USCIB Competition Committee Holds Joint Meeting With ICC

The USCIB Competition Committee held a joint meeting April 13 with the International Chamber of Commerce (ICC) Competition Commission to discuss developments in international competition enforcement.

The meeting featured a keynote presentation on a history of cases brought before the International Trade Commission (ITC) relating to unfair competition under Section 337, according to USCIB Director for Investment, Trade and China Alice Slayton Clark. While Section 337 protects U.S. companies from “unfair methods of competition and unfair acts” related to the importation of articles made by foreign companies, it was considered for years as inappropriate for antitrust litigation. Since the law was amended in 1974 to give the ITC authority to issue cease and desist orders, however, it is now being used more for antitrust filings. Deanna Tanner Okun, former ITC chair and managing partner at AMS Trade LLP, and Lauren Peterson, partner AMS Trade LLP, described how the law developed into the antitrust tool it is today, including details on key cases filed and their outcomes.

Of significance, USCIB member Taylor Owings of Baker Botts reviewed USCIB comments filed last week with the Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division on modernizing enforcement guidelines for mergers. USCIB Competition Committee Vice Chair Jennifer Patterson provided updates on details of antitrust legislation moving through the U.S. Congress. USCIB plans to facilitate a member briefing with congressional staff on antitrust legislation as it advances in the months ahead. Finally, USCIB member John Taladay of Baker Botts proposed the creation of a new ICC task force to develop principles for RFIs (requests for information) for non-targeted stakeholders because they have become overly burdensome.

Regarding the ICC Competition Commission workstreams, Compliance and Advocacy Chair Anne Riley reported that ICC is working to expand credit for compliance programs in other jurisdictions across the globe. Riley also reported that late last year, the ICC filed comments regarding the French Competition Authority’s (FCA) new guidance on antitrust compliance programs, highlighting the importance of compliance and providing benchmarks on the objectives, the definition, and the implementation of these programs. In addition, Member of the ICC Merger Control Regimes Task Force (TF) Alex Nourry reported that the TF is currently working on comments to the European Commission on a proposed revision of competition rules regarding horizontal cooperation agreements. USCIB members were solicited and provided inputs. The ICC hopes the revision will ultimately yield better clarity and legal certainty for these agreements.

ICC Competition Commission Chair Francois Brunet encouraged USCIB companies to get more involved in ICC task forces.

USCIB Launches Competition Webinar Series; First One Focuses on China

The USCIB Competition Committee launched a new webinar series for 2022 titled “Updates in International Competition Law and Enforcement,” spotlighting antitrust developments in key jurisdictions around the globe.

The first event was held last week, focusing on China antitrust regulation and enforcement and featuring experts from the International Chamber of Commerce (ICC) China National Commission: Dr. Hao Zhan, managing partner at Anjie Law Firm Beijing and ICC Competition Commission regional ambassador to China, Susan Ning, senior partner and head of compliance department of King & Wood Mallesons in Beijing, and Song Ying, antitrust partner at Anjie Law Firm Beijing.

“We hope these webinars will benefit USCIB members, giving them the opportunity to learn from competition experts from around the globe on issues critical to their business,” said USCIB Director Investment, Trade and China Alice Slayton Clark.

Zhan discussed recent fundamental changes in China’s antitrust system, with consolidation in 2018 of three authorities into the State Administration for Market Regulation (SAMR), a centralized, vice ministry level authority with more power to promulgate and enforce competition rules and laws. According to Zhan, this has ushered in a new era of antitrust enforcement in China with the establishment of the State Anti-Monopoly Bureau and more cases and higher penalties targeting mostly the media, finance, technology internet platform and pharmaceutical sectors.

Ning outlined the Anti-Monopoly Law, draft amendments released in October 2021 and the anti-monopoly guidelines on the platform economy enacted in February 2021. She discussed how the trend in China is to focus antitrust efforts on the platform economy, focusing on the role of algorithms and platform technologies being misused to exclude or coordinate with others in the marketplace.  Vertical, horizontal and hub and spoke relationships are all targeted. She also discussed the behavior patterns for big data killing, when platforms discriminate in pricing practices using algorithms to differentiate consumers and customary spending costs and described a few high-profile penalty decisions imposed on platform operators who hindered the flow of consumers between platforms – “picking one from the two” problem.

Finally Song described the recent history of anti-monopoly law development in China, highlighting a few of the key changes sought through AML amendments, most of which fall under merger control, addressing no safe harbor, aiding and abetting (liability of third parties), stop the clock, and higher penalties for gun jumping, for example.

Clark plans to host the next webinar in the spring, spotlighting European or Latin American antitrust enforcement practices.

USCIB Competition Group Meets With FTC Commissioner, Discusses US Antitrust Developments

The USCIB Competition Committee convened virtually November 12 for its semiannual meeting to discuss updates on antitrust at the national and international levels. Federal Trade Commissioner Noah Phillips served as featured speaker, providing personal insights on the shift in approach of the Biden Administration with respect to merger and acquisition activity, enforcement, rulemaking authority, treatment of labor markets, review of the horizontal and vertical merger guidelines, the July 2021 executive order on promoting competition and the new White House Competition Council.

Commissioner Phillips was appointed to the FTC in April 2018, having previously served as Chief Counsel to Senator John Cornyn (D-TX), on the Senate Judiciary Committee, and in various Washington D.C. and New York law firms. According to USCIB Director for Investment, Trade and China Alice Slayton Clark, Commissioner Phillips interactively engaged with the Committee by answering questions.

The Committee was also updated on the upcoming meetings and activities of the OECD and Business at OECD (BIAC) by Jane Antonio and John Taladay of Baker Botts. BIAC has prepared feedback on four OECD papers under discussion at recent OECD Competition Committee meetings: competition in books and e-books, environmental considerations in competition enforcement, ex-ante regulation and competition in digital markets, and economic analysis and evidence in abuse cases. The OECD meetings will be followed by the annual OECD Global Forum on Competition December 6-8.

USCIB Competition Committee Chair Dina Kallay (Ericsson) and Vice Chair Jennifer Patterson (Arnold & Porter), updated USCIB members on activities at the International Chamber of Commerce (ICC), where they serve as Vice Chairs on the ICC Competition Commission. They discussed the ICC’s Antitrust Compliance Toolkit and its Small and Mid-Size Enterprises (SME) version, as well as recent efforts to update the 2018 leniency manual. Both put a call out for interested USCIB members to become directly involved in the ICC Competition Commission and working groups.

Finally, Kallay informed members on a new draft framework paper issued by the French Competition Authority addressing compliance programs. She suggested USCIB weigh in, pressing for more credit for compliance programs in antitrust enforcement.

Julie Guichard and Matt Heim of Amazon also briefed members on a draft foreign subsidies regulatory initiative in the EU that would impact member companies operating in Europe. The proposal would require mandatory notification to the European Commission of all subsidies received from non-EU governments, information to be used in screening foreign direct investment, mergers and acquisitions, and joint ventures. The proposal was originally aimed at Chinese state-owned enterprises (SOEs), but they warned that the scope has been expanded and will now likely impact western multinationals doing business in Europe. USCIB will explore the issue with members to see if there is an interest in weighing in with the U.S. government on the proposal.

Accepting USCIB Amicus Position, Appeals Court Rejects FTC Approach to Antitrust Liability for Trademark Settlements

The U.S. Court of Appeals for the Second Circuit has vacated the Federal Trade Commission’s (FTC) decision that 1-800 Contacts engaged in illegal agreements with rival online contact lens sellers on June 11, 2021.

In 2018, the Commission imposed antitrust liability against 1-800 Contacts years after it settled at least fourteen trademark infringing lawsuits against competing online retailers. The Commission alleged the settlements restricted trade by preventing all parties from bidding on each other’s trademarked search terms. USCIB filed an amicus brief in support of 1-800 Contacts during the appeal, arguing, among other things, that the Commission’s decision ignored the critical importance to business of intellectual property rights and that enforcing the FTC’s ruling would unfairly apply the lawful exercise of such rights to a higher pro-competition standard.

According to Bryan D. Gant of USCIB member firm White & Case, the Second Circuit’s opinion rejected both the idea that settling trademark disputes is “inherently suspect,” and that this standard could be applied to future cases. The court also overruled the Commission’s attempt to treat mere anecdotal price differences as direct evidence of anticompetitive conduct and directed that any “less restrictive alternatives” the Commission proposes be realistic. Bryant cautions, however, that in a footnote to the opinion, the Second Circuit leaves open the possibility that negative keyword advertising—paying to have a competitor’s name not appear in the search—might raise antitrust concerns, but the Court refused to consider it in this case as the issue was not squarely addressed by the FTC.

“USCIB is pleased that the Second Circuit decision largely accepted its amicus brief, rejecting the FTC’s approach to antitrust liability for trademark settlements, avoiding the potential negative impacts the decision would have had on businesses, consumers and competition,” asserted USCIB General Counsel Nancy Thevenin. The case is now remanded back to the Commission with instructions to dismiss.

USCIB is grateful to Eileen M. Cole, Bryan D. Gant and Seiji Niwa of member firm White & Case and USCIB Competition Committee leadership for their excellent work on the amicus brief.

The Second Circuit opinion is available here.

Donnelly Co-Authors Op-Ed in The Hill on Commercial Diplomacy

USCIB Senior Advisor Shaun Donnelly and his longtime State Department colleague Ambassador (ret.) Tony Wayne recently co-wrote an op-ed in The Hill titled, “Biden’s Trade Policy Needs Effective Commercial Diplomacy.”

Wayne and Donnelly, both retired U.S. ambassadors, ran the State Department’s Economic and Business Bureau in the early 2000s; Wayne served as assistant secretary and Donnelly was his principal deputy assistant secretary.  Their recent op-ed recommends that the new Administration focus on strengthening a government-wide effort to support U.S. companies (and thereby, U.S. workers and localities) to win more business opportunities overseas in order to bolster American revenues, jobs, and global competitiveness across the United States.

According to both, the international competition is fierce, and getting increasingly more fierce every day. “Frankly other governments have upped their games in recent years, so we have some catching up to do,” they argue in the op-ed.

“High-level political support, interagency teamwork, strong Ambassadorial leadership in the field, and in-depth partnership with the U.S. private sector will be essential.”

“Both in our days together at the State Department and now as colleagues in the American Academy of Diplomacy, Ambassador Wayne and I have been working on these important issues of how the U.S. Government can best support U.S. companies and workers, to help them win more deals, contracts and partnerships around the world,” said Donnelly.  “We’ve worked with the Obama and Trump Administrations on these issues and we anticipate engaging actively with the incoming Biden team at key agencies, as well as key players at the White House, on the Hill and beyond.  The U.S. needs to up its game, play stronger offense on international commercial battlefields. I see this work as a natural extension of my earlier work at State and USTR on international economic and trade policy and also of the important work we at USCIB have been doing to support U.S. business.”

USCIB Competition Committee Hosts DOJ Antitrust Division Deputy

USCIB’s Competition Committee held its fall meeting on October 28 in a virtual format due to the ongoing COVID-19 pandemic. Following welcome and introductory remarks by Dina Kallay (Ericsson) and Jennifer Patterson (Arnold & Porter), Chair and Vice Chair of the Committee, respectively, the group received an update on the upcoming meetings of the OECD Competition Committee from John Taladay (Baker Botts), Chair of the Business at OECD (“BIAC”) Competition Committee, and on the current work of the ICC Competition Commission from USCIB Senior Director for Trade, Investment, and Financial Services Eva Hampl.

The meeting featured Alexander Okuliar, deputy assistant attorney general, Antitrust Division, U.S. Department of Justice (DOJ), as the main speaker. Okuliar recently returned to the DOJ following two decades at both federal antitrust agencies and the private sector, and is responsible for civil merger and conduct investigations and litigation. He delivered remarks to USCIB members that included the DOJ’s recent work regarding competition in digital markets; the recent DOJ Business Review Letter to IEEE; and China, including due process challenges in China’s antimonopoly agencies and the new China Standards 2035 policy. Following his remarks, DAAG Okuliar engaged in an open Q&A session with committee members.

The Committee, under the direction of Kallay also discussed various issues of concern, including on advocacy for international convergence re compliance. Finally, Lisa Kimmel (Crowell & Moring) provided the group an update of the recent report of the House Judiciary Committee, Subcommittee on Antitrust, Commercial and Administrative law, on the Investigation of Competition in Digital Markets.

 

USCIB Competition Committee Hosts FTC Antitrust Expert

USCIB’s Competition Committee held its spring meeting on April 16 in virtual format due to the COVID-19 crisis. The meeting included distinguished speaker Gail Levine, deputy director of the Bureau of Competition at the U.S. Federal Trade Commission (FTC). Jennifer Patterson (Arnold and Porter), who serves as vice chair of the USCIB Competition Committee, introduced Levine and USCIB Competition Committee Chair Dina Kallay (Ericsson) moderated the discussion with members.

“The off-the-record exchange included an update on antitrust enforcement in the time of COVID-19, as well as on recent cases, and the recent Draft Vertical Merger Guidelines, to which USCIB provided comments,” noted USCIB Senior Director for Trade, Investment and Financial Services.

Another issue of interest to members was the technology task force the FTC created in February 2019, which has since then been converted into a “Technology Enforcement Division” (TED) that now has 25 FTEs. The TED was created to monitor competition and investigate potential anticompetitive conduct in markets in which digital technology is an important dimension of competition.

Following the exchange with the government official, the Committee received an update from John Taladay (Baker Botts), chair of the Business at OECD Competition Committee on the upcoming OECD Competition Committee meetings in June. Lisa Kimmel (Crowell & Moring), also provided a summary of USCIB comments on the Department of Justine (DOJ)/FTC Draft Vertical Merger Guidelines, and Eileen Cole (White & Case) provided an update on the recent hearing of the 1-800 Contacts case, for which USCIB submitted an amicus brief, urging the reversal of the FTC ruling.

USCIB Comments on Draft Vertical Merger Guidelines

USCIB submitted comments recently on the Draft Vertical Merger Guidelines announced in January by the U.S. Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ).

In the submission, USCIB indicated that members understand the tremendous procompetitive benefits and efficiencies that can be associated with vertical mergers.

“Our members value transparency and predictability in vertical merger enforcement policy and welcome the agencies’ joint effort to clarify the analytic framework and methods they employ to review vertical mergers,” said USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl. “USCIB applauds the agencies for proposing draft vertical merger guidelines based on the well-established economics of vertical relationships and grounded in the consumer welfare standard.”

The comments are intended to support final guidelines that foster transparency and eliminate unnecessary regulatory obstacles to efficient vertical transactions.

USCIB member Lisa Kimmel, Ph.D., senior counsel, Crowell & Moring LLP, was also invited to participate in one of the public workshops announced by the agencies in February. Unfortunately, those workshops which were scheduled to take place this month, were cancelled due to COVID-19 related measures.

USCIB Discusses Online Platforms With Department of Justice

USCIB hosted a meeting with officials from the U.S. Department of Justice (DOJ) on the “Big Tech” review of online platforms on December 18. The meeting brought together USCIB members, staff as well as specialists who spoke on these issues, including Associate Deputy Attorney General and Senior Advisor for Technology Industries Ryan Shores and Counsel to the Attorney General Lauren Willard.

In July of 2019, the DOJ announced the review of market-leading online platforms. This review is considering competition and other issues related to online platforms, including a recently-announced review of Section 230 of the Communications Decency Act. Shores was appointed to his position in October of this year to lead this review effort.

“Wednesday’s meeting provided a great opportunity for members to exchange views with the DOJ officials on these important issues,” said Eva Hampl, senior director for investment, trade and financial services, who leads USCIB’s work on competition policy.

USCIB Meets With DOJ on Global Competition Issues

L-R: Mike Murray, Deputy Assistant Attorney General; James Fredricks, Section Chief, Criminal Section II, U.S. Department of Justice; Dina Kallay, Ericsson and USCIB Competition Committee Chair; Eva Hampl, USCIB Senior Director, Investment, Trade and Financial Services; and Jennifer Patterson, Arnold & Porter and USCIB Competition Committee Vice-Chair.

Department of Justice (DOJ) Deputy Assistant Attorney General for Appellate Mike Murray met with USCIB’s Competition Committee, chaired by Dina Kallay (Ericsson), during its fall meeting on September 25 at the offices of White & Case LLP.  Following an introduction and welcome by Vice Chair Jennifer Patterson (Arnold & Porter LLP), USCIB members participated in an active agenda that included updates on important developments on global competition issues.

Murray discussed the issue of indirect purchasers DOJ Antitrust Division brief and position in Apple v. Pepper. His complete remarks can be found here. DOJ Section Chief Jim Fredericks, Criminal Section II then presented and answered member questions regarding the DOJ Antitrust Division new policy to incentivize compliance programs.

Members also received an update from Bryan Gant from White & Case on the status of the amicus brief USCIB filed in the 1-800 Contacts case, which urges reversal of the FTC ruling on antitrust liability for trademark settlements. Finally, John Taladay (Baker Botts), Chair of the Business at OECD Competition Committee, provided an overview of the upcoming OECD Competition Week taking place December 2-6 in Paris. The latter part of that week will be the Global Forum on Competition, covering issues such as competition provisions in regional trade agreements and merger control in dynamic markets.