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April 6, 2023

Antitrust Agency Insights: Developments at the U.S. Antitrust Enforcement Agencies — First Quarter 2023

Antitrust/Competition Newsletter
By

Successfully navigating antitrust agency investigations requires a familiarity with Department of Justice and Federal Trade Commission processes, as well as insight into those agencies and their leaderships’ current priorities for enforcement and competition policy. This newsletter will provide periodic updates on both, offering an analytical look at how the antitrust agencies are approaching important competition issues and what current investigations may mean for potential future enforcement. We hope our experience — both inside and outside these agencies — will provide insights that help you make more informed decisions for your business.

Letter From the Editors

As we have previously written, the U.S. authorities’ focus on antitrust enforcement in the digital economy was on display when the Federal Trade Commission (FTC or Commission) challenged Meta’s acquisition of Within, a virtual reality app developer, in July 2022.1 The FTC’s attempt to block the deal failed, however, as Judge Edward J. Davila rejected the FTC’s request for a preliminary injunction in January 2023.2 While Judge Davila’s decision was clearly a victory for Meta in that it cleared the way for it to close its acquisition of Within, the FTC has highlighted what it sees as the silver lining in its comments on the decision, in particular that both the perceived potential competition theory and the actual potential competition theory were validated by the court, even if the court did not hold that the FTC had met its burden under either. Shortly after the court issued its decision, FTC Bureau of Competition Director Holly Vedova noted that “[e]ven in situations where a court doesn’t reach the conclusion we were hoping for, a court’s opinion can have beneficial interpretations of the law that can help us in future cases down the road, and really chart out a new course.”3 FTC Chair Lina Khan also commented that “[i]f you’re not really pushing the courts to engage with how these statutes apply in the new economy, you get doctrine that is stale[.]”4 Notwithstanding the loss, the decision likely will encourage the FTC to continue to pursue merger challenges involving potential competitors, especially in nascent markets.

The FTC’s Challenge

The FTC asserted that the proposed transaction would eliminate future competition between Meta and Within in the market for “VR dedicated fitness apps[.]”5 According to the FTC, Within offers a “VR dedicated fitness app” — a VR app designed to allow users to exercise through a structured physical workout in a virtual setting anywhere they choose to use their portable VR headset.6 The FTC’s amended complaint alleged that Meta’s acquisition of Within would lessen competition in the VR dedicated fitness app market because Meta would no longer have any incentive to develop its own competing app or add new features to existing Meta apps.7 The FTC alleged that “Meta has the economic characteristics, size, resources, capabilities, advantages, and incentives to enter the VR dedicated fitness app market — and it has seriously considered doing so — by means other than” the acquisition of Within.8 Specifically, the FTC asserted two theories of potential competition: actual potential competition (i.e., Meta’s entry “would have the effect of substantially deconcentrating and increasing competition in the market”) and perceived potential competition (i.e., “Meta’s presence as a perceived potential entrant likely influence[d] competition in the VR dedicated fitness app market”).9

Meta’s Response

In response to the FTC’s potential competition theories, Meta asserted that the FTC’s alleged “VR dedicated fitness app” product market was “artificial” and that it “had no plan to create its own VR fitness product.”10 Additionally, Meta added that its acquisition of Within would “improve and expand fitness offerings … and increase opportunities for existing and new third-party developers, all to the benefit of consumers, developers, and the overall VR ecosystem.”11

Meta also asserted that the FTC’s potential competition theories were unsupported by the facts or the law. First, Meta argued that, under United States v. Marine Bancorporation, Inc., a “potential competition theory” requires a showing that the relevant market is not functioning competitively.12 In contrast here, Meta asserted the FTC conceded that the “VR industry is currently characterized by a high degree of innovation and growth.13 ”Second, Meta argued the FTC’s perceived potential competition theory failed because the agency did not show market participants’ supposed fear of Meta’s entry or that Meta’s entry alone actually restrained “oligopolistic behavior” by Within or other VR fitness app providers.14 Third, Meta argued that the FTC’s actual potential competition theory is “a dead-letter doctrine” that has never been adopted by the Supreme Court or applied by the Ninth Circuit, “and no other Circuit has accepted it in a case involving a new product not already offered by the acquiring firm.”15

The Court’s Decision

On January 31, 2023, Judge Edward J. Davila rejected the FTC’s request for a preliminary injunction following a seven-day evidentiary hearing.16 First, Judge Davila accepted the FTC’s market definition, finding that the “practical indicia” analysis under Brown Shoe weighs in favor of the FTC’s assertion that VR dedicated fitness apps constitute the relevant product market.17 Namely, Judge Davila found that the industry and public recognition; peculiar characteristics and uses of the app; unique production facilities; customer base; and pricing structure all supported the FTC’s assertions that the VR dedicated fitness apps are distinct from both other VR apps and other fitness offerings.18 

After addressing the FTC’s market definition, the court considered the FTC’s potential competition theories. Importantly, the court rejected Meta’s assertion that the FTC’s actual potential competition theory invoked a “dead-letter doctrine” and acknowledged that the FTC, despite the nascent nature of the VR dedicated fitness app market, with many new entrants, had established the VR dedicated fitness app market was concentrated and thus “suitable for the potential competition doctrines."19 However, when applying those doctrines, the court ultimately held that the FTC failed to show a likelihood of success on the merits under either of the agency’s theories.

Actual Potential Competition Theory

Under the FTC’s actual potential competition theory, Judge Davila stated the question as “Is it reasonably probable that Meta would have entered the VR dedicated fitness app market de novo if it was not able to acquire Within?”20 To answer this question, Judge Davila broke it down into several specific inquiries:

  • Does the company have the capabilities to enter the market?
    • Here, the court considered both financial and engineering resources but also “capabilities unique to the relevant market[.]” Despite Meta’s financial and engineering resources, Judge Davila noted that it does not have the fitness content or studios needed to enter the VR dedicated fitness app market.21
  • Does the company have the incentives and motivations to enter the market?
    • The court examined Meta’s desire to grow the VR user base and improve hardware integration and profitability, but ultimately concluded that they did not provide significant probative value in assessing the likelihood of Meta’s entry because “Meta would enjoy those incentives even if it remained outside the relevant market and provided funding or technical support for in-market VR fitness app developers, as it already does.”22
  • Do the company’s contemporaneous documents demonstrate a subjective intent to enter the market?
    • Importantly, the court declined to consider the subjective evidence and testimony from Meta employees during the litigation and instead relied on ordinary course business documents.23 The court found that Meta had demonstrated interest in entering the market but that it was not “ever seriously contemplating a de novo entry, i.e., building its own VR fitness app.”24
  • Does the company have an identified means of entry?
    • While this inquiry may not be necessary in some cases where the evidence of capabilities, incentives, and intent is overwhelming, the court here rejected as speculative the FTC’s assertion that, with sufficient resources and excitement, Meta “would have inevitably found and implemented some unspecified means to enter the market[.]”25

Based on the answers to these questions, Judge Davila was not persuaded that it was “reasonably probable” Meta would enter the relevant market if it could not acquire Within.26

Perceived Potential Competition Theory

According to the court, the FTC’s perceived potential competition theory required it to show that “(1) Meta possessed the ‘characteristics, capabilities, and economic incentive to render it a perceived potential de novo entrant’ and (2) Meta’s ‘premerger presence on the fringe of the target market in fact tempered oligopolistic behavior on the part of existing participants in that market.’”27 The analysis here is therefore similar to the actual potential competition theory, but, instead of looking at Meta’s subjective intent, the court considered the “subjective perceptions of the in-market firms.28 ”In considering this element, the court focused on evidence (including testimony from in-market participants) that Meta was a perceived potential competitor and that in-market firms altered their otherwise oligopolistic behavior (or there were other procompetitive benefits) as a result.

To support their argument under this theory, the FTC presented evidence that Within co-founders and employees had expressed concerns that Meta could create a fitness version Beat Saber to compete with Supernatural.29 However, the court did not find this evidence convincing because communications occurred nearly a year before Meta began pursuing the acquisition of Within.30 The court further noted that the lack of testimony from other in-market firms further suggest that “the FTC failed to demonstrate that it was ‘reasonably probable’ that Meta was perceived as a potential competitor into the relevant market.31 ”Lastly, the court noted that the FTC failed to present sufficient evidence of a direct effect within the VR dedicated fitness app market because the statements the FTC pointed to were prior to Within and Supernatural entering the market. The statements were just “preemptive considerations of a firm contemplating entry into the market.”32 As a result, Judge Davila found that the FTC did not satisfy the requirements under this theory.

Court’s Decision and Takeaways

The court’s decision here is significant for multiple reasons. First, in many horizontal merger challenges, market definition is dispositive. Here, however, because Meta was not an actual competitor within the market, the FTC did not benefit from a presumption of competitive harm from increased concentration in a relevant market under the U.S. Supreme Court precedent in United States v. Philadelphia National Bank.33 As shown by the antitrust agencies’ recent track record in vertical mergers, proving that a merger may substantially lessen competition without the benefit of a presumption can be a challenge. Second, even if unsuccessful here, the opinion made clear that potential competition challenges are valid under the law. Judge Davila’s analysis clearly lays out a framework for evaluating such challenges so it is reasonable to assume that we will see the FTC follow his roadmap for challenges in the future. Ultimately, however, it remains to be seen whether the FTC will be able to establish the factual record required to show that a transaction between potential competitors will violate the antitrust laws.

Post Script

The Meta/Within transaction also received attention because it was the subject of a petition for Chair Khan to recuse herself in the FTC’s administrative challenge.34 She rejected that request,35 and the full Commission ultimately agreed, but not without vociferous dissent from the FTC’s lone Republican Commissioner, Christine Wilson.36 In her dissent, Commissioner Wilson called Chair Khan’s participation a violation of both “due process principles and federal ethics standards."37 Commissioner Wilson argued that the case law is clear that those sitting in a judiciary capacity need to avoid even the appearance of unfairness. She continued that Chair Khan’s former work at the Open Markets Institute where she urged the FTC to block any further acquisitions by Meta, her work on the House Majority Staff where they investigated big tech companies, and her academic work which has been critical of big tech companies, made Chair Khan’s participation in the Meta/Within case a violation under the ethics law.38

Commissioner Wilson, who had dissented from a number of the FTC’s recent actions, announced her departure from the Commission in an WSJ op-ed.39 Commissioner Wilson officially departed the agency on March 31, which left the FTC with no Republican members and all members of the same political party for the first time in history. While the loss of the FTC’s only Republican is unlikely to change the outcome of any specific enforcement or policy action, it does mean that the public, courts, and parties will not have the benefit of a dissenting voice at the Commission when considering future FTC actions (e.g., the final non-compete rule and the expected revised merger guidelines).

Additional Agency Updates

FTC Staffing Updates

  • Commissioner Christine S. Wilson announces that she will resign from the FTC. On February 14, 2023, Commissioner Christine S. Wilson announced that she would resign from the FTC and expresses her concern about the direction of the FTC. In her follow up official letter of resignation, Commissioner Wilson announced that she would resign on March 31, 2023.
  • Bloomberg reports that FTC Bureau of Competition Director Holly Vedova would retire. On March 2, 2023, Bloomberg reported that the FTC Bureau of Competition Director Holly Vedova would retire.

FTC Cases and Proceedings

  • Meta wins against FTC and closes Within acquisition. On January 31, 2023, Judge Edward J. Davila of the U.S. District Court for the Northern District of California denied the motion by the FTC to enjoin Meta’s proposed acquisition of Within, allowing Meta to close the acquisition. On February 24, the FTC dismissed the complaint.
  • By a 3-1 vote, the FTC approves a final consent order requiring O-I Glass, Inc. and Ardagh Group S.A. to drop noncompete restrictions on their workers. On February 23, 2023, the FTC announced the proposed consent order following a public comment period. The consent order prohibited O-I Glass and Ardagh from enforcing, threatening to enforce, or imposing noncompetes against any relevant employees.
  • FTC Chair Khan and Commissioners Slaughter, Wilson, and Bedoya publish a joint statement on Amazon.com, Inc.’s acquisition of 1Life Healthcare Inc. On February 27, 2023, the FTC Chair and Commissioners released a joint statement urging Amazon and One Medical to make clear how they will use protected health information, as defined by HIPAA, and how the integrated entity will use any One Medical patient data for purposes beyond the provision of health care. The FTC further stated that the law requires companies to treat sensitive data with great care, and accordingly, the parties and the market more broadly should be on notice that the Commission will continue to monitor this space and bring enforcement actions whenever the facts warrant.
  • By a 3-1 vote, the FTC approves a final consent order regarding the use of employee noncompete agreements by Prudential Security, Inc., Prudential Command Inc., Greg Wier, and Matthew Keywell (collectively “Prudential Security et al.”). On March 8, 2023, the FTC finalized consent orders settling charges that Prudential Security and two individuals illegally imposed noncompete restrictions on security guards who worked for them. The consent order imposed a number of requirements and restrictions including a provision that prohibits them from enforcing, threatening to enforce, or imposing noncompete agreements against any employees.
  • By a 4-0 vote, the FTC files suit to block Intercontinental Exchange Inc.’s proposed acquisition of Black Knight, Inc. On March 9, 2023, the FTC issued an administrative complaint seeking to block International Exchange from acquiring Black Knight, alleging that the proposed deal would drive up costs, reduce innovation, and reduce lenders’ choices for tools necessary to generate and service mortgages. Specifically, the FTC alleged that the merger would harm competition in the loan origin systems (LOS) market and competition for product pricing and eligibility engines, or PPEs, as well as other various ancillary services that are add-ons to loan origination software.
  • By a 3-1 vote, the FTC settles charges that Anchor Glass imposed anticompetitive noncompete restrictions on its workers. On March 15, 2023, the FTC accepted a consent agreement to resolve allegations that Anchor Glass Container Corporation and its owners, Lynx Finance GP, LLC and Lynx Finance L.P., “illegally imposed noncompete restrictions on more than 300 workers across a variety of positions, including salaried employees who work with the plants’ furnaces and forming equipment and in other glass production, engineering, and quality assurance positions.” The FTC’s consent order bans Anchor from entering into noncompete agreements with its workers and enforcing existing noncompete agreements. Anchor must also provide notice to future employees that they may compete with Anchor in the future.

DOJ Cases and Proceedings

  • Insulation contracting firm receives sentence for bid rigging. On January 17, 2023, a Texas military contractor, Aaron Stephens, pleaded guilty to bid rigging. The military contractor was alleged to have conspired with others to rig bids on certain government contracts from May 2013 to January 2018 to secure government payments in excess of $17.2 million.
  • MTA employee pleads guilty to bid rigging. On January 30, 2023, a Metropolitan Transportation Authority (MTA) employee, Timour Abramov, who allegedly used insider information to engage in bid rigging from November 2019 to February 2021 to purchase vehicles with insider information and resell them on social media platforms, pleaded guilty to wire fraud in connection with selling inside information on the competitive bidding process for MTA vehicle auctions on social media platforms.
  • Two Amazon Marketplace sellers and four companies plead guilty to price fixing. On February 9-10, 2023, two Amazon marketplace sellers, Bruce Fish and Victor Btesh, and their four companies, pleaded guilty to charges that they entered into a price-fixing conspiracy to raise prices of DVDs and Blu-Ray discs sold on Amazon marketplace. DOJ alleged that their collaborative action resulted in DVDs and Blu-Ray discs being sold at collusive and noncompetitive prices.
  • Insulation contracting firm co-owner sentenced to prison and ordered to pay more than $1 million to victims of bid rigging and fraud. On February 10, 2023, Insulation Contracting Firm Co-Owner, Michael S. Flynn, was sentenced to fifteen months in prison and ordered to pay restitution of $1,062,155.

  • DOJ files a Statement of Interest in Borozny et al. v. Raytheon Technologies Corp., Pratt & Whitney Division; Agilis Eng’g, Inc.; Belican Eng’g Grp., LLC; Parametric Sols., Inc. and Quest Global Servs.-NA, Inc. On February 10, 2023, the DOJ filed a Statement of Interest arguing that market definition should not be an element of per se violations of Section 1.
  • DOJ files a Statement of Interest in In Re: Deere & Company Repair Services antitrust litigation. On February 14, 2022, the DOJ filed a Statement of Interest in In Re: Deere & Company Repair Services. DOJ argued that Deere’s arguments that they can legally have exclusive repair power is not supported by precedent. On February 28 Deere filed a strongly worded response arguing that it was the DOJ itself that misstated precedent, arguing that “The fundamental problem with the Government’s position is that it rests on a reading of Kodak that was incorrect in 1992, and has been decisively foreclosed in circuit after circuit — starting with the Seventh — in the thirty-plus years since.”
  • Former digital interactive whiteboards salesman pleads guilty to rigging bids to the largest public-school system in the United States. On February 15, 2023, a former salesman, Dwayne Johnson, pleaded guilty for his leading role in a bid rigging scheme involving the sales of certain brands of digital interactive whiteboards to the New York City Department of Education Public Schools (NYCDOE). Johnson was alleged to have engaged in a conspiracy from late 2018 through at least October 2020 to undercut the NYCDOE’s competitive bidding process and ensure that companies controlled by his co-conspirators submitted winning bids. Johnson sold boards to his co-conspirator that won the bid, then the winning co-conspirator made the sale to the NYCDOE, and the losing co-conspirator was paid to install the boards in the classrooms. Johnson also created and submitted sham bids in order to ensure his co-conspirator won the bid.
  • DOJ sues to block JetBlue’s acquisition of Spirit Airlines. On March 7, 2023, the DOJ filed a complaint seeking to block JetBlue’s $3.8 billion acquisition of Spirit Airlines to “preserve Spirit’s unique and disruptive role in the industry, to protect choice and economical access to air travel, especially for millions of cost-conscious Americans, and to prevent hundreds of millions of dollars in annual harm to consumers.” In the complaint, the DOJ stated the merger should not be approved because JetBlue will abandon Spirit’s business model, remove seats from Spirit’s planes, and charge higher prices, which will lead to “lasting negative impacts on consumers.”
  • DOJ brings charges against healthcare staffing executive for fixing wages of nurses. On March 16, 2023, the DOJ brought an action against Eduardo Lopez, an executive of three different home health agencies, who allegedly participated in a series of meetings and communications to fix wages of nurses between March 2016 and May 2019. According to the DOJ, Lopez oversaw recruitment, hiring, retention, and assignments of nurses and other healthcare staff for all three home health agencies. Lopez and other unnamed co-conspirators are charged with agreeing to suppress and eliminate competition for the services of nurses.
  • DOJ abandons UnitedHealth merger appeal. On March 20, 2023, the DOJ jointly filed a stipulation of voluntary dismissal with UnitedHealth, marking an end to the DOJ’s challenge of UnitedHealth’s $13.8 billion purchase of Change Healthcare, after four months of docket silence and six months after D.C. federal court rejected the lawsuit.

Policy — FTC

  • FTC proposes rule to ban noncompete clauses. On January 5, 2023, the FTC proposed a new rule that would ban noncompetes. The new rule would make it illegal for employers to (1) enter into or attempt to enter into a noncompete with a worker; (2) maintain a noncompete with a worker; or (3) represent to a worker, under certain circumstances, that the worker is subject to a noncompete. The proposed rule would also apply to independent contractors and anyone who works for an employer, whether paid or unpaid.
  • FTC publishes inflation-adjusted civil penalties. On January 6, 2023, the FTC announced their revised inflation-adjusted civil penalties for 2023 as required by Federal Civil Penalties Inflation Act of 2015. As of January 11, 2023, the maximum civil penalty amount has increased from $46,517 to $50,120 for violations of Sections 5(l), 5(m)(1)(A), and 5(m)(1)(B) of the FTC Act, Section 7A(g)(l) of the Clayton Act, and Section 525(b) of the Energy Policy and Conservation Act. The penalties have increased from $612 to $659 for violations of Section 10 of the FTC Act.
  • FTC launches new Office of Technology. On February 17, 2023, the FTC launched a new Office of Technology to “keep pace with technological challenges in the digital marketplace by supporting the agency’s law enforcement and policy work.” The Office of Technology will have dedicated staff and resources and will be headed by Chief Technology Officer Stephanie T. Nguyen.
  • FTC seeks public comments on franchisor control over franchisees and workers. On March 10, 2023, the FTC requested comments on the franchise agreements and franchisor business practice, including but not limited to, how franchisors exert control over franchisees and their workers. More specifically, FTC stated that they want to know how franchisors disclose certain aspects and contractual terms of the franchise relationship, as well as the scope, application, and effect of those aspects and contractual terms.
  • FTC seeks comments on business practices of cloud computing providers that could impact competition and data security. On March 22, 2023, the FTC requested comments on business practices of cloud computing providers, including issues related to the market power of these companies, their impact on competition, and potential security risks. Specifically, the FTC seeks information about the competitive dynamics of cloud computing, the extent to which certain segments of the economy are reliant on cloud service providers, and the security risks associated with the industry’s business practices. Additionally, FTC is also interested in the impact of cloud computing on specific industries including healthcare, finance, transportation, e-commerce, and defense.
  • FTC and DOJ hold their second annual spring enforcers summit. On March 27, 2023, the FTC and the DOJ cohosted their second Spring Enforcers Summit. FTC Chair Lina Khan, DOJ AAG Jonathan Kanter, as well as senior staff members from both agencies, met with international enforcers and state attorneys general to discuss enforcement priorities and strategies for effective coordination.

Policy — DOJ

  • DOJ withdraws “outdated” enforcement policy statements. On February 3, 2023, the DOJ announced their withdrawal of three antitrust statements related to enforcement in healthcare markets: Department of Justice and FTC Antitrust Enforcement Policy Statements in the Health Care Area (Sept. 15, 1993); Statements of Antitrust Enforcement Policy in Health Care (Aug. 1, 1996); and Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (Oct. 20, 2011). The DOJ stated that their decision was based on careful review and consideration of the changes in the healthcare industry.
  • DOJ continues their Section 8 enforcement to prevent potentially illegal interlocking directorates. On March 9, 2023, the DOJ announced that five additional directors resigned from four corporate boards and one company declined to exercise board appointment rights in response to the Antitrust Division’s enforcement efforts around Section 8 of the Clayton Act. As of the announcement, the number of interlocks unwound or prevented as a result of the division’s recent efforts included at least 13 directors from 10 boards.

Inter-Agency Initiatives

  • FTC and DOJ issue fiscal year 2021 Hart-Scott-Rodino Premerger Notification Report. On February 10, 2023, the FTC and the DOJ jointly released the agencies’ 44th Annual Hart-Scott-Rodino Report for the Fiscal Year 2021. The agencies challenged a total of 32 mergers, with the FTC challenging 18 and the DOJ bringing 14.
  • FTC and DOJ jointly host Asia-Pacific Economy Cooperation Workshop on Competition Advocacy. On February 21, 2023, the FTC and DOJ jointly launched a two-day joint workshop as part of this year’s first Asia-Pacific Economic Cooperation’s (APEC) Senior Officials Meeting. This year marks the first time the United States has hosted APEC since 2011. The workshop features presentations and roundtable discussions on litigating competition matters, regulatory advocacy, and effective legislative advocacy in a changing world.
  • The FTC, DOJ, and the EC hold their third U.S.-EU Joint Technology Competition Policy Dialogue. On March 30, 2023, FTC’s Commissioner Lina Khan, DOJ’s AAG Jonathan Kanter, and EC’s Executive Vice President Margrethe Vestager met in Washington, D.C. for the third U.S.-EU Joint Technology Competition Dialogue (TCPD). The conversation centered on monopolization and mergers in the digital sector and the evolving business strategies of big tech companies, as well as their implications for enforcement. The agencies also announced planned liaisons of agency experts from the Antitrust Division and the FTC in Brussels, with each agency sending an official to assist with implementation of the Digital Markets Act (DMA).

FTC Speeches

  • Commissioner Holly Vedova delivers remarks at the 12th annual GCR Live. On February 3, 2023, Commissioner Vedova made remarks at the GCR Live Conference. Notably, Commissioner Vedova spoke about the court’s holding in the Meta/Within case. She said, “I want to emphasize that there is tremendous value in our bringing difficult cases to ensure competitive markets. Even in situations where a court doesn’t reach the conclusion we were hoping for, a court’s opinion can have beneficial interpretations of the law that can help us in future cases down the road, and really chart out a new course. In fact, that possibility is very much a part of what we consider when we think about which cases to bring.”

DOJ Speeches

  • Principal Deputy Assistant Attorney General Doha Mekki delivers remarks at Mercatus Center Second Annual Antitrust Forum: Policy in Transition. On January 26, 2023, Doha Mekki, Principal Deputy Assistant Attorney General, gave remarks at the Mercatus Center Second Annual Antitrust Forum: Policy in Transition about the importance of competition and the path forward. Notably, Mekki stated that they are skeptical of efficiencies and are willing to litigate antitrust violations.
  • AAG Jonathan Kanter delivers remarks at Keystone Conference on Antitrust, Regulation & the Political Economy. On March 2, 2023, AAG Kanter spoke at the Keystone Conference on Antitrust, Regulation & the Political Economy, outlining his thoughts on platform industries. Kanter noted that platforms differ from more traditional markets in numerous fundamental ways. For example, platforms often benefit from economies of scale as they grow, and the firms that own dominant platforms often get to set the rules of the road in unique ways. For these reasons, platforms do not fit neatly into traditional competition analysis. And as such, remedies must account for market realities and the future.
  • AAG Jonathan Kanter speaks at the South by Southwest Festival about artificial intelligence. On March 11, 2023, AAG Kanter told the crowd at South by Southwest Festival that the DOJ is paying close attention to artificial intelligence. AAG Kanter noted that DOJ has hired data scientists and are bringing in experts to better understand artificial intelligence technology.
  • AAG Jonathan Kanter delivers opening remarks at the second annual Spring Enforcers Summit. On March 27, 2023, AAG Kanter gave opening remarks at the second annual Spring Enforcers Summit. In his remarks, he highlighted the importance of adapting to keep pace with the current economy and technology.
© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

  1. Complaint, FTC v. Meta Platforms, Inc., No. 22-cv-04325 (ND Cal. July 27, 2022), available here; Sonia Pfaffenroth & Matthew Tabas, Antitrust Agency Insights: Developments at the U.S. Antitrust Enforcement Agencies — Third Quarter 2022 (Oct. 4, 2022), Arnold & Porter, available here.

  2. FTC v. Meta Platforms, Inc., No. 22-cv-04325 (ND Cal. Jan. 31, 2023).

  3. Holly Vedova, Update from the FTC’s Bureau of Competition (Feb. 3, 2023), FTC, available here.

  4. Lina Khan, Interview from the Enforcer’s Summit (March 27, 2023).

  5. Supra Note 2.

  6. Amended Complaint, FTC v. Meta Platforms, Inc., No. 22-cv-04325, 5 (ND Cal. Oct. 07, 2022).

  7. Id.

  8. Id. at 57, 58.

  9. Id. at 21, 23.

  10. Answer to Complaint and Affirmative Defenses of Meta Platforms, Inc., FTC v. Meta Platforms, Inc., No. 22-cv-04325, 1-2 (ND Cal. Aug. 26, 2022).

  11. Id.

  12. Defendant’s Motion to Dismiss Amended Complaint, FTC v. Meta Platforms, Inc., No. 22-cv-04325, 7 (ND Cal. Oct. 13, 2022).

  13. Id. at 8.

  14. Id.

  15. Id.

  16. Supra Note 2.

  17. Id. at 29.

  18. Id.

  19.  Id. at 33, 40.

  20. Id. at 43.

  21. Supra note 2 at 44-46.

  22. Id. at 27.

  23.  Id. at 49.

  24. Id. at 53.

  25. Id. at 54.

  26. Id. at 60.

  27. Supra note 2 at 60.

  28. Id. at 61.

  29. Id.

  30. Id.

  31. Id. at 62.

  32. Id. at 63.

  33. 374 U.S. 321 (1963).

  34. Petition for Recusal of Chair Lina M. Khan from Involvement in the Proposed Merger between Meta Platforms, Inc. and Within Unlimited, Inc., FTC No. 221-0040 (July 25, 2022), available here.

  35. Order Denying Petition for Recusal, FTC v. Meta Platforms, Inc., No. 22-cv-04325 (Feb. 1, 2023), available here.

  36. Dissenting Statement of Commissioner Christine S. Wilson, FTC v. Meta Platforms, Inc., No. 22-cv-04325 (Feb. 1, 2023), available here. 

  37. Id.

  38. Id.

  39. Christine Wilson, “Why I’m Resigning as an FTC Commissioner” (Feb. 14, 2023), WSJ | Opinion, available here (stating “I refuse to give their endeavor any further hint of legitimacy by remaining ... . Accordingly, I will soon resign as an FTC commissioner.”)

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Sonia Kuester Pfaffenroth
Sonia Kuester Pfaffenroth
Partner
Washington, D.C.
+1 202.942.6831
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Matthew Tabas
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Washington, D.C.
+1 202.942.6224

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