A quick look at the top headlines in Antitrust and Competition
A quick look at the top headlines in Antitrust and Competition
A breakdown of the latest news, moves and trends
President Trump Rejects Biden Administration’s Whole-of-Government Approach to Competition
President Trump reversed course on a Biden-era policy that created a “whole-of-government approach” to competition enforcement. President Biden’s “Executive Order on Promoting Competition in the American Economy” previously directed executive agencies to coordinate on antitrust enforcement and consider using agency statutory authorities to address consolidation. It also established a competition council, made up of cabinet secretaries, to ensure that the operations of each executive agency promoted fair competition.
On August 13, President Trump revoked the Executive Order on Promoting Competition. The revocation does not include a policy section detailing a rationale for the move, but earlier actions in the Administration provide some insight: In a previous newsletter, we explained that President Trump commenced a process for eliminating regulations that could hinder competition, and he directed agency heads to review and identify such regulations. Our newsletters also previously noted that AAG Slater expressed “a healthy fear” of regulations, calling antitrust a scalpel and regulations a sledgehammer in her first speech after taking the helm of the Antitrust Division. AAG Slater additionally announced a Task Force to identify and eliminate laws and regulations that undermine the operation of free markets.
Bottom line: Together, it appears this Administration viewed a comprehensive whole-of-government approach to competition enforcement as a sledgehammer rather than a scalpel. But the Biden-era policy did not ipso facto regulate businesses - it was intended for the government to work together to promote competition. It may be that the DOJ and FTC can carry the banner of antitrust enforcement on their own to unleash innovation and guard against further consolidation. But the past is prologue.
Developments and deals to watch
United Amedisys Settlement Signals Optimism for Merging Parties
On August 14, UnitedHealth announced it closed its $3.3 billion acquisition of home health and hospice provider Amedisys, after reaching a settlement with the DOJ.
The settlement requires UnitedHealth and Amedisys to divest 164 home health and hospice locations (including one affiliated palliative care facility) across 19 states, accounting for approximately $528 million in annual revenue. The DOJ stated that it believes the settlement will preserve both price and wage competition and noted that it represents the largest divestiture of outpatient healthcare services to resolve a merger challenge. Amedisys is also required to pay a $1.1 million civil penalty for falsely certifying that the company had “truthfully, correctly, and completely” responded to Second Request document production requirements.
Bottom line: As we have noted previously, antitrust enforcers in the Trump Administration have expressed an openness to accepting remedies, in contrast to the Biden Administration, which sued to block the United-Amedisys deal. The United-Amedisys clearance follows other recent settlements for deal approvals including Hewlett Packard Enterprise’s (HPE) acquisition of Juniper Networks and Keysight’s acquisition of Spirent.
Essential insights and analysis
Google Fighting on all Fronts: Epic, Perplexity, and Adtech Remedies
We have previously highlighted the legal challenges Google faces in antitrust lawsuits involving its search and advertising technology businesses. Now, Google’s antitrust woes are seemingly coming to a head- especially as the judge overseeing the Google-search remedies has promised a ruling in August. All of this heightens scrutiny for the company as it seeks to navigate additional court cases threatening how it operates, its products, and disruptions to its business models from the emergence of generative AI technology.
Here is the latest on court Google’s battles:
Google Play Store: In the battle with video game developer Epic, the maker of Fortnite, Google loses again. On July 31, the Ninth Circuit Court of Appeals upheld a jury verdict finding Google’s app store and payments system operated as illegal monopolies. The Ninth Circuit also ruled that the district court’s permanent injunction was supported by the jury’s verdict. Google has indicated it will continue pursuing avenues to appeal the decision. However, if Google is unsuccessful in overturning the unanimous jury verdict, it could be forced to make a host of concessions, including opening its Google Play Store to rival app stores and granting rivals access to the full catalog of Google Play apps. The company would also be prohibited from a variety of other practices, including requiring apps to use Google Play Billing.
Chrome browser: After losing the battle with the DOJ over online search, the government argued that Google should be forced to divest its premier web browser, Chrome, to adequately restore competition. Chrome is an important distribution tool for Google Search and the company’s other services, but, as the most popular web browser on the market, the browser also provides valuable data and insights into search habits. The court will soon decide the appropriate remedies for the adjudged monopolist. But several competitors have already expressed interest in buying the web browser. Notably, AI search startup Perplexity made an unsolicited $34.5 billion bid for the web browser this week—offering more than Perplexity’s entire current valuation. Other companies looking into buying Chrome reportedly include Search.com, OpenAI, and Yahoo.
Ad tech stack: On September 22, Google will face off with the DOJ in the remedies phase of the trial involving the company’s monopoly over the ad tech ecosystem. In April, the district court ruled in the liability phase that Google violated federal antitrust laws by monopolizing publisher ad server and ad exchange markets. The DOJ has proposed sweeping remedies in a phased approach. The proposed structural remedies would require Google to fully divest the DFP and AdX products in the ecosystem. Google would also be banned from running an ad exchange for a decade. For its part, Google is proposing more targeted remedies that fall short of a breaking up its ad tech business, such as providing competitors real-time access to AdX data. Google’s proposed behavioral remedies included a commitment to not provide advantages to publishers using Google products.