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good morning and good afternoon and thank you for joining baker hostetler's cle webinar anti-trust enforcement in the biden administration and what to expect my name is carl hittinger and i'm the national practice team leader for baker hostetler's anti-trust and competition team i'll be serving as a moderator today for this webinar but before i set the stage for our webinar and introduce our speakers our marketing manager alex schrager will go over a few housekeeping items for you for the cle seminar thank you carl our program today will last an hour and is approved for one hour of cle credit in california new york pennsylvania and texas cle credit is available via reciprocity in new jersey cle credit is pending in colorado florida georgia illinois ohio virginia and washington for all other states attorneys can receive a certificate of attendance and electronic materials so they can file directly themselves during the course of the webinar we'll share two codes that you'll need to enter into a brief cle questionnaire immediately following the program's conclusion once the webinar has ended please look for a small pop-up on your screen click close for your cle quiz to appear in your browser please make sure to answer all of the questions if you'd like us to submit for cle on your behalf if you have any questions during the presentation you can type your questions in the bar on the right side of your screen in the questions area we will try our best to answer them at the end of the program time permitting if not we will follow up with you after the webinar to answer those questions we will also provide our contact information at the end of the program so you can contact us at any time with comments suggestions concerns or questions we also will send an email to everyone in the next day or two with a link to a recording of the webinar along with the powerpoint slides thank you alex as you will see in the next hour we believe that there will be a new era of anti-trust law under the bible administration and the newly elected congress and why do we say that our speakers will go into the details in both civil and cartel activity and enforcement but let me start with some of the personalities that will drive this new era in our view first and foremost is our new president president joseph biden who was just elected and as you know was the former chairman of the judiciary committee in the senate for many years a very experienced senator on the judiciary committee he did not have any involvement that we can find directly on antitrust issues he has not said anything really publicly about his antitrust views uh in his uh campaign but there are some key leaves that we are looking at that we think will help us understand a little bit better what he might be doing first that he has said quite clearly which is indicative of the rest of his administration as he's stated it that he will let the department of justice be an independent body and as you know there are two groups that deal with antitrust issues in the federal government the department of justice and the fdc the fdc by definition is an independent body set up by statute but the department of justice is a member of the cabinet and within the department of justice is the in a trust division which enforces the antitrust laws both civil and criminally as does the ftc in a civil capacity what president biden did recently we think is of great importance and we're going to talk about this a little bit at the end in a round table discussion is in the past couple of days you've seen reported that he is looking to appoint possibly an anti-trust czar and it's a word that's been used by the press i'm not sure that he's using that word uh it's not unusual to have for the white house to have czars in certain areas they had in the automobile industry a couple years ago uh the role of that person is to coordinate things among the agencies to deal with congress on issues affecting that industry or that particular issue but this is the first that we know of that any president has had anyone who's specifically designated to be helping and coordinating antitrust issues and since that person will be in the white house that is obviously somebody that will have president biden's ear which is why he's appointing that person to that job we'll talk about that later the other person that is going to be very important in the antitrust world will be obviously the attorney general united states and the department of justice the nominee for that position is merrick garland who you know was a federal circuit judge who still is a federal circuit judge in the d.c circuit he was the chief judge and we looked very carefully at his experience and background in antitrust issues he brings to the attorney general's office a wealth of experience in antitrust law he has you know handled a number of uni trust cases on the dc circuit merger cases enforcement cases other cases not too surprisingly in many of those cases deference was given to the government's position but his experience also goes beyond that in private practice he worked on the united trust cases and also he actually taught antitrust law uh at a law school uh for a year uh so he has that academic kind of background uh but we think that the the importance of a girl into this position is he will bring to the job something that i don't think any of his predecessors had because we can't think of anybody who was a former federal judge before they became an attorney general in the united states uh he will come with the judge's eye of looking at cases to do what good judges do which is do the right thing and also to look at cases as we think he will do to see whether or not they're winnable to bring cases that will win to start investigations that will prove to be successful uh we think that he'll be have an intellectual curiosity which we've seen on the bench from him that he'll bring over to the department of justice so he is not going to be in the antitrust area someone who's going to just be deferring to people in his department that we think he will ask the tough questions and make the tough decisions the other person of course that will be very important is the the germ person of the ftc and since a new president's been elected and that's a democrat that chairperson will have to be appointed by the president that has not yet happened uh and the final person we think is important and you may have seen this in the news recently is senator amy klobuchar uh why do i say that because amy klobuchar sits on the district committee but more importantly she is chair person of the antitrust subcommittee of the judiciary committee and those of that you are that are familiar with that sub-committee know that that sub-committee does do a great deal of work in the antitrust policy area and looks at antitrust issues she's made it very clear in fact just yesterday that in terms of who should be appointed to head up the antitrust division that she looks she's looking for somebody that's going to be aggressive and show leadership uh and she's going to be on the on the judiciary committee you know looking at that person but more importantly something you may not be aware of is that she has proposed legislation in the antitrust area that is very sweeping and uh in in many ways would be a big sea change in the anti-trust laws as developed by the courts since the sherman act was passed uh this is called the the act is called the anti-competitive exclusionary conduct prevention act of 2020 um now remains to be seen whether it will get through congress uh and when what formula would get through but the current condition of that bill is that she is proposing in others that there'll be major changes made to uh the antitrust laws concerning exclusionary conduct and and looking at the uh market power of companies that have over 50 percent of the market she uh wants to in those situations put the burden literally on those companies to show that they're not they're dominating the market is not presenting a appreciable risk of harming competition uh she wants to also allow the doj and fdc to seek substantial penalties penalties for violations up to 15 of total u.s revenues of those companies and do away with the whole concept the market definition that as many of you know is a key element of sherman and i trust that prosecutions and not require that there be a determination of market definition in an antitrust case uh again those are issues that will uh you know uh be debated in congress but if that legislation does go forward out of the judiciary committee as her being the leader and does go to the congress in his past it could end up on president biden's desk and he may be the first president in a long time since the united trust legislation has been presented to him now that may explain a little bit of why he's looking at an anti-trust czar but it does show the significance and the point of view uh that is serious on these antitrust issues being taken by this administration already you know two weeks in um with that i'd like to introduce our presenters today who have a wealth of experience both in private practice and then also in the government uh let me start with jeff martino jeff martinez is a partner in our new york office and also in our san francisco office he has two decades of experience with the doj and trust division when he left the division to come with us uh over a year ago he was chief of the doj's anti-trust division's office in new york city uh with 25 prosecutors working for him investigating major price fixing and bid rigging cases in in that jurisdiction also joining us today is another member of our antitrust team ann o'brien who recently joined us she too comes with two decades of experience with the antitrust division uh working mostly out of washington uh she served in a variety of capacities uh in the united trust division including the assistant chief of two different sections and at one point was the acting director of criminal enforcement uh she was virtually involved in every major criminal enforcement and policy decision made by the division for the last two decades and worked with many attorney generals and of course serving under many presidents and finally uh my partner mark shield crowd who is also in our d.c office along with ann uh and is also works out of a philadelphia office mark comes to baker from uh major law firms where he has handled uh civil ani trust matters he was a former assistant director of the ftc's bureau of competition where he directed the investigations of hundreds of mergers and numerous injunctive actions brought by the ftc and since leaving the ftc he has been involved in numerous mergers and fights over mergers with the ftc in the courts and as extreme experience and even worked on the original microsoft antitrust investigation so i think we have a very uh experienced group of presenters today i'm going to turn it over to mark to start with the first presentation and once the presentations are over again we'll have a round table discussion at the end any questions you have if you go along please post them and we will try to ask those of the presenters at the end thank you mark all right so we're going to start with mergers and if we can go to the next slide to understand anti-trust enforcement with respect to mergers in the binding administration in fact this is important for almost all aspects of antitrust law we need to explore the likely perceptions of the biden administration officials regarding the economy in the last 20 years and we will also attempt to connect this up uh with anti-trust enforcement and these are sort of the perceptions of people who are proponents of more anti-trust enforcement who are talking to the biden administration we're not going to attempt to referee the disputes or uh you know explain whether you know whether each of these things are true to in our own view we're just going to go through what people are thinking so over the last 20 years has been an increase in consecration in concentrations increasing more than three quarters of industries infer term of the dynamism of the markets firms are less likely to drop out of the top four over a five-year period than they were previously the number of startups are declining firms less than five years old now account for about 10 percent of the workforce back in 1980 they accounted for 20 percent of the workforce there's been a steep increase in acquisitions uh resulting in a reduction in the number of publicly traded companies 1997 7 500 such companies today under 3 600. in terms of financial indicia for over 50 years after world war ii corporate profits amounted to six to seven percent of the gross domestic product now uh they amount to 10 to 11 of the gross domestic product from 62 to 2001 firms reinvested back 20 of each dollar of profits more recently that reinvestment has been about 10 of profits and that's uh one of the things that is most concerned to the kind of folks we're talking about let's go to the next slide in terms of productivity in the 1990s more concentrated industries were also large industries with large productivity gains more recently the more concentrated the industry the lower the productivity productivity grains we've we've seen in terms of inequality market market returns have increased and there is a they are distributed proportionately to the wealthy this suggests to some that the returns to market powers go mainly to the wealthy let's go to the next slide so there's been a consensus in antitrust since the 1980s um and we do not believe the biden and antitrust and forces will depart from the basic antitrust paradigm and adopted in the 1980s which is the protection of consumer welfare and there will be a continued commitment to economic methodology and ethanol economic based policy that's not to say uh that most of the proponents of aggressive anti-trust enforcement are aligned with this consensus very many uh sometimes called new brandesians or hipster anti-trusters think that antitrust should be used to resolve social problems ranging from unemployment uh to the concentration of political power but court precedence and that's mainly what we're talking about here are going to constrain the anti-trust agencies we may touch on new litigation but um excuse me new new laws at the end of our presentation but mainly what we're talking about here what the agencies can do in the absence of new laws and the binding administration can only nibble at the edges and many of those advocating more aggressive enforcement remain committed to maximizing consumer welfare and using standard economic methodology so we think we'll stick they'll be sticking with that next slide please um there are a number of assumptions however um that um that have been part of the consensus which are now being very strongly questioned pushed back upon these are called chicago schools assumptions because that's where the origin of these assumptions are and i'm these are over simplifications for sure of these assumptions but let's just go through them briefly we don't need much anti-trust enforcement because entry quickly erodes market power markets self-correct because oligopolies compete and cartels are unstable monopolies innovate more than other firms monopolists cannot obtain more than a single monopoly profit so single uh so vertical arrangements are not designed or to maintain or enhance monopolies vertical restraints are almost always efficient in fact a business practices prevalent and competitive market won't harm competition if practiced by dominant firms so those are the assumptions being questioned let's go to the next slide so let's talk a little bit about um sort of the recent merger enforcement track record there's been a gradual reduction in merger enforcement after 1996 in terms of some of the metrics we'll be looking at in 2010 the merger guidelines increase the concentration thresholds and you can see that on the right part of the screen there's been a shift in in enforcement from coordinated interaction to unilateral effects and what i what that means is a unilateral effect is where a merger gives a firm more market power and can unilaterally all by itself increase prices reduce output while coordinated interaction is as it you know sounds like is coordination among the firms in the market due to increased concentration so in an earlier period of time a unilateral effects theory was only 16 of the theory of the times the theory was used um uh you know for enforcement purposes more recently that's been 76 percent of the time also in recent years mergers enforcement and moderately concentrated industries reduced to almost zero let's go to the next slide and you can see by looking at this chart that um and where i've highlighted the zeros that's where there's been no enforcement so for example in the most recent period i was able we were able to we have on the chart the number if there were five remaining significant competitors in the market a post acquisition not a single deal was challenged over that 2008 to 2011 period of time next slide please um but there has been one recent trend for which seems like for more enforcement which was nascent competition theory um this is uh this is a theory where um where the agencies both agencies have been um uh in in for attempting to stop deals where a dominant firm is buying a very small competitor but an aggressive competitor a fringe competitor but someone that might be able to expand over time i think ann was going to tell us more about this later let's go to the next slide so there have been a number of studies used to support more aggressive merger enforcement uh one of the one of the key studies is by uh economist john quoca who did a meta-analysis of 60 other studies covering 3000 consummated mergers they were consummated either because there was no challenge or because there was a consent order with some divestitures he found an average price increase of 7.22 over these 3 000 deals there have been a lot of other studies like that third bullet point a study of five mergers that were not challenged found that four of them resulted in price increases there have been studies showing higher prices in airlines aluminum auto rental and when when economists looked at stable versus concentrating industries one study concluded that firms in stable industries show no increase in profit margin but firms and concentrating industries experienced rising profit margins next slide please so one well-known economist carl shapiro looking at the situation came to the conclusion that many large u.s corporations are earning extent substantial incumbency rents ig eg higher profits and have been doing so for many years and giving the high level of profits it was natural to ask whether the growing gap between leaders and laggards also reflects less vigorous competition carl concluded in markets where economy scales are significant it may well make sense to allow smaller firms to merge to achieve lower costs and thus take on larger rivals but letting the larger firms and such markets merge is more likely to lessen competition next slide so based on based on this kind of uh what the proponents have been saying we expect more enforcement in moderately concentrated industries uh you know preventing mergers more enforcement under coordinated effects theories while maintaining enforcement of unilateral effects we believe it's going to be hard to convince the agencies that entry will protect markets more reliance on the prima facie case and less homage paid to rebuttals of the prima facie case now prima facie case essentially is an analysis of concentration sometimes entry is included in the prime of asia case and the agencies uh will be will may be spending less time looking at all the details and all the pushbacks relating to that continued aggressive merger enforcement regarding acquisitions of nascent competitors by large incumbents greater scrutiny of mergers resulting in monopsony power buyer power that is particularly where it affects labor and agricultural markets we expect more second requests more challenges but a lower percentage of challenges versus second request the agencies have been really good in the last many years basically i've seen statistics 80 or 90 percent of the time where there's a second request there is a challenge or a consent order we don't expect that number to be as high in the future next slide so less likely but possible merger enforcement policies greater skepticism of efficiencies we think there's such great skepticism now it's pretty hard to be greater more skeptical of them challenges to common ownership of competing companies by investment fund purchasing for investment purposes only there have been some recent changes to heart scott rodino filing requirements that may foretell this may happen more demanding consent orders we think that's unlikely but possible and that's because the consent orders are are are pretty demanding already but potentially there may be fewer matters where the anti-trust energy being in consent order to be an appropriate rendering and there may be more challenges in court next slide so we're going now from horizontal to vertical mergers and a vertical merger is a merger between a supplier and a customer and um there has been an average of only two vertical challenges a year and what i mean by challenges here and elsewhere is either a challenge in court or a consent order but in this case it's been almost all consent orders that is until at t time warner in 2018 and between 1970s and 2018 or the 1980s at least there have been um no no matters taken to court until the 18t matter next slide next slide alex uh so uh likely merger enforcement uh policies more challenges to vertical marriages in highly concentrated market more demanding consent orders more litigation of vertical mergers let's go to the next slide next slide please um there you go potentially more challenges to vertical mergers and moderately concentrated markets i don't think there are going to be revised vertical guidelines they're going to want some experience under the vertical guidelines let's go to the next slide this is we're going to spend just a couple of minutes on vertical restraints um there has been a recent study including that 25 of cartels have used vertical restraints to maintain the cartels and there was a study on resale price maintenance that concluded that banning outright resale price maintenance led to lower prices next slide please so likely biden vertical enforcement policy uh more challenges to vertical restraints including in markets where the restraint is pervasive even if no single firm has market power less likely challenges next slide um potentially possible more challenges to most favored nation clauses um uh and potentially challenges to vertical no poach agreements that's agreement between uh horizontal no poach agreements would be agreements between companies not to poach each other's employees vertical agreements would be usually a franchise contract with the franchisees preventing preventing poaching and potentially challenges resale resale price maintenance agreements but again we think this is less likely alex i think it's time for your code number one thanks mark uh on the screen you will see the first cle code that you'll need to enter into a brief cle questionnaire immediately following the program's conclusion the code is baker hostetler three and hope to you great thank you everybody for joining us we can move on to the next slide alex so now we're going to get to big tech monopoly cases they're really the biggest thing to watching in a trust right now and you don't have to look to antitrust focused periodicals you can see it on your nightly news on top your news feed big cases um you know we often see the monopoly man as a you think of monopolies but then i trust merger enforcement is intended to stop monopolies from and cartel conduct you have horizontal collusion um that acts as in a competitive way but monopolies and what we call an anti-trust problem section two monopolies monopolization cases it only takes one to tango so you know we're focusing on single firm or what we sometimes call unilateral conduct um by an lh monopolist the 800 pound gorilla so really in the sites right now are big tech companies there has never been more scrutiny by any trust enforcers academics congress on big tech and these are novel and complex issues of first impression involving data and privacy and search capability and digital advertising and everything that you and i are buying on the internet every social media outlet we're going on to all that we're doing sitting in our houses during covet is getting looked at by a lot of people i read that article this morning calling it a hinge point for antitrust and i think that's a good way to look at it's a hinge between as mark said the old think and the new thing and how are we going to deal with all these new things the united trust laws have been around german accents 1890 um but now we're right here in 2021 are we going to go in this hipster anti-trust direction and what's really interesting is there there has been more cases brought in the last two months than in the last two decades you know you got to go back to standard oil the supreme court deciding in 1911 for you know a really big famous monopolization case and then fast forward all the way to the late 90s um to the microsoft case um that i was a law clerk then and i watched that that trial and really exciting in the district court and and that's where we are with cases right now that's that's the the level of of cases in the 2000s monopolization or section 2 cases were a political hot potato with a section 2 report issued during the bush administration quickly withdrawn at the beginning of the obama administration and while the withdrawal was premised on the fact that is you know essentially too soft and created too many barriers to section two enforcement the reality is there was no flood of section two cases during the obama administration in fact there really wasn't a single standalone section two case even worth discussing ironically you know with all sites uh on big tech they're you we've seen more cases in the last few months in it will be then in decades and and maybe even going big cases a century back it'll be incredibly interesting to see how these play out during the bible administration next slide please so just in a mindful of our time we're just going to focus on there's a lot going on but on the one recently brought by the anti-trust division doj definitely used to work in a number of states in october of 2020 doj and 11 states you know sued google um big case you know case of a century and they interestingly called former you know darling of silicon valley google said no more calling him the gatekeeper for the internet and the allegations in the complaint are to stop google from unlawfully maintaining monopolies through anti-competitive conduct um and remedying competitive harms what the lawsuit at its core accuses google of of doing is um you know using the money it makes from a dominant position in its search it's search capability we all use google to pay other companies to help maintain its uh its lead and block out competitors so while there's discussion of advertising i'm going to call this the google search case um you know we we could call it google one if there's another case brought um the states have also gotten involved notably all the states to join the doj were republican ags but then we had phil weiser leading from colorado the attorney general former anti-trust division colleague of mine at some point um and jeff's along with 38 states saying you know we're not going with doj and the the general talk is maybe he could be more aggressive so they filed their own case um now those have been consolidating dc for discovery um but there's really a lot of speculation in the media about whether doj rushed to bring the case by the end of the administration um and why the complaint didn't focus on digital advertising unrelated to search so you know not to be outdone ken paxton the texas a g who had joined the doj case brought his own case um and led in the eastern district of texas there's some movement to see if that would be moved elsewhere but led a coalition of 10 states and this case is really focusing on ad tech advertising uh industry as a distinct case now the deal a lot of things could happen um the doj google case is probably not going to settle i mean i could be wrong but we're look probably looking at a trial if they've come this far in 2023 is the current set date so a couple years from now certainly the by the administration's unlikely to dismiss the case it's possible the case is broadened the complaint is broadened to add additional um claims including those focused on ad tech as well there's already been some consolidation and the judge may may decide on more of those motions cases could could settle aspects of it um and you know another really interesting thing i just want to point out because we just saw this in the qualcomm case is these are dynamic markets where are we now versus 2023 you could see a lot of change and we saw in the qualcomm case that some of that when the ftc filed its complaint when they finally reached this the ninth circuit it just wasn't the same market anymore and i think that made it hard for them and it could really that's a real possibility here and the doj like all of us has been doing you know the key word for 2020 may have to pivot they may have to change their theory of the case so instead of a focusing on time you know just focusing on the doj case but there's an obviously another really big case demonstrate the ftc focusing on social media um and really these are cases to watch that will receive a lot of media attention and really shape the future of the internet of advertising social media of privacy in some ways whether it's overlap and inform really the modern section 2 monopolization law next slide here alex so just quickly likely by monopolization policy and this is all looking into our our crystal ball but you know these are aggressive cases that have already been brought during the end of the trump administration you have staff that's been working on those those people are going to continue working on these cases these are aggressive cases um the social media case you know is even seeking a breakup which is often called the bludgeon of antitrust rather than using a scalpel so these are cases are going to be litigated there's likely going to be legislation also um in this arena and you're you're gonna see you know we think continued aggressive challenging of monopolistic conduct really focused on tech and and the harm you know we're constantly talking to clients about what's the harm these agencies might be willing to bring cases before the harm is apparent and that's the area that mark mentioned nascent competition joe simons did a big speech on it before he left so the ftc is already talking about it there's been some mergers where it's come up so they're going to be looking at not what's happening already but should we stop this conduct to prevent from the future um and they may require defendants to show pro-competitive effects outweigh anti-competitive effects so turning it back to mark sorry i was muted for a second so uh so now we're talking about monopolization policy at the ftc which has its own authority under section five of the ftc act to condemn unfair methods of competition and uh things that the ftc may be thinking about is to eliminate the safe harbor for above cost pricing and for above cost margin squeezes the ftc recently alleged such a squeeze in qualcomm the supreme court precedent is that is that predatory pricing is not illegal in fact it's not predatory unless it's below cost so the ftc may work around the edges of that the ftc may structure monopolization cases to include primophasia presumptions of unlawful monopolization where the exclusionary conduct lacks a plausible justification and there may be more aggressive enforcement covering refusals to deal which again the supreme court cut back on some in in the last decade the ftc would do this under its own authority which is separate from the sherman act authority next slide and there's one other thing that's only possible under section 5 of the ftc act and that is to apply the monopolization standards to firms that are not monopolies that are only dominant firms where the ftc can establish that the conduct has an anti-competitive effect and in fact this is something that senator klobuchar is trying to do in proposed legislation next slide i think i'm turning it over to jeff at this point great great thanks mark and you know ann and i will uh take on the what made happen uh at doj and cartel enforcement and you can move on to the next slide what we want to do is really set the stage um i think and this point out already i think what what's probably going to be the theme of 2021 at doj is litigation uh so we'll set the stages whereas what the statistics are how many people are been indicted and and what that has meant for them and companies then we'll discuss how the use of uh deferred prosecution agreements over the last few years has changed and what it means going forward and then we'll highlight you know those areas that we see that are going to be the priorities of the division in the coming years um you know first off is you know making darwin really set the stage and continued on as far as international engagement and cooperation and what that means for potential extraditions as those seem to have increased as well um and we'll certainly try to address the question of where where the labor market cases are going and then uh touch upon another high priority area um and program the procurement collusion strike force and then finally we can't you know we gotta obviously uh operate in the world that we're living in and certainly want to talk about how covet 19 the pandemic and you know its effects are going to what it's going to have on potential enforcement actions and other policies that are coming out so with that and once you set the stage for us yeah we can move on to some charts i mean i was with the antitrust division for 20 years i love my charts i we worked you know jeff and i worked on the cases that were the the substance of the charts and put them together and we were lucky to work you know when the charts were all going up so that hasn't been the case for the last few years and i helped a deputy or two write some talking points to explain them but this is just where we are we'll look through these this this first stat is the antitrust division corporations and individuals charged in criminal cases you know we can see a downward trend recently the jump out thing here and we put it in this side of division recently confirmed this more trials i think than ever in my experience there's currently 11 trials pending against 22 individuals and six companies wow that's a lot of trials and that's a lot of division resources and you may have covid delays in most of those dockets so the antitrust division criminal prosecutors are going to be litigating and that's going to bring us case law in some of those areas as there's tough cases with motions to dismiss and it's a resource issue that the new administration's really going to have to address and decide the allocation of existing cases to when are we going to move on to new cases not not dismiss those cases of course but like not broaden them maybe shut down investigations that have been pending and move on to new stuff that can happen next slide please this just shows the the criminal fines and penalties and the prison sentence you know some downtrend although the prison times um have stayed pretty consistent and we don't really expect that to change the next stat is um total criminal cases filed i mean i was working hard during the so was jeff during those years we were filing 90 so now you know there was a couple years of 18 now it's down to 20. but a lot of those were trials those were indictments so i have to say those are very resource intensive um these things are cyclical you know the division's the next big thing may already be in the pipeline and we don't know it under the biden administration we expect the criminal enforcement will remain a top priority of the antitrust division given the harm that cartels cause and consumers and competition i'll turn it back to you jeff thanks ann and so um we want to highlight just a few of the the potential uh trials coming up in indictments um and they really they really fall into two buckets and you can go to the next slide alex um in the next one there we there we go thank you um food right the first bucket is gonna be food and second bucket we see is health care um so far to date ten executives at poultry suppliers including former ceos former vice presidents presidents of these companies have been indicted um and certainly are facing trial but you know when you go patrol against that many individuals and in that many council uh there's gonna be a lot of litigation to come and if we can move to the next slide so we're moving into into health care um and in here back in september a uh dr harwin the former president of florida cancer um specialties is a florida privately held oncology practice uh that operates in in the southeast and they basically had a market allocation a legend market allocation agreement and we can move on to the next matter i think probably the most significant matter for the division is going to be the potential trial against teva um definitely they have thrown down the you know the gauntlet here um many of the other companies involved in the generics matter uh settled with dpas um due to the significant collateral consequences that they faced and we'll talk a little bit about the use of dpas here in a bit but it's not only teva but there's also another individual who's also a former executive who was also indicted and go the next case which brings us to um the first of what and i believe are going to be several labor market cases and the first one that they brought is usv jindal this is a wage fixing case which um from i think our perspective it much more closely aligns with traditional price fixing uh and as easily explained the one i think uh interesting point about this case is that uh the defendant was been allegedly accused of lying before the ftc this actually started as an ftc investigation and he uh during or he made statements the ftc that uh doj believes were untruthful and that they could prove that so it's not only a wage fixing indictment but it's also about obstruction obstructing a federal proceeding certainly which gives it more jury appeal for doj in in these labor market cases next slide so surgical care affiliates is the first no poached case after four years um from when doj and the ftc issued its first or its guidance um about how it's going to then treat agreements among competitors in in the labor context and and so it's been much anticipated what that case will look like and so this will certainly not only give us an indication of how aggressive doj will be on this front but also track to where the law will go and if it will fully support their theories so we can now move on to and probably back a little bit to defer prosecution agreements so i'm sorry we can go we can go forward alex thank you so deferred prosecution agreements are not a new tool for the division um and it's prosecutors but we're seeing them more used now more often if a company is not granted conditional leniency um a dpa allows them to resolve the case short of conviction if the if the company fully cooperates i think they serve an important middle ground between declining to bring charges and doj securing a conviction we think they are being more are used now more often basically because of the guidance that doj put out that anna and i both worked on regarding compliance and how um they're going how the prosecutors will evaluate compliance programs to credit um or provide credit to compliance programs at the charging phase rather than just perhaps the sentencing phase and along with that do it's very consistent with how other components of doj evaluate whether or not they're going to prosecute business organizations they've got to follow a pretty strict analysis of 10 factors that's laid out in the justice manual compliance is just one of them and so with each of these dpas none of them were were solely because of the compliance program that existed at the time of the alleged crime um they're each unique um as far as the health care cases that's those are really because of collateral consequences and that they would have those companies would have had trouble operating uh because of in in the federal environment they would have been kicked out of the programs but looking at um the the berlitz and the argos uh dpas there it goes to other factors that were traditionally not recognized by the division uh to not bring a an indictment um those go to pervasiveness and really seriousness so they fence um i think in the we're talking about one contract worth with berlitz um and the other company was going out of business so these are things that perhaps might have actually led to declinations in the past or or a plea agreement with a very low fine but dpas is a new tool for the division which i think gives them another avenue to resolve cases and really get cooperation of companies so with that i'll turn it over to ann and talk about some of the uh priorities for the upcoming 2021 and biden administration just to note on dpas i mean let's be real you know we all thought at the end of the financial crisis you know there was this waiting for the big cases to come and there was a lot the pendulum on the dpas there was a lot of use of dpas and in fact there was a book written about it called the chicken club that really focused on that and i think now on the precipice of the biden administration this is a critical not just for the united trust division but the broader department as we come hopefully out of the coveted crisis just like the financial crisis what's going to happen is there going to be dpas which are sometimes viewed as a financial slap on the wrist or is there going to be vigorous enforcement so that is something to watch just to build on what jeff said cooperation moving to that i mean always incredibly important in the antitrust realm and while other pockets of the government seem to suffer a bit during the trump administration internationally we did see a lot of examples of efforts at international cooperation the doj um in stc there was these um agreements with multiple countries and enforcers reached their soft agreements meaning their coordination promises but they're important and as jeff mentioned extraditions you know the division has never had more success than they've had in last few years on extraditions um there's been you know eight there's recently been once from korea you know in some very important matters and it's we have there's a mou with korea that's an area to watch i mean fugitives we call them in the in the trust division but people that are charged with crimes and stay outside the us they've never had more to fear in terms of being tracked down by the nhs division and extradited jess and i've written on this and just something we're really following and we think is gonna the doj is only gonna build on that next slide so just quickly wage fixing no poach labor markets really important um as jeff mentioned there was this pronouncement at the end of the obama administration that going forward there was going to be criminal prosecution of naked no coaching wage fixing um and so they were you know shouting that at the hills announcing it and go to the next slide um but then we waited and waited and waited for those cases and only at the end of this administration so four years later despite pronouncements from aag del rahim that they were coming we got two at the end of the administration so question i often get is you know will this focus on no poach and labor market you know continue with the buying administration and the antitrust field unequivocally yes i believe it will there's no caveats needed here no lawyer caveats we think that's going to happen because we know a little bit about biden when he was vice president there's a tweet you know a recent a tweet during his campaigning when he talked about this he is all for you know the worker and it is tried and true i think he really believes that there's no not going to be any shying away from this um you know that said you know he's talking about doing away with nine competes which is even a little more complex than no poach um but i think we're going to see this trend continue certainly they're going to litigate those difficult cases they've brought i mean those are hard cases there's going to be motion to dismiss and there's no poach in wage fixing cases and we're going to see those play out and you know if i was still the head of criminal policy at the division i'd be telling the new folks coming in you know to wait and see how some of that plays out before they double down and bring more because that's what we're going to be watching is how do courts and juries view this stuff not just the antitrust division because it's complex next slide i'll turn it over to jeff just to wrap up on cartels yeah i think that's a really good point ann and um what's not as complex is the procurement collusion strike force um typically these cases involve bid rigging and payoffs and so there's gonna be multiple types of charges that that are brought with um bid rigging charges and maybe a customer allocation charge that really tell a full story and the divisions partnering with several u.s attorneys around the country so the resources are there the infrastructure is there now with dan glad as a permanent director the just this week richard powers the the deputy assistant attorney general and now he has a title of senior supervisor of the of the division um told an audience that they've got dozens and dozens of investigations and we've heard that for the last year so we expect that they're going to come to fruition and that's where i think the really most of the cases will come out of and and because it involves procurement collusion and corruption you're going to see a lot of varied charges and not just the sherman act charge we can move on to the next slide so unfortunately you know desperate times often incentivize desperate measures and executives when they're facing downturns may consider reaching out to their competitors and other businesses that are in their industry to survive they might for example consider agreeing not to undercut each other their prices agree on you know wages for employees during this difficult time these are some of the efforts that the past administration has put in place and i certainly expect that going through in until the pandemic is under control uh these type of policies including various state price gouging laws at the at the local level and at the federal level will be pursued we can go to the next slide but ultimately um you know collaborations can be beneficial and there's a mechanism that the ftc and doj have put in place that allows for expedited review of certain collaborations and to date there's been at least six of those that received expedited review and i think that's the real bright spot um of the agencies working together and i expect that uh that collaboration will actually be a theme in the next administration so with that i'll hand it back over to you alex for the cle code thanks jeff on the screen you will see the second cle code that will need to be entered into a brief cle questionnaire immediately following the program's conclusion the code is bakerhostetler4 i'll kick it back over to you carl in the beginning we said that it was our prediction that there's going to be a new era of the united trust law under the bible administration the new congress and i think i hope you see from this past hour that that's true uh there's a real whirling dervish going on here uh we have activity in congress we have activity in the department of justice that's ongoing and will continue and we have a president who's committed to certain ideals including consumer protection in the labor area in particular all those things and possible legislation could all come to a head and the ramifications and the damages that can be caused to corporations and individuals violating the anti-trust laws is monstrous and therefore for planning for the by the administration next slide let's just have our presenters summarize if they can the last few minutes um what do you do to protect yourself from this uh swirling bullet that's coming in our direction let's start with uh ian on compliance which she worked on at doj and labor market focus yeah i think compliance is always where we recommend starting i mean if you don't have an antitrust problem now getting your compliant anti-trust specific compliance program you know ramped up solidified reiterated only helps um and you know we're here to help doing that we do it all the time and what we're seeing is turning over rocks is only to the benefit of the company because you either don't find anything and you improve and you make people aware or you find something and in the criminal realm if it's horizontal cartel conduct you have this potential benefit of early reporting either through leniency or compliance so we're all waiting to see when the division is going to decline a case or do a dpa because of compliance and that's coming and they're looking for it so we want our clients to be you know the gold star compliance they look at labor markets i think are just you know these put no poached cases every compliance training we do we are adding more and more on that because people just are not aware that that is illegal stuff you know that you talking to competitors about hiring and standing down um tech obviously anyone in the tech sector anyone you know it's another thing just even being adjacent to tech i mean there's going to be lit led this litigation we talked about there's going to be legislation there's this complicated intersection of privacy and antitrust so if you're in tech or you touch tech you know compliance in order know that you're going to be scrutinized um also just an interesting wrinkle i've worked you know on some initiatives with universities also we didn't touch on that but i don't think that stuff's going away either there's been an interest that started in the in the obama administration continue through the trump administration and kind of focus so that's another area so jeff it looks like dpas are definitely a possibility to consider under this administration right yeah and i it's it's more than a possibility in what what folks should know is even in the leniency context where there's just two companies one company has leniency the other one doesn't um you need good counsel to to walk through those factors in order to to put your client the best position to to get a dpa if there is a violation there and i one thing i'd add just about the healthcare and we've talked a bit about that but there's really a blend between healthcare and the labor markets um it's it's it's though it's that industry that is causing a lot of questions from doj and focusing on the the labor market conduct and mark in the hsr world you mentioned some changes there and the analysis is maybe being different going forward would you advise clients in that area i think you get that mute my mark sorry about that so i i think uh we talked about the fact that in hsr in merger in merger analysis there's going to be more aggressive enforcement and i think it will happen in moderately concentrated industries as it has not happened in the recent past and the place to start with policing your your companies internally is with the production of documents because um and four c4d documents are documents that have to be submitted as part of uh heart scope for dino uh pre-merger notifications and they are documents produced by or going to executives uh about the merger and about competition relating to the merger and um the agencies are going to look hard at those and to pick out which in moderately concentrated industries is uh which merges look problematic but it goes even beyond that it goes to the point that if you get a second request a second request you might not have gotten in uh previously there's going to be a hard look not just at the merger but whether there are there are any issues in the documents relating to other potentially competitive problems i mean this has happened to people it happened in the tuna industry where the where the agency saw that the documents were indicating uh price fixing so i think that's an important important area to police as well in terms of document production by the companies and also i think there's going to be more focus on monopsony on buyer power in the biden administration and uh we we may see cases um where the challenge is the result of just buyer power not seller power as you as usual so you got to be on the lookout for that you got to think about that in advance you've got to think about how to present that to the agencies and you've got to think about uh your documents and whether you're in full compliance with the anti-trust laws thanks carl well there's a few seconds left let's end it where we started it which is the anti-trust czar there's an old story about when president wilson needed some legal advice he would walk down the street and go to justice brandeis's house and ask him for legal advice and he did no one questioned that in those days now where you may have an anti-trust czar in the white house so certainly this president president biden is going to be talking to that person directly that's unprecedented just in and of itself so with all of that if there's any further questions you have please let us know we'll be sending out a summary of this presentation and when the new antitrust uh head of uh doj is appointed we'll also provide additional information about that person our views about what that person may or may not do under the wide administration thank you all very much for participating tonight we hope it's been helpful to you we very much enjoyed talking to all of you thank you bye-bye [Applause] you