A Fiscal Year Like No Other

With the conclusion of FY2020, we look back on a year unlike any other in the history of the Bureau of Competition.  The year has been marked by a combination of exceptional commitment from the Bureau’s staff, enforcement achievements that would be remarkable in any year but which are nothing short of incredible in this one, and a string of enforcement and policy successes.

The first measure of our success in any year is our work to protect consumers through our enforcement activity, and this year reflects a sustained and exceptionally high level of enforcement.  In our July 2020 blog, we flagged that the Bureau was on pace for its busiest merger enforcement year since the statutory HSR thresholds were revised twenty years ago.  The Bureau sustained that pace and ultimately saw twenty-eight merger enforcement actions this fiscal year: seven complaints voted out by the Commission, ten settlements accepted for public comment, and eleven transactions abandoned or restructured.  This is the highest number since FY2001.  And even these figures do not tell the whole story—for example, they omit matters abandoned or restructured before issuance of a second request or compulsory process.  Finally, the merger enforcement statistics do not reflect our conduct work, in which all three of our conduct divisions have undertaken challenging and demanding investigations across an array of industries in the economy.

Individual highlights from this year’s cases illustrate the breadth and diversity of the Bureau’s enforcement portfolio and our use of all the tools of antitrust law to protect consumers from harm.  Early in the fiscal year, the Commission accepted the largest divestiture by value in U.S. antitrust history in order to resolve its challenge to BMS/Celgene.  The Commission then brought a challenge to Illumina’s acquisition of Pacific Biosciences under a Section 2 monopolization theory as well as a Section 7 merger theory, demonstrating our willingness to examine mergers through Section 2’s lens when appropriate.  In the same week, it also brought its first private label product challenge, in Post/Treehouse. 

In April, the Commission used a similar two-pronged structure to Illumina in its challenge to Altria and Juul’s proposed joint venture and minority investment, alleging violations of both Section 1 and Section 7.  The Commission also emphasized its continued willingness to challenge consummated anticompetitive mergers in challenging Axon’s acquisition of its police body camera competitor VieVu.  As we continue to examine the anticompetitive effects of non-compete provisions across the economy, three of the merger challenge complaints – Axon/VieVu, Altria/Juul, and DTE/Generation – challenged the use of non-compete agreements.  Finally, and remarkably, six of our public merger cases this year – BMS/Celgene, Illumina/PacBio, Altria/Juul, Edgewell/Harry’s, Ossur/College Park, and Abbvie/Allergan – involved nascent or potential competition theories.  We rounded out the fiscal year with a win securing a preliminary injunction blocking Peabody and Arch Coal’s proposed joint venture.  The matter was notable as the first PI hearing undertaken by the Bureau following the telework structure resulting from the pandemic.  In September, the Bureau went to court a second time during the pandemic telework period to challenge the merger of the Jefferson and Einstein hospital systems in Philadelphia.

On the conduct front, the Commission voted out a groundbreaking challenge against Vyera and several executives for monopolization of the pharmaceutical Daraprim.  Several state Attorneys General joined in the complaint.  In another groundbreaking case, the Commission moved into discovery following denial of a motion to dismiss in its monopolization case against digital e-prescribing platform SureScripts.  The Commission also settled with three rent-to-own chains on market allocation charges, and settled an Order violation case for failure to timely divest, resulting in a $3.5 million fine.  In the meantime, other major conduct matters in the Anticompetitive Practices, Health Care, and Technology Enforcement Divisions reached significant milestones, as our teams continue to investigate a host of high-priority issues.  Several matters from these Divisions remain in the appellate process.

On the policy front, the Commission voted to issue new Vertical Merger Guidelines, the first ever issued jointly by the Commission and the Department of Justice.  These Guidelines explain in clear language how the Bureau analyzes vertical issues in its merger enforcement practice.  The Commission also recently voted out proposed rules and questions regarding the Hart-Scott-Rodino premerger notification regime, the most significant reevaluation of the Hart-Scott-Rodino rules in more than thirty years.  On these and other projects, the Bureau’s policy experts have continued to make an incredible contribution across our portfolio, from our guidance projects and workshops, to our amicus and legislative efforts.

Finally, to turn at last to the elephant in the room: this level of action would be nearly unprecedented in any year, but to accomplish it with our teams almost entirely working from home is exceptional.  In March, the Commission transitioned to a telework structure with remarkable speed, calm, and efficiency.  The first electronic filing system for Hart-Scott-Rodino notifications was created and implemented in a matter of days.  Our investigational methods and tools—from timing agreements to investigational hearings—adapted in short order.  And, at every turn, Bureau attorneys rose to the challenge, conducting large numbers of virtual investigational hearings and depositions, as well as two merger PI hearings.  We stated at the outset of this period that we did not intend to relax our enforcement standards, and we have not done so, bringing and winning enforcement actions under this new normal.

The many successes of this year are the result of the unwavering dedication of the Bureau staff to the consumers who depend on us now just as much as ever.  Staff from every office and every Division within the Bureau, as well as the many others in the Commission who work with us, have excelled in countless ways in this new environment.  And somehow, through it all, we have maintained the good humor, collegiality, and warmth that make our Bureau such an incredible place to work.  We enter FY2021 with a strong head of steam and ready for the challenges to come.  Happy new fiscal year.