Insights From the Inevitable: A New Doctrine for Trust-busting: The Evolving View on Antitrust Litigation
Recent actions by the new administration are signaling change is on the horizon for antitrust litigation. The nomination of Lisa M. Khan for commissioner of the Federal Trade Commission (FTC), Tim Wu’s appointment to the National Economic Council as a special assistant to the president for technology and competition policy, and Senator Klobuchar’s unwavering focus on breaking up corporate monopolies, show a renewed interest in antitrust doctrine. Their sights all seem to be set on the digital giants, who have now enjoyed decades of unabated growth.
We invited three attorneys, whose expertise lies within mergers and acquisitions and antitrust litigation, to share their views on these changes and the implications of increased antitrust investigations on the legal industry. Our discussion, “A New Doctrine for Trust-busting: The Evolving View on Antitrust Litigation,” is available on-demand here.
Panelists, clockwise from top left: Ben Dryden, Brad Tennis, Jessica Michaels, and moderator Jack Perrin.
The Current State of Antitrust Laws
Ben Dryden, a partner at Foley & Lardner, gets viewers up to speed on the current economic, political, and legislative environment that brought antitrust laws back to the forefront in America, “the economy really has changed in the past three years, whether it's a network of flat effects or we're finally at that moment [with tech achieving] $4 trillion companies.” He continues, “so a further backdrop is the Supreme Court over the past 30 and 40 years really has shifted towards the Chicago school of laws, a fair mold of economic analysis. They really have adopted the consumer welfare standard as the north star of antitrust enforcement.” Dryden goes on to cite the polarized political environment in the U.S. and increased enforcement against monopolistic and anti-competitive behaviors by the FTC and Department of Justice (DOJ).
This laundry list of contributing factors has led to an extremely active antitrust legislative environment for our panelists. “I think this signals their policies and the way that they approach antitrust law,” Jessica Michaels, partner at Mayer Brown, says of the new administration. “I think it signals that this isn't a topic that's going to go away all of a sudden.”
The recent flurry of activity in the antitrust realm begs the question, what’s coming next? We asked our panelists to share their predictions in this space:
- Shift away from the consumer welfare standard. The “hipster antitrust movement” is top of mind for our panelists. This movement, which refers to shifting antitrust law to take into account additional goals such as income inequality, unemployment, and wage growth. A departure from focusing singularly on maximizing consumer welfare.
Dryden gives his take: “For regulators to be able to pick and choose which goal they're going to try to pursue from a merger perspective, inserts a lot of picking winners and losers. It makes it hard to counsel clients. It makes it hard for businesses to really answer. But, these are judgment calls.”
Michaels agrees, adding “I think losing predictability and not being able to know whether the conduct or the merger you're about to engage in is going to be challenged by regulators is a really, really big deal. And, something that the legislature will hopefully take into account when they're considering whether to change the law.”
- Greater enforcement. All three experts agree that the heightened level of enforcement is here to stay. Michaels shares her perspective: “I don’t think this increased enforcement and the activity that we're seeing is going away anytime soon. We've seen the Biden administration take action since the beginning of the year. That signals that we're going to continue seeing this aggressive antitrust enforcement.”
Other signals of greater enforcement in the future include:
- The FTC’s new technology enforcement division
- The opening of a civil conduct task force within the DOJ to look at day-to-day civil antitrust violations
- Increasing the FTC’s budget to approximately $40 billion and the headcount by 110
- Additional legislative proposals aimed at providing enforcers with additional tools for investigation
- Increased adoption of technology. “I think that there is definitely going to be a push to adopt it more widely,” states Michaels. “When you're talking about a Second Request review, you're talking about millions and millions of documents that you've collected. And you're also typically talking about trying to get the entire process done in a month or two, right? And so, particularly in those instances, technology has allowed us to accomplish our clients’ goals of getting the deal done in the shortest amount of time possible. You could hire 200 contract attorneys, but that's going to cost a lot of money.”
Brad Tennis, a partner at Wilson Sonsini, cautions that “technology is a tool. It's not a replacement. It's part of a holistic strategy that is going to involve outside counsel in-house counsel, the contract reviewer team—if there is one—and the technology team to put together a strategy for identifying documents for a particular purpose.” He adds, “so antitrust litigation, and Second Requests, for that matter, are already huge. They're already super expensive and they're getting bigger all the time. There'll still be room for specialists to evaluate the significance of some of the documents that are coming through.”
- Continued focus on Big Tech and Pharma. The big four tech companies have been under the FTC’s microscope recently. Epic Games v. Apple and the Washington D.C. Attorney General’s lawsuit against Amazon, just to name a couple, monopolized headlines last month. This scrutiny is likely to continue for the foreseeable future.
“I think healthcare and pharma industries are always big targets for both enforcement and reform proposals,” adds Tennis. “[These are] definitely areas where there has been a tremendous amount of enforcement interest and very quick developments of the law over the past decade or so to try to capture issues that are unique to those industries. So that's another area that is seen as being a really key area for antitrust enforcement going forward.”
Practical Considerations of Technology in Antitrust Litigation
With increased enforcement necessitating an accelerated adoption of technology in antitrust litigation, we asked our panel of experts to share their views on the practical considerations that accompany technology adoption.
Gaining the support of clients and stakeholders on leveraging technology in a case is critical. “It's a conversation you have to have with a client, but usually when you say, ‘I'll save you a million dollars and the results will be a lot better, a lot more defensible, and I’ll feel stronger about having done a thorough privilege review having used this technology,’ they come around,” shares Dryden.
Michaels agrees, sharing “in my experience, most clients are pretty eager to figure out a way to cut costs down substantially. [Those who] have gone through the Second Request process and people who have dealt with large antitrust civil litigations in the past are more so pushing the technology on outside counsel versus us pushing it on them. They recognize the value internally, whether they've used AI for internal purposes or they've used it in previous cases.”
“Privilege [identification] gets to one of the more central ethical considerations,” states Tennis, “which is the duty to protect the client's confidences, and that's something, of course, we take very seriously.”
As lawyers, Michaels points out, “we have an obligation to stay abreast of changing technology and to understand how new technology can both help and harm our clients.”
She also touches on another important issue lawyers must consider—oversight. “You can't hit a button and walk away. We have an obligation to supervise not only contract attorneys that are working under us but also discovery vendors to make sure that the process is working the way that it's supposed to be working.”
While these considerations may be roadblocks in the litigation process, our expert panelists agreed that the advantages of using technology in antitrust litigation far outweigh any potential negatives.
Watch “A New Doctrine for Trust-busting: The Evolving View on Antitrust Litigation” on-demand here.