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Antitrust / Competition

United States: President Biden issues Executive Order to promote Vigorous Antitrust Enforcement in Key Markets

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In brief

On 9 July 2021, President Joe Biden issued an Executive Order (“Order“) and a supporting Fact Sheet announcing 72 initiatives to increase vigorous antitrust enforcement. The Order sets competition-law priorities for the Federal Trade Commission (FTC), the US Department of Justice (DOJ), and more than a dozen other federal agencies coordinated through a new White House Competition Council.

The Order also prioritizes certain conduct for antitrust enforcement, rulemaking and/or guidelines including employee non-compete clauses, occupational licensing requirements, sharing of wage data among employers, customer data collection, restraints on use of third-party product repair options, “pay-for-delay” pharma patent settlements, and standard-essential patent licensing.  

It also calls for “greater scrutiny of mergers” through revisions to the DOJ/FTC Merger Guidelines and more aggressive enforcement for mergers involving internet platforms, hospitals, drug companies, banks, and others.

Key takeaways 

The Biden Administration claims this broad-reaching Order will benefit American consumers through increased competition across various sectors and reduced prices of essential goods. It mandates more aggressive merger enforcement by the antitrust agencies to address market power of large companies and recommends other regulatory and legislative changes to promote competition. The Order prioritizes the following key industries for scrutiny: Technology, Healthcare & Life Sciences, Banking and Finance, Transportation, Agriculture, Intellectual Property, Defense, and Real Estate. In addition, the Order focuses on labor markets, which touch upon all industries and sectors. The highlights of the Order are summarized below.

Labor

The Order encourages the FTC to increase enforcement in labor markets, with the following objectives:  

  • Ban or limit non-compete agreements and other clauses that may unfairly limit worker mobility (for more specifics, see our recent blog post on this topic);
  • Ban unnecessary occupational licensing restrictions that impede economic mobility; 
  • Strengthen guidance regarding collaboration by employers to prevent suppression of wages and reduction of benefits;
  • The Treasury Department must submit a report on the impact of the current lack of competition in labor markets within 180 days.

Technology

  • The Order encourages greater scrutiny of mergers by “dominant” internet platforms with particular attention to the “killer acquisitions” of nascent competitors or serial mergers;
  • The FTC is encouraged to issue rules regarding 
  1. Surveillance and accumulation of data; 
  2. Barring “unfair” competition on internet marketplaces; and
  3. Anticompetitive restrictions on using independent, third party repair shops; 
  • The Federal Communications Commission is encouraged to implement changes in pricing, fees, and transparency in internet services.
  • The Secretary of the Treasury must submit a report within 270 days “assessing the effects on competition of large technology firms’ and other non‑bank companies’ entry into consumer finance markets.”

Healthcare & Life Sciences

The Order directs the agencies to tackle four areas of healthcare (prescription drugs, hospital consolidation, hearing aids, and insurance).

  • The DOJ and FTC are encouraged to review and revise their merger guidelines for hospital consolidations;
  • The FTC is encouraged to ban “pay for delay” settlement agreements between brand and generic drug manufacturers, also known as “reverse payments”;  
  • The Food and Drug Administration is directed to work with state agencies to import prescription drugs from Canada; 
  • The Health and Human Services Administration (HHS) will issue a comprehensive plan within 45 days to prevent price gouging and rising prescription drug prices; 
  • HHS will increase support for generic and biosimilar drugs, improve transparency rules in hospital prices, and conclude the implementation of federal legislation to address hospital billing; 
  • HHS to issue proposed rules within 120 days for allowing hearing aids to be sold over the counter;
  • HHS is directed to standardize insurance plan options in the National Health Insurance Marketplace. 

Transportation

  • DOJ is instructed to work with the Department of Transportation (DOT) to ensure competition in air transportation, particularly “the ability of new entrants to gain access;”
  • The DOT is directed to issue rules around fee structure, with respect to items such as refunds, baggage, change and cancellation fees; 
  • The Federal Maritime Commission is encouraged to “vigorously enforce” against shippers who impose excessive charges against American exporters;  
  • Railroad track owners shall be required to provide rights of way to passenger rail and increase obligations of fair treatment of other freight companies.

Agriculture

  • The FTC is encouraged to issue rules limiting equipment manufacturers from restricting people’s ability to use independent repair shops;
  • The FTC is directed, along with the US Department of Agriculture (USDA), to ensure that the intellectual property system does not reduce competition in seed and other input markets;
  • The FTC is ordered, along with the USDA, to report on the effect of retail concentration and retailers’ practices on the competition in the food industry (USDA must issue a plan to increase opportunities for farmers to access markets within 180 days and a report on the effect of retail concentration on competition in the food industries within 300 days);
  • The DOJ, FTC, and the Department of Treasury are directed to issue a report of threats to competition and barriers to new entry in the beer, wine, and spirits markets;
  • The USDA is directed to issue new rules for filing claims by farmers and to adopt anti-retaliation protections for farmer whistleblowers;
  • USDA is directed to issue new labeling rules for permitting the use of “Product of USA” on meat products.

Banking & Financial Services

  • The DOJ and the banking agencies1 are encouraged to update their guidelines and provide more robust scrutiny of banking mergers (within 180 days); 
  • The Consumer Financial Protection Bureau is encouraged to issue rules allowing customers to download their banking data.

Intellectual Property

The DOJ and Department of Commerce are encouraged to revise their position on the intersection of antitrust and intellectual property policy (including the previous administration’s Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments issued in December 2019). This is based on concerns about the anticompetitive extension of market power “beyond the scope of granted patents,” and the protection of standard-setting processes.

Defense

The Department of Defense is directed to conduct a review of the state of competition within the defense industrial base and make recommendations for improving the solicitation process to promote greater competition (within 180 days).

Real Estate

The FTC is encouraged to issue a rule addressing unfair tying and other exclusionary practices in the brokerage or listing of real estate.

Next Steps 

Immediately after the Order’s signing, a joint Statement was published by Acting Assistant Attorney General of the DOJ Antitrust Division, Richard Powers, and the new FTC Chair, Lina Khan. The Statement declared that the agencies would be jointly launching a review of the merger guidelines to determine whether they are “overly permissive.”  Indeed, the FTC recently approved several measures, including rulemaking changes and broad enforcement authorizations, to spur more enforcement.   

The Order establishes a White House Competition Council, which will monitor the progress on and execution of these initiatives. It strongly encourages coordination among the agencies to tackle these objectives in both enforcement and policy development. Shortly after the issuance of the Order, the Attorney General of the United States, Merrick Garland, declared that the DOJ would immediately comply with the “whole of government approach” of the Order—pointing to healthcare, technology, and labor as three areas of regulatory focus and improved collaboration.  

While the Order and the related pronouncements are important and signal the direction of the Biden Administration’s antitrust policy, there remain hurdles to full implementation. In particular, some recommended actions may require a change in existing law. Several relevant legislative proposals are currently being discussed in Congress (e.g., Competition and Antitrust Law Enforcement Reform Act (CALERA), S. 225 or Platform Competition and Opportunity Act of 2021 (H.R. 3826)), but the likelihood and timing of legislative action is unclear.  

We will continue to monitor the statements, actions, and initiatives undertaken in accordance with the Order and will provide pertinent updates. In the interim, we are available to respond to any specific questions you have about how the Order may affect your business. 

1  The Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency

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Author

Mark H. Hamer is Global Chair of the Firm's Antitrust & Competition Practice Group, comprised of over 300 competition lawyers in over 60 offices across 43 countries. Mark has over 25 years of wide-ranging litigation experience, including first-chair roles in jury trials, bench trials and arbitrations. His primary focus is antitrust litigation. Before joining Baker McKenzie, Mark was a successful trial attorney in the Antitrust Division of the US Department of Justice. He was involved in some of the DOJ's highest-profile antitrust trials. Before joining the DOJ, Mark was a partner at another global law firm where he handled complex multidistrict antitrust class actions in courts across the nation.

Author

Creighton Macy is the Chair of Baker McKenzie's North America Antitrust & Competition Practice Group. Creighton is recognized as a leading global antitrust practitioner.

Creighton has extensive experience representing clients in a wide variety of antitrust matters, including mergers and acquisitions, investigations by the United States Department of Justice and the Federal Trade Commission, private litigation, and counselling on issues such as antitrust compliance. Before joining the Firm, Creighton served as Chief of Staff and Senior Counsel in the DOJ Antitrust Division, working as a senior advisor to the Assistant Attorney General on civil and criminal antitrust enforcement and policy matters, as well as budget and personnel issues. During Creighton's time at the DOJ, the Antitrust Division undertook an unprecedented volume of high-profile civil and criminal matters.

Creighton began his career as a Trial Attorney in the Litigation III and Transportation, Energy, and Agriculture sections of the Antitrust Division, working on a number of notable merger and civil non-merger investigations and cases. Before rejoining the Antitrust Division as its Chief of Staff, he was a member of another global law firm's antitrust practice, where he advised clients on a wide range of US and international antitrust issues.

Creighton is consistently recognized globally for his market-leading antitrust practice with respect to high-stakes transactions, investigations, and compliance and counseling work. For example, clients have noted that Creighton “shines above the rest’ due to his first-rate cartel and merger control-related practice.’” He also regularly speaks and publishes articles relating to a variety of antitrust issues, and has been recognized many times for his contributions and thought-leadership on these issues.

Creighton is currently Co-Chair of the American Bar Association Antitrust Law Section’s Young Lawyers Task Force. In previous roles, he served as Reporter of the Presidential Transition Task Force, as well as Chair of the Trade, Sports, and Professional Associations Committee. He is highly involved in mentoring programs, including with the Antitrust Law Section, as well as Marquette University Law School, where he previously served as the DC Representative of the Alumni Board.

Creighton graduated from Marquette University, where he was an NCAA Division I Academic All-American tennis player. During his time at Marquette, he was awarded the Athletic Department’s Cura Personalis award by his peers, as well as several leadership awards. More recently, Creighton was named the Athletic Department’s Young Alumnus of the Year Award.

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Brian Burke is a partner in Baker McKenzie's Washington, DC office. He draws on over 20 years of experience to counsel clients on all federal antitrust issues. He assists clients in successfully navigating the merger clearance process before the US as well as international antitrust authorities. Brian also has extensive experience advising clients on civil and criminal governmental antitrust investigations, commercial antitrust litigation, antitrust compliance programs, risk assessments, and pricing and distribution policies. Brian holds multiple leadership positions in the Firm. He is a member of the Steering Committee for the Firm's North American Antitrust Practice Group, as well of the Global Antitrust and Competition Taskforces for Healthcare, Energy Mining and Infrastructure, and Consumer Goods Industries. He also serves as the co-head of the Firm's Merger-Control Task Force.

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John Fedele is a member of Baker McKenzie's antitrust practice and is located in its Washington, DC office. While he has a broad range of antitrust experience, he most frequently represents clients before the Antitrust Division of the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) in investigations of proposed mergers and acquisitions, and routinely analyzes and manages filing obligations under the Hart-Scott-Rodino (HSR) Act and foreign competition regimes.

Author

Teisha Johnson is a member of Baker McKenzie's antitrust practice in Washington, DC. She advises clients on a wide range of antitrust and e-discovery matters, and has considerable experience counseling clients in government investigations, proposed mergers and acquisitions, compliance, and litigation matters.

Author

Jeff Martino brings an in-depth understanding of a wide variety of white collar and fraud related matters to his antitrust litigation and investigations practice. Jeff is co-lead of the Firm's Global Cartel Task Force and represents multinational corporations and their boards and executives in high-stakes criminal and civil investigations by the US Department of Justice (DOJ) and other federal and state agencies Prior to joining Baker McKenzie, Jeff spent nearly two decades at the DOJ and his last 7 years as a senior leader in two different DOJ components. He has extensive experience as “first chair” on trials and investigations in the most complex areas of criminal antitrust. Jeff's work at the DOJ included providing technical assistance to competition agencies in Asia, Africa, the Americas and Europe and overseeing matters that included international corruption and antitrust cartel offenses that entangled the largest global banks and their key executives.

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Catherine Koh Stillman is a partner in the Firm’s Antitrust & Competition Practice Group. She is global co-lead of the Firm’s Competition Litigation Task Force. Catherine is the leader of the New York office’s BakerWomen Initiative and is a member of the BakerWomen Steering Committee. She serves on the New York office’s Associate Recruiting Committee. Catherine has mentored numerous associates throughout her career at Baker McKenzie, and has maintained an active pro bono practice, focusing primarily on advocacy issues related to children and public international law.

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Natalie Flores is currently the regional knowledge attorney for North America and Latin America in the Global Antitrust & Competition Group in the Firm's Mexico City Office. She has over ten years of experience as an attorney, and manages and executes regional and global legal content projects, training and client initiatives for the Competition Group within the context of the Firm's knowledge strategy across the region. Natalie oversees all regional knowledge for the antitrust and competition group for the Americas, including develop thought leadership, client training, and publications, amongst other antitrust initiatives for the region, and advises a diverse range of industry clients in multijurisdictional competition matters. She has experience in competition litigation, specifically class action. She is an active member of the Firm's various industry groups, with a focus in the Energy, Mining & Infrastructure group of Baker McKenzie. Natalie is on the Board for Mujeres en Energías Renovables (Women in Renewable Energy) en México (MERM), an association dedicated to promoting the development of women in renewable energy, and concentrates on advocating for renewables and the empowerment of women in the sector.

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