Two major players in the automotive manufacturing industry, Sweden’s Autoliv and Michigan’s TRW, are under investigation by the antitrust divisions of both the U.S. Department of Justice (“DOJ”) and the European Commission (“EU”). 

Both companies are multi-billion dollar corporations that supply safety systems, such as seatbelts, airbags and steering wheels, to automakers.  Autoliv and TRW each operate on a global scale, employing thousands of people worldwide. 

The EU recently conducted surprise visits to Autoliv and TRW manufacturing facilities in Germany.  A spokesman for the Commission said that there “is reason to believe that the companies concerned may have violated EU antitrust rules that prohibit cartels and restrictive business practices.” 

In the U.S., the DOJ is overseeing a similar investigation and has subpoenaed documents from both TRW and Autoliv. 

In keeping with their policies, neither agency has provided details of these ongoing investigations.

The U.S. Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”) plan to sign a memorandum of understanding with China’s three antitrust enforcement agencies, signaling the first formal pact of cooperation between U.S. and Chinese regulators. 

This deal comes on the heels of China’s sweeping antitrust reform, a policy it developed with advice from foreign agencies like the FTC.  The growing number of countries with antitrust laws and agencies, combined with the increasingly global profile of corporations, has made international cooperation extremely important.  Moreover, multi-jurisdiction, transnational antitrust investigations are now common, meaning that different agencies often have overlapping authority. 

A formal memorandum of understanding facilitates agencies’ ability to share information, especially confidential documents.  The FTC hopes this deal will bring international antitrust policy one step closer to a convergent set of global standards with consistent enforcement. 

The U.S. shares similar agreements with a handful of other countries (Russia, Japan, Israel, and the E.U.) and intends to actively pursue new deals, especially with developing countries like India.

The Antitrust Division of the U.S. Department of Justice has updated its Policy Guide to Merger Remedies.

In a press release, the Antitrust Division stated that the updated Policy Guide takes into account new merger dynamics that have surfaced since the issuance of the original guide in 2004, particularly the rise of transnational mergers and complex vertical transactions.

The Antitrust Division uses the policy guide in analyzing proposed remedies for potentially anticompetitive mergers reviewed by its staff.

The update highlights the role of the Antitrust Division’s new Office of the General Counsel, which is responsible for enforcing consent decrees.  One of the main goals of the update is to more accurately reflect the division’s actual merger remedy practices.

The revised policy guide also maintains the original goal of providing effective merger remedies when necessary to preserve competition in the relevant market and promote innovation and consumer welfare.

The end of the decade-long federal court supervision of Microsoft’s licensing practices last month provides an opportunity to reflect on the impact that case has had.  A lasting legacy of the U.S. v. Microsoft case is that monopolists in dynamic and rapidly changing high-tech industries do not receive special treatment under the Sherman Act.  There is no presumption that high market shares will be counteracted by the possibility of innovation by competitors, without convincing proof.

In an article for Law360, Constantine Cannon’s Mitch Stoltz reflects on the long-term impact on antitrust in the software industry of the Justice Department’s 1999 monopolization suit against the software giant.

The historic case was resolved in 2001 with a settlement that provided for a decade of government oversight of Microsoft, which ended in May 2011.

The DOJ and state attorneys general had claimed that Microsoft’s use of contracts with PC manufacturers to control which programs could appear on the Windows “desktop” violated Section 2 of the Sherman Act as a form of monopolization or attempted monopolization.  They also claimed that Microsoft’s commingling of the computer code for the Windows operating system and the Internet Explorer browser was a form of tying that illegally excluded other browsers, such as Netscape Communicator, from the market. 

Microsoft and its supporters claimed that its restrictive contracts were not anticompetitive because, despite its very high market share in the PC operating system market, the possibility of rapid innovation by competitors like Netscape effectively checked any Microsoft attempt to wield market power.  They also argued that combining the browser with the operating system was innovative and that to punish it as tying would bring the courts into the business of judging technological merit.

After a bench trial and appeal, the Court of Appeals for the D.C. Circuit ruled that Microsoft possessed and abused monopoly power in violation of Section 2 through its manufacturer contracts.  The court also ruled that the “tying” of two software programs technologically must be evaluated under the rule of reason, taking into account procompetitive and anticompetitive effects, rather than being declared per se illegal.

In other words, the court held that lower courts can and should look into the technological merit of combining two software programs to see if the combination truly benefits consumers rather than simply locking out competitors.

The Federal Trade Commission (“FTC”) has approved Microsoft’s $8.5 billion purchase of Internet telephone giant Skype. 

Opponents of the deal have pointed to several aspects of Microsoft’s purchase of Skype that they claimed would negatively impact competition.  They expressed concern about greater horizontal integration because Microsoft already offers a similar service through its Windows Live product.  Industry experts and Skype users alike also worried that the deal would mean Microsoft limiting Skype support to its own platform.

While the FTC does not publish the reasoning for these decisions, its swift approval of the deal indicates that it did not find these concerns compelling. 

Microsoft had a number of factors working in its favor, most importantly the robust competition in the Internet telephone market.  Industry heavyweights Google and Apple both have services that directly compete with Skype.  Google and Apple rival Microsoft in resources and market power, making it less likely that Microsoft’s control of Skype would enable it to dominate the market.  Microsoft’s plan to keep Skype as a separate division and its promise not to limit support to its own operating system were also important in allaying fears of anticompetitive practices.  

Microsoft says that it hopes to complete all further regulatory procedures by the end of the calendar year.

The FTC reviewed the acquisition under the Hart-Scott-Rodino Act of 1976, which requires the FTC and the Department of Justice (“DOJ”) to investigate mergers valued at more than $65.2 million to avoid anticompetitive outcomes.  Because it is often exceedingly costly or even impossible to restore a market to a healthy, competitive condition, the FTC and DOJ are tasked with preventing anticompetitive effects through the merger approval procedure.  The agencies examine more than 1,000 such cases each year, the vast majority of which are approved.