Department of Justice

Can You Make Money From an Antitrust Hedge Fund?

October 9, 2014 | Bona Law PC

So here’s an idea. Let me know what you think: A hedge fund or other investment vehicle centered on antitrust analysis.

I’ll explain.

As you might know, I am an antitrust attorney. And I write a blog on antitrust and competition law. So, as you may expect, I follow antitrust developments somewhat obsessively at times. As a result, I have a good sense of the practical antitrust implications of certain cases, investigations, or prospective mergers.

I don’t have a crystal ball or anything. Nor do I have any inside information. And since human beings—judges or agency officials—make the relevant decisions, nobody can actually predict what will happen.

But by now, I can review a complaint or a motion to dismiss or description of facts and have a good sense of the strength and risk of the antitrust issues. I think I also have a decent idea how the major antitrust agencies—the FTC and Department of Justice—focus their priorities and like to resolve investigations, cases, and mergers. Like I said, I can’t predict anything with certainty, but there is a high learning curve for antitrust (probably more than most specialties) and I’ve spent a lot of time and effort climbing that curve.

Enough about me—for now anyway.

Let’s talk about antitrust and company stock performance. The obvious scenario is a merger. Two companies, perhaps competitors, announce a merger or acquisition. It isn’t a dead-on-antitrust-arrival merger between the first and second leading companies in a product and geographic market that is easily defined. Instead, it is the sort of merger where the markets are somewhat complicated, perhaps in flux, and it isn’t entirely clear whether an antitrust agency will challenge it or a court will stop it.

Continue reading →

The Antitrust Laws Encourage Stealing

April 22, 2014 | Bona Law PC

That’s right, the antitrust laws care so much about competition that they even prohibit agreements among competitors to not steal. In a society that morally condemns stealing, this is counter-intuitive (and a good reason to learn a little bit about antitrust).

You might wonder now whether I will engage in some philosophy gymnastics to convince you that stealing is okay. No, but I will provide a concrete example, then offer some advice. Not as fun, but perhaps more useful.

So California is abuzz with recently released documents in an antitrust class action by employees against giant Silicon Valley employers like Google, Inc., Apple Inc., Intel Corp and Adobe Systems Inc. The case is scheduled for trial soon and news reports suggest a settlement is likely.

Update: As expected, the parties have reportedly agreed to settle the antitrust case.

What happened? The class-action employees accused major Silicon Valley employers of agreeing not to steal each other’s employees. If true, that’s kind of a big deal under the antitrust laws.

It doesn’t sound so bad, right? How can anyone get any work done if everyone is trying to steal everyone’s employees? And it just seems impolite. Competitors are so tough on each other—can’t we have just a little bit of dignity and not try to hire away your competitor’s employees? The sort of war that can ensue among competing employers for a scarce resource—quality technology employees—can make a truce very tempting.

Continue reading →

The Problem with Conduct Remedies for the Comcast-Time Warner Cable Merger

April 16, 2014 | Bona Law PC

Antitrust attorneys do everything that a lawyer can do: They litigate in both courts and agencies; they counsel clients; and they participate in mergers & acquisitions. If you are a young lawyer or law student that can’t decide what type of legal activity you like best, try antitrust and competition law—you can do it all.

In the mergers & acquisitions category, antitrust’s most recent obsession is the deal between Comcast Corp. and Time Warner Cable., Inc.

Competition Policy International (CPI) was kind enough to ask me to write a few words expressing my thoughts, and you can read them here. You can view the other Comcast-TWC articles from the CPI Antitrust Chronicle here.

I won’t go into a lot of detail because you can read the actual article (which is less than five pages), but I thought I’d provide a little introduction into my thinking.

Usually in these circumstances, you will see commentary on one side stating that, of course, the merger should be approved, maybe even “as is.” On the other side, you will read analyses that the world will fall apart if the merger is not blocked forever.

Continue reading →

Does My Company’s Loyalty-Discount Program Violate Antitrust and Competition Laws?

January 22, 2014 | Bona Law PC

This article is cross-posted in both English and French at Thibault Schrepel’s outstanding competition blog Le Concurrentialiste. Like most antitrust issues today, questions about loyalty discounts are relevant across the globe as competition regimes and courts grapple with the best way to address them.

Companies like to reward their best customers with discounts. It happens everywhere from the local sandwich shop to markets for medical devices, pharmaceutical products, airline tickets, computers, consumer products, and many other products and services.

Customers like loyalty-discount programs (or rebates) because they get more for less. And the reason so many companies offer them is because they are successful.

Everyone wins, right?

Usually. But the program could very well violate antitrust and competition laws in the United States, the European Commission, or other jurisdictions.

Continue reading →

Even Individual Real-Estate Investors Can Violate The Antitrust Laws

January 6, 2014 | Bona Law PC

When you think about a government antitrust investigation, you probably picture monopoly accusations against large companies like Microsoft in the 90’s and early 2000’s or AT&T in the 70’s and 80’s. Or perhaps you imagine a global price-fixing cartel like that depicted in the movie The Informant.

In any event, the target in your mind is a big company, along with their officers and executives, and perhaps some sales people.

The Department of Justice actions against individual real-estate investors in Northern California should shatter those preconceptions. Over the last few weeks, the Antitrust Division of the DOJ has announced a series of plea agreements arising out of its antitrust investigations into bid rigging at real-estate-foreclosure auctions for certain Northern California counties.

Continue reading →

Building an Antitrust and Competition Policy: Where to Begin

December 26, 2013 | Bona Law PC

Let’s pretend that you are starting the new year with an exciting opportunity: You were just named general counsel of a multi-national corporation with several market-leading products.

You received lots of congratulations, high-fives, and kudos during holiday parties and family get-togethers, but you can’t help but start to think about the arduous task ahead.

Continue reading →

The Anatomy of a Per-Se-Antitrust Violation

December 15, 2013 | Bona Law PC

The Internet didn’t fall down after my first post, so I thought I’d try another.

In the US, certain conduct is so obviously anticompetitive that antitrust law labels it per se illegal. These restraints lack redeeming pro-competitive value in almost all instances, so the law allows plaintiffs an important short-cut to pleading and proving such a claim.

The short-cut is that a plaintiff asserting a per-se-antitrust claim need not demonstrate anticompetitive harm. The law presumes such harm. This is huge because this element is one of the most difficult and expensive to prove.

Proving anticompetitive harm is often tough. Plaintiffs usually start by defining the relevant product and geographic markets. This is obvious is some cases; difficult and disputed in others.

Within that defined market, the plaintiff will then usually have to show market or monopoly power, then actual competitive harm in that market that exceeds any competitive benefits from the challenged restraint. It doesn’t always go like this, but that is the typical journey.

Proving all of this almost always requires expert economic testimony, which is—again—almost always disputed by defendants’ economic expert.

So this anticompetitive harm element can become quite burdensome and expensive. That is why fitting a case into a per-se-antitrust package is so valuable for a plaintiff, and risky for a defendant.

Price-fixing agreements usually come to mind as the prototypical per se antitrust violation (keep in mind that antitrust views agreements to limit volume as effectively the same thing). Other examples are market-allocation agreements and certain boycotts.

Let’s talk about market-allocation agreements—as price-fixing is a bit too obvious—so we can see how dangerously easy it is for this per-se-antitrust violation to develop.

Market allocation is an antitrust problem because competitors are agreeing not to compete. The most simple market-allocation agreement is geographic—“you take customers West of the Mississippi, and we will take the ones to the East.”

But sometimes it develops more subtly.

Continue reading →