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The members of BakerHostetler's Antitrust and Competition Team are pleased to present these brief updates from the conference sessions on Day 2 at last week's ABA Antitrust Spring Meeting in Washington, D.C.
State AGs Discuss Antitrust Approach
At the session, "A New State of Mind," the panelists addressed a number of issues relating to state-level antitrust enforcement, providing a variety of perspectives.
State laws remain a patchwork, and each state has its own enforcement priorities, which can be daunting for private parties to navigate during a time when, as some panelists stated, the federal government has shifted its enforcement approach. Julian Quiñones, of the Connecticut Attorney General's office, said that "[s]tates step in where the feds don't." However, while there may sometimes be different approaches between states and the federal government, there are still many places where the states continue to work collaboratively with the federal enforcers. Private party complainants would be well-served to keep these relationships in mind as they consider where to pitch enforcement actions.
Paula Blizzard of the California Attorney General's office addressed numerous topics relating to California. She emphasized the importance of avoiding information-sharing at industry or trade association events – including pricing algorithms and aggregated data that can be de-anonymized. She also discussed recent California legislation that had the effect of increasing penalties, creating a single-firm monopolization cause of action, and broadly outlawing pricing algorithms. She was also candid about pending prominent lawsuits – California will not hesitate to bring cases independent of the federal government.
The panel also discussed antitrust actions in state courts. State courts can present an opportunity to educate state court judges on antitrust, particularly in states where antitrust litigation is rare, and can provide state AGs with a potential advantage as the representative of a state sovereign before a home court.
Further, the panelists discussed the expanding state-level "mini-HSR" regime. Three states have enacted the Uniform Premerger Notification Act, and at least four more are likely to adopt the law before the end of the year. Ms. Blizzard argued in favor of these laws as a low-burden means of achieving information disclosure, without the need to respond to compulsory process. The state laws can also help state agencies to rule out potential merger investigations with ease, reducing the burden on transacting parties.
Into the Breach: Private and State Merger Challenges
The panel discussed the rise of state attorney general and private challenges to problematic mergers. Elizabeth Maxeiner of the Illinois AG's office observed that in her view, "Merger review, at least on the merits, is effectively dead at the federal level, particularly at the DOJ." States are "concurrent" antitrust enforcers with the FTC and DOJ, and states may challenge deals as anticompetitive even if federal agencies do not. Historically, the federal agencies have worked closely with the states, but states are increasingly likely to go it alone, or as a group, typically when there are local interests that particular states seek to protect. Independent state action has worked in some cases, but has not had a tremendous track record of success to date. As always, resource constraints remain a concern for the states.
As it relates to private plaintiffs, they may sue for injunctive relief before a merger closes (i.e., in a similar procedural posture to government enforcers), or they may wait until after a problematic merger has closed to bring an affirmative claim for damages. By waiting to sue, private parties avoid the countervailing ripeness, standing and mootness considerations that often color private litigants' premerger lawsuits. Look for more private litigation in this space in the coming years, particularly if transactions perceived as problematic are approved by government regulators.
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