FTC orders unwinding of consummated, non-reportable merger of microprocessor-equipped prosthetic knee companies

On November 1, 2019, the Federal Trade Commission (FTC) upheld the decision of an administrative law judge (ALJ), finding that the non-reportable acquisition of FIH Group Holdings, LLC (Freedom) by Otto Bock HealthCare North America, Inc. (Ottobock) was likely to substantially lessen competition.

Ottobock and Freedom are both manufacturers of prosthetic knees, and they both offer microprocessor-equipped prosthetic knee products. Prior to the acquisition, Ottobock and Freedom competed vigorously and were the first and third largest manufacturers by revenue of microprocessor-equipped prosthetic knees in the United States. In a transaction that was not reportable under the Hart-Scott-Rodino Act, Ottobock acquired Freedom on September 22, 2017, and the merged firm possessed at least an 80 percent share of the relevant market.

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Advent International has proposed an acquisition of Cobham plc, but why is the UK Government getting involved – and what are the implications?

On the grounds of national security, the UK Government made a surprising intervention in the U.S private equity firm Advent International’s proposed acquisition of Cobham plc, a British aerospace and defence company. Since the decision back in September to look into the acquisition, the UK Competition Market Authority has submitted a review to establish if the deal meets certain jurisdictional criteria and if competition issues would be likely from the deal. The Government will then decide if the proposal can go ahead, or not.

In this recent alert our lawyers examine the legal basis for this intervention, the climate in which the intervention emerged and take closer look at what implications the decision could have for the frequency of similar interventions if it is made into legislation.

Ninth Circuit’s decision in hiQ Labs, Inc. v. LinkedIn Corp. has major antitrust implications

In hiQ Labs, Inc. v. LinkedIn Corp., No. 17-16783, 2019 WL 4251889 (9th Cir. Sept. 9, 2019), a Ninth Circuit panel affirmed the district court’s grant of a preliminary injunction in favor of hiQ, which prohibited LinkedIn from denying access to publicly available data on LinkedIn profiles. The Ninth Circuit declares that selectively banning potential competitors from accessing and using public data “may well be considered unfair competition under California law.” This decision that could have broad implications for the role of antitrust laws in the privacy sphere. Our Antitrust and IP, Tech & Data teams explain what you need to know in our recent alert.

What does ICAP’s successful appeal mean for competition law fines going forward?

ICAP’s successful appeal against the EU Commission’s €14.96 million fine for facilitating banks in influencing the LIBOR/TIBOR rates is hugely significant and signals a significant set back for the EU competition authority. The case was complicated and unusual from the start, the European Court of Justice clarified the level of detail required in a decision when issuing a fine for a breach of competition law. Nonetheless, the ICAP saga has serious consequences for companies acting in a facilitator capacity, although interdealer brokers may find some protection from the phase-out of LIBOR to SONIA. Read our alert for a review of this recent decision and the consequences of competition law fines on companies that do not directly take part in cartels but merely facilitate them.

Our Paris EU, Competition and Regulatory team coaches clients on how to prepare and react to investigations from competition and regulatory authorities

On 19 June 2019, our Paris office organized a client seminar on the topic: “Insight into competition and regulatory authorities’ investigations in France”.

Our Paris competition partners Natasha Tardif and Marc Lévy spoke alongside in-house counsel Amandine Jacquemot, senior legal advisor at EDF, before a fully packed room composed of Paris contacts and clients. Natasha and Marc discussed strategies and measures to adopt when facing requests for information, dawn raids and investigations led by competition authorities.

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What does the Competition and Markets Authority’s decision to impose a 10-year ban on the Sainsbury’s/Asda merger suggest for the future of UK competition law?

The recently proposed Sainsbury’s/Asda merger would have combined the second- and third-largest UK supermarkets. The merger would also have created the largest retailer of fuel by volume in the UK. The UK Competition and Markets Authority (CMA) decided to step in and concluded that the prohibition of the merger was the only way to go. Most importantly, however, is the 10-year ban imposed by the CMA on the parties’ attempting a similar deal in the future. Read our alert where we review the CMA’s decision and its powers, and consider the future for UK competition law.

Merger control and minority investments

A commonly held view is that merger control filings are not relevant for minority investments.

On Friday, 5 July 2019, the UK Competition and Markets Authority (CMA) announced that it had issued an order to hold separate to Amazon.com Inc and Roofoods Ltd (trading as Deliveroo). We understand that Amazon had made an investment for a minority of shares in Roofoods (though the exact size of Amazon’s stake has not been revealed).

The UK has a voluntary merger control regime. This means that even where a merger meets the notification threshold, there is no obligation to notify the CMA. However, the CMA has a market intelligence function and can investigate mergers of its own accord up to four months after a deal has come into the public domain. If a merger has already been completed when the CMA investigates, it is usual practice for the CMA to issue an order to hold separate while its investigation is carried out. This means that parties cannot integrate in any way (nor usually act outside the ordinary course of business) without the CMA’s permission (known as a derogation).

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Changes in California could see significant impact on the price of prescription drugs

California Governor Gavin Newsom recently signed an Executive Order to allow state agencies to join together and negotiate the purchase of prescription drugs. This measure could significantly reduce the cost of drugs and therefore will most certainly impact pharmaceutical manufacturers, managed care companies, pharmacies and other industry participants, as well as prescription drug consumers. For a summary of this Executive Order and our thoughts on the impact, read our client alert.

Foreign investment control extends in Germany

The German government’s decision to tighten regulation around foreign investment control in Germany means that acquisitions by foreign companies are facing much greater scrutiny. The government’s amendments to the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung) means that the Federal Ministry for Economic Affairs and Energy will be able to inspect, and potentially prohibit, an acquisition of a shareholding of at least 25 percent in a German company by a non-EU investor if they deem the acquisition as a danger to Germany’s public order or security. Make sure to read our client alert for a summary of the updated policy and a list of the key points to consider.

German FCO limits Facebook’s scope for collecting and combining data

Facebook has a unique positioning in the digital market, which is based entirely on the collecting of user data. Currently, users have only one option: accepting the terms and conditions imposed by Facebook or being excluded from the social network entirely. After almost three years of investigation, the German Federal Cartel Office (FCO) found that the social network’s practices violate competition law and data protection principles. Specifically, the FCO held that Facebook abused its dominant market position by collecting and combining vast amounts of user data on the German market without giving its users the possibility to object. Our team goes into depth about what you need to know about the findings of the Facebook decision in our client alert.