News
February 8, 2021

Developments in US Antitrust Litigation—2020 Year in Review

Advisory

Introduction

Even as courtrooms were replaced by Zoom rooms in 2020, the last year brought a number of important developments in US antitrust litigation across a range of topics and industries. Recent developments include significant wins for life sciences defendants that will present challenges for plaintiffs at the class certification phase and for patent-related claims. The Seventh Circuit also teed up a refusal-to-deal case for the US Supreme Court to consider, and the Raiders stiff-armed the City of Oakland's challenge to the team's move to Las Vegas. Federal and state antitrust authorities remained active challenging allegedly anticompetitive conduct and mergers, though the antitrust authorities lost several key cases. Notably, the federal antitrust agencies challenged Google and Facebook's alleged conduct in search advertising and social networking, respectively. Those litigations, filed in late 2020, will likely continue into 2021 and beyond.

Key Private Litigation

In re Lamictal Direct Purchaser Antitrust Litigation

On April 22, 2020, the US Court of Appeals for the Third Circuit vacated a New Jersey district court's certification of a class of direct purchasers allegedly harmed by a so-called "pay-for-delay" agreement between GlaxoSmithKline (GSK) and Teva Pharmaceuticals (Teva). The Third Circuit found that it could not determine whether common issues predominated the direct purchasers' claim because the district court failed to conduct a rigorous analysis of the competing evidence cited in the parties' expert reports. The Third Circuit remanded the case to the district court to complete this analysis.1

The direct purchasers' suit, filed in 2012, alleged that GSK and Teva violated the antitrust laws through their settlement agreement to end a patent dispute over GSK's anti-epilepsy drug Lamictal and Teva's generic equivalent, lamotrigine.2 In the mid-2000s, GSK and Teva settled a patent dispute brought by GSK after Teva sought to market a generic version of Lamictal before GSK's patent expired using the Hatch-Waxman Act procedures. As part of that settlement, plaintiffs alleged that Teva's entry was delayed by the agreement allowing it to begin selling lamotrigine only six months before it could have had GSK had won its lawsuit, and in exchange, GSK committed not to launch an authorized generic in competition with Teva's generic. The direct purchasers asserted that but for this illegal "reverse payment agreement," both GSK and Teva would have launched generic products sooner, resulting in lower prices for lamotrigine.3

The district court certified a class of all direct purchasers of Lamictal from GSK or generic lamotrigine from Teva,4 and GSK and Teva sought an interlocutory appeal challenging its finding that common questions would predominate as to the class members that purchased generic lamotrigine from Teva. At the Third Circuit, the plaintiffs argued, based on the Supreme Court's ruling in Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036 (2016), that the standard for predominance is satisfied "unless no reasonable juror could believe the common proof at trial."5 The Third Circuit rejected plaintiffs' argument, holding that Tyson did not control and confirming the long-standing Third Circuit rule that a class must demonstrate that its claims are capable of common proof at trial by a preponderance of the evidence.6 The Third Circuit next held that the district court had failed to conduct a sufficiently rigorous analysis of the parties' dueling expert reports to determine whether the plaintiffs' injuries were capable of common proof at trial. According to the Third Circuit, the district court abused its discretion by accepting the plaintiffs' economist's use of averages without resolving key factual disputes bearing on the commonality of the plaintiffs' injury, including whether the plaintiffs individually negotiated contracts with GSK or Teva and what pricing and generic strategy GSK would have pursued in the but-for world.7

This case signals that courts must conduct a rigorous analysis of conflicting evidence at the class certification stage, even where factual disputes may overlap with the merits of a case. The case likely raises the bar for class action plaintiffs to prove common questions predominate where class members' purchases are subject to individually negotiated contracts with the defendants or where conflicting expert testimony muddies the question of whether the plaintiffs would have suffered a common injury in the but-for world.

In re Humira (Adalimumab) Antitrust Litigation

On June 8, 2020, the Northern District of Illinois dismissed without prejudice a complaint by indirect purchasers of AbbVie's autoimmune disorder biologic product, Humira.8 The decision is notable in that it roundly rejected allegations that AbbVie's lawful enforcement of patent rights violated the antitrust laws, and confirmed there is no "one size fits all" requirement for settling patent litigations in different jurisdictions.

The complaint alleged that AbbVie Inc. and its subsidiary, AbbVie Biotechnology, Ltd. (collectively, AbbVie), violated Sections 1 and 2 of the Sherman Act and state laws by engaging in allegedly anticompetitive conduct to protect AbbVie's market position.9 In particular, plaintiffs alleged that in the years leading up to the expiration of Humira's main patent in 2016, AbbVie sought additional patents to create "a thicket of intellectual property protection so dense that it prevented would-be challengers from entering the market with cheaper biosimilar alternatives," including 247 patent applications covering the uses of Humira, as well as manufacturing processes, ingredients, and alternative formulations.10 Further, plaintiffs asserted that AbbVie's settlement agreements with potential generic entrants, which allowed them to enter in Europe before the United States, amounted to market allocation or a so-called "pay-for-delay" scheme.11

The district court dismissed the Section 2 claims and held that AbbVie's patent assertion activity was protected under the Noerr-Pennington doctrine. The district court looked at AbbVie's success rate in its patent prosecution, inter partes review, FDA application, and patent litigation efforts to conclude that AbbVie had not engaged in objectively baseless conduct. More than half of AbbVie's 247 Humira-related patents were granted, which the court deemed "too high to plausibly allege sham petitioning as a matter of law."12

The district court also dismissed the Section 1 market allocation and "pay-for-delay" claims. The plaintiffs had alleged that AbbVie used its "patent thicket" as leverage during its patent litigation settlement negotiations with potential Humira competitors, forcing them to agree to delay their US market entry in exchange for earlier entry dates in Europe. The district court disagreed, finding that the complaint did not allege any agreement by AbbVie to stop selling Humira in Europe or that the settlements imposed any limitation on its ability to compete there, and that AbbVie had legitimate reasons for agreeing to different settlement terms in different jurisdictions.13 The court explained that patents are entitled to special treatment when "it comes to geographic restrictions," and under the Patent Act, "an agreement to permit entry into a market previously protected by a patent does not become a per se invalid market allocation agreement just because it is specific to one territory (or one country)."14

The AbbVie decision confirms that patent holders may lawfully obtain and enforce patents against alleged infringers so long as their efforts are not objectively baseless, and protects their ability to settle lawsuits against would-be infringers. This is even true when a patent holder obtains additional patents near the expiration of the initial patents protecting the patent holder's exclusivity. Here, the court's emphasis on AbbVie's success rate in patent prosecution suggests that, while such a strategy can be lawful, a company seeking additional patent protections for its products should be mindful to seek strong patents as to which it has a reasonable chance of success of prevailing in enforcement actions.

In addition, the court's rejection of the plaintiffs' market allocation and "pay-for-delay" allegations acknowledges that parties may have legitimate, independent reasons for settling patent litigation related to the same products in different jurisdictions under different terms, and that different entry dates in those settlements can be procompetitive. To the extent one settlement's terms are more favorable to a particular potential infringer, this does not necessarily indicate the sort of "reverse payment" actionable under FTC v. Actavis, 570 U.S. 136 (2013). Finally, the decision is a reminder that biologic product manufacturers must abide by the same rules as small molecule drug manufacturers when settling patent litigation.

Viamedia, Inc. v. Comcast Corp.

On February 24, 2020, the US Court of Appeals for the Seventh Circuit revived Viamedia's claim that Comcast used its monopoly power in interconnect services to monopolize the market for advertising representation services (ad rep services) for cable and satellite TV providers, known in the industry as MVPDs.15 Interconnect and ad rep services are distinct but related services that enable MVPDs to sell advertising effectively. Interconnect service providers bundle and resell ads from multiple MVPDs in a regional market, while ad rep services represent MVPDs in selling local, regional, and national ads.

In this case, Viamedia alleged that Comcast used unlawful exclusionary conduct to shut it out of three local markets in which Viamedia was Comcast's only competitor for ad rep services for MVPDs. Specifically, Viamedia asserted that Comcast refused to deal with Viamedia by cutting off its access to Comcast's interconnect services, entered into exclusive ad rep services agreements with other MVPDs, and unlawfully tied its interconnect services to its ad rep services.

A district court in the Northern District of Illinois granted Comcast's motion to dismiss plaintiff's claim based on the refusal-to-deal theory, finding that it claim failed because the allegations could not show that Comcast's conduct was "irrational but for its anticompetitive effects."16 Put differently, the facts as alleged would not support a finding that that there was no valid business purpose for Comcast's refusal to deal with Viamedia. After discovery, the district court granted summary judgment for Comcast on the tying and exclusive dealing theories because Viamedia had failed to "present evidence that tends to exclude the possibility that [Comcast]'s conduct was as consistent with competition as with illegal conduct."17 Viamedia appealed the final judgment rejecting its claims.

The Seventh Circuit reversed the district court's decision on the refusal-to-deal and tying claims. The Seventh Circuit held that Viamedia had pleaded sufficient evidence to make out a refusal-to-deal claim under the limited exception laid out in Supreme Court's Aspen Skiing decision. The court reasoned that the complaint's allegations that plaintiff had a pre-existing, voluntary, profitable course of dealing with Comcast, that Comcast had entered similar agreements in comparable markets, and that Comcast sacrificed profits to harm Viamedia were adequately pled. Specifically, the court noted that Comcast "abruptly terminated decade-long, profitable agreements and sacrificed short-term profits to obtain and entrench long-term market power, and used its monopoly power in Interconnect services market to force its MVPD competitors into a relationship that makes Comcast a gatekeeper of its competitors' advertising revenue."18 The court also held that, at the pleadings stage, a plaintiff alleging a refusal-to-deal claim only needs to plausibly plead some anticompetitive effect, not rule out every hypothetical valid business purpose for the defendant's conduct.19 On the tying claim, the court ruled that by offering evidence that Comcast forced its rival MVPDs to use its ad rep services in order to retain access to its interconnect services, Viamedia had provided sufficient proof of an illegal tie to survive a motion for summary judgment.20

The Seventh Circuit's holding that a refusal-to-deal claim can survive a motion to dismiss even if a potentially valid business justification exists for defendant's conduct appears to breathe new life into monopolization claims based on a refusal-to-deal theory. However, Comcast sought and the Supreme Court granted certiorari on this issue, so given the current makeup of the Court, it is unclear how long this ruling will stand. While on the Tenth Circuit, Justice Gorsuch authored the Novell opinion,21 the case Comcast cited for the "irrational but for its anticompetitive effect" standard.

City of Oakland v. Oakland Raiders

On April 30, 2020, a federal district court in the Northern District of California dismissed Oakland's amended complaint alleging that the Raiders' decision to leave the city and NFL's approval of that decision violated antitrust laws.22

In January 2017, after years of unsuccessful efforts by the Raiders to resolve their stadium issues in Oakland, the team submitted an application to the NFL to relocate the franchise to Las Vegas. Several months later, the NFL approved the request subject to the Raiders paying a $378 million relocation fee to the league. In December 2018, the City of Oakland filed an antitrust lawsuit against the Oakland Raiders and the NFL, alleging that the NFL and its teams act as an anticompetitive cartel, extracting supracompetitive payments for stadium construction and maintenance from host cities by limiting the number of NFL clubs to 32 teams and collectively controlling the terms under which cities can host an NFL team.23 Among other claims, Oakland's complaint sought damages for three Sherman Act, Section 1 violations based on defendants' "demands" that Oakland secure funding to build or renovate a stadium in order to retain the Raiders or attract another NFL team and the NFL's decision to limit the number of NFL teams.24

In July 2019, the district court dismissed Oakland's complaint with leave to amend.25 The court held Oakland had failed to allege an antitrust injury because it primarily complained that it had been outbid by Las Vegas and that its claimed injury reflected an increase, not a reduction, in competition.26 The court also found that lost tax revenue from the future absence of the Raiders and the economic activity their presence generates was not an antitrust injury.27

Oakland filed an amended complaint, again attacking the relocation fee, the NFL's relocation approval process, and the NFL's limitation to 32 teams. The Raiders and the NFL moved to dismiss the amended complaint, arguing that the City of Oakland had not cured the defects identified in the court's previous order. On April 30, 2020, the district court dismissed Oakland's antitrust claim with prejudice. The district court rejected the relocation fee and approval process arguments on the same grounds, reiterating that any harm from allowing a team to relocate to the city with the highest bidder was not a redressable under the antitrust laws. The court also rejected the city's "somewhat halfhearted" attack on the NFL team number limitation, finding that the city had not alleged a non-speculative, compensable antitrust injury arising from this limitation.28

The City of Oakland has appealed the district court's decision to the Ninth Circuit. The case demonstrates the ongoing trend toward increased scrutiny of antitrust claims at the pleadings stage and the importance to a plaintiff of being able to allege a non-speculative injury that derives from a reduction in competition.

Significant Government Litigation

FTC v. Qualcomm

In August 2020, the US Court of Appeals for the Ninth Circuit reversed the Federal Trade Commission (FTC)'s district court win in its suit challenging Qualcomm's licensing practices related to its standard essential patents (SEPs) for the CMDA and LTE cellular communications standards.29

In January 2017, the FTC sued Qualcomm in the Northern District of California alleging that the company had illegally maintained its monopoly and unreasonably restrained trade in markets for the sale of CDMA and premium LTE modem chips.30 The FTC alleged that certain Qualcomm licensing practices violated its commitment, as a member of the standard setting organizations (SSOs) adopting the CDMA and LTE standards, to license its SEPs on fair, reasonable, and non-discriminatory (FRAND) terms. Specifically, the FTC challenged Qualcomm's refusal to license its CDMA and LTE SEPs directly to rival chip suppliers. Instead, Qualcomm licensed these SEPs only to original equipment manufacturers (OEMs) of devices that incorporate CDMA and LTE-compliant chips and instituted a "no license, no chips" policy, under which Qualcomm refused to sell its CDMA and LTE modem chips to OEMs that did not also license Qualcomm's SEPs.31 In addition, the FTC challenged Qualcomm's exclusive dealing in its modem chip supply agreements with Apple.32

In May 2019, the district court held that Qualcomm's licensing practices violated the Sherman Act.33 The court found that Qualcomm's refusal to license its SEPs to its rivals had harmed competition by promoting exit and preventing entry, and enabled Qualcomm to charge "unreasonably high" royalty rates for its SEPs.34 The court further found that Qualcomm had an antitrust duty to license its SEPs to its rival chip suppliers under Aspen Skiing, which imposes a duty to deal where a defendant terminates a voluntary, profitable prior course of dealing and its refusal to deal with rivals is motivated by anticompetitive malice.35 The court also held that Qualcomm's modem chip supply agreements with Apple were de facto exclusive and harmed competition.36 The court issued a permanent, worldwide injunction that 1) prohibited Qualcomm from conditioning its supply of modem chips on a customer taking a patent license, 2) required Qualcomm to make SEP licenses available to rival modem chip suppliers on FRAND terms, and 3) prohibited Qualcomm from entering into explicit or de facto exclusive dealing agreements for the supply of modem chips.37

Qualcomm appealed, and in a rare move, US Department of Justice, Antitrust Division (DOJ) filed a statement of interest and an amicus brief arguing against the FTC's position.38 The Ninth Circuit reversed the district court's judgment and vacated the injunction. The court held that Qualcomm's SSO commitments to license its SEPs on FRAND terms did not create an antitrust duty to license its SEPs to rival chip suppliers, and therefore Qualcomm's refusal to license its rivals was not an antitrust violation.39 The court also rejected the FTC's argument that the breach of an SSO commitment, standing alone, gave rise to an antitrust violation. The court reasoned that any such breach is appropriately remedied by contract and patent claims, not an antitrust claim.40 The court further held that Qualcomm's "no license, no chips" policy did not impose an anticompetitive surcharge on rivals' chips that undermined competition in the modem chip markets.41 The FTC petitioned for a rehearing en banc, but the Ninth Circuit denied its petition.

The Qualcomm case illustrates the continued trend by courts to impose an antitrust duty to deal with rivals only in narrow circumstances (see, e.g., the Viamedia case discussed above). The case also suggests that plaintiffs, including antitrust authorities, will encounter resistance from courts when challenging SEP-related claims under the antitrust laws. In addition to highlighting the tension between antitrust and IP law, the Qualcomm case also exposed tension between the FTC and DOJ in interpreting the scope and role of antitrust law in this area. It remains to be seen how the new FTC and DOJ leadership under the Biden administration will view the role of antitrust law in this space, and how the Qualcomm decision will influence the enforcement approach to SEP-related issues.

State Attorneys General's Challenge to the T-Mobile/Sprint Merger

In February 2020, a district court in the Southern District of New York denied a group of state Attorneys General's request to enjoin the proposed merger of T-Mobile and Sprint, freeing the parties to consummate their transaction.42 The Attorneys General for New York and nine other states sued to block the merger in June 2019 alleging that the deal would substantially lessen competition in the national market for retail mobile wireless telecommunications services by eliminating competition between T-Mobile and Sprint.43

The challenge to the transaction was notable because the DOJ and states diverged in their reviews of the deal. One month after the states challenged the merger, DOJ cleared the deal, requiring the divestiture of Sprint's prepaid mobile business and certain spectrum assets to Dish Network.44 (The Federal Communications Commission (FCC) also approved the transaction in November 2019.45)

In rejecting the states' challenge, the district court concluded that defendants had successfully rebutted the presumption, based on market concentration, that the merger would substantially reduce competition for retail mobile wireless telecommunications services. Specifically, the court found that the transaction would not have anticompetitive effects because: 1) efficiencies arising from the transaction would cause the merged firm to compete more aggressively; 2) Sprint was a "weakened competitor" and unlikely to continue competing vigorously absent the merger; and 3) with the divestiture assets, Dish was likely to become a viable competitor nationally, filling the gap left by Sprint.46 Throughout the opinion, the court relied heavily on the testimony of fact witnesses, finding that the expert witnesses cancelled each other out.47

The T-Mobile/Sprint decision is a rare instance in which a court has credited defendants' claimed efficiencies as cognizable. In so finding, the court emphasized the magnitude of the efficiencies arising from the merger compared to those achievable through speculative (or previously attempted) alternatives, as well as efficiencies T-Mobile achieved from similar prior deals.48 The case also represents a rare instance in which a court has accepted a "weakened competitor" defense, with the court taking pains to describe in detail why the case fit the narrow circumstances when the defense is applicable. Additionally, the T-Mobile/Sprint case underscores the challenge state Attorneys General face when challenging a fix approved by DOJ and the FCC, and the weight that courts give to federal antitrust authorities' analysis of proposed mergers and merger remedies. Finally, the decision emphasizes the importance of supporting an antitrust case with strong fact witnesses; a battle of economic experts in merger litigation is often a wash.

United States v. Sabre

On April 7, 2020, the District of Delaware rejected DOJ's bid to block Sabre's acquisition of Farelogix, a travel technology company.49 DOJ had alleged that the Sabre/Farelogix transaction would harm competition by eliminating an innovative, disruptive competitor in the market for "booking services," or IT solutions that allow airlines to sell tickets through travel agencies to the traveling public.50 In denying DOJ's request for an injunction, the district court held that the government had failed to establish nearly every element of its case. Notably, the court found that the government had not proven that booking services was a relevant product market because, as a matter of law under the Supreme Court's Amex decision, Sabre's two-sided transaction platform, which serves both airlines and travel agencies, does not compete against Farelogix's one-sided platform, which only serves airlines.51

However, just days after the Delaware court's ruling, the UK's Competition and Markets Authority (CMA) blocked the transaction after completing its own in-depth investigation.52 As a result, Sabre and Farelogix abandoned their deal.53 DOJ then moved to vacate the Delaware ruling as moot in order to prevent the district court's holding related to Amex from unduly affecting antitrust enforcement in other cases involving competition between multi-sided platforms and one-sided rivals. On July 20, 2020, the US Court of Appeals for the Third Circuit vacated the district court's ruling.54

United States v. Sabre showcases US antitrust authorities' continued scrutiny of, and willingness to challenge, the acquisition of nascent competitors by allegedly dominant, established players. The Sabre decision is also a reminder that that government often faces an uphill battle defining a relevant market and proving anticompetitive effects in spaces with rapidly changing technology. The case also highlights how Amex's discussion of two-sided markets can confuse courts analyzing technology markets in which companies offer both single-sided and multi-sided platforms.

FTC v. Surescripts

On January 17, 2020, the District of Columbia district court denied Surescripts' motion to dismiss the FTC's Section 2 claims against the health information technology company.55 The FTC's complaint, filed in April 2019, alleged that Surescripts engaged in anticompetitive conduct to maintain its monopoly in two complementary, two-sided markets: electronic prescription routing and eligibility, together known as "e-prescribing."56 The FTC alleged that Surescripts' "loyalty" program, which is structured to require exclusivity, and its threats to charge non-exclusive customers higher prices, prevented entry into e-prescribing by companies with lower-priced, more innovative offerings. Surescripts moved to dismiss, arguing that the court lacked subject matter jurisdiction to hear the case because the FTC's claim was not a "proper case" under Section 13(b) of the FTC Act, and that the FTC had failed to state a Section 2 claim because it did not allege that Surescripts engaged in predatory pricing or that its behavior was anticompetitive under the rule of reason.57

The district court rejected both of Surescripts' arguments. As to the first argument, the court held that the "proper cases" language in Section 13(b) is not a jurisdictional requirement intended to limit the FTC's power to seek a permanent injunction to "routine, straightforward" cases, as Surescripts had argued, and that the FTC had pleaded a "proper case."58 The court agreed with the FTC's broader interpretation that "proper" meant "any case in which a permanent injunction would be 'appropriate'" because a law the FTC enforces was violated and equitable remedies were needed to make consumers whole.59 As to the second argument, the court held that Surescripts' exclusionary practices did not need to amount to predatory pricing to constitute illegal monopoly maintenance, and that the FTC's complaint plausibly pleaded an exclusive dealing violation by alleging that Surescripts had foreclosed competition in at least 70% of both markets and harmed competition on both sides of the two-sided markets.60 Surescripts then sought an interlocutory appeal on the question whether Supreme Court precedent forecloses the FTC's argument that Surescripts' low but not predatory pricing is anticompetitive. The district court denied this motion in May 2020.61 The case proceeds, with summary judgment briefing scheduled to be completed by December 2021.

The district court's ruling on Surescripts' motion to dismiss rejected the argument that low but non-predatory pricing cannot violate Section 2 of the Sherman Act. The Surescripts case also presents an interesting case study of whether, and to what extent, courts will extend the Supreme Court's Amex ruling to Section 2 cases involving two-sided markets. In Amex, the Supreme Court examined the vertical restraints imposed by American Express's anti-steering provisions, holding that in a two-sided transaction market, like a credit card market, an antitrust plaintiff must prove effects looking at the two-sided market as a whole, not just harm on one side of the market.62 In ruling on the motion to dismiss, the district court distinguished the FTC's Section 2 monopolization claim from the Section 1 claim at issue in Amex,63 suggesting that at least this court may be reluctant to extend Amex beyond its current ambit.

"Big Tech" Litigation

In 2020, large US tech firms faced major antitrust actions brought by private plaintiffs and US antitrust authorities.

Amazon: On March 29, 2020, two consumers brought a class action complaint against Amazon in the Western District of Washington for violations of Sections 1 and 2 of the Sherman Act.64 The plaintiffs allege that Amazon limits sellers' ability to discount their products through the use of Amazon's "fair pricing" policy, which prohibits a seller from listing a product on non-Amazon sales platforms for less than the seller charges on the Amazon platform. The complaint asserts that the policy compels "Amazon's sellers to maintain supracompetitive prices for [their products] on competing retail e-commerce channels because any discounts sellers offer on another site must also be offered to Amazon buyers."65 Plaintiffs claim this amounts to horizontal price-fixing agreement between Amazon and its third-party sellers, and "demonstrates an abuse or attempted abuse of monopoly power."66 Amazon has filed a motion to dismiss the complaint, which is currently pending at the district court.

Google: On October 20, 2020, the DOJ and 11 state Attorneys General67 filed an antitrust action against Google in federal district court in Washington, DC, alleging that Google had unlawfully maintained monopolies in general search services, search advertising, and general search text advertising.68

In December 2020, two separate groups of states, one led by Colorado and Nebraska, and the other led by Texas, also filed suit against Google based on similar claims.69 The Texas action, however, is focused on Google's alleged actions in display advertising markets and contains a standalone Section 1 count regarding online display advertising auctions.70 Google has also been sued by advertisers in a number of antitrust class actions filed in the Northern District of California related to Google's alleged actions in the online display advertising space.71

Facebook: On December 9, 2020, the FTC and 46 states, the District of Columbia, and Guam, filed parallel suits against Facebook in federal district court in Washington, DC accusing it of unlawfully maintaining its monopoly over personal social networking by acquiring companies that posed competitive threats and imposing restrictive policies that hindered competition.72 The allegations in both cases focus on Facebook's 2012 purchase of Instagram, its 2014 purchase of WhatsApp, and a range of allegedly anticompetitive conditions that Facebook imposes on third parties seeking to access its platform.

Both the FTC's and states' complaints assert that Facebook's Instagram and WhatsApp acquisitions violated Section 2 of the Sherman Act, but the states' complaint also includes a Clayton Act, Section 7 claim and covers a broader range of conduct. Specifically, the states' complaint more explicitly alleges that Facebook's conduct reduced the quality and variety of data protection and privacy options available to users of personal social networking services.73 However, the two complaints seek similar remedies, including unwinding the Instagram and WhatsApp transactions.

The FTC's attempt to unwind two transactions it previously reviewed is rare (especially this many years after the acquisitions) though not unprecedented. The FTC's ex post decision to challenge Facebook's acquisitions of these two once-nascent competitors also aligns with the agency's increased emphasis on retrospective studies of consummated mergers.74 While antitrust complaints often allege quality or other non-price harms, the allegations that the reduction of privacy and data protection options constitute antitrust harm drift into relatively uncharted waters. Facebook also faces a number of other private cases with antitrust claims in California federal court, five of which have been deemed related to the cases in DC federal court.

Looking Forward to 2021

As we move into 2021, we expect many of the trends from 2020 to continue, with a focus on the conduct of "Big Tech." Relatedly, the FTC also is facing a Supreme Court challenge to its authority to seek monetary damages in federal court, which may limit its ability to use the threat of disgorgement to deter anticompetitive conduct in the future.

Continued Focus on "Big Tech"

After years of calls from Congress, public interest groups, and others to investigate "Big Tech," the DOJ and FTC brought major antitrust cases in this space. Private antitrust litigation against "Big Tech" players also continues apace, notably the litigation against certain players' app store practices.

In the coming weeks, Facebook is expected to move to dismiss both the FTC and state cases. The parallel cases were recently brought before the same judge, but Facebook has asked the district court not to consolidate the cases until after it resolves any initial motions Facebook files.75 Facebook may also ask the court to transfer the states' case to California federal court, where it faces a growing number of cases making related antitrust claims. Observers will closely follow if the court pares down any of the FTC or states' claims and to see how the court addresses the allegations related to unwinding the Instagram and WhatsApp transactions.

Meanwhile, Epic Games' monopolization lawsuits against Apple and Google, are pending in the Northern District of California and will reach a critical juncture in the first half of 2021. On August 13, 2020, Epic sued Apple and Google separately and alleged that the two companies removed Epic's popular video game Fortnite from their app stores in response to Epic's offer of a direct pay option to its customers.76 The Epic suits and similar class actions allege that Apple and Google unlawfully monopolized and unreasonably restrained trade in iOS and Android app distribution and in-app payment processing markets. Briefing is completed (or close to complete) on Google's motion to dismiss Epic's complaint and a related class action, and a decision on that motion is expected early this year. A bench trial in Epic Games v. Apple is set to begin in May 2021.

FTC's Ability to Seek Monetary Relief for Antitrust Violations

During its 2021 term, the Supreme Court will rule on the FTC's ability to seek disgorgement and restitution in consumer protection and antitrust cases in AMG Capital Management v. FTC. In that case, the FTC is seeking to preserve a Ninth Circuit ruling upholding the FTC's long-standing claim that the agency's power to seek injunctions under Section 13(b) of the FTC Act also gives the agency authority to seek monetary relief for victims of consumer scams or fraud and, in rarer cases, antitrust violations.77 Since 2012, the FTC has increasingly sought disgorgement in antitrust cases, especially in so-called "pay-for-delay" cases, to deter companies from committing future antitrust violations and to recover their ill-gotten gains.

In their Supreme Court briefing, the petitioners argue that the plain text of Section 13(b) and the structure and history of the FTC Act indicate that the FTC's injunction authority only permits the agency to halt bad behavior, not to seek restitution or other monetary relief.78 At oral argument on January 13, 2021, the Supreme Court seemed sympathetic to these arguments. Many justices questioned the FTC's broad interpretation of its power to seek injunctions. The more conservative justices, in particular, seemed skeptical that "injunction" should be read to include disgorgement, even if it might cover restitution.

Given the tone of oral arguments, most legal observers expect the FTC to lose the case, knocking out a key enforcement tool to address and deter fraud and antitrust harm. If the FTC loses, expect the FTC to ask Congress quickly to pass a new law or amend the FTC Act explicitly allowing the agency to seek monetary relief in fraud and antitrust cases.

*John Holler contributed to this Advisory. Mr. Holler is a graduate of the University of Chicago Law School and is employed at Arnold & Porter's New York office. Mr. Holler is admitted only in Illinois. He is not admitted to the practice of law in New York.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

  1. In re Lamictal Direct Purchaser Antitrust Litig., 957 F.3d 184 (3d Cir. 2020).

  2. Complaint, Louisiana Wholesale Drug Co., Inc. v. SmithKline Beecham Corp. et al., No. 2:12-cv-00995 (D.N.J. Feb. 17, 2012).

  3. Id. at *9-10.

  4. Opinion, In re Lamictal Direct Purchaser Antitrust Litig., No. 2:12-cv-00995 (D.N.J. Dec. 12, 2018).

  5. In re Lamictal Direct Purchaser Antitrust Litig., 957 F.3d 184, 191 (3d Cir. 2020).

  6. Id. at 191-192.

  7. Id. at 193-194.

  8. In re Humira (Adalimumab) Antitrust Litigation, 465 F. Supp. 3d 811 (N.D. Ill. Jun. 8, 2020).

  9. Complaint, UFCW Local 1500 Welfare Fund v. Abbvie Inc. et al., No. 1:19-cv-01873, at *2 (N.D. Ill. Mar. 18, 2019).

  10. In re Humira (Adalimumab) Antitrust Litigation, 465 F. Supp. 3d 811, 820 (N.D. Ill. Jun. 8, 2020) (citing the complaint).

  11. Complaint, UFCW Local 1500 Welfare Fund v. Abbvie Inc. et al., No. 1:19-cv-01873, at *5-6 (N.D. Ill. Mar. 18, 2019).

  12. Id. at 822, 830.

  13. Id. at 840-842.

  14. Id. at 837.

  15. Viamedia, Inc. v. Comcast Corp., 951 F.3d 429 (7th Cir. 2020).

  16. Viamedia, Inc. v. Comcast Corp., 218 F. Supp. 3d 674, 698 (N.D. Ill. 2016).

  17. Viamedia, Inc. v. Comcast Corp., 335 F. Supp. 3d 1036, 1054 (N.D. Ill. 2018).

  18. Viamedia, Inc. v. Comcast Corp., 951 F.3d 429, 485 (7th Cir. 2020).

  19. Id. at 463-464.

  20. Id. at 470.

  21. Novell, Inc. v. Microsoft Corp., 731 F.3d 1064 (10th Cir. 2013).

  22. City of Oakland v. Oakland Raiders, 445 F. Supp. 3d 587 (N.D. Cal. 2020).

  23. Complaint, City of Oakland v. Oakland Raiders, No. 4:18-cv-07444 (N.D. Cal. Dec. 11, 2018).

  24.  Id. at *33-34.

  25. City of Oakland v. Oakland Raiders, No. 18-cv-07444-JCS, 2019 WL 3344624 (N.D. Cal. July 25, 2019).

  26. See id. at *10.

  27. Id. at *13.

  28. City of Oakland v. Oakland Raiders, 445 F. Supp. 3d 587, 599 (N.D. Cal. 2020).

  29. Fed. Trade Comm'n v. Qualcomm Inc., 969 F.3d 974 (9th Cir. 2020).

  30. Complaint, Fed. Trade Comm'n v. Qualcomm Inc., No. 5:17-cv-00220 (N.D. Cal. Jan. 17, 2017).

  31. Id. at *14-24.

  32.  Id. at *24-28.

  33.  Fed. Trade Comm'n v. Qualcomm Inc., 411 F. Supp. 3d 658 (N.D. Cal. 2019).

  34. Id. at 698.

  35.  Id. at 758-762. The court had previously granted partial summary judgment to the FTC on a related issue, finding that Qualcomm's FRAND commitments to SSOs required it to license its SEPs to other modem chip suppliers. Order Granting FTC's Motion for Partial Summary Judgment, Fed. Trade Comm'n v . Qualcomm Inc., No. 5:17-cv-00220 (N.D. Cal. Nov. 6, 2018).

  36. Fed. Trade Comm'n v. Qualcomm Inc., 411 F. Supp. 3d 658, 763-772 (N.D. Cal. 2019).

  37. Id. at 818.

  38. United States' Statement of Interest Concerning Qualcomm's Motion for Partial Stay of Injunction Pending Appeal, No. 19-16122, Dkt. No. 25-1 (9th Cir. July 16, 2019); Brief of the United States of America as Amicus Curiae in Support of Appellant and Vacatur, No. 19-16122, Dkt. No. 86 (9th Cir. Aug. 30, 2019).

  39. Fed. Trade Comm'n v. Qualcomm Inc., 969 F.3d 974, 993-995 (9th Cir. 2020).

  40. Id. at 995-997.

  41. Id. at 997-998.

  42. New York v. Deutsche Telecom AG, 439 F. Supp. 3d 179 (S.D.N.Y. 2020).

  43. Complaint, New York v. Deutsche Telecom AG et al., No. 1:19-cv-05434 (S.D.N.Y. June 11, 2019).

  44. See Complaint and Proposed Final Judgment, United States v. Deutsche Telecom AG et al., No. 1:19-cv-02232 (D.D.C. July 26, 2019).

  45. Memorandum Opinion and Order, Declaratory Ruling, and Order of Proposed Modification, In the Matter of Applications of T-Mobile US, Inc. and Sprint Corp. for Consent to Transfer Control of Licenses and Authorizations, WT Docket No. 18-197 (Nov. 5, 2019).

  46. New York v. Deutsche Telecom AG, 439 F. Supp. 3d 179, 207 (S.D.N.Y. 2020).

  47.  Id. at 187-188.

  48. Id. at 211-213, 216-217.

  49. United States v. Sabre, 452 F. Supp. 3d. 97 (D. Del. 2020).

  50. Complaint, United States v. Sabre Corp. et al., No. 1:19-cv-01548 (D. Del. Aug. 20, 2019).

  51. United States v. Sabre, 452 F. Supp. 3d. 97, 136 (D. Del. 2020).

  52. See UK Competition and Markets Authority, Anticipated acquisition by Sabre Corporation of Farelogix Inc., Final report (Apr. 9, 2020).

  53. Notwithstanding, Sabre has appealed the CMA's jurisdiction to review the initial transaction. Sabre is challenging the CMA's application of the highly discretionary "share of supply" test, which allows the CMA to assert jurisdiction when the merging parties supply or acquire 25% of a particular good or service in the UK.

  54. United States v. Sabre, 2020 WL 4915824 (3d Cir. July 20, 2020).

  55. Fed. Trade Comm'n v. Surescripts, LLC, 424 F. Supp. 3d 92 (D.D.C. 2020).

  56. Complaint, Fed. Trade Comm'n v. Surescripts, LLC, No. 1:19-cv-01080 (D.D.C. Apr. 17, 2019).

  57. Motion to Dismiss Complaint, Fed. Trade Comm'n v. Surescripts, LLC, No. 1:19-cv-01080, Dkt. No. 31 (D.D.C. July 12, 2019).

  58. Fed. Trade Comm'n v. Surescripts, LLC, 424 F. Supp. 3d 92, 96-100 (D.D.C. 2020).

  59. Id. at 97.

  60. Id. at 100-104.

  61. Fed. Trade Comm'n v. Surescripts, LLC, 2020 WL 2571627 (D.D.C. May 21, 2020).

  62. Ohio v. American Express Co., 138 S. Ct. 2274 (2018).

  63. Fed. Trade Comm'n v. Surescripts, LLC, 424 F. Supp. 3d 92, 103 (D.D.C. 2020).

  64. Complaint, Frame-Wilson v. Amazon.com Inc., No. 2:20-cv-00424 (W.D. Wash. Mar. 19, 2020).

  65. Id. at *5.

  66. Id. at *6.

  67. On January 15, 2021, DOJ filed an amended complaint adding three additional states attorneys general as plaintiffs. Amended Complaint, United States v. Google LLC, No. 1:20-cv-03010, Dkt. No. 94 (D.D.C. Jan. 15, 2021).

  68. Complaint, United States v. Google LLC, No. 1:20-cv-03010 (D.D.C. Oct. 20, 2020).

  69. Complaint, Colorado v. Google LLC, No. 1:20-cv-03715 (D.D.C. Dec. 17, 2020); Complaint, Texas v. Google LLC, No. 4:20-cv-00957 (E.D. Tex. Dec. 16, 2020).

  70. Complaint, Texas v. Google LLC, No. 4:20-cv-00957, *106-107 (E.D. Tex. Dec. 16, 2020).

  71. See, e.g.In re Google Digital Advertising Litigation, No. 5:20-cv-03556 (N.D. Cal.).

  72. Complaint, Fed. Trade Comm'n v. Facebook, Inc., No. 1:20-cv-03590 (D.D.C. Dec. 9, 2020); Complaint, New York v. Facebook, Inc., No. 1:20-cv-03589 (D.D.C. Dec. 9, 2020).

  73. Complaint, New York v. Facebook, Inc., No. 1:20-cv-03589, at *67-69 (D.D.C. Dec. 9, 2020).

  74. See Press Release, FTC's Bureau of Economics to Expand Merger Retrospective Program, Fed. Trade Comm'n (Sept. 17, 2020).

  75. Memorandum in Response to Plaintiffs' Motion to Consolidate, New York v. Facebook, Inc., No. 1:20-cv-003589, Dkt. No. 80 (D.D.C. Jan. 4, 2021).

  76. Complaint, Epic Games, Inc. v. Apple Inc., No. 3:20-cv-05640 (N.D. Cal. Aug. 13, 2020); Complaint, Epic Games, Inc. v. Google LLC, No. 3:20-cv-05671 (N.D. Cal. Aug. 13, 2020).

  77. See Fed. Trade Comm'n v. AMG Capital Mgmt., LLC, 910 F.3d 417 (9th Cir. 2018).

  78. Brief for Petitioners, AMG Capital Mgmt., LLC v. Fed. Trade Comm'n, No. 19-508, at *19-29 (S. Ct. Sept. 25, 2020).

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