The FTC is expanding its powers to investigate proposed mergers and potentially illegal violations Hogan Lovells

From all the new resolutions2 they come about one year after the FTC announced two enforcement action plans in July 2021 and September 2021. The first of these 2021 resolutions was set.3 the mandatory authorization process in investigations of any proposed merger, acquisition, or transaction subject to federal premerger notification requirements. He also organized a forced process in research “on the key priorities of the law for the next decade”, including technology companies and digital platforms; and benefits pharmaceutical healthcare businesses such as companies, pharmacy operators and hospitals.4 The second round of resolutions, which was announced in September 2021, will force the process to authorize investigations into eight key areas including restrictions; abuse of intellectual property; block directories and common domain; and monopolistic5

August 2022 Process of Compulsory Resolutions

An FTC press release announcing the new resolutions says the need to reduce the need for FTC staff to investigate the process imposed by the Commission-wide vote “removes a redundant and time-consuming impediment to the pursuit of investigative staff.” Democratic Commissioner Alvaro Bedoya, in a statement joined by Chair Lina Khan and Commissioner Rebecca Kelly Slaughter, explains that while the FTC’s Bureau of Consumer Protection has historically used all resolutions more often than the Competition Bureau, the agency’s new resolutions show. The intention is to “increase the use of this tool in the Competition Bureau to increase the Commission’s ability to rapidly emerge against threats of anticompetitive activity in our economy.”6 The vote to approve the resolutions was 3-2, with Republican Commissioners Christine Wilson and Noah Phillips casting a dissenting line calling the conclusions “obvious” that opens the door to politically motivated decision making by the agency.7

Collusive Power and Coordinated Action

Over all the use of the solution is a forced process directing the investigation of the breached practices8 states that such collusion or coordination may be accomplished through private communications, public statements, information sharing or other activities. In a press release, the FTC cites “a growing concern that recent increases in inflation in prices may be giving cover companies to collude against the government,” citing the agency’s fast-track investigative process in these matters. In several statements, Commissioner Bedoya describes collusive or coordinated activity that involves “competitors cooperating against the interests of consumers or working rather than competing with each other,” and points to examples of collusion in industries related to mobile phones, soft drinks and meat. to pack Commissioner Bedoya argues that “this type of competitive damage will require a quick and thorough investigation by the Bureau of Competition staff and strong enforcement action by the Commission.”

Proposed Mergers, Acquisitions and Transactions

Majority claims govern mergers, acquisitions and proposed transactions9 “It will allow for live investigations of all mergers, including those that fall below the value thresholds that report antitrust agencies under the Hart-Scott-Rodino Act (HSR Act). This will be expanded to all in July 2021, the resolution that directed a mandatory process to investigate any merger, acquisition , or a transaction subject to HSR reporting requirements.To justify this expansion, Commissioner Bedoya reported to the 6(b) Commission a study on non-HSR matters;10 arguing that the expanded resolution will allow the FTC to “expeditiously investigate even our traffickers who would otherwise fly under our radar.” Commissioner Bedoya also says the program is aimed at “hundreds of scams” that have not been reported to the FTC or DOJ, warning that “[f]irms can. . . Deliberately construct their own thresholds for HSR decline; [and] this use of “avoidance devices” actively subverts the work of institutions.

Republican Commissioners’ Disagree Statement

Republican Commissioners Christine Wilson and Noah Phillips issued a joint dissenting statement, citing all new findings as “an ill-advised long-term and well-functioning (and perfectly organized) Commission process promoted by transparency, oversight, and accountability.” The dissent argues that – in combination with the resolutions of July 2021 and September 2021 – all the new conclusions should be “eliminated.” only the floor of the Commission’s inspection of the use of forced processing in most of the investigations related to competition. A major dissent rejecting the need for investigative campaigns asserts that “the Commission has always been perfectly capable and willing to initiate appropriate investigations on a case-by-case basis, imposing little real additional costs.”

Republican commissioners call it a major dispute that the merger will “deal with more” for everyone [the FTC’s] radar,” noting that the Commission has been asked to investigate non-reporting matters and sometimes pursue remedies. With respect to the resolution relating to non-public collusion investigations, the dissent says that while the FTC must devote resources to rooting out illegal infringement in the marketplace, the new resolution is broad and applies to the procedure of the law under the well-established cause of the law, writing:[t]the new coercion resolution process exceeds the limits of common sense law, allowing investigations to examine not only collusion, but firms that “participate”. . . coordination in some way with any other market partner. Republican commissioners argue that the resolution suggests that the FTC use Section 5 of the FTC Act to pursue conduct that has been concluded does not violate antitrust laws, and while “there are circumstances in which tacit coordination investigations are appropriate.” . . . those investigations should be allowed in case of investigation rather than under any solution.

Looking ahead

All new resolutions are yet another step forward in the publication of the Author’s Research Competition. Combined with the relaxation of the resolutions effective from 2021, the new resolutions allow the agency to bypass the procedural hurdle of a Commission-wide vote and allow a streamlined process in investigations across a wide range of law enforcement areas. Every merger action – whether HSR-reportable or not – can now trigger a request for documents and evidence, at the discretion of each Commissioner. The agency can also now conduct investigations on a wide range of issues by any one Commissioner to facilitate “collaboration or coordination in any way with any other forum participant.” As a result, individuals and businesses should be aware that the use of FTC investigative tools such as issued requests for information, documents and evidence through civil investigations (CIDs) or subpoenas is likely to become more common and widespread, especially in sectors that are the current focus of FTC leadership such as technology and of vital sciences.

References

1 The FTC also decided to conduct related investigations of unfair and deceptive practices in the car rental industry.

Federal Trade Commission Federal Trade Commission II, “Federal Trade Commission Authorizes Three New Enforced Process Resolution Reviews” (26 August 2022) available here.

3 Federal Trade Commission press release, “FTC Allows Investigations into Key Product Priorities” (July 1, 2021) available here.

4 Other “priority” targets that had been decided in the focus of the month of July 2011 were repeat offenders; harm against workers and small businesses, and harm related to the covid-19 pandemic.

5 Federal Trade Commission press release, “FTC Streamlines Consumer Protection and Competitive Investigations in Eight Key Enforcement Areas to Enable Higher Caseload” (September 14, 2021) available here. Other areas of enforcement through the resolutions include acts or practices involving serving members of the US armed forces and veterans; acts or practices relating to children; bias in algorithms and biometrics; and deceptive and abusive behavior on the Internet.

6 Federal Trade Commission, “Statement by Commissioner Alvaro M. Bedoya, Joint Chair Lina M. Khan and Commissioner Rebecca Kelly Slaughter Regarding All Resolutions Approved by the Federal Trade Commission (August 17, 2022) available here.

7 Federal Trade Commission, “Dissenting Statement of Commissioners Noah Joshua Phillips and Christine S. Wilson Regarding the Issuance of Two Enforcement Resolutions (July 1, 2022) available here.

8 Federal Trade Commission, “Resolution Guide to Use of Coercive Procedures in Reviews of Nongovernmental Collusive Practices,” available here.

9 Federal Trade Commission, “Resolution Directing the Use of Coercive Processes in Nonpublic Reviews of Proposed Mergers, Acquisitions, and Transactions,” available here.

10 Federal Trade Commission, “Non-HSR Reported Acquisitions by Select Technology Platforms, 2010-2019: An FTC Study (September 2021) available here.

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