Published on Mar 21, 2022
Absent Senate Dems stall Bedoya. Sources supporting Alvaro Bedoya, President Joe Biden’s nominee for the FTC’s third Democratic commissioner slot, were expecting movement from Senate Majority Leader Chuck Schumer (D-NY) on the confirmation front last week. But Schumer needed all 50 Senate Democrats at the Capitol in order to move Bedoya, and he didn’t have that.
Bedoya’s delayed confirmation process—which has kept the FTC split between two Republicans and two Democrats—has already affected FTC Chair Lina Khan’s merger enforcement agenda, with Amazon’s move to close its $8.5 billion acquisition of MGM Holdings last week without a commission challenge just the most recent example. Bedoya’s absence is also seemingly delaying Khan’s rulemaking agenda.
While it’s clearly a priority for Schumer to move Bedoya, his confirmation—and in turn a Democratic FTC majority—is at this point more in the hands of Senate Democratic attendance than anything else.
Movement on Kanter slate. DOJ antitrust division head Jonathan Kanter has been without his preferred deputies since the Senate confirmed him in November—at the moment, three of the division’s six deputy assistant attorney general slots remain vacant.
But that should resolve itself sooner rather than later—it appears that Kanter picks are moving, with sources saying that his selections are starting to receive interviews as part of routine background checks.
Kanter and Khan collaborating, signaling drop in influence of ABA. The American Bar Association’s Antitrust Law Section has long been viewed as something of an authority on antitrust issues, and also puts on the competition community’s premier event—the “Antitrust Spring Meeting.” That four-day gathering—which this year is set to run from April 5 to April 8—typically includes various panels with DOJ and FTC officials, including the “Friday Enforcers Roundtable,” probably the meeting’s most prominent event.
Recently, however, Kanter and Khan sent a message that the ABA’s Spring Meeting would no longer have exclusive access to high-level government antitrust officials when they announced that they will hold a “Joint Spring Enforcers Summit” that will be open to the public on April 4, the day before the Spring Meeting begins.
Khan and Kanter also last week announced a joint listening tour series starting on March 28 where they plan to “hear from those who have experienced firsthand the effects of mergers and acquisitions beyond antitrust experts, including consumers, workers, entrepreneurs, start-ups, farmers, investors, and independent businesses.”
The mention of “antitrust experts” appears to be another slight to the ABA crowd. And for antitrust stakeholders hoping that Kanter would prove to be more sympathetic than Khan to big business and otherwise chummier with the ABA, the latest announcements are likely disappointing—although to be sure, the Spring Meeting’s most recent brochure does confirm Kanter’s attendance at the Friday roundtable, while Khan is still listed only as “invited.”
In any event, the recent developments do show that the ABA’s position as a bipartisan authority on antitrust matters is now on somewhat shaky ground, and its influence going forward could very well shift depending on the political affiliation of antitrust enforcers.
NTIA hire sets up likely clash with DOJ Antitrust division. Ex-Internet Corporation for Assigned Names and Numbers (ICANN) staffer Grace Abuhamad is now senior advisor on internet and emerging technology policy to Assistant Commerce Secretary Alan Davidson, head of the National Telecommunications and Information Administration, she tweeted and NTIA confirmed.
Abuhamad had been at Element AI and worked from 2013-2016 at ICANN, which oversees Verisign’s .com domain name registry and has deferred to NTIA advice on wholesale rates.
ICANN is widely viewed as captive to Verisign’s interests. DOJ, which is in charge of reviewing U.S. competition issues in the domain name registry industry, including Verisign’s contract renewals, is likely to step up their scrutiny of the sector with Kanter now in office, making a clash between DOJ and NTIA more likely.
FTC calendars. The Capitol Forum didn’t receive any calendars of FTC officials this week.
Personnel News
FTC seeks Bureau of Competition merger division heads. The FTC is looking to hire assistant directors to head the Bureau of Competition Mergers I & II divisions overseeing antitrust investigations and M&A challenges: Mergers I covers “pharmaceuticals, medical devices, consumer health products, defense, scientific, etc.;” Mergers II covers “coal mines, chemicals, entertainment, and computer hardware and software.” Applications are due by April 18.
Perlman new DOJ antitrust division director of human capital and counsel. Evan Perlman is now the director of human capital and counsel, a new position, in the DOJ antitrust division’s Executive Office, said a department spokesperson. He had been a senior employment counsel.
DOJ antitrust seeks personnel security specialist. The DOJ antitrust division is looking for a personnel security specialist, said a job announcement.
Ex-DOJ antitrust chiefs create Rule Garza Howley. Charles F. (Rick) Rule, a former head of the DOJ antitrust division, Deborah Garza, a former deputy and acting head of the division, Daniel Howley, a veteran antitrust litigator, and two others have started Rule Garza Howley, the new firm announced, noting its attorneys collectively have over $1 trillion in deal experience. Rule and Howley had been at Paul, Weiss, and Garza used to be with Covington & Burling.
Cooley hires ex-DOJ attorney in D.C., and practitioner vet in London. Antitrust attorney Ethan Glass has joined Cooley LLP in Washington, D.C. as a partner in its global litigation department, the firm announced. Glass was chair of Quinn Emanual’s antitrust practice and previously was a DOJ antitrust division trial attorney and assistant chief. Cooley also has hired Caroline Hobson in London for its antitrust and competition practice, the firm announced, noting she’s “defended numerous high-profile mergers before the UK Competition and Markets Authority” and the EC.
Top Events
Pending. Senate floor consideration of commissioner nominations of Alvaro Bedoya for the FTC and Gigi Sohn for the Federal Communications Commission.
Tuesday, March 22 at 10 a.m. ET. Senate Commerce Committee meeting with votes scheduled on various bills, including the Ocean Shipping Reform Act (S. 3580), FREIGHT Act (S. 3262), and Strengthening Support for American Manufacturing Act (S. 3434).
Tuesday, March 22 10:15 a.m. ET. Senate Banking Committee hearing, “Building a Resilient Economy: Shoring Up Supply.”
Wednesday, March 23 at 10 a.m. ET. Senate Commerce Committee hearing, “Developing Next Generation Technology for Innovation,” to examine U.S. “competitiveness and semiconductors; the impact of vulnerabilities in our semiconductor supply chains; and the importance of CHIPS legislation within House- and Senate-passed competition and innovation bills. CEOs of Intel, Micron, Lam Research and PACCAR Inc. to testify.
March 28 at 3 p.m. ET. FTC and DOJ virtual “Listening Forum” to hear first-hand accounts of M&A effects in the Food and Agriculture sector, the first of four such forums. The others are: Health Care, April 14 at 2 p.m. EDT; Media and Entertainment, April 27 at 1:30 p.m. EDT; and Technology, May 12 at 2 p.m. EDT.
All Upcoming Events
Pending. Senate floor consideration of commissioner nominations of Alvaro Bedoya for the FTC and Gigi Sohn for the Federal Communications Commission.
Monday, March 21 at noon ET. Lexology, GCR, Morrison Foerster webinar, “Competition for Talent: Limits on Hiring or Wages Risk Criminal Indictments and Jail.” Morrison Foerster attorneys examine the DOJ antitrust division’s “aggressive” labor antitrust enforcement.
Monday, March 21 at 5 p.m. ET. Information Technology & Innovation Foundation webinar, “The FTC Rulemaking Agenda—Dwindled Innovation Through Regulation?” Ex-FTC Chairs Timothy Muris and Maureen Ohlhausen, and ex-FTC Bureau of Competition Director Bruce Hoffman to discuss commission efforts to engage in rulemaking, including for antitrust.
Tuesday, March 22 at 10 a.m. ET. Senate Commerce Committee meeting with votes scheduled on various bills, including the Ocean Shipping Reform Act (S. 3580), FREIGHT Act (S. 3262), and Strengthening Support for American Manufacturing Act (S. 3434).
Tuesday, March 22 10:15 a.m. ET. Senate Banking Committee hearing, “Building a Resilient Economy: Shoring Up Supply.”
Wednesday, March 23 at 10 a.m. ET. Senate Commerce Committee hearing, “Developing Next Generation Technology for Innovation,” to examine U.S. “competitiveness and semiconductors; the impact of vulnerabilities in our semiconductor supply chains; and the importance of CHIPS legislation within House- and Senate-passed competition and innovation bills. CEOs of Intel, Micron, Lam Research and PACCAR Inc. to testify.
Wednesday, March 23 at 1 p.m. ET. R Street Institute conference in Washington, D.C. (in-person and livestream), “Content and Governance Online: Working Together for a Better Internet.”
Thursday, March 24 at 11 a.m. ET. The Capitol Forum conference call with policy analyst Shahid Naeem to discuss the proposed merger between Spirit and Frontier Airlines.
Thursday, March 24 at 1 p.m. ET. The Federalist Society teleforum, “Where’s the Beef? Inflation at the Grocery Store and Proposed Regulatory Responses,” including antitrust proposals.
March 28 at 2 p.m. ET. Software and Information Industry Association virtual event, “Building U.S. Leadership in Responsible AI Use.” Speakers include: Rep. Jan Schakowsky, chair of the Energy and Commerce Committee consumer protection subcommittee; Sorelle Friedler, assistant director for data and democracy, White House Office of Science & Technology Policy; and House Administration Committee Chair Zoe Lofgren (D-CA).
March 28 at 3 p.m. ET. FTC and DOJ virtual “Listening Forum” to hear first-hand accounts of M&A effects in the Food and Agriculture sector, the first of four such forums. The others are: Health Care, April 14 at 2 p.m. EDT; Media and Entertainment, April 27 at 1:30 p.m. EDT; and Technology, May 12 at 2 p.m. EDT.
March 29-30 at 9 a.m. ET both days. MIT Technology Review—EMTech Digital “Critical AI Execution 2022” conference in Cambridge, Massachusetts (in-person, virtual). Agenda, Speakers.
March 29 at noon PT. The Federalist Society event in Los Angeles, “Treating Social Media Platforms Like Common Carriers?” Speaker: UCLA law professor Eugene Volokh.
March 31 at 8:45 a.m. Central European Time (3:45 a.m. ET). Charles River Associates Brussels Conference (in-person and livestreamed), “Competition and Regulation in Disrupted Times.” Speakers on agenda include: EC Competition Commissioner Margrethe Vestager; EC Internal Market Commissioner Thierry Breton; DOJ antitrust AAG Jonathan Kanter; FTC Chair Lina Khan; Tim Wu, President Biden’s special assistant for technology and competition policy.
April 4 at 9 a.m. ET. FTC and DOJ antitrust division joint Spring Enforcers Summit in Washington (in-person and virtual). Assistant Attorney General Jonathan Kanter, FTC Chair Lina M. Khan, and senior staff from both agencies “to facilitate discussions on modernizing merger guidelines and interagency collaboration,” including with international enforcers and state attorneys general. Also see: DOJ, FTC announcements.
April 5 at 8:45 a.m. EDT. “GCR Live: Cartels 2022” conference, Washington, D.C. (in-person only). Key topic: “Tacit collusion – what does it mean to ‘agree’?” Speakers include: Daniel Glad, DOJ director of Procurement Collusion Strike Force; Maria Jaspers, EC director of cartels, Directorate General for Competition.
April 5-8. American Bar Association Antitrust Law Spring Meeting in Washington, D.C. (planned in-person only). Agenda includes a two-hour “Enforcers Roundtable” on April 8 at 10 a.m. EDT with DOJ antitrust chief Jonathan Kanter; FTC Chair Lina Khan (invited); Margrethe Vestager, EC vice president & commissioner; Gwendolyn J. Cooley, National Association of Attorneys General representative; and Alexandre Cordeiro Macedo, president of Brazil’s Administrative Council of Economic Defense.
Recent Developments
Schumer looks to trigger House-Senate conference on competitiveness bills. Senate Majority Leader Chuck Schumer (D-N.Y) said that he plans to push this week to take a procedural step toward holding a House-Senate conference to reconcile two major bills (H.R. 4521, S. 1260) aimed at promoting U.S. competitiveness, innovation and jobs.
“In order to go to Conference, the Senate needs to amend the House-passed [America] COMPETES bill with the Senate-passed U.S. Innovation and Competition Act [USICA] and send it back to the House,” he said in March 17 floor remarks. “That’s what we will aim to do next week [March 21-25], as quickly as we can.” He said it’s “regrettable that a small band of Republicans are determined to stand in the way of quick action” but voiced hope there would be “an agreement to expedite this process soon.”
The planned conference “got frozen” by the Ukraine war crisis, American Enterprise Institute senior fellow Derek Scissors emailed The Capitol Forum before the Schumer comments. He said staff had continued to work on the conference efforts and noted a “recent recommitment by leadership” of both parties, “but they’re running out of time. Members don’t usually come back from spring recess in an election year to cooperate on an issue that swings votes. The other possibility is the bills get stripped way down.”
It should be easy for the House and Senate to agree on proposed semiconductor funding, and wrinkles in advanced research and technology investment provisions are “conferenceable,” an advocate familiar with the process told The Capitol Forum. But the advocate said divergent trade sections—with the House’s version more consistent with Biden labor and China policy, and the Senate’s including some pro-Big Tech language—will be difficult to reconcile and pass through both houses. Given the urgency to pass the semiconductor, research and innovation provisions, it’s possible the trade sections could be jettisoned to ease a deal, the advocate said.
California judges rule Sec. 230 doesn’t shield Amazon from state consumer protection law. A California state appellate court overturned a lower court’s ruling that had shielded Amazon from a state consumer protection law under federal “Section 230” internet immunity. Under the 1986 Safe Drinking Water and Toxic Enforcement Act (Proposition 65), businesses are barred from “knowingly and intentionally exposing” individuals to “certain chemicals without first providing a warning,” noted the March 11 ruling of a California First Appellate District three-judge panel in Larry Lee v. Amazon.com. It said Lee seeks to hold Amazon “accountable for offering on its Web site, without warnings, certain skin-lightening face creams sold by third parties and alleged to contain mercury.”
“The trial court concluded that Amazon is immune from liability under the federal Communications Decency Act (CDA)[technically, Communications Act Section 230] and also that Lee failed to establish several elements of his case under Proposition 65,” wrote the panel. “Lee maintains Amazon is not protected by the CDA and the trial court erred in its view of the evidence required to establish the alleged statutory violations. We agree with Lee and, therefore, will reverse and remand for further proceedings.” The panel noted that California attorney general and three groups had filed amicus briefs in support of Lee’s case, while one had backed Amazon.
“This ruling deals a major blow to Amazon, which has tried mightily and with some success to evade liability across the country for harm caused by products sold on its marketplace,” said a release from As You Sow and the two other groups supporting Lee. “Our position has always been that Amazon’s online shelves must be subject to the same consumer protection laws as other businesses, full stop,” said Danielle Fugere, president and chief counsel at As You Sow. “Amazon is in a far better position than individual shoppers to ensure that the products it sells meet health and safety standards.” Amazon didn’t respond to a Capitol Forum query.
District of Columbia judge dismisses AG Racine’s antitrust case against Amazon. A District of Columbia Superior Court judge issued an oral ruling dismissing D.C. Attorney General Karl Racine’s antitrust complaint against Amazon, according to a March 18 entry in the court docket (here, Case No.: 2021 CA 001775 B). Racine had alleged that Amazon used anti-competitive most-favored-nation agreements and minimum margin agreements to restrain trade and attempt to monopolize the retail online marketplace business, in violation of D.C. antitrust law. The AG’s office didn’t respond to a Capitol Forum query.
“We believe that the Superior Court got this wrong, and its oral ruling did not seem to consider the detailed allegations in the complaint and a recent decision of a federal court to allow a nearly identical lawsuit to move forward,” an AG spokesperson emailed to wire services. The office was considering its legal options.
Judge allows much of consumer pricing case against Amazon to proceed or be amended. A U.S. District Court allowed some consumer class-action antitrust claims against Amazon’s e-commerce platform pricing policies to proceed while dismissing other claims, though state claims could still be cured and refiled. Consumers had alleged that they were injured by Amazon’s “platform most favored nation” provision and “fair pricing” policies having “the effect of getting sellers to raise prices elsewhere, rather than risk lower revenue from Amazon,” noted the March 11 order of Judge Richard Jones of the Western District of Washington in Seattle in Wilson v. Amazon.com. Amazon moved to dismiss the claims on various grounds.
Jones denied Amazon’s dismissal motion regarding plaintiffs’ federal Sherman Act Section 1 claim under a “rule of reason” and Section 2 claims because they had “plausibly stated claims.” He granted the motion regarding plaintiffs’ Section 1 claim under a “per se analysis,” and regarding their state antitrust and restraint of trade laws, consumer protections statutes, and unjust enrichment claims, but granted them leave to amend their complaint because it may be cured “by the allegation of other facts.” Amazon didn’t respond to a Capitol Forum query.
Amazon closes MGM takeover; FTC notes right to still challenge deals. Amazon announced on March 17 it closed its acquisition of MGM’s film and TV studio despite the possibility the FTC, which has a 2-2 partisan split, could still challenge the deal after a third Democratic commissioner joins the agency. Biden administration nominee Alvaro Bedoya is awaiting possible Senate confirmation. Although Amazon reportedly received an FTC warning letter, neither the company, which didn’t respond to a Capitol Forum query, nor the agency confirmed it.
“The FTC does not comment on any particular matters,” emailed an FTC spokesperson. “However, we reiterate that the Commission does not approve transactions and may challenge a deal at any time if it determines that it violates the law. Additionally, this summer the FTC announced that it will send pre-consummation warning letters in connection with deals it cannot fully investigate within the timelines established by the HSR Act. These letters alert merging parties that their transactions remain under investigation, and warn that consummation occurs at their own risk.”
The FTC “has the ability to block or unwind any merger they find to be illegal before or after the deal is completed,” said Krista Brown, American Economic Liberties Project senior policy analyst in a statement. “[A]ntitrust officials can still hold Amazon accountable for the wide range of anticompetitive tactics they’ve used to hurt workers, small businesses, and consumers. Amazon’s $8.45 billion deal to acquire MGM is the latest in an unprecedented wave of massive mergers that has increased prices across the country and strained antitrust enforcement. Congress must respond by increasing funding and resources for the FTC…”
Senators seek DOJ probe of live entertainment, Ticketmaster-Live Nation. Senators Richard Blumenthal (D-CT) and Amy Klobuchar (D-MN) urged DOJ to investigate the live-entertainment market, including Ticketmaster-Live Nation. Consumers face “skyrocketing ticket prices, opaque terms, and exorbitant fees” in a market, particularly for tickets, dominated by Live Nation, “cemented” by its 2010 merger with Ticketmaster, said a Blumenthal March 15 release, noting an updated consent decree. “We are deeply concerned that the Department’s past enforcement and negotiated remedies in this industry have failed to adequately foster and protect competition in live entertainment and ticketing markets,” wrote the chairs of the Commerce consumer protection and Judiciary antitrust subcommittees. Ticketmaster and Live Nation didn’t respond to Capitol Forum queries.
House members query Hertz, Avis. House Oversight Committee members wrote Hertz and Avis seeking info about rental car prices that “have risen by 24% over the past year.” Hertz and Avis, which “control over 90% of the U.S. rental car market, appear to have significantly increased prices despite falling costs, leading to record profits,” said a March 18 committee release. “Avis’s financials indicate that the company may have prioritized maximum profits and shareholder payouts at consumers’ expense,” wrote Rep. Raja Krishnamoorthi (D-IL), chairman of the Subcommittee on Economic and Consumer Policy, and Rep. Katie Porter (D-CA) in their letter to Avis. “We are deeply concerned that Avis may have engaged in predatory business practices during the pandemic, taking advantage of consumers.”
Democrats unveil bills to crack down on big ‘anti-competitive’ mergers. Senator Elizabeth Warren (D-MA) and Representative Mondaire Jones (D-NY), backed by other Democrats, introduced companion bills to “ban the biggest, most anticompetitive mergers” and give the DOJ and FTC “the teeth to reject deals in the first instance without court orders and to break up harmful mergers,” according to Warren’s March 16 release (Jones’ release).
The Prohibiting Anticompetitive Mergers Act would “make ‘prohibited mergers’ illegal”—“deals valued over $5 billion,” “deals resulting in market shares above 33% for sellers or 25% for employers,” and “deals resulting in highly concentrated markets under the 1992 agency guidelines,” the Warren release said. The bill would strengthen antitrust agency tools “to stop the most harmful mergers,” including by:
The legislation would also establish procedures for the agencies “to conduct retrospective reviews and break up harmful deals that have destroyed competition.”
The Senate bill is cosponsored by seven Democrats and Bernie Sanders (I-VT). The House bill is cosponsored by eight Democrats. Missing are any Republicans and the two antitrust subcommittee chairs: Senator Amy Klobuchar (D-MN) and Representative David Cicilline (D-RI). Progressive groups, farm advocates and the Communications Workers of America praised the legislation, while the Information Technology & Innovation Foundation cited objections.
Pallone, Schumer want oil company CEOs’ answers on gas prices; Wicker seeks FTC evidence. House Energy and Commerce Committee Chair Frank Pallone (D-NY) said on March 16 that oil and gas producers might be capitalizing on the Ukraine war and global market shocks to maintain artificially high prices and boost their profits. He requested the CEOs of BP, Chevron, Devon Energy, ExxonMobil, Pioneer Natural Resources and Royal Dutch Shell to testify to the committee on April 6 on their business practices and the consumer fallout.
“I am deeply concerned that the oil industry has not taken all actions within its power to lower domestic gasoline prices and alleviate Americans’ pain at the pump,” Pallone wrote to six executives. “By keeping domestic oil production low and funneling revenue back to investors and executives, the oil industry is keeping energy prices—and profits—artificially high. And this is all happening at the same time the industry is taking advantage of generous production tax incentives provided by American taxpayers.”
“The bewildering incongruity between falling oil prices and rising gas prices smacks of price gouging,” said Senate Majority Leader Chuck Schumer (D-NY) in March 16 floor remarks. “As Americans pay more at the pump, the biggest oil companies in America are making a killing. … But instead of lowing gas prices, oil companies are using these soaring profits to reward their shareholders through stock buybacks. … These disturbing trends demand answers, and the CEOs of large oil and gas companies should be advised that they will have to provide answers before the Senate very soon.”
Senate Commerce Committee Ranking Member Roger Wicker (R-MS) called on the FTC to provide any evidence backing Democratic suggestions that improper or illegal company behavior is responsible for surges in U.S. gas prices. “It is clear that gas prices have risen due to the current administration’s zealous agenda to reduce domestic oil and gas production combined with surging inflation caused by a significant increase in government spending,” he wrote to FTC Chair Lina Khan. “However, some have proposed that the cause of rising gas prices is [due to] market manipulation or some other type of collusion among members of the oil and gas industry.” The FTC declined to comment.
Senate Democrats, Republicans at loggerheads over Medicare negotiation. Senate Democrats and Republicans agreed that the prescription drug market has serious problems and needs certain solutions, but completely diverged over a proposal to deputize the federal government’s Medicare system. At a March 16 Finance Committee hearing on drug price inflation, Democrats supported allowing “Medicare” to use its vast purchasing power to negotiate with pharmaceutical companies for lower prices on some drugs; Republicans said that would lead to “price controls” and less innovation, and argued for other fixes.
“The scandal is what’s legal,” said Chairman Ron Wyden (D-OR). “Today, Big Pharma has a legal right to set whatever prices they wish and expect Medicare to pay them. Drug companies can game the system to maintain monopolies and protect their cash cows.” He said the committee found that Americans in 2015 were “paying 2, 3, or 4 times as much as international patients paid” for the same medications, with the gap roughly doubling by 2020 for many expensive drugs. “Americans see this infuriating price gouging, and it’s clear that Big Pharma’s treating Medicare like they’ve cracked an ATM,” he said.
The Democratic plan would “allow Medicare to negotiate for lower prices for brand-name drugs, focusing on the costliest products that monopolize the market,” Wyden said. The plan would also “cap co-pays for insulin at $35 a prescription,” set “a $2,000 out-of-pocket cap for seniors’ medications in Medicare Part D and spread those costs over the year instead of front-loading them,” and “create a tough new price gouging penalty for drug companies that raise prices faster than inflation.” A number of the ideas “were developed in this committee with bipartisan support, and that remains,” but, he added, “There’s no substitute for the number one reform, allowing Medicare to negotiate like any other payer.”
Ranking Member Mike Crapo (R-ID) said Democrats were pursuing “deeply problematic” policies from the stalled Build Back Better Act to “impose bureaucratic government price controls with … bad consequences for consumers, patients, and small businesses.” He said a University of Chicago study found “innovative R&D would decline by nearly one-fifth under [such] price controls, leading to a staggering 135 fewer new drug approvals” over 20 years. That “would hand a competitive edge” to “global rivals, including the Chinese Communist Party,” he said. “We would see fewer new treatments and cures, higher prices for new drugs, more health care provider strain and burnout, and an alarming expansion of the federal bureaucracy.”
Crapo touted his Lower Costs, More Cures Act to place a “hard cap on out-of-pocket drug spending under Medicare Part D,” cap insulin costs at $35 a month, and create more Part D choices for low deductibles and reduced cost-sharing, among other proposals. Senator Charles Grassley (R-IA) urged Democrats to pursue bipartisan proposals he and Wyden had pushed in the last Congress when Grassley was chair. “If the majority keeps debating partisan ideas on drug pricing, we’ll get nowhere.” Other Republicans focused concerns on the status quo, including Senator John Cornyn (R-TX) who lamented a “shell game” of cost shifting and knocked drug company “patent thickets” to thwart drug competition.
“Most of the so-called ‘new’ drugs released at higher and higher prices are actually old drugs packaged in new ways,” Wyden said. He said out-of-pocket caps without lower drug prices just shifts “massive” costs to others, including taxpayers. “Pharma can charge whatever it wants. Period. Full-stop,” he said. Proposals to get rid of cost shifting in the last Congress were blocked by then-Senate Majority Leader Mitch McConnell (R-KY), Wyden said. “Without fail, the Republican leadership … protects the status quo. That is a recipe to stifle innovation, not promote it.” He said allowing Medicare to negotiate price cuts was the best market solution. “We need hardball negotiation,” he said. “Big Pharma has never lost a fight. We’re going to change that.”
Warren, others push PhRMA to answer questions about drug prices. Democratic lawmakers pressed the Pharmaceutical Research and Manufacturers of America (PhRMA) to address their concerns about rising drug prices after the group’s initial response to a letter “failed to answer key questions.” PhRMA, “the trade group for brand drug companies provided misleading information about brand drug manufacturers’ price increases and their impact on patients at the pharmacy counter—shifting blame from brand drug manufacturers, who have a long history of using their monopoly power to raise prices, to other actors in the drug delivery chain,” said a March 16 release of Senator Elizabeth Warren (D-MA).
“Your letter was simply unresponsive to our concerns, leading to one clear conclusion: there is no good explanation for drug manufacturers’ behavior other than corporate profiteering,” wrote Warren and other Senate and House Democrats in a new letter to PhRMA. “Congress and the public deserve clear answers about brand name drug price increases affecting millions of Americans.” After citing PhRMA as offering “no response” to their questions, the lawmakers again asked the group to “provide full and complete answers” by Tuesday, March 22.
A PhRMA representative pointed to a tweet: “We stand by our letter which was comprehensive, responsive and factual. We reiterate our offer to work collaboratively with members to meet the needs of patients.”
DOJ sues to stop Verzatec’s planned purchase of Crane. DOJ sought to block Grupo Verzatec, a privately held Mexican company, from acquiring its biggest competitor, Crane Composites (Crane), a wholly-owned subsidiary of Crane Co. A complaint filed in U.S. district court “alleges that the proposed $360 million transaction would harm competition in production and sale of pebbled fiberglass reinforced plastic” panels, “the wall covering of choice for many [U.S.] restaurants, grocery stores, hospitals and convenience stores,” said a March 17 DOJ release. “Verzatec’s proposed acquisition of Crane is a brazen attempt to eliminate a rival and cement a monopoly,” said Assistant Attorney General Jonathan Kanter of DOJ’s antitrust division.”
House Passes FAIR Act to bar forced arbitration in antitrust, other disputes. The U.S. House of Representatives on March 17 passed the Forced Arbitration Injustice Repeal (FAIR) Act (H.R. 963), which would prohibit enforcement of mandatory arbitration clauses in antitrust and other disputes. The 222-209 vote was almost completely along party lines, with Representative Matt Gaetz (R-FL) voting with the Democratic majority in favor. The Biden administration backed H.R. 963, and Senator Richard Blumenthal (D-CT) introduced a companion FAIR Act (S. 505) over a year ago, but it has yet to move.
“By burying a forced arbitration clause deep in the fine print of take-it-or-leave-it consumer and employment contracts, companies can evade the court system—where plaintiffs have far greater legal protections—and hide wrongdoing behind a one-sided process that is tilted in their favor,” said House Judiciary Committee Chairman Jerrold Nadler (D-NY) on the floor. “These take-it-or-leave-it contracts, which were once clearly disfavored under the law, now seem to have been blessed by the Supreme Court as standard operating procedure in the corporate world. … The FAIR Act reverses this disastrous trend by prohibiting the enforcement of forced arbitration clauses in consumer, labor, antitrust, and civil rights disputes. Importantly, this legislation does not preclude both parties from agreeing to arbitrate a claim after a dispute arises.”
Senators introduce right-of-repair bill. Senators Ben Ray Luján (D-NM), Cynthia Lummis (R-WY) and Ron Wyden (D-OR) proposed right-of-repair legislation to protect consumers, farmers and small businesses by ensuring that owners and independent service providers aren’t prevented from doing repairs. The Fair Repair Act would “require manufacturers of electronic equipment to make the same tools, parts, and documentation available to owners and independent repair providers, covering a variety of industries such as agricultural equipment, consumer electronics, medical equipment, and motor vehicles,” said a March 16 Luján release. “Whether you own a smart phone or a tractor, this legislation will help all consumers,” said Luján.
U.S. PIRG praised the Senate’s “first broad Right of Repair” bill, joining Senator John Tester’s (D-MT) measure targeting farm equipment. “Right to Repair continues to build momentum across the country and the world,” said Nathan Proctor, U.S. PIRG’s senior right to repair campaign director. “We’ve witnessed progress in dozens of states, an investigation by the [FTC], an executive order from President Joe Biden, multiple shareholder actions, and now increasing support on Capitol Hill and the U.S. Senate.” U.S. PIRG joined consumer groups and others on a March 16 letter asking House Judiciary Committee leaders to hold a hearing on the Freedom to Repair Act (H.R. 6566), which seeks to address copyright issues for software-enabled devices.
White House starts FLOW information-sharing supply chain pilot. The Biden administration launched a supply chain information-sharing initiative that aims to improve the movement of goods. The Freight Logistics Optimization Works (FLOW) pilot includes 18 major participants, including port, ocean carrier, terminal, logistics and warehousing, and other companies and entities. The aim is to develop by summer’s end “a proof-of-concept information exchange to ease supply chain congestion, speed up the movement of goods, and ultimately cut costs,” said a March 15 White House release. Participants met with Transportation Secretary Pete Buttigieg and “acknowledged the current system is underperforming and needs greater investment and more collaboration in creating ship to shelf visibility,” said a readout.
House GOP letter objects to surgeon general on ‘pressure’ for tech ‘censorship.’ House Republicans voiced concern the Biden administration is undermining the First Amendment by “pressuring” tech companies to “censor” users and speech through “jawboning.” Energy and Commerce Ranking Member Cathy McMorris Rodgers (R-WA), Minority Whip Steve Scalise (R-LA), Judiciary Ranking Member Jim Jordan (R-OH), and Oversight and Reform Ranking Member James Comer (R-KY) wrote U.S. Surgeon General, Dr. Vivek Murthy, objecting to his “ongoing pressure campaign to collude with Big Tech and censor Americans online,” said a March 14 release.
They cited a July 15, 2021, U.S. Surgeon General Advisory demanding social media companies do more to address perceived “health misinformation,” Murthy’s follow-up remarks, and comments by White House Press Secretary Jen Psaki. They asked for answers by Friday, March 25 to various questions, including on a recent Surgeon General request for data and analysis on tech platform Covid-19 “misinformation.” The Surgeon General’s Office didn’t respond to a Capitol Forum query.
Demand Progress, others seek House hearing on Google crypto moves. Progressive groups called for a House hearing to examine Google efforts to enter the cryptocurrency and digital assets markets. “Google’s announced intentions to invest in crypto markets confirms our fears that Big Tech firms continue to seek … to use their data-harvesting methods to deliver financial services in ways … likely to increase surveillance, erode privacy and allow these companies to dominate yet another economic and social sphere,” said Mark Hays, senior policy analyst of Americans for Financial Reform Education Fund and Demand Progress Education Fund, according to a March 18 release on a letter asking Financial Services Chair Maxine Waters (D-CA) to hold the hearing. The committee and Google didn’t respond to Capitol Forum queries.
Restaurant company files class-action suit against Google. A Florida restaurant company filed a class-action lawsuit alleging that Google in 2019 abused its search platform to “make even more money” by trading off the restaurant’s name without permission and directing consumers to “two new environments it dreamed up.” One website took orders for restaurant food items, which Google then sold to food-delivery companies, and another was a webpage where Google presented users “with even more targeted (and profitable) ads than it displayed within its search engine results page and did so within a format even more likely to induce a paying click,” said the recent complaint of Left Field Holdings in U.S. district court.
“This case is about Google’s disregard” of “long-standing principles” in common law and the Lanham Act, “and its attempt to trade off of the goodwill, reputations, and tradenames of thousands of restaurants throughout the United States for its benefit and the restaurants’ detriment,” said the complaint, alleging Google never sought Left Field’s permission, and designed its websites to lure and deceive customers on the business relationship. “Google’s use of Plaintiffs’ and class members’ tradenames in connection with its unauthorized button and webpages violates Section 43(a) of the Lanham Act.”
Judge sets Aug. 1 trial on DOJ state AG case against United Health-Change deal. A U.S. district judge set an August 1-16 trial on the antitrust case of DOJ and the attorneys general of Minnesota and New York against UnitedHealth Group’s proposed purchase of Change Healthcare. “Plaintiffs will have 7 days to present their case (including rebuttal) and Defendants will have 5 days,” said the March 17 minute order (in docket) of Judge Carl J. Nichols of the District of Columbia District. UnitedHealth had proposed the trial start on June 20 while the government wanted late August.
DOJ cites indictments in price-fixing and bid-rigging cases. A federal grand jury in Knoxville indicted two individuals and four companies for allegedly participating in a price-fixing conspiracy on DVDs and Blue-Ray discs sold on the Amazon Marketplace, the DOJ announced on March 18. The indictment is the fifth charge to date in the ongoing investigation, said Assistant AG for antitrust Jonathan Kanter. Separately, a federal grand jury in Texas indicted two South Koreans on charges in a bid-rigging conspiracy to restrain trade and “scheme to defraud the United States in connection with operation and maintenance work for U.S. military installations in South Korea,” the DOJ announced on March 17.
