FTC Category Archives — Page 7 of 7 — The Antitrust Attorney Blog Published by California Antitrust Lawyer

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.

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Antitrust Law as a Negotiating Tool and the Pursuit of Family Dollar Stores

September 3, 2014 | Bona Law PC

When you are a law student, you don’t usually understand that most cases are just one of several business tools that are companies utilize to advance their interests in the marketplace.

You might think that cases are academic-like exercises that reach either trial or some appellate court (perhaps after a motion-to-dismiss or summary-judgment motion). One or the other party or both are seeking justice and will not rest until the case terminates. That’s not a surprise, really, because much of what you do in law school is read such cases. I guess that is why many law students want to become appellate attorneys.

But the reality is that—as much as lawyers like myself like to view the law through an academic lens—a lawsuit or threat of a lawsuit is often just a way for someone to seek leverage. The claim is real and is serious, but litigating the case to termination is usually a last resort. The best result is often a settlement—the earlier the better.

Lawyers don’t like to talk about that much because unless you are on a contingency fee an early settlement means less money for the attorney. But it is the truth; lawyers are not special, really. What we do in litigation is often just another business tool to advance our client’s position in the marketplace. There are exceptions, of course—cases where justice must be done—but most commercial litigation doesn’t fall into that category.

Most of commercial litigation is a negotiating tool.

And an antitrust claim is a particularly large (and effective) bat when it comes to leverage.

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We Filed a US Supreme Court Amicus Brief Supporting Antitrust Lawsuits Against Licensing Boards

August 7, 2014 | Bona Law PC

By Jarod Bona and Aaron Gott

We filed an amicus curiae brief with the U.S. Supreme Court on behalf of We All Help Patients, Inc. in North Carolina State Board of Dental Examiners v. FTC, a federal antitrust case challenging anticompetitive conduct by professional-licensing boards.

Let us tell you a little bit about this interesting case.

The Antitrust Case

The North Carolina Board of Dental Examiners is composed of six licensed dentists, one licensed dental hygienist, and one “public member.” Dentists make a lot of money by offering teeth-whitening services. So when non-dentists started providing teeth-whitening services at a far lower cost, dentists started complaining to the Board about the lower-priced competitors.

Naturally, a Board made up of self-interested private parties had an incentive to do something about it. They began sending cease-and-desist letters to non-dentist teeth whiteners and even went so far as to ask shopping malls to not lease kiosks to teeth whiteners. It wasn’t clear, of course, that North Carolina law limited teeth-whitening services to dentists.

The Board’s actions were, in fact, a conspiracy to restrain trade. The members were competitors that acted in agreement to exclude other competitors. The conspiracy question was not at issue with the US Supreme Court.

The Federal Trade Commission, which has long advocated for “free and unfettered competition as the rule of trade” to protect consumers and economic liberty, issued an administrative complaint against the State Board and ultimately held that the Board engaged in anticompetitive conduct and the state-action immunity doctrine did not apply. The case made its way up through the Fourth Circuit—which agreed with the FTC—and finally to the U.S. Supreme Court.

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Is the FTC a Libertarian Government Agency?

July 16, 2014 | Bona Law PC

Probably not. But any government agency that files an amicus brief supporting an Institute for Justice case challenging anticompetitive state action deserves some libertarian props.

If I had to name a favorite government agency, I would pick the FTC. I don’t agree with many of their positions, of course, and have gone up against them before. But they work hard to rein in anticompetitive state and local conduct and that is meaningful. In those instances, they are champions of competition. These state and local boards shouldn’t violate the antitrust laws.

Andrew Gavil, the Director of the Office of Policy Planning at the FTC, testified before the House Committee on Small Business on “Competition and the Potential Costs and Benefits of Professional Licensure.” This is an issue that I have studied for many years and the FTC has been and remains a leader in protecting competition from needless entry barriers by state and local boards.

Let’s take a quick look at Andrew Gavil’s written statement, which officially presents the views of the Federal Trade Commission by a 5-0 vote.

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The FTC Orders Ski-Equipment Companies to Start Competing Again

July 9, 2014 | Bona Law PC

Sometimes competition is a real hassle.

If your company has a loyal customer or longtime employee, you feel betrayed when a competitor swoops in to try to “steal them.”

If you are the Miami Heat, you probably don’t like that the Cleveland Cavaliers are trying to hire your best player, LeBron James. Of course, a few years ago, the Heat signed James from Cleveland. (On a side note, this Minnesota Timberwolves fan wonders whether a LeBron James move to Cleveland will lead to a Kevin Love trade for Number 1 draft pick, Andrew Wiggins).

Update: LeBron James is indeed “coming home” to Cleveland.

I just started watching Breaking Bad. (I know, what took me so long?). Anyway, it is apparent in the early episodes that drug cartels shovel heavy resources into extinguishing competition. They certainly don’t seem too happy about this Heisenberg fellow coming in to outcompete them with a superior product. Perhaps in a later season, “Better Call Saul” will help Walter White file a Sherman Act, Section 2 Antitrust lawsuit against some of these monopolists that are restraining him from competing in certain geographic markets?

The bottom line is that as great as competition is—for almost everyone—it isn’t always enjoyable to those that must compete.

It is much easier to complacently offer the same product or service for a highly-profitable price than to constantly refine your wares and cut prices to attract and keep customers.

Perhaps a couple major ski equipment manufacturers were thinking along those lines if we are to believe the FTC’s allegations that ended in settlements approved today?

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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.

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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.

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Breaking Up The Music-Teachers’ Cartel

December 18, 2013 | Bona Law PC

Little Johnny finally has a chance for some decent-priced piano lessons, thanks to the diligence of your Federal Trade Commission.

On Monday, December 16, 2013 the FTC slammed the full weight of its antitrust authority against the Music Teachers National Association (MTNA) and their vicious cartel to make little Susie pay more for her violin lessons.

The Association entered into a consent decree with the FTC, addressing the following provisions in their code of ethics: “The teacher shall respect the integrity of other teachers’ studios and shall not actively recruit students from another studio.”

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