Published on Oct 07, 2024
Kamala Harris avoids committing to keep on FTC Chair Lina Khan. The Wall Street Journal reported last week that at a meeting with the Teamsters union, a Teamsters board member asked Harris for a commitment to keep Khan in place at the FTC. Harris then declined to make that commitment, saying she needs to win the election first, and then talked about addressing price gouging.
Teamsters subsequently announced no endorsement of either presidential candidate. In line with the Teamsters news, discussions with antitrust experts included a mix of pessimism and optimism regarding whether or not a Harris administration would continue with President Biden’s aggressive, whole-of-government approach to competition.
In his newsletter, Matt Stoller, AELP’s director of research, previewed the fight that Khan’s political supporters would put up should Harris become president: “[Khan] is being conspicuously invited for policy roundtables all over the country by members of Congress, both moderate and progressive, who love what she is doing. Arizona Senate candidate Ruben Gallego did an event with Khan, so did Senator Bernie Sanders, Reps. Alexandria Ocasio-Cortez, Raja Krishnamoorthi, Rosa DeLauro, Joe Neguse, and Colorado Senator John Hickenlooper.
“I think there are many of us–and I’m not just speaking for myself–in Congress who feel the same way,” Congressman Marc Pocan said of his support for Khan, “and we’re very enthusiastic about her role and her continuing the work she’s doing.” Rep. Don Beyer, another moderate, said that Khan is his “favorite” Biden official, while candidates in swing races like Nevada Senator Jacky Rosen are talking up their work with the FTC.
One thing is for sure—Harris is courting Republicans (see Cheney campaign event) and the super wealthy as she seeks the Presidency. The decision to campaign this way, as opposed to taking a more populist and, in many respects, mainstream approach (at least as it pertains to where the Democratic party sits in terms of policy), suggests that, should she win, there will likely be epic fights within the party over both personnel and policy, even beyond the extent that we’ve seen during the Biden administration.
Names being floated for potential Harris Cabinet. Multiple news publications including NBC, The Hill, The Wall Street Journal and Axios have weighed in on potential picks for a Kamala Harris Cabinet. The Capitol Forum spoke to two former high-level government officials who have generally supported the Biden antitrust agenda about how they see things shaking out.
One former official pointed to a recent internal speech by Merrick Garland that “had a note of thanks and farewell in it,” suggesting that he would be stepping down no matter who wins the presidency. Possible replacements as attorney general mentioned by the publications include former Senator Doug Jones (D-AL); Vanita Gupta, former associate U.S. Attorney General in the Biden administration; Google lawyer Karen Dunn, who helped Harris prepare for the debate; and North Carolina Governor Roy Cooper.
One of the former officials also saw Senator Amy Klobuchar (D-MN) as a potential candidate for AG. “I don’t know what’s left for Amy to do as a senator, and she really cares about antitrust,” the source said. “She would get confirmed. She was a prosecutor.” Gupta and Cooper would be good candidates, too, they added. As for Dunn, the other official said, “I don’t expect that President Harris would appoint anyone who doesn’t fully embrace the pro-competition agenda…. Dunn would have a role, but I don’t know what that would be.”
Other names floated by the publications include Senator Laphonza Butler (D-CA) for Labor Secretary; current Deputy Agriculture Secretary Xochitl Torres Small for that department’s top job; former American Express CEO Ken Chenault for Treasury Secretary; Senator Chris Murphy (D-CT) for Secretary of State; Wall Street financier Blair Effron for Commerce Secretary; and current Army Secretary Christine Wormuth for the Department of Defense. Neera Tanden, director of the United States Domestic Policy Council, was mentioned as a potential head of Health and Human Services, though Tanden had Senate confirmation issues under Biden.
At the antitrust enforcer level, one official said, “Both [DOJ antitrust chief Jonathan] Kanter and [FTC Chair Lina] Khan have done a great job, and I don’t think President Harris would be in any rush to replace them.” The other official said, “If you’re Harris you might want to bring in your own person,” for Antitrust Division chief and FTC Chair.
One source said that if Harris makes changes in antitrust personnel, they might come well into her administration and after Cabinet members go through the Senate confirmation process.
One candidate for the FTC, according to one of the sources, could be Daniel Suvor, current partner at the O’Melveny law firm and former chief of policy and senior counsel to Harris while she was California Attorney General. Depending on the Senate makeup after the November elections, one source said that any candidate might need to attract Republican support, which both Kanter and Khan enjoyed in their confirmation fights. One source mentioned that Michael Kades, deputy assistant general at the Antitrust Division and former Klobuchar staffer, could attract the support of Senator “Mike Lee (R-UT), who liked him when he worked on the Judiciary Committee,” the source said.
Khan, who spoke to unions and consumer groups last week across the country alongside Senator Bernie Sanders (I-VT) and Representative Mark Pocan (D-WI), among others, could stay at her role in a Harris administration on an interim basis since her term has technically expired.
One former official said if Khan was presented as a nominee on the Senate floor at the same time as a Republican, there could be a quid-pro-quo solution.
At a virtual roundtable discussion in late September on policy shifts post-election, Robin Adelstein, leader of Norton Rose Fulbright’s antitrust practice, said that while she expected Harris would continue the Biden administration’s use of antitrust to combat food and housing prices, the vice president’s connections to Silicon Valley from her days as San Francisco district attorney and California AG raise questions about her commitment to enforcement action against Big Tech.
“One big question,” Adelstein said, “would be whether Harris would alter the ongoing antitrust tech cases at the FTC and DOJ and whether Harris would remove FTC Chair Khan or Jonathan Kanter at DOJ.”
Harris representatives did not respond to a request for comment.
Live Nation’s push to move antitrust case out of New York federal court fails. Live Nation Entertainment (LYV), the concert and ticketing behemoth, was dealt a major blow on Thursday when a federal judge rejected its motion to move its antitrust trial to Washington, D.C.
Live Nation argued that U.S. District Court for the District of Columbia was the appropriate venue because that court oversees the 2010 consent decree between Live Nation and the Department of Justice that allowed its merger with Ticketmaster to go forward. Live Nation argued that the concert monopolization suit brought by DOJ and 39 states, plus the District of Columbia, earlier this year is connected to the consent decree.
But Judge Arun Subramanian of U.S. District Court for the Southern District of New York dismissed that argument as “a stretch.”
“The decree resolved a single claim arising under Section 7 of the Clayton Act, 15 U.S.C. § 18. This case alleges violations of the Sherman Act and various state laws, not the consent decree. Plaintiffs aren’t trying to vindicate the decree’s requirements; they say that defendants have violated separate legal duties,” he ruled.
DOJ had opposed the motion to transfer venues. In July, The Capitol Forum profiled Subramanian, a Biden appointee who clerked for former Supreme Court Justice Ruth Bader Ginsburg. As a prominent plaintiff attorney, Subramanian brought complex civil suits against large companies, including antitrust cases.
DOJ has requested a jury trial, which Live Nation opposes. Subramanian has not yet ruled on that question, but he has long been a vocal champion of the importance of jury trials, calling them “vital” in his Senate confirmation hearing.
While Live Nation did not respond to a request for comment, the company’s critics celebrated the venue-change ruling. Diana Moss, director of competition policy at the Progressive Policy Institute, said it is “highly relevant” that the case is before a judge who has worked across areas of law where consumers are victims of civil and criminal violations.
Both Moss and Kevin Erickson, director of the Future of Music Coalition, an advocacy group for musicians, highlighted the importance of a potential jury trial. “I’m especially stoked about [Subramanian’s] view on jury trials; it’s easy to understand why Live Nation might be especially averse to a jury trial given how directly many citizens have felt the impact of the company’s power over the industry; people understand unfairness and abuse of power when they see it,” Erickson said.
Meanwhile, Ticketmaster is facing arguably its fiercest public backlash since Taylor Swift fans started a campaign against the company in 2022. Late last month the British rock band Oasis announced that it was ditching Ticketmaster’s “dynamic pricing” for the North American leg of its heavily anticipated reunion tour after outraged fans watched the retail price for UK tickets almost triple in price. Oasis released a statement saying dynamic pricing “can lead to an unacceptable experience for fans.”
The opening months of the DOJ Lawsuit have involved a lengthy process of haggling over discovery. Subramanian has scheduled the start of the trial for March 2026 and said that date is “set in stone.”
Free speech and authority of enforcers are on the SCOTUS docket. While no potential antitrust issues are on the U.S. Supreme Court’s October docket, court watchers are focused on how the conservative court will apply administrative law in cases involving free speech and the authority of federal agencies.
Last Tuesday at The Federalist Society’s “Supreme Court Preview” conference, Lisa Blatt, chair of Williams & Connolly’s Supreme Court and Appellate practice, brought up the free speech case, Free Speech Coalition v. Paxton, which the court will hear this month. The case revolves around a 2023 Texas bill that requires prospective viewers of online pornography to submit a government ID to watch content. “We’ll see whether the true hardcore First Amendment side of the Court shows up or the JD Vance side of the Court,” Blatt said.
Blatt said that “pornography happens to be fully protected speech” and suggested that the law’s focus on websites whose content is at least one-third sexually explicit would exclude social media platforms, from which she “hear[s] a lot of minors get their porn,” from liability.
Blatt also felt that the law would lead to websites “just putting [out] more junk” to get pass the one-third stipulation. A decision, she suggested, could reveal the openness of the court to government (or court) intervention in digital platform design.
The Strict Scrutiny podcast by Crooked Media, a media group started by former Obama officials, predicted the Supreme Court will continue its “war on the administrative state” as it resumes in October.
Co-host Professor Kate Shaw of the University of Pennsylvania Law School said, “The Court already has on its docket several cases that seek to limit agency authority or that seek to second-guess agency determinations, which we know the court loves to do.”
Those cases are related to the purview of the Federal Drug Administration, the Environmental Protection Agency and the Biden administration’s Environmental Policy Act. The Strict Scrutiny hosts expect more agency authority cases to show up, particularly Biden-era regulatory efforts, which could potentially include Federal Trade Commission rulemaking on non-competes.
They also discussed a CNN report which indicated Alito’s concurring opinion in NetChoice v. Paxton, where he argued that states should have an ability to regulate social media and that the companies’ actions are not “expressive,” was originally the Court’s majority decision before Jackson and Barrett left, leaving Kagan to write a much less radical majority opinion which ascribed free speech rights to the companies which operate digital platforms.
In Their Own Words
FTC Chair Lina Khan discusses the parameters of antitrust enforcement on the Prof G Show, October 3: “Antitrust is a law enforcement regime, and so we can only act if and when there is a violation of the law. We can’t go in prophylactically and set entirely new regulations and create new market structures.
“It’s really pegged to, ‘are firms violating the law’? It’s not unlawful for a firm to be big. It’s really about: are they competing fairly or unfairly? Are they using their dominant position to undermine competition, which is preventing other companies from being able to compete fairly?
“You’re right that we are already seeing some major players have a pretty significant leg up [in AI], and the focus needs to be on making sure those firms are not acting in ways that are keeping out other rivals in terms of how they’re designing their contracts, in terms of how they’re designing their products. It has been publicly reported that both the FTC and the DOJ are looking at some of these markets.
“But the bigger point is here, we went through a 20-year period where the big five tech companies, Apple, Facebook, Google, Microsoft and Amazon, collectively made over 800 acquisitions and not a single one of which was challenged at the time, and now there are lawsuits retroactively identifying some of those were missed opportunities and really had a negative effect on the market.”
Upcoming Events
October 8-9 at 9 a.m. ET. “Pharma Law USA,” an in-person conference in Boston hosted by Informa Connect. Scheduled speakers include FTC General Counsel Anisha Disgupta and Assistant Chief of DOJ Health Care Fraud Unit Aleza Remis.
October 10 at 3:30 p.m. ET. Press meet-and-greet with Arizona Attorney General Kris Mayes, hosted by the American Economic Liberties Project, at the AELP office, 2001 Pennsylvania Avenue NW, Suite 540, Washington, DC. Register here.
October 16 at 11 a.m. CT. The University of Chicago’s Stigler Center will host a webinar conversation with Filippo Lancieri (Georgetown Law) and Luigi Zingales (Chicago Booth) as they share key findings from their forthcoming paper “The Conflict-of-Interest Discount in the Marketplace of Ideas.” Register here.
October 17 at 9 a.m. CET. “Annual Conference on European Competition Law 2024,” a conference hosted both in-person in Trier, Germany, and online by the Academy of European Law. Speakers include Antonio Capbianco, deputy head of the OECD Competition Division; Olivier Guersent, director-general of competition at the European Commission; and Johannes Laitenberger, judge of the General Court of the European Union.
October 17 at 10 a.m. ET. “Antitrust Texas,” an in-person conference designed for in-house counsel hosted in Houston by InformaConnect. Speakers include James Lloyd, chief of Antitrust Division of the Texas Attorney General’s Office, and Charles Webb, Lead Antitrust Counsel at FedEx. The event will be held at JW Marriott Houston Downtown in Houston, Texas.
October 29 at 9 a.m. ET. “GCR Live: Antitrust in Pharmaceuticals,” an in-person conference hosted by Global Competition Review in New York. The conference will be chaired by David Backburn, managing director of the National Economic Research Associates, and Peter Carney, partner at law firm White & Case.
October 30 at 8:15 a.m. ET. The “18th AAI Annual Private Antitrust Enforcement Conference,” an in-person event will be hosted by the American Antitrust Institute in Washington D.C. Speakers include Sally Hubbard, senior counsel to the assistant attorney general of the DOJ Antitrust Division, and Katherine Van Dyck, attorney advisor at the FTC.
November 7 at 9 p.m. ET. “Anti-Trust in Asia: One Size Fits All?” is an in-person conference hosted by Concurrences in Hong Kong. Speakers include Reiko Aoki, a member of the Japan Fair Trade Commission, and Hee Eun Kim, director of Competition Policy, Asia Pacific, Meta.
November 14 at 8 a.m. ET. “2024 Antitrust Fall Forum,” an in-person event hosted by the American Bar Association, will be held in Washington D.C. and is co-chaired by Terell McSweeney, a former FTC commissioner, and Taylor Owings, a partner at Wilson Sonsini.
November 21 at 11 a.m. CET: “Competition Policy 2024” is an in-person conference hosted by Chatham House in London. Keynote speakers include Sarah Cardell, chief executive of the Competition and Markets Authority, and Henry Liu, director of the Bureau of Competition at the FTC.
Personnel
DOJ Antitrust Division Shifts Economics Staff. The DOJ Antitrust Division’s online staff directory no longer lists Mark Chicu as acting assistant chief in its Economic Policy Section. Additionally, former acting assistant chief of the Economic Policy Section, Margeret Loudermilk, has moved to become assistant chief in the Economic Regulatory Section. Loudermilk is swapping jobs with Malika Krishna, who has left the Economic Regulatory Section as acting assistant chief and moved to the Economic Policy Section as acting assistant chief.
Items of Note
Japanese Regulator Probing Broadcom/VMware. The Japan Fair Trade Commission (JFTC) is investigating Broadcom (AVGO) and its recently acquired VMware for possible unfair trading practices. They include bundling sales and “transactions with restrictive conditions and abuse of superior bargaining position,” an agency official confirmed to The Capitol Forum after local media reported that the regulator raided VMware’s Tokyo office.
The official said the companies were suspected of unilaterally adjusting sales terms with cloud service providers from around January to March this year, which could lead to bundling sales of undesired products such as server virtualization software.
It was reported that Fujitsu Limited (TYO:6702) and Nippon Steel Solutions (TYO:2327) were among the cloud service providers affected.
It is worth noting that the JFTC was one of the regulators that opted for an unconditional clearance for Broadcom’s proposed acquisition of VMware last year, along with competition agencies in the U.S., UK, Australia, Brazil, Canada, Israel, South Africa and Taiwan. The European Commission, Korea Fair Trade Commission and China’s State Administration for Market Regulation approved the deal on conditions. The EC also has been investigating the companies for similar alleged conduct this year, as reported by Nippon.com.
A Broadcom spokesperson said the company will “work constructively and fully with the JFTC to resolve any issues and concerns” and declined to comment further “at this early stage.”
FTC Commissioner Holyoak visits Utah pharmacy. The Utah news publication Deseret published a story last week describing a visit to a Utah pharmacy owner by FTC Commissioner Melissa Holyoak, who was the Utah solicitor general before she became FTC Commissioner earlier this year.
The pharmacy owner, Kevin DeMass, showed Holyoak and Congresswoman Celeste Maloy (R-UT) a demonstration of the cost effects from pharmacy benefit managers (PBMs), particularly the preferencing of name-brands over generics.
Deseret quotes Holyoak describing her agency’s interim 6(b) report on pharmacy benefit managers (PBMs) as not “fulsome.” Holyoak voted not to issue the interim report. Holyoak said she was visiting DeMass to look at more data, and further said, “I do want to continue and encourage the FTC to finish that report and do it in a thorough, economically objective way so that we can actually make some decisions based on good economic evidence.”
The Capitol Forum reported last week on the rising bipartisan issue of PBM reform. The FTC last month sued CVS Health (CVS), Cigna (CI), and UnitedHealth Group (UNH), the owners of the three largest PBMs, for unfair methods of competition under Section 5 of the FTC Act.
News
Antitrust/M&A
Politico: Insiders Look for Signals that Kamala Harris Would Keep Up One of Biden’s Biggest Fights LINK
CNN: DirecTV Agrees to Buy Dish for $1 LINK
CNBC: PepsiCo to Buy Tortilla Chip Maker Siete Foods for $1.2 Billion LINK
PYMNTS: VISA Facing Merchant Class Action Case Amid DOJ Antitrust Action LINK
Antitrust/M&A Opinion
Avi Salzman in Barron’s: The FTC is Delaying Big Oil Mergers. It’s Not Stopping Deals from Closing LINK
Johnathan B Baker and Fiona Scott Morton in ProMarket: Market Power Has Grown and Antitrust Needs Strengthening, Despite What Shapiro & Yurukuglo and Miller Suggest LINK
Lulu Wang in ProMarket: A DOJ Victory Against Visa May Not Help Merchants or Consumers LINK
Healthcare/Pharma
STAT News: Epic and Particle Dragged a Non-Profit into Their Antitrust Fight. Here’s What You Need to Know LINK
Financial Times: China’s WuXi Explores Sale of Pharma Units as US Restrictions Loom LINK
Bloomberg Law: Why the FTC Suit Against Drug Benefit Manufacturers Is an Unusual Step LINK
Labor
Bloomberg Law: DOJ Backs Worker Antitrust Case Against Pittsburgh Hospital LINK
Reuters: Apple Accused by US Labor Board of Imposing Illegal Workplace Rules LINK
Reuters: US Port Workers and Operators Reach Deal to End East Coast Strike Immediately LINK
The Hill: Amazon Faces Complaint from NLRB Amid Battle with Teamsters LINK
Tech/Social Media
Competition Policy International: Tech Rivals Push for EU Crackdown on Microsoft Edge Dominance LINK
Bloomberg Law: Google Hit with Renewed Antitrust Suit Over Voice Assistants LINK
The Verge: Uber Partners With ex-Yandex Self-Driving Group for Robotaxis and Robot Delivery LINK
Other
The Wall Street Journal: Michael Jordan’s Racing Team Files Antitrust Lawsuit Against NASCAR LINK
The New York Times: O’Bannon Lawyer Challenges NCAA Antitrust Lawsuit Settlement Over Revenue-Sharing System, NIL Regulations LINK
