Antitrust

S H E A R M A N & S T E R L I N G L L P | 1 5 rather than by court order following prolonged litigation. For many vertical mergers, government enforcers are willing to accept behavioral remedies, such as agreements to modify business practices. In certain cases, structural remedies such as divestitures are required, but attempts to block vertical mergers entirely are exceedingly rare. Here, however, Time Warner offered — and the DOJ rejected — a behavioral remedy in the form of an agreement to arbitrate pricing disputes between the company and distributors, similar to an arbitration commitment the DOJ accepted in the 2011 Comcast/NBCUniversal merger. Despite AT&T's victory, the case indicates both the DOJ's willingness to challenge vertical mergers, and that an enforcer or private plaintiff might still succeed in challenging a merger without putting forth a quantitative model predicting that the merger will lead to price increases. REVISITING CONSENT DECREES As another example of the DOJ's preference for and focus on structural remedies, in early 2018 AAG Delrahim announced several provisions that the DOJ will include in consent decrees going forward that are intended to make the decrees more easily enforceable and less regulatory in nature. 5 The DOJ will now include provisions in consent decrees that establish that consent decree violations may be proven by a preponderance of the evidence, rather than by the more stringent clear and convincing evidence standard. The DOJ will also include provisions that will allow the government to seek an extension of the consent decree term if a court finds a violation of the decree, and that will require defendants to reimburse the government for costs related to successful enforcement. Additionally, the DOJ can now terminate consent decrees after providing notice to the court and to the defendants. Separately, the DOJ has announced an initiative to terminate outdated legacy antitrust judgments that no longer serve their intended purpose to safeguard competition in light of industry, economic and legal changes. 6 To aid in fostering compliance with and enforcement of existing consent decrees, the DOJ announced the creation of an Office of Decree Enforcement. These changes reflect AAG Delrahim's view that the Antitrust Division is an enforcer of the antitrust laws rather than an industry regulator. TARGETING NO-POACH AGREEMENTS In early 2018, the DOJ highlighted so- called 'no-poach' agreements as an enforcement priority. 7 The DOJ clarified that naked no-poach agreements — that is, agreements between firms not to hire each other's employees, when the firms are not parties to a legitimate collaboration — are per se unlawful, as they eliminate competition among employers for labor. N A K E D N O - P O A C H A G R E E M E N T S A R E P E R S E U N L A W F U L CONTINUED > 1. Makan Delrahim, Assistant Attorney General, U.S. Dep't of Justice, Keynote Address at American Bar Association's Antitrust Fall Forum (Nov. 16, 2017). 2. See U.S. v. AT&T, Inc., 310 F. Supp. 3d 161 (D.D.C. 2018). 3. U.S. v. AT&T, Inc., 916 F.3d 1029 (D.C. Cir. 2019). 4. Id. at 1045. 5. Makan Delrahim, Assistant Attorney General, U.S. Dep't of Justice, Remarks to New York State Bar Association (Jan. 25, 2018). 6. Press Release, U.S. Dep't of Justice, Department of Justice Announces Initiative to Terminate "Legacy" Antitrust Judgments (April 25, 2018). 7. Andrew Finch, Principal Assistant Attorney General, U.S. Dep't of Justice, Remarks at Heritage Foundation (Jan. 23, 2018).

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