November Antitrust Bulletin

November 1, 2017

Trump Announces Two Federal Trade Commission Nominees

On Oct. 19, President Trump nominated Joseph J. Simons to be the next Federal Trade Commission chairman. If confirmed, Simons would serve a full seven-year term and replace acting Chair Maureen Ohlhausen.

Simons led antitrust enforcement as director of the Bureau of Competition from 2001 to 2003, during which time the bureau produced a record number of nonmerger enforcements. Simons currently co-chairs the antitrust group at Paul, Weiss, Rifkind, Wharton & Garrison and co-developed the “critical-loss analysis” technique, which was applied in a number of court decisions and implemented in Department of Justice and FTC merger guidelines. Simons received degrees in economics and history from Cornell University in 1980 and graduated cum laude from Georgetown University Law Center in 1983.

The president also nominated Rohit Chopra, a senior fellow at the Consumer Federation of America, to fill one of three vacant seats on the FTC. An expert in financial services, Chopra served as assistant director of the Consumer Financial Protection Bureau from 2010 to 2015. Chopra was then appointed as the Treasury Department’s student loans ombudsman and later served as special adviser to the secretary of education. If confirmed, Chopra would serve the remainder of a seven-year term set to expire in September 2019. Chopra graduated from Harvard College and received his MBA from the Wharton School at the University of Pennsylvania.

Senate Confirms Makan Delrahim to Lead Antitrust Division

On Sept. 27, the Senate confirmed Trump nominee Makan Delrahim to be the next U.S. assistant attorney general for the Antitrust Division. Delrahim previously served as the White House deputy counsel under Trump and as deputy assistant attorney general under President George W. Bush. Delrahim is expected to oversee several key mergers while heading the Antitrust Division and is an experienced antitrust lawyer, especially in the areas of international trade and technology. He worked under U.S. Sen. Orrin Hatch (R-Utah) as counsel to the Senate Judiciary Committee and served on the Antitrust Modernization Commission. Delrahim received a degree in kinesiology from the University of California, Los Angeles, and is a graduate of the George Washington University Law School.

Supreme Court to Hear American Express Anti-Steering Case

The U.S. Supreme Court announced on Oct. 16 that it would hear Ohio v. American Express, a case decided by the U.S. Court of Appeals for the 2nd Circuit in September 2016. The case concerns American Express’ nondiscrimination provisions, which the DOJ asserted were anti-competitive mechanisms that prohibited merchants from steering consumers to other credit cards. Although the DOJ won the trial in the District Court, the 2nd Circuit reversed.

In June 2017, 11 states filed a petition for writ of certiorari, asking the Supreme Court to clarify the rule of reason and contending that the burden of proof was on Amex to show the pro-competitive benefits of the nondiscrimination provisions because of the two-sided nature of the credit card market. In August, the DOJ took an unusual action in filing a brief that sides with the states while simultaneously urging the Supreme Court not to review the case. An argument date for the case has not yet been set.

Supreme Court Calls for Views of Solicitor General in Apple Inc. v. Pepper

During its Oct. 6 conference, the Supreme Court called for the views of the solicitor general in Apple Inc. v. Pepper, signaling potential interest. Since the 1977 Illinois Brick decision, the Supreme Court has held that only direct purchasers who are the immediate victims of anti-competitive conduct can seek antitrust damages, a doctrine complicated by the role of Apple as a marketplace sponsor for apps in the App Store.

Breaking with a decision by the U.S. Court of Appeals for the 8th Circuit in a similar case, the 9th Circuit reversed the lower court’s decision and held that Apple was a direct distributor of iPhone apps to its purchasers, not merely in “the chain of manufacture or distribution.” It therefore held that plaintiff Robert Pepper had standing to sue Apple over its 30 percent commission fee and alleged attempt to monopolize the market for apps. Apple petitioned for a writ of certiorari in August, but the Supreme Court is awaiting the solicitor general’s brief expressing the views of the United States.

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