Two-minute Recap of Competition Law Matters Around the Globe - August 2024

A Digital Divorce? Google may be forced to divest Android, Chrome, and AdWords

The U.S. Department of Justice (DoJ) is reportedly exploring a range of potential remedies for Google’s anti-competitive practices, including a potential break-up, following a recent court ruling that found the company to be abusing its dominance in search and text advertising. The DoJ is considering the divestiture of Android, Chrome or AdWords (formerly known as Google Ads). It is also examining the possibility of forcing Google to share more information with competitors and implementing measures to prevent it gaining an unfair advantage in AI. These developments highlight the ongoing scrutiny faced by tech giants and the potential of significant antitrust actions to reshape the competitive landscape.

Dutch banks allowed to collaborate on sustainability reports

The Netherlands Authority for Consumers and Markets (ACM) has approved cooperation between banks concerning sustainability reports. The Dutch authority found no negative consequences and concluded that the

collaboration would allow investors to make more sustainable choices. The collaboration involves banks working together on a data project to explain sustainability criteria and develop common interpretations. The ACM’s approval is based on its assessment that the collaboration is voluntary, does not involve the exchange of sensitive information, and uses objective sources for the common interpretation of ESG criteria.

FTC’s Non-Compete Ban Bites the Dust

A federal court in Florida has granted a preliminary injunction blocking the implementation of the Federal Trade Commission’s (FTC) ban on the use of non- compete agreements. The rule, aimed at reducing barriers to job mobility and fostering competition, was met with significant opposition from businesses and industry groups. The court’s decision represents a setback for the FTC’s efforts to curtail the use of non-compete agreements, which are often criticized for limiting worker mobility and stifling innovation. The court ruled that the FTC likely exceeded its authority in enacting the rule and that it would cause irreparable harm to businesses. This decision marks the second preliminary injunction against the enforcement of the new non-compete rule.

Mexico President’s Power Grab

A sweeping constitutional bill, submitted by the president in February and aimed at abolishing various institutions, has been approved by lower house committees of Congress in Mexico. Among those set to be abolished are the Mexican Competition Authority (COFECE), the Telecommunications Authority (IFT), and the Energy Regulatory Authority (CRE) as well as other regulatory agencies for various sectors. The bill could enter into force in the next few months.

UK Investigations into App and Play Stores takes next step

The UK’s Competition and Marketing Authority (CMA) has closed its investigations into Google’s Play Store and Apple’s App Store arising from a 2022 mobile ecosystems market study regarding Google’s alleged abuse of dominance and concerns raised in 2021 regarding Apple’s App Store policies restricting alternative app stores and browser engines. After rejecting Google’s commitments to allow app developers to use alternative payment systems on Play Store, CMA decided to assess both companies’ app distribution policies under the new Digital Markets, Competition and Consumers Act which is expected to come into force later this year. If one or both of Google and Apple are determined to have “strategic market status”, the new law will allow the CMA to conduct investigations with enhanced powers including increased flexibility for dawn raids, more flexibility in defining the scope for market investigations, and requiring businesses to test proposed remedies.

CMA’s AI Watchlist Grows: Amazon- Anthropic deal under investigation

Also in the UK, the CMA has formally opened an investigation into Amazon’s USD 4 billion investment in Anthropic and announced a 4 October 2024 deadline for referral of the case to a Phase 2 investigation. This is the second AI partnership to be probed under its merger rules following its investigation into Microsoft’s investment in Inflection. The CMA also expressed interest in Anthropic’s USD 2 billion partnership with Google.

Judge overturns decision ordering the NFL to pay USD 4.7 billion in damages

In our June 2024 issue, we mentioned that the U.S. National Football League (NFL) faced over USD 4.7 billion in class-action damages for charging subscribers to its “Sunday Ticket” broadcast inflated prices. In August, the U.S. District Court for the Central District of California overturned the verdict against the NFL, finding that the evidence presented did not support the jury’s conclusion that the NFL had restricted the availability of the package and inflated prices.

CMA provisionally approves the deal including a failing firm defence

Returning again to the UK, the CMA is now likely to approve T&L Sugars’ acquisition of Tereos’ UK packing and distribution site and business- to-consumer activities after accepting a failing firm defence. The CMA had initial concerns regarding the deal’s impact on competition in the UK sugar market as the vast majority of sugar is supplied by only three major players. However, the evidence showed that Tereos had been incurring losses for a long time leading the CMA to provisionally approve the deal after concluding that its UK retail business would have likely closed without the acquisition.