In a move the surprised no one, the Federal Trade Commission (FTC) reversed the decision of its own Administrative Law Judge (ALJ) and held that LabMD’s “data security practices constitute an unfair act or practice within the meaning of Section 5 of the FTC Act.” There are two noteworthy aspects to the opinion. First, if the magnitude of the harm is great enough, the risk of its occurrence can be low and still satisfy the “substantial injury” requirement. Second, believe it or not, the word “likely” does not mean “probably.” Continue Reading
Soon your Miller Lite will be brewed by a new company.
Last December, we wrote about a complaint filed by craft beer drinkers in an effort to block the merger between brewing titans Anheuser-Busch Inbev (ABI) and SABMiller. The post pointed out the unusual enforcement posture—private plaintiffs leapfrogging the federal antitrust enforcers and filing suit significantly prior to a decision by the Federal Trade Commission (FTC) or Department of Justice (DOJ). At that time we prognosticated, “a private plaintiff decrying a merger in court as illegal is left in an awkward position if the FTC or DOJ subsequently approves the deal.”
After eight years of antitrust enforcement under the Obama administration that some consider robust, while others are more critical, it is fair to wonder what we can expect from a Trump or Clinton administration. Of course, it is often difficult, if not dangerous, to make such prognostications, but it is worth considering the question nonetheless.
Donald Trump has had little to say so far on his position concerning antitrust enforcement. But, he has had one high profile run-in with the antitrust laws that may inform his perspective on the topic. Way back in 1986, Mr. Trump owned the New Jersey Generals football team, which was part of the now defunct United States Football League (USFL). The USFL held their games only in the spring until Mr. Trump came along and convinced other owners they should move the games to the fall with the idea that the league might eventually merge with the NFL. When the USFL was unable to secure a broadcast television contract for showing fall games, he backed a lawsuit against the NFL for violations of the Sherman Act. Ultimately, the jury found that the NFL had violated Section 2 of the Act, but they rejected the USFL’s primary claim that the NFL had monopolized the television market or attempted to do so. As a result, the jury awarded just $1 in damages (trebled to $3). An appeal to the 2nd Circuit did not overturn the verdict, and the league disbanded.
In its continuing fight against rising healthcare costs, the Justice Department (DOJ) has sued Charlotte, North Carolina’s largest healthcare system for using a common healthcare contracting tool, the anti-steering clause. U.S. and the State of North Carolina v. The Charlotte-Mecklenburg Hospital Authority, d/b/a Carolinas Healthcare System (CHS), Case No. 3:16-cv-00311, filed on June 9, 2016.
A few years ago, the DOJ attacked another healthcare contracting tool, the most-favored-nation clause, which insurers employed to guarantee they would receive the lowest rates on any given service. According to the DOJ, those clauses, when utilized by dominant healthcare systems, stifle competition and contribute to rising healthcare costs because providers cannot offer lower rates to other insurers without violating the most-favored-nation clause. The DOJ’s work had an effect too, as legislation banning the clauses has passed in a number of states. Now, the DOJ and the state of North Carolina have placed anti-steering clauses in their crosshairs. Continue Reading