Antitrust in focus - May 2024

U.K. finalizes new consumer, antitrust and digital markets regime

The Digital Markets, Competition and Consumers Act 2024 has finally been enacted. It introduces significant changes to the U.K. merger control and antitrust rules, establishes a new consumer protection regime and introduces a groundbreaking new digital markets regime.

In a landmark development, the Competition and Markets Authority (CMA) will be able to bring enforcement action against companies infringing U.K. consumer protection rules directly, without recourse to the courts. It will be able to impose fines of up to 10% of annual global turnover for infringements and there will be other heavy fines for procedural breaches.

The CMA has focused increasingly on online sales practices and the new rules introduce further restrictions on consumer businesses. Fake reviews will be added to the list of prohibited commercial practices. Hidden fees and unavoidable drip pricing will be prohibited. The rules safeguarding consumers from subscription traps will be tightened.

Overall, the CMA’s consumer enforcement powers are being brought into line with existing antitrust and merger control powers, meaning the rules have more teeth and we expect greater impact going forward.

You can find out more about the new consumer protection rules here.

The new digital markets regime will subject certain large digital firms to significant regulatory hurdles:

• Firms designated as having “strategic market status” (SMS) in relation to one or more digital activities by the CMA will be subject to tailored conduct requirements.
• The CMA will also be able to make “pro-competition interventions” to address factors underpinning the firms’ market power.
• SMS firms will be required to report certain M&A to the CMA, giving the authority greater visibility over deals in the digital sector.

The CMA will have the power to enforce the regime with fines of up to 10% of global turnover for non-compliance.

The regime is designed to be more “bespoke” than its EU equivalent, the Digital Markets Act.

Read more about the new digital markets regime here.

With respect to merger control, the CMA has updated its primary merger control thresholds for the first time since its creation.

A new threshold will enable the CMA to take jurisdiction more easily over non-horizontal mergers. This is seen as important given the increased focus on the potential for competitive harm from non-horizontal mergers that may eliminate or weaken an important potential competitor or strengthen a dominant position through an acquisition in a neighboring market.

The current turnover threshold will also increase (to GBP100 million) and there will be a new “safe harbor” for small mergers.

The Act introduces two amendments to the U.K. in-depth merger control review process:

• A new fast-track procedure is designed to speed up in-depth merger reviews.
• Merging parties will be able to agree an extension with the CMA, which could give more time for the consideration of complex remedies or help align the U.K. review timetable with parallel merger reviews in multi-jurisdictional deals.

With respect to antitrust, the CMA has been given tougher powers to investigate and enforce. In particular, an important expansion to the prohibition on anticompetitive agreements will bring in scope agreements implemented outside the U.K. that have effects within the U.K.

The CMA will gain more robust powers to gather evidence, including electronic data and information located overseas. The CMA will also get substantial new fining powers: up to 1% of annual turnover for companies failing to comply with a CMA investigation and up to 5% for breaches of remedies.

In market inquiries, there will be a greater focus on ensuring any remedies are effective, as well as procedural changes to give the CMA more flexibility.

Our key takeaways on the revisions to the antitrust regime tell you more here.

Businesses with operations in the U.K. – particularly those active in digital and consumer sectors – should begin preparing now to ensure they are in full compliance when the rules start to take effect, which is for the most part expected in stages from autumn 2024.

Federal Trade Commission’s case against PE firm dismissed but challenge to serial acquisitions continues

The U.S. Federal Trade Commission (FTC) made good on its promise to ramp up enforcement against PE funds and roll-up acquisitions when it filed its groundbreaking complaint in federal court against PE fund Welsh Carson and its portfolio company, U.S. Anesthesia Partners (USAP), in September 2023.

The FTC alleged that, through the acquisition of 17 anesthesiology practices over a ten-year period, together with price-setting and market allocation agreements, Welsh Carson and USAP violated Clayton Act Section 7 and FTC Act, Section 5 prohibiting monopolies, unfair methods of competition, and anticompetitive acquisitions. Read our alert for more commentary on the FTC’s claims.

However, fast forward a few months, and the FTC’s lawsuit has hit a hurdle.

On May 13, 2024, a District Judge dismissed the FTC’s claims against Welsh Carson. The district court ruled that the FTC failed to establish under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), (which governs the FTC’s ability to seek preliminary injunctions) that the PE firm is violating, or about to violate, the antitrust laws.

In particular, the judge looked carefully at Welsh Carson’s stake in USAP. While the PE firm set up USAP and established its initial strategy, by the time the FTC opened its investigation Welsh Carson held only around 23% of USAP.

The district court noted that the FTC had not cited a case in which a “minority, noncontrolling investor—however hands on—is liable under Section 13(b) because the company it partially owned made anticompetitive acquisitions”. According to the district court, such a reading “would expand the FTC’s reach further than any court has yet seen fit” and “expand liability to minority investors whose subsidiaries reduce competition”. The district court declined to follow this “novel interpretation”.

The ruling is a clear victory for Welsh Carson. Although it is generally non-binding, the ruling provides useful guidance for other PE firms, particularly those in the health care space.

But it does not mean that a PE firm will always escape being on the hook for the conduct of its subsidiary. Following the judge’s reasoning, it will depend, among other factors, on the stake held in the subsidiary in question and whether the PE parent has control.

The lawsuit is far from over. The FTC’s complaint against USAP will proceed and, in that respect, is a win for the agency and its enforcement efforts against serial acquisitions. The U.S. antitrust agencies continue to bolster their ability to scrutinize such deals, including through updated Merger Guidelines (setting out potential concerns over minority stakes and serial acquisitions) and imminent updates to the HSR filing form (likely requiring provision of greater information on fund ownership structures, cross directorships, and prior acquisitions).

Also this month, the FTC and DOJ jointly launched a public inquiry to help identify serial acquisitions and roll-up strategies that have led to consolidation that has harmed competition. The agencies are seeking information from the public on serial acquisitions in all sectors of the U.S. economy, including housing, defense, cybersecurity, distribution businesses, agriculture, construction, aftermarket/repair, and professional services markets. Responses submitted will inform the agencies’ priorities and future enforcement.

Welsh Carson, too, may face further action. The FTC is reportedly considering whether to bring a case against the PE firm through its in-house administrative process. It may also appeal the District Judge’s ruling.

Find out more about how PE deals are facing more rigorous antitrust scrutiny in our global trends in merger control enforcement report.

French Competition Authority uses antitrust rules to review below threshold mergers

The French Competition Authority (FCA) has, for the first time, examined M&A falling below French merger control filing thresholds.

It assessed whether a series of 21 asset swaps in the meat-cutting sector breached the prohibition on anticompetitive agreements. The authority looked closely at whether agreements between three market players amounted to an agreement to allocate the French meat-cutting market by geography.

Ultimately, the FCA decided that the transactions were not illegal. It concluded that there was no evidence of an overall plan to allocate markets, noting that the exchanges between the parties were merely preparatory discussions for the mergers. It also found that the merger agreements did not have an anticompetitive purpose.

The case was dismissed but is nevertheless important.

First, the FCA’s reliance on the European Court of Justice (ECJ)’s ruling in Towercast. This is significant—the Towercast judgment confirmed that Member State antitrust authorities can use abuse of dominance rules to assess deals falling below national merger control thresholds. However, the court was silent on the application of the rules on anticompetitive agreements in this context. The FCA therefore adopted a broad (and unprecedented) interpretation of the ruling.

The Towercast judgment has received specific attention in recent months. This follows the opinion given by an EU Advocate General (AG) in the Illumina/GRAIL appeal before the ECJ. Illumina and GRAIL are challenging the European Commission (EC)’s decision to review their transaction under the EC’s revised “Article 22 policy”, which provides that the EC can take jurisdiction over deals referred to it by Member State antitrust authorities where neither EU nor national merger control filings are required. The AG advised the ECJ to rule that the EC does not have the ability to review transactions under these circumstances—see our commentary on the AG’s opinion for further information.

If, in Illumina/GRAIL, the ECJ follows the AG’s opinion, it is likely that some antitrust agencies may instead rely on Towercast as a basis to review below-threshold transactions under antitrust behavioral (rather than merger control) rules. A wide interpretation of the Towercast ruling, i.e., as endorsing the use of rules on anticompetitive agreements as well as the abuse of dominance framework, would open many more deals to antitrust scrutiny.

Second, the timing of the FCA’s investigation is worrying for merging parties. The meat-cutting firms concluded the agreements in 2015. The authority launched its investigation in 2016, carried out dawn raids in 2017, and sent a statement of objections in 2022. It concluded its probe nine years after the transactions took place. This highlights the significant post-closing uncertainty faced by merging parties to deals that do not require merger control notification.

The focus on below-threshold deals is not unique to the EU. Across the globe we have seen antitrust authorities seeking additional merger control powers to review such transactions. Authorities that already have these powers have been using them. In China this month, for example, the antitrust authority has requested Synopsis to notify its purchase of Ansys.

You can read more about this trend in our latest report on global trends in merger control enforcement.

Revised Chinese antitrust guidance throws light on how companies can ensure compliance

Last month, China concluded a comprehensive revamp of its antitrust compliance guidance to reflect the newly amended Anti-Monopoly Law and recent antitrust enforcement practices.

The revised guidance provides welcome clarification on practices likely to breach antitrust prohibitions.

Significantly, it also formally introduces a “compliance incentive mechanism” under which companies may benefit from reduced penalties in return for adopting an effective antitrust compliance system.

Read our alert on the revised guidance for six key takeaways on how to avoid anticompetitive conduct and learn how you can establish an appropriately tailored antitrust compliance system.

U.K. government revises guidance on its approach to calling in acquisitions for national security review

The U.K. government’s section 3 statement sets out the factors that the Secretary of State expects to take into account when deciding to exercise the call-in power under the U.K. national security regime. A couple of years into the operation of the regime, the government has published an updated version.

There are several key amendments, including additional information on the approach the government takes to assessing risk.

Acquisitions involving the incorporation of a new entity: these will be considered for call-in if the incorporation includes a change of control over an existing asset or entity, e.g., the transfer of intellectual property in certain joint ventures or greenfield investment, or control over certain assets in new build energy infrastructure.

• Asset acquisitions: the guidance highlights an increasing focus by the Secretary of State on whether asset acquisitions allow the transfer of technology, intellectual property or expertise to an acquirer, or parties linked to an acquirer, which could undermine or threaten national security now or in the future. They will also consider whether the asset is subject to export controls.
• Sensitive targets: the target may be so sensitive, or have existing structures or security processes that raise national security risks, that the government will call in the acquisition regardless of whether the acquirer is U.K.- or foreign-based or if it is generally a low-risk acquirer, such as one that has previously been cleared through the national security review system.
• Linked parties: in addition to the characteristics of the acquirer, the Secretary of State will consider the intent and past behavior of linked parties, e.g., the source of the funds (including individual members of investment consortiums, the fund managers, and the ultimate beneficial owner) and “whether actors with hostile intentions are seeking to obfuscate their identity by funnelling investment through other companies or corporate structures”.
• Loans, conditional acquisitions, futures, and options: notably, the guidance no longer states that loans, conditional acquisitions, futures, and options are unlikely to be called in. It now says that such instruments will be considered as part of the control risk analysis. This change of emphasis might suggest that the government is alert to other ways in which hostile actors may seek to “obfuscate” their control over sensitive U.K. entities or assets.
• Acquirer’s country of origin: the Secretary of State will look at requirements placed on the acquirer by other entities or foreign governments to consider any political, military or state-backed influence or obligations. The statement notes that intelligence agencies of certain countries may compel organizations and individuals to carry out work on their behalf, share data and provide support, assistance and cooperation and this may raise a greater degree of national security risk where investors are from such countries. The guidance indicates that the Secretary of State does not regard “all” state-owned and sovereign wealth funds as inherently more likely to pose a national security risk, but where these entities have ties or allegiances to states or organizations hostile to the U.K., this will inform the Secretary of State’s risk assessment.
• Cumulative investments: the Secretary of State will consider risks presented by cumulative investments across different or related sectors, as well as within the same sector or supply chains. Notably the guidance provides that even where an acquirer is deemed low risk, a build-up of cumulative investment across sensitive areas of the economy may be called in for review to assess the national security risk of an acquirer’s influence over a broad sector. However, a history of passive or long-term investments, or voting rights being held by passive investors compared to direct owners, may be indicative of a lower risk profile in such circumstances.

The government has also updated various guidance on its investment screening powers. Most significant—and welcome—are revisions to the guidance for higher education institutions. There is also clarification on how the regime can apply to outward direct investment, e.g., when forming joint ventures overseas.

Less welcome is the government’s decision not to exempt transfers of control under automatic enforcement provisions in secured lending agreements from mandatory notification.

Further developments are on the horizon but, with the U.K.’s imminent general election, the scope and timing of these are now uncertain. The government had expected to consult this summer on updated definitions for areas of the economy subject to mandatory notification, including proposals for standalone semiconductor and critical minerals areas. Legislation providing for technical exemptions to the mandatory notification requirement—including the appointment of liquidators, official receivers, and special administrators—were intended to be laid before parliament in the fall. We will keep you posted.

Reforms to Australia’s foreign investment framework increase scrutiny while streamlining processes

The Australian Treasurer has announced a series of important changes to the Australian foreign investment regime. Alongside this, the Foreign Investment Review Board (FIRB) released an updated foreign investment policy document.

The reforms aim to strengthen the framework in some places and streamline it in others, while increasing transparency across the board. Most of the changes take immediate effect.

Aspects of the revised framework that will become tougher include:

• Greater focus on sensitive proposals: The government will put in place “more robust, more efficient and more effective arrangements”, as well as greater resources, to scrutinize complicated or higher risk proposals. A particular focus will be on foreign investment in critical infrastructure, critical minerals, critical technology, and involving sensitive data sets. Investment in close proximity to defense sites will also be closely examined.
• Greater compliance monitoring: We have already seen greater monitoring of compliance with conditions, and this will now increase further. FIRB will bolster its compliance team, including by upping Treasury’s capacity to undertake on-site visits (which is a new feature). The compliance team will support the use of the Treasurer’s call-in power to review investments that come to pose a national security concern in time.
• Examination of tax conditions: FIRB will release updated guidance about tax arrangements that will attract greater scrutiny. This continues a trend of FIRB engagement on tax matters.
• Aligning foreign investment process with other regulatory frameworks: The FIRB consultation process already involves other government agencies. Now, FIRB/Treasury will look to additional industry settings to ensure emerging risks are identified and managed. This includes enhancing energy network security, better managing and monitoring investments close to defense sites, and adopting the right settings in relation to critical minerals and critical technologies.

Several elements of the process will be streamlined, including:

• Faster approvals for known investors making investments in non-sensitive sectors and that have a good compliance record. In assessing whether an application is low risk, Treasury will consider the investor, the target, and the structure of the transaction. For these applications, consultation timeframes will be shortened. FIRB will also look to reduce paperwork for repeat investors where Treasury is informed early in the process that ownership information has not changed since the previous foreign investment application.
• A new target of processing 50% of cases within the initial statutory timeframe of 30 days from January 1, 2025. No doubt this will relate to the simpler cases and those streamlined above, but it is a welcome development.
• Fee refunds: FIRB will incentivize early applications by providing a fee refund where competitive bids are ultimately unsuccessful. This will likely address the current reticence to file early due to substantial fees for larger acquisitions.
• Removing unnecessary regulatory duplication in the assessment of antitrust issues: Treasury has indicated that it is looking to reduce overlap between antitrust issues in the FIRB process (which considers competition as part of its national interest assessment) and its proposed new merger reforms.

Please get in touch with your usual A&O Shearman contact if you would like to discuss the impact of the reforms on your business.

European Commission imposes heavy fine on Mondelēz for hindering cross-border trade

Food producer Mondelēz has been fined EUR337.5 million by the European Commission (EC) for restricting the cross-border trade of chocolate, biscuits, and coffee products within the EU.

The focus of the EC’s investigation was “parallel trade”, i.e., where traders buy products in EU Member States where prices are lower and sell them in Member States where prices are higher. This generally leads to greater competition and price reductions in the higher-priced jurisdictions.

The EC found that Mondelēz restricted parallel trade in two ways.

First, by engaging in anticompetitive agreements and concerted practices. In some cases, these limited the territories or customers to which certain wholesalers could sell Mondelēz products. In others, they blocked exclusive distributors from replying to sales requests from customers located in other Member States without Mondelēz’s permission. The EC found 22 separate infringements in total.

Second, by abusing a dominant position. The EC concluded that Mondelēz refused to supply a trader in Germany in order to prevent the resale of chocolate tablet products in certain jurisdictions where prices were higher. It also found that the company stopped selling chocolate tablet products in the Netherlands to prevent imports into Belgium, where Mondelēz was selling the products at higher prices.

Ultimately, said the EC, this conduct “artificially partitioned” the EU market, preventing price decreases in jurisdictions with higher prices and enabling Mondelēz to continue to charge more for its products.

It is not the first time the EC has sanctioned this type of conduct. Executive Vice-President Vestager commented that the authority has “a track-record of fighting territorial restrictions”, and that it is well-established that they violate EU antitrust rules. The EC took this, and the fact that Mondelēz’s conduct covered a large part of the EU and lasted for up to 14 years, into account when setting the fine.

It also considered Mondelēz’s cooperation during the investigation and its express acknowledgment of liability. This secured a fine reduction of 15% and prompted Vestager to herald the speed and efficiency benefits of the cooperation procedure.

The decision demonstrates the EC’s appetite to prevent unjustified barriers to cross-border trade, which it describes as among the most serious restrictions of competition.

It also shows the authority’s continued determination to enforce antitrust rules in the food industry, which Vestager notes is “an important part of the effort to ensure that consumers have access to lower prices, especially in times of high inflation”. The EC has several ongoing investigations in the sector (including food delivery services and energy drinks).

European Commission says wage-fixing and no-poach agreements will usually breach EU antitrust rules

The European Commission (EC) has become the latest antitrust authority to set out how it will analyze certain labor market practices.

In a policy brief the EC zeros in on wage-fixing and no-poach agreements. It considers such agreements to be akin to buyer cartels, noting that they will generally qualify as “by object” restrictions of competition (meaning that by their very nature they have the potential to harm competition). The EC explains how wage-fixing and no-poach agreements are unlikely to give rise to procompetitive effects.

The authority also acknowledges that in certain circumstances, targeted and limited no-poach agreements may qualify as “ancillary” to legitimate joint ventures or vertical supply agreements, and therefore fall outside the scope of the prohibition on anticompetitive agreements. However, the EC sets a high bar for such exceptions to apply, which may prompt companies to review existing non-solicitation clauses in supply and procurement contract templates.

In relation to non-compete obligations in employment contracts (i.e., vertical intracompany obligations rather than horizontal intercompany obligations between competitors), the EC adopts a different approach. It states that these clauses generally fall outside the EU antitrust rules. They should instead be assessed for compliance with national labor laws.

The EC’s position on wage-fixing, no-poach, and non-compete agreements is aligned with that of the U.K. Competition and Markets Authority (CMA). The CMA recently published a paper on competition in labor markets (see our commentary) and, last year, issued guidance to employers on how to avoid breaching U.K. antitrust rules.

Across the Atlantic, the U.S. antitrust agencies also have labor markets in their sights.

They have stepped up enforcement action against both wage-fixing and no-poach agreements in recent years. In contrast to the EU and the U.K., non-compete obligations have also been in the antitrust spotlight. Last month, we reported that the Federal Trade Commission issued a final rule to ban new non-competes in employment contracts on the basis that they amount to an unfair method of competition, though the rule is not yet in effect. Existing non-competes with most U.S. workers will be unenforceable, although they will remain in force for senior executives.

The overall landscape is one of increased antitrust scrutiny of labor market agreements. More enforcement action is expected.

How this will manifest itself in the EU is yet to be seen. While the EC is yet to adopt a decision concerning wage-fixing and/or no-poach agreements, the policy brief notes that the authority is “actively investigating leads”. It cites 2023 dawn raids in the online food delivery sector where suspected anticompetitive conduct includes a no-poach agreement.

Having said this, the EC acknowledges that most cases are likely to be dealt with by Member State antitrust authorities given that labor markets are often national, regional, or local rather than cross-border. Slovakia has provided a timely example—this month it opened its first investigation into a suspected labor market cartel involving an association of entrepreneurs—while the Portuguese competition authority has now formally accused a multinational technology consulting group of entering into no-poach agreements with rival companies following fines imposed on other market players in January and April 2024. Antitrust authorities in other Member States have also scrutinized labor markets in the past year, including Belgium, the Czech Republic and Poland.

In any event, guidance such as the EC’s policy brief is useful in helping employers operating across the EU to stay on the right side of the line.

New U.S. DOJ task force to identify and address antitrust problems in health care markets

The U.S. Department of Justice (DOJ) has announced the formation of a Task Force on Health Care Monopolies and Collusion (HCMC) to “identify and root out monopolies and collusive practices that increase costs, decrease quality and create single points of failure in the health care industry”.

The HCMC will consider what the DOJ refers to as “widespread competition concerns”. These are wide-ranging and relate to, for example, payer-provider consolidation, serial acquisitions, labor and quality of care, medical billing, health care IT services, and access to and misuse of health care data.

The task force’s findings will guide the DOJ’s policies and enforcement strategy in health care, facilitating advocacy, investigations, and any civil and criminal enforcement in health care markets.

The development is yet another reminder that health care currently tops the U.S. antitrust agenda.

In practice, we have seen persistent U.S. antitrust intervention in health care M&A. For example:

• Over the past six months, several deals have been abandoned following Federal Trade Commission (FTC) enforcement action, including Sanofi/Maze, a rare challenge to the acquisition of an exclusive license relating to a pipeline product with no sales.
• The FTC agreed a consent order in Amgen/Horizon Therapeutics, which the agency had litigated on the basis of a novel portfolio theory of competitive harm.
• The FTC has also challenged a roll-up strategy in relation to anesthesiology services—see our article above on this case.

The U.S. agencies are also seeking information on potential antitrust issues in health care markets:

• We previously reported on the DOJ, FTC, and U.S. Department of Health and Human Services’ joint public inquiry into PE and other corporations’ control over health care markets. Significantly, the inquiry covers transactions that fall below U.S. merger control reporting thresholds. The comment period has subsequently been extended to June 5, 2024.
• Last month, the agencies launched an online portal, HealthyCompetition.gov, for the public to report health care practices that may harm competition. FTC Chair Lina Khan predicts that it will bolster the agencies’ work to check illegal business practices harming consumers and health care workers.

With the establishment of the HCMC, businesses operating in the U.S. health care industry and adjacent sectors can expect even more scrutiny of their conduct and deals. Health insurers, health care providers, and PE firms should prepare for both U.S. antitrust agencies to continue to push novel forms of enforcement.

Sustainability initiatives given the green light in the EU

With the potential for antitrust authorities to take diverging approaches to the assessment of sustainability agreements under antitrust rules, we promised to keep you updated on developments—these are our top picks from the last couple of months.

In Germany, the Federal Cartel Office (FCO) has found that the introduction of a reuse system in the plant trade sector does not raise serious antitrust concerns. Euro Plant Tray, a cooperative of European companies active in plant growing and trading and of related industry associations, plans to replace single-use plastic trays to distribute potted plants with a shared reuse system for B2B transport.

The FCO has pointed to three aspects which were critical to its positive assessment of the project:

• First, coordination and the exchange of information between participants is limited to what is necessary to introduce and operate the reuse system. A neutral third party will collect company-specific, strategic data and participants can only access that data in an accumulated and aggregated form.
• Second, participation in the system is voluntary and open to all market participants at the different levels of the value chain. This includes companies that are not members of Euro Plant Tray. 
• Third, members are still free to use plant trays from other providers.

Elsewhere in the EU, the Netherlands Authority for Consumers and Markets (ACM) has allowed Dutch certifying organization Stichting Milieukeur (SMK) to introduce a sustainability fee for farmers.

SMK owns and manages the fruit and vegetable certification label On the Way to PlanetProof (OPP Label). It wants to introduce a scheme under which buyers will pay producers of products with the OPP Label a fee for the sustainability costs. The initiative will remove any uncertainty as to whether producers are compensated for production under the label and improve the business model for sustainable farmers.

Referencing its revised January 2024 guidelines on collaborations between farmers, the ACM concluded that the fee is not likely to restrict competition, has a clear sustainability objective, and will be unlikely to appreciably increase consumer prices. The authority also notes that farmers and supermarkets will continue to be free to determine their own prices and that the fee is only a small part of the price.

The ACM’s decision closely follows another sustainability initiative approval, this time in the e-commerce sector. Thuiswinkel—a Dutch trade association—plans to launch a new sector-wide non-profit sustainability standard for businesses that wish to reduce their environmental impact in areas such as product selection, packaging, and delivery.

As in the German decision, the voluntary nature of the standard was crucial to the ACM’s assessment. Other factors taken into account were the role of an independent organization to determine whether an online store meets the requirements for certification, participants being free to adopt additional sustainability measures, and Thuiswinkel guaranteeing that commercially sensitive information will not be exchanged.

Finally, to ensure consumers receive clear, complete, and concrete information on the sustainability benefits of products and services, participants will be required to communicate their sustainability efforts in accordance with the ACM’s guidelines on sustainability claims.

Still within the EU, the French competition authority has this month published a notice providing an “open door” policy for the provision of informal guidance on the compatibility of projects with a sustainability objective with antitrust rules. Given informal guidance letters will only be published with the requesters’ express agreement, it remains to be seen whether the process will serve any useful precedent value. The Portuguese antitrust authority has also issued a best practices guide for sustainability agreements, at this stage a draft for consultation.

Outside the EU, the Japan Fair Trade Commission is also at the forefront of thinking on green collaborations. In April it released an updated version of its guidelines on collaborations aimed at reducing carbon dioxide emissions. Revisions include the addition of sample scenarios of joint procurement and joint disposal of production facilities, and clarifications on the authority’s approach to assessing the pro-competitive environmental benefits of collaborations. We expect the authority to continue to update its guidelines, in line with market and business developments.

The European sustainable aviation fuel mandate and its impact on competition

The aviation industry is facing a transformative challenge to step up its efforts to reduce carbon emissions. A core component to achieving this is sustainable aviation fuel (SAF), which could reduce lifecycle CO2 emissions by up to 80%.

Following the EU’s adoption of the ReFuelEU Aviation Regulation late last year, aviation fuel suppliers, airlines, and airports are required to ensure that their uptake of SAF increases going forward.

These obligations are expected to have a major impact on the competitive dynamics in aviation markets. Find out how in our alert, which also discusses possible ways to alleviate antitrust concerns and further work by the European Commission that may lead to a revision to the Regulation.

Need to know: updates on U.S. antitrust litigation

Our Need-to-Know Litigation Weekly publication analyzes notable U.S. litigation decisions, orders and developments. From an antitrust perspective, we have featured the following cases over the past month:

• Eastern District of Virginia rejects allegations of fraudulent concealment and dismisses no-poach case as time-barred (read here)
• District of Nevada dismisses with prejudice price-algorithm suit against Las Vegas strip hotel operators and software company (read here)
• Second Circuit affirms dismissal of “pay for delay” case alleging patent litigation settlement between pharmaceutical company and generic manufacturers violated antitrust law (read here)
• NCAA proposes settlement to class action antitrust litigation (read here)

You can access Need-to-Know Weekly in full here. If you would like to be added to the distribution list, contact us at litigation_weekly@aoshearman.com.

A&O Shearman Antitrust team in publication

• Partner Kristina Nordlander is guest editor of the latest edition of the Competition Law & Policy Debate Journal (Volume 8: Issue 3, May 2024), which focuses on the theme of “deal uncertainty”. Read her editorial here. This edition also features an article by counsel Chris Best: “Jurisdictional convergence, remedial divergence: parallel post-Brexit reviews” (behind a paywall).
• Partner Hugh Hollman has interviewed the Egyptian Competition Authority Chairman about Egypt’s new merger control regime and the outlook for antitrust enforcement. Find out more—and access the interview — here.