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2018 Antitrust Report

Apr 09, 2018

2018 ANTITRUST ANNUAL REPORT

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Sixth Annual Report Finds Controls on Foreign Direct Investment and Focus on Fairness Are Top of Mind Among Antitrust Enforcement Trends

Global law firm Shearman & Sterling publishes its sixth annual Antitrust Annual Report today. The 2018 Report discerns two key trends – a global resurgence of controls on foreign direct investment and the focus on ‘fairness’ developing in the European Union (EU). 

The report also discusses various other important developments in international competition law enforcement.

A global resurgence of foreign direct investment controls

“A new U.S. Administration more assertive than previously anticipated, along with a wave of coming foreign investment control reform in Europe, means that corporations considering cross-border transactions in sensitive industries will need to prepare well and tread carefully,” says David Higbee, Global Antitrust Practice Group Leader. 

Fairness in EU competition policy and enforcement

“Fairness has been the common theme in Commissioner Vestager’s tenure as Competition Commissioner,” says Matthew Readings, Global Antitrust Practice Group Leader. He adds, “arguably the focus on fairness has in some cases taken precedence over more ‘traditional’ competition principles and objectives of promoting consumer welfare and an efficient allocation of resources. I expect this trend to continue and companies with strong market positions in Europe ignore this enforcement perspective at their peril.”

Mergers

We look at gun-jumping and procedural compliance in the EU, the U.S. and China. We explore the implications of the DOJ’s challenging Parker-Hannifin Corp.’s consummated acquisition of Clarcor. In its Dow/DuPont decision, the EC introduced a novel innovation theory of harm and the report assesses how this could impact companies whose business strategies are focused on innovation and R&D. In September 2017, the Court of Justice of the European Union issued an important judgment clarifying the application of the EU Merger Regulation to joint ventures (JVs). We look at what the ruling means in practice and compare it with the treatment of JVs in China and the United States. We also report on the DOJ reviewing its use of behavioral remedies and consider what it might mean for future mergers.

Cartels

The EC has been very vocal about its concerns regarding the use of algorithms and artificial intelligence to engage in anti-competitive practices. The report explores possible scenarios and how an investigation would be approached. 

Compliance

We conduct an early review of antitrust enforcement under the Trump Administration and discuss Brexit and the implications on trade. With the EC’s increasing focus on the implementation and achievement of the Digital Single Market, distribution agreements in the online sale of goods are very much on competition authorities’ radars and the report explores the do’s and don’ts in the EU. In a separate piece, we look at China’s intervention against resale pricing-related offenses in distribution agreements – an enforcement priority for authorities. 

Unilateral conduct

With European competition authorities increasingly investigating online platforms, we reflect on the novel questions this raises, especially when applying general principles. The EC and other EU national competition authorities are investigating multiple allegations of excessive pricing in the pharmaceutical industry. We take stock of the various investigations and assess the long-awaited Intel ruling for practical takeaways. 

Litigation

Given developments in U.S. reverse payment settlements in the pharmaceutical industry, we look at what to expect in the coming months. The FTC v. Qualcomm ruling upends the modern trend for U.S. courts to decline to order production in civil discovery of confidential submissions to foreign competition enforcement authorities on grounds of comity. We consider the impact on future cases and analyze the dispute between the U.S. Department of Justice and Broadcast Music Inc. over the licensing of fractional interests. We also report on the U.S. Supreme Court hearing of United States v. American Express, a key case for the application of the rule of reason and the analysis of markets in antitrust cases.

EU State aid

We assess the EC’s new approach to infrastructure aid and review the EC investigation of a U.K. tax exemption (the Group Financing Exemption) and explore possible consequences for affected parties.

The Antitrust team

Companies choose us to address their most critical issues because we understand their business, know their industries and think ahead. Our success is our client’s success. 

Our strong worldwide experience in advising on the full antitrust law spectrum coupled with a presence in key antitrust jurisdictions; including the U.S. and Europe, makes us the to-go practice when it comes to providing practical guidance across multiple jurisdictions.

We have been recognized by the leading competition publication, Global Competition Review, as one of only 25 “Global Elite” practices in its 2018, 2017 and 2016 GCR 100 rankings. To find out more about our Antitrust practice, click here.

Read the 2018 Antitrust Annual Report.

Authors and Contributors

Elvira Aliende Rodriguez

Partner

Antitrust

+32 2 500 9837

+32 2 500 9837

Brussels

Brian G. Burke

Partner

Litigation

+1 212 848 7140

+1 212 848 7140

New York

John F. Cove, Jr.

Partner

Antitrust

+1 415 616 1139

+1 415 616 1139

San Francisco

Jessica K. Delbaum

Partner

Antitrust

+1 212 848 4815

+1 212 848 4815

New York

Stephen Fishbein

Partner

Litigation

+1 212 848 4424

+1 212 848 4424

New York

Jerome S. Fortinsky

Partner

Litigation

+1 212 848 4900

+1 212 848 4900

New York

Geert Goeteyn

Partner

Antitrust

+32 2 500 9800

+32 2 500 9800

Brussels

Adam Hakki

Partner

Litigation

+1 212 848 4924

+1 212 848 4924

New York

David A. Higbee

Partner

Antitrust

+1 202 508 8071

+1 202 508 8071

Washington DC

Masahisa Ikeda

Partner

Capital Markets

+1 212 848 5378

+1 212 848 5378

New York

Toshiro Mochizuki

Partner

Capital Markets

+81 3 5251 0210

+81 3 5251 0210

Tokyo

Djordje Petkoski

Partner

Antitrust

+1 202 508 8083

+1 202 508 8083

Washington DC

Matthew Readings

Partner

Antitrust

+44 20 7655 5937

+44 20 7655 5937

London

Patrick D. Robbins

Partner

Litigation

+1 415 616 1210

+1 415 616 1210

San Francisco

Richard F. Schwed

Partner

Litigation

+1 212 848 5445

+1 212 848 5445

New York

Ryan Shores

Partner

Antitrust

+1 202 508 8058

+1 202 508 8058

Washington DC

Todd Stenerson

Partner

Litigation

+1 202 508 8093

+1 202 508 8093

Washington DC

James Webber

Partner

Antitrust

+44 20 7655 5691

+44 20 7655 5691

London

Wayne Dale Collins

Of Counsel

Antitrust

+1 212 848 4127

+1 212 848 4127

Washington DC

James P. Tallon

Of Counsel

Litigation

+1 212 848 4650

+1 212 848 4650

New York

S. Lynn Diamond

Counsel

Antitrust

+1 212 848 7086

+1 212 848 7086

New York

Daniel Francis

Counsel

Antitrust

+1 202 508 8026

+1 202 508 8026

Washington DC

Kana Morimura

Counsel

Antitrust

+81 3 5251 0211

+81 3 5251 0211

Tokyo

Paolisa (Paola) Nebbia

Counsel

Antitrust

+39 06 697 679 231

+39 06 697 679 231

Rome

Mathias Stöcker

Counsel

Antitrust

+49 69 9711 1619

+49 69 9711 1619

Frankfurt

Mikael Abye

Associate

Litigation

+1 415 616 1197

+1 415 616 1197

San Francisco

James Alicea

Associate

Antitrust

+1 212 848 5146

+1 212 848 5146

New York

Arjun Chandran

Associate

Antitrust

+1 212 848 7292

+1 212 848 7292

New York

Rebekah Conlon

Associate

Antitrust

+1 202 508 8010

+1 202 508 8010

Washington DC

Özlem Fidanboylu

Associate

Antitrust

+44 20 7655 5671

+44 20 7655 5671

London

Stephanie Greco

Associate

Antitrust

+1 212 848 5347

+1 212 848 5347

New York

Gabriella Griggs

Associate

Antitrust

+44 20 7655 5664

+44 20 7655 5664

London

William Haun

Associate

Antitrust

+1 202 508 8056

+1 202 508 8056

Washington DC

Brian Hauser

Associate

Antitrust

+1 202 508 8005

+1 202 508 8005

Washington DC

Rena Katsuyama

Associate

Capital Markets

+ 81 3 5251 0229

+ 81 3 5251 0229

Tokyo

Misaki Kodama

Associate

Capital Markets

+81 3 5251 0228

+81 3 5251 0228

Tokyo

Alisa Mastro

Associate

Antitrust

+1 202 508 8103

+1 202 508 8103

Washington DC

Matthew Modell

Associate

Antitrust

+1 202 508 8045

+1 202 508 8045

Washington DC

Ruba Noorali

Associate

Antitrust

+44 20 7655 5039

+44 20 7655 5039

London

Yuko Ohba

Associate

Litigation

+1 212 848 7242

+1 212 848 7242

New York

Aleksandra Petkovic

Associate

Antitrust

+1 212 848 4484

+1 212 848 4484

New York

Caroline Préel

Associate

Antitrust

+32 2 500 9887

+32 2 500 9887

Brussels

Patricia Sanchez-Calero

Associate

Antitrust

+32 2 500 9879

+32 2 500 9879

Brussels

Timothy Slattery

Associate

Antitrust

+1 202 508 8003

+1 202 508 8003

Washington DC

Mark Steenson

Associate

Antitrust

+44 20 7655 5602

+44 20 7655 5602

London

Simon Thexton

Associate

Antitrust

+44 20 7655 5731

+44 20 7655 5731

London

Leo Tian

Associate

Litigation

+852 2978 8077

+852 2978 8077

Hong Kong

Mark Weiss

Associate

Antitrust

+1 202 508 8031

+1 202 508 8031

Washington DC

Chiharu Yuki

Associate

Mergers and Acquisitions

+81 3 5251 0421

+81 3 5251 0421

Tokyo