitecase.com/insight-alert/youre-gonna-need-bigger-boat-stormy-waters-ahead-ftc-proposes-far-reaching-changes; Rebecca Farrington, Heather Greenfield, Anna Kertesz, Mark Gidley, Gabriela Baca et al., ‘DOJ Antitrust Announces Five More Director Resignations from US Company Boards in Continued Aggressive Clayton Act Section 8 Enforcement, Increasing the Spotlight on Private Equity (PE) and Technology Firms’, 17 March 2023, available at https://www.whitecase.com/insight-alert/doj-antitrust-announces-five-more-director-resignations-us-company-boards-continued; Rebecca Farrington, Mark Gidley, George Paul, Martin Toto et al., ‘FTC Announces New Filing Fees Up to $2.25 Million and Annual Changes to US HSR Thresholds (2023)’, 26 January 2023, available at https://www.whitecase.com/insight-alert/ftc-announces-new-filing-fees-225-million-and-annual-changes-us-hsr-thresholds-2023; George Paul, Daniel Sokol and Gabriela Baca, ‘United States: Developments in Competitive Scrutiny and Growing Scepticism over Tech Companies’, 25 November 2022, available at https://globalcompetitionreview.com/guide/digital-markets-guide/second-edition/article/key-developments-in-the-united-states.

3 See, for example, US Department of Justice (DOJ), ‘Assistant Attorney General Jonathan Kanter of the Antitrust Division Delivers Remarks to the New York State Bar Association Antitrust Section’, 24 January 2022, available at www.justice.gov/opa/speech/assistant-attorney-general-jonathan-kanter-antitrust-division-delivers-remarks-new-york. (‘Antitrust law enforcement has not succeeded in keeping pace with these massive changes in our economy. In my view, the only way to reinvigorate antitrust enforcement is to adapt our approach to reflect the obvious economic and transformational technological changes that now define our economy.’)

4 US Federal Trade Commission (FTC), ‘Keynote Remarks of Lina M. Khan International Competition Network Berlin, Germany’, 6 May 2022, available at www.ftc.gov/system/files/ftc_gov/pdf/Remarks%20of%20Chair%20Lina%20M.%20Khan%20at%20the%20ICN%20Conference%20on%20May%206%2C%202022_final.pdf.

5 The Proposed Merger Guidelines for public comment are available at https://www.ftc.gov/system/files/ftc_gov/pdf/p859910draftmergerguidelines2023.pdf.

6 In announcing the Proposed Merger Guidelines, Commissioner Rebecca K Slaughter claimed that the horizontal and vertical distinctions are ‘artificially constructed mathematical categories [that] do not accurately capture the full set and complexity of relationships between merging parties that can cause a transaction to run afoul of the antitrust laws’. Statement of Commissioner Rebecca Kelly Slaughter, joined by Chair Lina M Khan and Commissioner Alvaro M Bedoya Regarding FTC-DOJ Proposed Merger Guidelines Commission File No. P234000 at 1 (July 19, 2023), https://www.ftc.gov/system/files/ftc_gov/pdf/p234000_bks_statement_re_draft_merger_guidelines_final.pdf.

7 DOJ, ‘Assistant Attorney General Jonathan Kanter Delivers Keynote at CRA Conference’ in Brussels, Belgium, 31 March 2022, available at www.justice.gov/opa/speech/assistant-attorney-general-jonathan-kanter-delivers-keynote-cra-conference.

8 id.; FTC, ‘Remarks of Chair Lina M. Khan Charles River Associates Conference Competition & Regulation in Disrupted Times Brussels, Belgium’, 31 March 2022, available at www.ftc.gov/system/files/ftc_gov/pdf/CRA%20speech.pdf.

9 DOJ, ‘Assistant Attorney General Jonathan Kanter Delivers Keynote at CRA Conference’ in Brussels, Belgium, 31 March 2022, available at www.justice.gov/opa/speech/assistant-attorney-general-jonathan-kanter-delivers-keynote-cra-conference.

10 FTC, ‘Remarks of Chair Lina M. Khan Charles River Associates Conference Competition & Regulation in Disrupted Times Brussels, Belgium’, 31 March 2022, available at www.ftc.gov/system/files/ftc_gov/pdf/CRA%20speech.pdf. (‘After achieving a gatekeeper position, these firms . . . can exploit their leverage over dependent users by increasing the price of access, such as by hiking fees, demanding valuable data, or imposing oppressive contractual terms.’)

11 Notice of Proposed Rule Making to 17 C.F.R. Parts 801 and 803, June 27, 2023, https://www.ftc.gov/system/files/ftc_gov/pdf/p239300_proposed_amendments_to_hsr_rules_form_instructions_2023.pdf.

12 Mark Gidley, Rebecca Farrington, George Paul, Anna Kertesz et al., ‘U.S. Merger Filing Fees to Increase Dramatically for Large Deals’, 27 December 2022, available at https://www.whitecase.com/insight-alert/us-merger-filing-fees-increase-dramatically-large-deals; Rebecca Farrington, Mark Gidley, George Paul, Martin Toto et al., ‘FTC Announces New Filing Fees Up to $2.25 Million and Annual Changes to US HSR Thresholds (2023)’, 26 January 2023, available at https://www.whitecase.com/insight-alert/ftc-announces-new-filing-fees-225-million-and-annual-changes-us-hsr-thresholds-2023.

13 White House, Executive Order on Promoting Competition in the American Economy, 9 July 2021, available at www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy.

14 See, for example, White & Case LLP, ‘Sweeping US Order on Promoting Competition’, 12 July 2021, available at www.whitecase.com/publications/insight/sweeping-us-order-promoting-competition.

15 White House, Fact Sheet: Executive Order on Promoting Competition in the American Economy, 9 July 2021, available at www.whitehouse.gov/briefing-room/statements-releases/2021/07/09/fact-sheet-executive-order-on-promoting-competition-in-the-american-economy.

16 id.

17 id.

18 US Department of Agriculture Press Release 0001.22, ‘Agriculture Department and Justice Department Issue Shared Principles and Commitments to Protect Against Unfair and Anticompetitive Practices’, 3 January 2022, available at www.usda.gov/media/press-releases/2022/01/03/agriculture-department-and-justice-department-issue-shared.

19 DOJ, 'Memorandum of Understanding Between the US Department of Justice and US Department of Labor', 10 March 2022, available at www.justice.gov/opa/press-release/file/1481811/download.

20 Office of the Comptroller of the Currency, ‘Acting Comptroller of the Currency Michael J. Hsu Remarks at Brookings “Bank Mergers and Industry Resiliency”’, 9 May 2022, available at www.occ.gov/news-issuances/speeches/2022/pub-speech-2022-49.pdf.

21 White House, ‘Brian Deese Remarks on President Biden’s Competition Agenda’, 14 July 2022, available at www.whitehouse.gov/briefing-room/statements-releases/2022/07/14/brian-deese-remarks-on-president-bidens-competition-agenda.

22 id.

23 ‘FACT SHEET: White House Competition Council Announces New Actions to Lower Costs and Marks Second Anniversary of President Biden’s Executive Order on Competition’, Press Release, The White House (July 19, 2023), available at https://www.whitehouse.gov/briefing-room/statements-releases/2023/07/19/fact-sheet-white-house-competition-council-announces-new-actions-to-lower-costs-and-marks-second-anniversary-of-president-bidens-executive-order-on-competition/.

24 ‘FACT SHEET: Biden-Harris Administration Takes on Junk Fees in Rental Housing to Lower Costs for Renters’, Press Release, The White House (July 19, 2023), available at https://www.whitehouse.gov/briefing-room/statements-releases/2023/07/19/fact-sheet-biden-harris-administration-takes-on-junk-fees-in-rental-housing-to-lower-costs-for-renters/.

25 The White House, ‘Bidenomics Is Working: The President’s Plan Grows the Economy from the Middle Out and Bottom Up—Not the Top Down’, 28 June 2023, available at https://www.whitehouse.gov/briefing-room/statements-releases/2023/06/28/bidenomics-is-working-the-presidents-plan-grows-the-economy-from-the-middle-out-and-bottom-up-not-the-top-down/.

26 id.

27 Mark Gidley, George Paul, Rebecca Farrington et al., ‘U.S. Antitrust Agencies Propose Sweeping Changes to Merger Guidelines – 5 Key Things You Need to Know’, White & Case LLP (July 20, 2023), available at https://www.whitecase.com/insight-alert/us-antitrust-agencies-propose-sweeping-changes-merger-guidelines-5-key-things-you.

28 Rebecca Farrington et al., ‘You’re gonna need a bigger boat: Stormy waters ahead as the FTC proposes far-reaching changes to HSR Form’, White & Case LLP (June 20, 2023), available at https://www.whitecase.com/insight-alert/youre-gonna-need-bigger-boat-stormy-waters-ahead-ftc-proposes-far-reaching-changes.

29 Rebecca Farrington and Heather Greenfield, ‘Antitrust scrutiny intensifies as DOJ and FTC step up enforcement’, 27 January 2023, available at https://www.whitecase.com/insight-our-thinking/us-ma-fy-2022-antitrust-scrutiny-intensifies.

30 id.

31 Rebecca Farrington, Kathryn Mims, Heather Greenfield et al., ‘DOJ Announces Seven Director Resignations from Five US Public Company Boards in the Most Recent Wave of Reinvigorated Clayton Act Section 8 Enforcement’, 21 October 2022, available at https://www.whitecase.com/insight-alert/doj-announces-seven-director-resignations-five-us-public-company-boards-most-recent.

32 Holly Vedova, FTC, ‘Making the Second Request Process Both More Streamlined and More Rigorous During this Unprecedented Merger Wave’, 28 September 2021, available at www.ftc.gov/enforcement/competition-matters/2021/09/making-second-request-process-both-more-streamlined-more-rigorous-during-unprecedented-merger-wave.

33 Protect Working Musicians Act of 2023, H. R. 5576, 118th Congress (2023–2024), available at https://www.congress.gov/bill/118th-congress/house-bill/5576/text.

34 Digital Consumer Protection Commission Act of 2023, S.2597 — 118th Congress (2023–2024), available at https://www.congress.gov/bill/118th-congress/senate-bill/2597/text?s=1&r=1&q=%7B%22search%22%3A%22Digital+Consumer+Protection+Commission+Act+of+2023%22%7D.

35 Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act of 2023, S.2521 — 118th Congress (2023–2024), available at https://www.congress.gov/bill/118th-congress/senate-bill/2521/text?s=2&r=1&q=%7B%22search%22%3A%22Augmenting+Compatibility+and+Competition+by+Enabling+Service+Switching+%28ACCESS%29+Act%22%7D.

36 See American Innovation and Choice Online Act, S.2033 — 118th Congress (2023–2024), available at https://www.congress.gov/bill/118th-congress/senate-bill/2033/titles?s=1&r=17&q=%7B%22search%22%3A%5B%22cory+booker%22%5D%7D.

37 Digital Platform Commission Act of 2023, S.1671 — 118th Congress (2023–2024), available at https://www.congress.gov/bill/118th-congress/senate-bill/1671?q=%7B%22search%22%3A%5B%22S.+1671%22%5D%7D&s=1&r=1.

39 Advertising Middlemen Endangering Rigorous Internet Competition Accountability (AMERICA) Act, S.1073 — 118th Congress (2023–2024), available at https://www.congress.gov/bill/118th-congress/senate-bill/1073/actions?s=6&r=1&q=%7B%22search%22%3A%5B%22advertising%22%5D%7D.

40 Consumer Reports, ‘Consumer Reports applauds reintroduction of the American Innovation and Choice Online Act in the US Senate’, Consumer Reports (15 June 2023), available at https://advocacy.consumerreports.org/press_release/consumer-reports-applauds-reintroduction-of-the-american-innovation-and-choice-online-act-in-the-us-senate/.

41 Complaint, United States v. Google, No. 1:20-cv-03010 (D.D.C. 20 October 2020), available at www.justice.gov/opa/press-release/file/1328941/download.

42 id.

43 Complaint at 1, 51-52, Federal Trade Commission v. Meta Platforms, Inc., 1:20-cv-03590 (D.D.C. 9 December 2020) (ECF No. 3).

44 Substitute Amended Complaint, Federal Trade Commission v. Meta Platforms, Inc., 1:20-cv-03590 (D.D.C. 9 December 2020) (ECF No. 82).

45 Minute Order at 2, Federal Trade Commission v. Meta Platforms, Inc., 1:20-cv-03590 (D.D.C. 9 December 2020) (ECF. No. 165).

46 Order Denying Plaintiff’s Motion for Preliminary Injunction, Federal Trade Commission v. Meta Platforms Inc., et al., Docket No. 5:22-cv-04325-EJD (Jan. 31, 2023), available at https://storage.courtlistener.com/recap/gov.uscourts.cand.398508/gov.uscourts.cand.398508.549.0.pdf.

47 Diane Bartz, 'FTC Withdraws from Adjudication in Fight with Meta over Within Deal', Reuters (February 10, 2023), available at https://www.reuters.com/markets/deals/ftc-withdraws-fight-with-meta-over-within-deal-adjudication-2023-02-10/.

48 'Within Joins Meta', Meta (Feb. 8, 2023), available at https://www.meta.com/en-gb/blog/quest/within-to-join-meta/.

49 ‘FTC Sues Amazon for Illegally Maintaining Monopoly Power’ (September 26, 2023), available at https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-sues-amazon-illegally-maintaining-monopoly-power.

50 id.

51 Illumina, Inc. and GRAIL, Inc., Docket No. 9401, F.T.C. 201 0144 (30 March 2021).

52 See Illumina Press Release, ‘Illumina Acquires GRAIL to Accelerate Patient Access to Life-Saving Multi-Cancer Early-Detection Test’ (18 August 2021), available at https://investor.illumina.com/news/press-release-details/2021/Illumina-Acquires-GRAIL-to-Accelerate-Patient-Access-to-Life-Saving-Multi-Cancer-Early-Detection-Test/default.aspx.

53 id.

54 FTC Press Release, ‘Administrative Law Judge Dismisses FTC’s Challenge of Illumina’s Proposed Acquisition of Cancer Detection Test Maker Grail’ (12 September 2022), available at www.ftc.gov/news-events/news/press-releases/2022/09/administrative-law-judge-dismisses-ftcs-challenge-illuminas-proposed-acquisition-cancer-detection?utm_source=govdelivery.

55 Illumina, Inc., and GRAIL, Inc., Docket No. 9401, F.T.C. 201 0144 (9 September 2022) (pub. redacted initial decision), at 2.

56 id. at 178.

57 id. at 174.

58 Opinion of the Commission (Public Version), In the Matter of Illumina, Inc. v. GRAIL, Inc., Docket No. 9401 (March 31, 2023).

59 'FTC Seeks to Block Microsoft Corp.’s Acquisition of Activision Blizzard, Inc.', Press Release, FTC (Dec. 8, 2022), available at https://www.ftc.gov/news-events/news/press-releases/2022/12/ftc-seeks-block-microsoft-corps-acquisition-activision-blizzard-inc.

60 Preliminary Injunction Opinion, FTC v. Microsoft, Docket No. 3:23-cv-02880-JSC (July 10, 2023), available at https://storage.courtlistener.com/recap/gov.uscourts.cand.413969/gov.uscourts.cand.413969.305.0_4.pdf.

61 ‘FTC withdraws its in-house challenge to Microsoft’s Activision Blizzard deal’, The Verge (July 20, 2023), available at https://www.theverge.com/2023/7/20/23795591/ftc-microsoft-activision-administrative-challenge.

62 Leah Nylen et al., ‘DOJ Preps Antitrust Suit to Block Adobe’s $20 Billion Figma Deal’, Bloomberg (Feb. 23, 2023), available at https://www.bloomberg.com/news/articles/2023-02-23/doj-preparing-suit-to-block-adobe-s-20-billion-deal-for-figma#xj4y7vzkg.

63 Complaint (Redacted Public Version), In the Matter of Intercontinental Exchange, Inc. v. Black Knight, Inc., Docket No. 8413 (March 9, 2023), available at https://www.ftc.gov/system/files/ftc_gov/pdf/d09413icebkp3complaintredacted.pdf; see also ‘FTC Secures Settlement with ICE and Black Knight Resolving Antitrust Concerns in Mortgage Technology Deal’, Press Release, FTC (August 21, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-secures-settlement-ice-black-knight-resolving-antitrust-concerns-mortgage-technology-deal.

64 2023-08-31 FTC Consent Order - ICE Black Knight (link).

65 Annika Kim Constantino, 'The FTC cleared Amgen’s $27.8 billion Horizon buyout — here’s what it means for other massive pharma deals’, CNBC (Sept. 5, 2023), available at https://www.cnbc.com/2023/09/05/ftc-clears-amgen-horizon-buyout-what-it-means-for-other-pharma-deals.html.

66 Annika Kim Constantino, 'The FTC cleared Amgen’s $27.8 billion Horizon buyout — here’s what it means for other massive pharma deals’, CNBC (September 5, 2023), available at https://www.cnbc.com/2023/09/05/ftc-clears-amgen-horizon-buyout-what-it-means-for-other-pharma-deals.html.

67 ‘Biopharmaceutical Giant Amgen to Settle FTC and State Challenges to its Horizon Therapeutics Acquisition’, Press Release, FTC (September 1, 2023), available at https://www.ftc.gov/news-events/news/press-releases/2023/09/biopharmaceutical-giant-amgen-settle-ftc-state-challenges-its-horizon-therapeutics-acquisition.

Unlock unlimited access to all Global Competition Review content