Antitrust Law Daily Wrap Up, WORTH NOTING—Other Antitrust and Trade Regulation developments, (Dec 20, 2024)

By WK Editorial Staff

A periodic roundup of other items of interest to the Antitrust and Trade Regulation community.

ANTITRUST NEWS: The Justice Department announced that two directors of Epic Games Inc. (Epic), who had been appointed by Tencent Holdings Ltd. (Tencent), resigned from the Epic board after the Antitrust Division expressed concerns that their positions on both the Epic and Tencent boards violated Section 8 of the Clayton Act. Tencent owns a minority interest in Epic. The interlock was created because Tencent also is the parent company of a gaming competitor to Epic, Riot Games Inc. Tencent also decided to amend its shareholder agreement with Epic to relinquish its unilateral right to appoint directors or observers to the Epic board in the future. This is the latest of the division’s ongoing Section 8 enforcement efforts, which to date have unwound or prevented interlocks involving at least two dozen companies.

ANTITRUST—N.D. Ill.: On remand from the Seventh Circuit, the federal district court in Chicago has entered an order granting Pilgrim’s Pride Corporation’s motion for summary judgment on Sysco’s claims against it in the long running broiler chicken antitrust litigation based on the contention that Sysco released its claims in the settlement agreement the court enforced when it granted Pilgrim’s earlier motion for summary judgment. Pilgrim’s has since paid the money due under the settlement agreement. The motion for summary judgment was opposed by Carina Ventures LLC, which did not dispute that the court found the parties reached a settlement agreement and that Pilgrim’s has paid the amount due. Carina’s argument that questions of fact remained for a jury to decide regarding whether an agreement was reached was unpersuasive because the court had already considered it on Pilgrim’s initial motion to enforce the agreement and found sufficient evidence that an agreement had been reached (In re Broiler Chicken Antitrust Litigation, No. 1:16-cv-08637 (N.D. Ill. Dec. 16, 2024)).

ACQUISITIONS & MERGERS NEWS: The European Commission is investigating the proposed acquisition of media company Dorna Sports by competitor Liberty Media, citing concerns that the transaction could lead to higher prices for the licensing of broadcasting rights for motorsports events hosted by both parties. Liberty owns the Formula One Group and holds the exclusive commercial rights for the FIA Formula One World Championship. Dorna Sports holds exclusive commercial rights for the FIM World Championship Grand Prix (‘MotoGP') as well as other motorcycle racing championships. The transaction raises serious competition concerns in potential narrow national markets for the licensing of broadcasting rights for motorsports content, where Formula One is the clear market leader in all European countries and MotoGP is most often its only competitor. During its in-depth investigation, the Commission will also further investigate whether Liberty Media's and Liberty Global's largest shareholder, Mr. John Malone, is able to exert decisive influence over both companies. If confirmed, the transaction could also give rise to concerns that Liberty Media may foreclose rival broadcasters in countries in which Liberty Global is active, namely in Belgium, Ireland and the Netherlands.

ACQUISITIONS & MERGERS NEWS: The European Commission approved unconditionally the proposed acquisition of Run:ai Labs Ltd by NVIDIA Corporation. NVIDIA designs and supplies Graphic Processing Units (‘GPUs'), a type of semiconductor for datacenter applications. Run:ai supplies GPU orchestration software allowing corporate customers to schedule, manage, and optimize their artificial intelligence compute infrastructure, whether on premises, in the cloud or in hybrid environments. The activities of NVIDIA and Run:ai do not overlap, but GPUs and GPU orchestration software must be compatible. The Commission assessed whether, post-transaction, NVIDIA would be able to hamper the compatibility between its GPUs and the GPU orchestration software of Run:ai's competitors, and the compatibility between Run:ai's software and the GPUs of NVIDIA's competitors. The Commission found that the proposed acquisition would not raise competition concerns on any of the markets examined in the EEA or in Italy. It therefore cleared the transaction unconditionally.

ACQUISITIONS & MERGERS NEWS: The Competition and Markets Authority has cleared the acquisition by Carlsberg UK Holdings Limited of Britvic plc.

ANTITRUST NEWS: Representatives Jim Jordan (R-OH) and Thomas Massie (R-KY) have requested CVS Health President and CEO David Joyner produce documents and information related to CVS Caremark’s practices that limit the ability of patients to access services through some independent pharmacies.

ANTITRUST—D. Mass.: Even though a Sig Sauer P320 firearm was used in a professional capacity, for purposes of a Magnuson-Moss Warranty Act (MMWA) claim, it could be a consumer product under 15 U.S.C. §2301(1) where it was distributed broadly in the United States and Canada, mostly through distributors, but was sold directly to consumers in New Hampshire. Sig Sauer's motion for summary judgment on the MMWA claim on this ground was denied (Ahern v. Sig Sauer, Inc., No. 1:21-cv-11007-DJC (D. Mass. Dec. 16, 2024)).

ANTITRUST NEWS: A suit filed against Google LLC and Alphabet, Inc. filed by Rumble Canada Inc. Was transferred to the Southern District of New York. The actions concern Google’s alleged monopolization and suppression of competition in online display advertising” – an industry that involves high-speed electronic trading venues called “exchanges” that advertisers and online publishers use to manage the buying and selling of ad space on web sites and mobile apps (In Re: Google Digital Advertising Antitrust Litigation, No. 3010 (J.P.M.L. Dec. 11, 2024)).

ANTITRUST NEWS: Department of Justice Antitrust Division Director David Lawrence delivers remarks at the New York State Bar Association William Howard Taft Lecture on the bipartisan antitrust revival now underway. The recent history of enforcement against mergers that involve products and services rivals rely on to compete, sometimes called vertical mergers, is another example of a multi-administration antitrust accomplishment. “To cut to the chase, Bill, my thesis is this—the holdings from the 1960s merger cases remain vibrant parts of the modern antitrust landscape and would therefore be affirmed today, even if some of their outdated economic analysis doesn’t form a question presented for Supreme Court review,” said Lawrence.

ANTITRUST NEWS: Department of Justice Antitrust Division Deputy Assistant Attorney General Michael Kades delivered remarks at the 2024 Capitol Forum Health Care Competition Conference on the role of competition law in healthcare. Kades said that although only competition can prevent the rise of dominant firms that will control the delivery of health care in the United States, finding the right role for competition has eluded policy makers for decades. “For too long, competition has been a villain that undermines health care markets or a victim that needed to be sacrificed for the greater good. Unless we understand that competition is part of the solution, the same frustration that plagued my father as a small businessman will continue to plague the country.”

ANTITRUST NEWS: The European Commission has sent preliminary findings to Apple indicating the proposed measures for Apple to ensure interoperability of connected devices with iPhones and to make interoperability by third parties more predictable and transparent, as required by the Digital Markets Act (DMA). Under the DMA, Apple must provide developers and businesses with free and effective interoperability with hardware and software features controlled by its operating systems iOS and iPadOS, which are core platform services for which Apple was designated as gatekeeper.

ANTITRUST NEWS: In a long-running antitrust class action against California healthcare system Sutter Health that was returned to the federal district court in San Francisco by a Ninth Circuit panel in June, a jury trial has been set to begin in March 2025. The next case-management conference is scheduled for January 30, 2025. The U.S. Court of Appeals in San Francisco overturned a jury verdict in favor of Sutter Health in June. The trial court judgment based upon the jury verdict was reversed and remanded to the district court for a new trial (Sidibe v. Sutter Health, No. 3:12-cv-04854-LB).

CONSUMER PROTECTION NEWS: The FTC held a virtual workshop on real-world evidence and economic scholarship regarding modern predatory pricing strategies, and how predatory pricing caselaw maps to these new economic realities. Real-world evidence and significant scholarship has shown the ways in which firms can now profitably utilize predatory pricing to achieve market dominance. The workshop featured speakers with experience of how predatory pricing has impacted competition and consumers.

FRANCHISING & DISTRIBUTION—W.D. Tenn.:The federal district court for the Western District of Tennessee has granted a motion for a default judgment and by Plaintiff hair salon franchisor Fantastic Sams Franchise Corporation’s against a former franchisee and its owners (together, the franchisee) that was terminated for failure to make its required weekly royalty payments. The franchisee continued to operate their salon at the same location where they once franchised Plaintiff’s store. The franchisor alleged Defendants hold themselves out to the public as a Fantastic Sams location by retaining signage and possibly performing Fantastic Sams-approved salon treatments. The franchisor was entitled to damages of the sum of the minimum royalty payment per week ($368.40) with the minimum advertising payment per week ($146.49) multiplied by approximately 18 weeks, and to permanent injunctive relief enjoining it from continued operation of the salon and enforcing the terms of the parties’ noncompete agreement (Fantastic Sams Franchise Corp. v. DonMarcos, LLC, No. 2:24-cv-02867-JPM-atc (W.D. Tenn. Dec. 17, 2024)).

Attorneys: John Doroghazi (Wiggin and Dana LLP) for Fantastic Sams Franchise Corp. Brian D. Clark (Lockridge Grindal Nauen P.L.L.P.) for Maplevale Farms, Inc. Adam J. Trott (Cotchett, Pitre & McCarthy, LLP) for Fargo Stopping Center LLC. Bobby Pouya (Pearson Warshaw, LLP) for Ferraro Foods of North Carolina, LLC. Serena Georgette Rabie (Armstrong Teasdale LLP) for Koch Foods, Inc. Bradley David Justus (Axinn, Veltrop & Harkrider LLP) for Tyson Foods, Inc. William Anthony Burck (Quinn Emanuel Urquhart & Sullivan) for Pilgrim's Pride Corp. Robert William Dickerson (Competition & Technology Law Group LLP) for Rumble Canada, Inc. Justina Kahn Sessions (Freshfields US LLP) for Google LLC. David J. Kete (Donnelly, Conroy & Gelhaar, LLP) for Thomas R. Ahern. Brian Keith Gibson (Littleton Park Joyce Ughetta & Kelly LLP) for Sig Sauer, Inc.

Companies: Fantastic Sams Franchise Corp.; DonMarcos, LLC; Maplevale Farms, Inc.; Koch Foods, Inc.; Tyson Foods, Inc.; Pilgrim's Pride Corp.; Fargo Stopping Center LLC; Ferraro Foods of North Carolina, LLC; Dorna Sports; Liberty Media; Run:ai Labs Ltd; NVIDIA Corporation; CVS Caremark; Carlsberg UK Holdings Limited; Britvic plc; Rumble Canada, Inc.; Google LLC; Sig Sauer, Inc.

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