United States

Federal Trade Commission (FTC)

On May 14, 2021, FTC Acting Chairwoman Rebecca Slaughter and Commissioner Rohit Chopra issued a public statement criticizing the announced closing of 7-Eleven’s acquisition of roughly 3,900 Speedway retail gasoline and convenience stores from Marathon Petroleum Corporation.  In an unusual development, Slaughter and Chopra noted that the closed transaction raised significant competitive concerns in hundreds of local retail gasoline and diesel fuel markets across the country, resulting in a merger-to-monopoly scenario or reducing the number of competitors from three to two.  The deal parties had been unable to come a definitive divestiture agreement with the FTC to address those concerns by the end of the statutory HSR review period.  Slaughter and Chopra indicated that the FTC would continue to investigate the closed transaction and that “[t]he parties have closed their transaction at their own risk” and that the FTC “will determine an appropriate path forward to address the anticompetitive harm and will also continue to work with States Attorneys General.”

 FTC announces intention to block acquisition of Keystone Cement Co. by rival Lehigh Cement

On May 20, 2021, the FTC announced that it was seeking to block Lehigh Cement Company’s $151 million acquisition of its rival Keystone Cement Company, based in Philadelphia,  alleging that the proposed acquisition would harm regional competition in the market for the key ingredient to make concrete.  Lehigh owns several facilities that sell cement in direct competition with Keystone, including two plants within 40 miles of Keystone’s Bath, Pennsylvania plant. The FTC authorized suit in federal court seeking to enjoin the proposed acquisition pending the outcome of an administrative trial.  The FTC alleges that the acquisition would reduce competition in eastern Pennsylvania and in western New Jersey by reducing the number of competitors from four to three; would give Lehigh, which is the leading cement supplier in the area, more than 50% of cement sales in those areas; and would eliminate Keystone’s aggressive pricing in the market, which had caused Lehigh to lower its cement prices in those markets.  The FTC also alleges that the acquisition would make anticompetitive coordination among the remaining cement suppliers more likely to occur, noting that these and the other cement suppliers have expressly colluded within the recent past in other geographic markets with similar characteristics.

 Department of Justice (DOJ)

DOJ resolves antitrust concerns from proposed acquisition of TCF Financial Corp. by Huntington Bancshares Inc.

On May 25, 2021, DOJ announced that Huntington Bancshares Inc. and TCF Financial Corp. have agreed to sell 13 bank branches in Michigan, with approximately $872.3 million in deposits, to resolve antitrust concerns arising from Huntington’s proposed acquisition of TCF Bank.  The assets to be divested include all of the deposits and loans associated with the divested branches as well as the physical branch assets.  Under the divestiture agreement, the parties will divest bank branches in 10 locales in Michigan and in several other market overlap areas in Ohio.  The parties also agreed to suspend existing, and not to enter into new, non-compete agreements with branch managers and loan officers located in those areas for a period of 180 days following the consummation of the proposed acquisition. In addition, the parties agreed that any branches located in those areas that are closed within three years of the proposed acquisition’s closing will be sold or leased to an insured depository institution that offers deposit and credit services to small businesses.

Claxton Poultry charged in ongoing price-fixing conspiracy.

On May 20, 2021, a federal grand jury in Denver, Colorado returned an indictment charging an executive of Claxton Poultry Farms with participating in a conspiracy to fix prices and rig bids for broiler chicken products. According to government filings, Claxton and two of its top executives, along with co-conspirators, worked together to illegally suppress and eliminate competition for sales of broiler chicken products, which are sold to grocers and restaurants. To date, two individuals from Claxton have been charged and they join 10 others in a superseding indictment that was first brought in October 2020. Pilgrim’s Pride Corporation, another chicken producer, pleaded guilty and was sentenced in February 2021 to pay a criminal fine over $107 million for its role in the conspiracy.

Indictments handed down in estate auction bid-rigging case.

On May 21, a federal grand jury in the Western District of Kentucky returned an indictment charging two Kentucky real estate professionals with conspiring to rig bids at an estate auction for farmland and timber rights. According to government filings, the individuals conspired with others to rig bids at a 2018 auction for hundreds of acres of farmland and a tract of timber rights. The indictment alleges that the defendants demanded and accepted a $40,000 payoff from competing auction participants to stop bidding, artificially suppressing the sales price of the farmland.

U.S. Litigation.

Federal Courts in New Jersey Considering Rule to Require Litigants to Disclose Litigation Funding.

On April 14, 2021, United States District Court for the District of New Jersey proposed an amendment to Local Civil Rule 7.1.1, requiring all parties to a suit to disclose whether an entity not a party to the suit is providing litigation funding.  If so, the litigant must disclose the identity of the funding source, whether the funder’s approval is necessary for ligation decisions or settlement, and a description of the nature of the financial interest.  The U.S. Chamber of Commerce supports the proposal. The International Legal Finance Association, a trade group that advocates for the litigation funding industry, has filed comments against the proposed rule, arguing that the rule would lead to increase litigation and fishing expeditions into irrelevant topics related to the funding.  DRI, Inc., which represents defense counsel, is seeking even stricter disclosure requirements.  In 2017, the U.S. District Court for the Northern District of California adopted a rule requiring disclosure of litigation funding arrangements in class action cases.

OM. v. National Women’s Soccer League, LLC; Case No. 21-cv-00683 (D. Or. May 24, 2021).

On May 24, 2021, a 15-year-old athletic prodigy won the right to compete for a spot in the National Women’s Soccer League, persuading a federal judge in Oregon that the league has likely violated antitrust laws by enforcing a minimum age while its counterpart for men, Major League Soccer, lets teenagers play.  The preliminary ruling on May 24th clears the way for Olivia Moultrie, who already practices and scrimmages with the NWSL’s Portland Thorns, to sign a contract with the league while her case proceeds in court.    The lawsuit accuses the 10-team league of flouting antitrust laws and international norms by preventing its teams from signing Moultrie, who turned professional at age 13 after signing a multi-year Nike contract.  Moultrie would be eligible to play in MLS if she were male and “in France if she were French,” the suit says. The policy is allegedly harming her long-term career prospects by depriving her of professional seasoning.  The NWSL has countered the rule is shielded from antitrust scrutiny by the league’s early stage, but ongoing collective bargaining talks with its players’ association.

Mexico

 The Teams of the Mexico’s First Division Soccer League are Under the Spotlight of COFECE Over Possible Cartel Conduct.

The Federal Economic Competition Commission (COFECE or Commission) announced that it has notified several companies with a “statement of probable responsibility” in conducting cartel conducts in the market for the draft of professional soccer players in the national territory. With this notification a trial-like procedure is initiated so that those notified can present their defense. This probe is the first one initiated in connection with conduct that may restrict the mobility of workers and affect the determination of wages in a market.

The notified parties may present their defense before the Commissioners. If the accusation stands, companies may be fined with up to 10% of their income. Additionally, natural persons who acted in representation of a company may face a criminal procedure that entails sanctions of 5 to 10 years of prison.

COFECE Makes Available to the Public the Preliminary Version of the Study of Competition in Rail Freight transport.

On May 24, 2021, COFECE published the preliminary version of the Study of competition in the public service of rail transport of load (Study), in order to receive comments June 26, 2021.  COFECE reported that the railway network has practically not grown in the past 30 years, and that the participation of the railway in total freight transport is low (25%), compared to other countries. The study identified the following competition problems:

• The original design of the network presents asymmetries in the access of the rail companies to the most important nodes of the country.

• The network operates in a fragmented manner.

•  There is a lack of clear criteria to extend the licenses.

•  Absence of regulation for access license exclusivities expire.

•  The Railway Transport Regulatory Agency (ARTF or Agency) lacks enough information to carry out its regulatory task.

COFECE made 25 recommendations on achieving three goals:

1. Remove obstacles that limit the use of existing rights of way and hinder the creation of new ones;

2.  Establish a more expeditious procedure for rate regulation of towing rights in the first and last mile, when they become more expensive and / or hinder interline services;

3. Strengthen the institutional design of the ARTF so that it has enough information and powers to exercise its regulatory task.

Edoardo Gambardo, Pamela J. Marple, Yuji Ogiwara, Stephen M. Pepper, Gillian Sproul, Filip Drgas, Marta Kownacka, Pietro Missanelli, Massimiliano Pizzonia, Anna Rajcert, Jose Abel Rivera-Pedroza, Ippei Suzuki and Rebecca Tracy Rotem also contributed to this update.