Tag: antitrust policy

Antitrust Enforcers’ “Second Listening” Forum On Merger Reform Highlights Issues In The Healthcare Industry

In March of this year the Antitrust Division of the U.S. Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) jointly announced a series of “listening forums” that would help gather real world input from participants in key industry segments on possible reforms to the antitrust regulations pertaining to mergers and acquisitions.1 Co-led by DOJ Deputy Assistant Attorney General (“DAAG”) Doha Mekke and FTC Chairperson Lina Khan, the second of the four announced forums, focusing on healthcare, was held on April 14, 2022. 2  In addition to DAAG Mekki and Chairperson Khan, the program included eight panelists that provided perspectives from nurses, doctors, patients, pharmacists and small businesses. 3

DAAG Mekki started off the discussion by reaffirming the antitrust enforcement agencies’ collective commitment that “healthcare markets remain competitive” because it “is essential to our livelihood or the livelihood of the nation.” Mekki referenced ongoing work by the agencies in the healthcare field, including recent DOJ enforcement actions. 4

The healthcare panelists highlighted several ongoing issues in the industry, such as the adverse impact of care due to post-merger hospital staff downsizing that was tied to merger-specific efficiencies, reduced options to tertiary care, higher healthcare costs for patients, and unfair competition in the pharmaceutical and small business markets, and other impacts in the research and labor markets.

Chairperson Khan indicated that the comments resonated with the concerns that the FTC had in the hospital, pharmacy benefits management, and pharmacy industries. Ms. Khan also suggested a renewed interest in examining the potential anticompetitive effects of vertical integration in addition to horizontal mergers and acquisitions, which is consistent with the FTC’s position when it indicated that it wanted to revisit this issue while withdrawing the Vertical Merger Guidelines in 2021. Khan also reaffirmed the importance of examining anticompetitive effects in the labor market. All of these issues, according to Khan, are important in assessing how the antitrust laws can be used to improve the quality of healthcare for patients.

The forum ended with some of the more than two hundred public comments, most of which echoed similar concerns raised by the panelists in addition to concerns such as disparities in hospital-physician group contracting situations and racial disparities in access to healthcare as a result of healthcare system mergers.

Once again, all signs point toward an unprecedented time in antitrust enforcement in the healthcare industry. Accordingly, it is important that healthcare companies revisit, revise, and implement best practices with regard to their respective antitrust compliance programs. A proactive, as opposed to a reactive, approach would provide companies the best risk management strategy. It is also important to engage antitrust counsel early in potential transactions to assess how the antitrust agencies may view the deal.

The DOJ and FTC Listening Forums continue with Media and Entertainment, which was held on April 27, 2022, and the final one on Technology, which will be held on May 12, 2022. Click here to download the alert. 

FOOTNOTES

1    “Forums to focus on markets commonly impacted by mergers: food and agriculture, health care, media and entertainment, and technology,” March 17, 2022, available at: https://www.ftc.gov/news-events/news/press-releases/2022/03/ftc-justice-department-launch-listening-forums-firsthand-effects-mergers-acquisitions

2   See “Antitrust Enforcers’ First ‘Listening Forum’ On Merger Reform Highlights Ongoing Concerns in the Food and Agriculture Industry” May 9, 2022, available at: https://www.polsinelli.com/intelligence/antitrust-forum-highlights-concerns-in-food-and-ag

3 Full transcript of forum available at: https://www.ftc.gov/system/files/ftc_gov/pdf/FTC-DOJ-Listening-Forum-%20Health-Care-Transcript.pdf. It should be noted that Assistant Attorney General Jonathan Kanter did make an appearance at the end of the session, reiterating the importance of this forum.

4    See “DOJ Faces Two Strikeouts in First Health Care Wage-Fixing and ‘No Poach’ Prosecutions,” April 20, 2022, available at: https://www.polsinelli.com/intelligence/doj-faces-two-strikeouts-in-first-health-care

© Polsinelli PC, Polsinelli LLP in California
Article By Arindam Kar with Polsinelli PC.
For more articles about antitrust law, visit the NLR Antitrust law section.

Election 2016: Trump on Antitrust

Donald Trump AntitrustWhile antitrust policy and enforcement has not received much attention from Donald Trump on the campaign trail, Mr. Trump has made a few notable statements regarding antitrust law that provide hints as to potential antitrust enforcement priorities for a Trump administration. Mr. Trump’s history as both a plaintiff and defendant in antitrust litigation is also notable and unprecedented.

In his 2011 book Time to Get Tough: Making America #1 Again, Mr. Trump addressed the Organization of the Petroleum Exporting Countries (OPEC) specifically in the context of antitrust law. Under the heading “Sue OPEC” Mr. Trump wrote:

We can start by suing OPEC for violating antitrust laws. Currently, bringing a lawsuit against OPEC is difficult. . . . The way to fix this is to make sure that Congress passes and the president signs the “No Oil Producing and Exporting Cartels Act” (NOPEC) (S.394), which will amend the Sherman Antitrust Act and make it illegal for any foreign governments to act collectively to limit production or set prices. If we get it passed, the bill would clear the way for the United States to sue member nations of OPEC for price-fixing and anti-competitive behavior. . . . Imagine how much money the average American would save if we busted the OPEC cartel.

More recently, in a May 2016 interview with Sean Hannity, Mr. Trump made a notable reference to antitrust law in connection with a discussion of Jeff Bezos and Amazon:

[Jeff Bezos is] using the Washington Post for power so that the politicians in Washington don’t tax Amazon like they should be taxed. He’s getting absolutely away. He’s worried about me and he’s, I think he said that to somebody, it’s in some article, where he thinks I would go after him for antitrust, because he’s got a huge antitrust problem because he’s controlling so much, Amazon is controlling so much of what they’re doing. And what they’ve done is, he-he bought this paper for practically nothing, and he’s using that as a tool for political power against me and against other people and, I’ll tell you what, we can’t let him get away with it. . . . So what they’re doing is that he’s using that as a political instrument to try and stop antitrust, which he thinks I believe he’s antitrust, in other words what he’s got is a monopoly and he wants to make sure I don’t get in. So, it’s one of those things. But I’ll tell you what, I’ll tell you what, what he’s doing is wrong and the people are being, the whole system is rigged – you see a case like that, the whole system is rigged. . . he’s using the Washington Post, which is peanuts, he’s using that for political purposes to save Amazon in terms of taxes and in terms of antitrust.

In addition to his statements, there is also Mr. Trump’s personal history as an antitrust litigant to be considered. In January 2016, former FTC Chairman Bill Kovacic was quoted as observing that “Donald Trump is the only presidential candidate in my lifetime to be a plaintiff in an antitrust case.

Indeed, as detailed in the American Bar Association’s Antitrust Source earlier this year, Mr. Trump was involved in three significant antitrust proceedings in the late 1980s and early 1990s. First, in 1988, Mr. Trump paid a $750,000 civil penalty to settle charges brought by the US Department of Justice (DOJ) and Federal Trade Commission (FTC) that he had violated the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) by acquiring stock in two companies without making timely HSR filings. Around the same time, Mr. Trump, as one of the owners of the New Jersey Generals US Football League team, was involved in a private antitrust suit against the National Football League (NFL)—a case that resulted in a jury verdict that the NFL had willfully acquired or maintained monopoly power in a market consisting of major league professional football in the United States, in violation of Section 2 of the Sherman Act. Damages of $1, trebled to $3, were awarded. US Football League v. Nat’l Football League, 842 F.2d 1335 (2d Cir. 1988). Finally, Mr. Trump, in connection with his Atlantic City casinos, was sued by Boardwalk Properties, Inc. on numerous grounds including allegations that he had attempted to monopolize casino gambling and had conspired to suppress competition. After a lengthy legal battle, Mr. Trump prevailed.

While we can only speculate as to how a Trump administration would approach antitrust policy and enforcement, Mr. Trump’s commentary regarding Amazon suggests that he would not be shy about pressing for aggressive investigation and potential enforcement action against those he perceives to be running afoul of antitrust laws. While it appears likely that Amazon would find itself under the microscope of a Trump administration, it is unknown whether Mr. Trump would direct enforcement towards other particular domestic companies or industries. It is also uncertain if Mr. Trump would maintain the Obama administration’s increased rate of merger challenges.

With respect to international enforcement, Mr. Trump’s comments on OPEC, coupled with his campaign focus on trade issues, suggest that he would be in favor of aggressive antitrust enforcement actions focused on foreign companies—and, potentially, against foreign governments (though some of Mr. Trump’s strategies may first require legislative action by US Congress before they can be pursued). Mr. Trump’s litigious history on both sides of antitrust laws demonstrates his familiarity and experience with the legal system, and further suggests that a President Trump would not hesitate in pressing for antitrust action against foreign actors. Mr. Trump underscored this point in Time to Get Tough favorably quoting a former Reagan and Bush advisor who, commenting on antitrust enforcement against OPEC, stated “isn’t starting a lawsuit better than starting a war?”

It is possible that a President Trump would ultimately do little to shake up the antitrust enforcement status quo, given other pressing national and international issues that have been focal points of the Trump Campaign. On the other hand, it is equally possible that, given his comments and litigation history, Mr. Trump would adopt a very aggressive antitrust investigation and enforcement policy against perceived wrongdoers, resulting in antitrust issues becoming central to a Trump administration’s economic and trade policies.

ARTICLE BY Emre N. Ilter of McDermott Will & Emery
© 2016 McDermott Will & Emery