Published: November 2016Contents
i) What are the hot topics?
a. There is considerable interest in how the US administration will handle enforcement and what impact, if any, this will have on global enforcement trends.
b. The role of big data in antitrust investigations and in merger control assessments is the subject of debate and is likely to gain importance as technical advances continue to expand the possibilities for data accumulation, such as through new voice activated technologies and the internet of things.
c. Emerging new guidance on IP and antitrust in the US and in Asia has the potential further to inform the balance of IP protections against antitrust enforcement – the Federal Trade Commission and Department of Justice issued updated Antitrust Guidelines for the Licensing of Intellectual Property in January 2017, and IP and antitrust guidelines in China and Japan are under revision.
ii) Tell us about any key legal developments – recent or pending – and their international impact.
a. IP licensing – including licensing of FRAND-encumbered standard essential patents – continues to be an area of key antitrust development globally. Following the Huawei judgment by the Court of Justice of the European Union in 2015, authorities in other jurisdictions like China and India are considering similar issues. Several open antitrust questions remain surrounding FRAND licensing, and these questions are the subject of evolving legal developments across the globe.
b. There appears to be a trend toward increasing scrutiny of prices of IP protected products in particular in the pharmaceutical sector. The UK's Competition and Markets Authority and the Italian competition authority have been active in bringing excessive pricing cases against pharmaceutical companies in 2016, suggesting a stricter approach to antitrust enforcement in excessive pricing cases may be on the horizon.
c. Recent developments in the US and EU augur a rise in private enforcement against cartel participants, which is likely to have an international impact on applications for leniency, possibly undermining incentives to apply for leniency. The DOJ published revised FAQs regarding its leniency programme in January 2017, pointing to stricter disclosure requirements for leniency applicants and increasing unpredictability of a favourable outcome. In the EU, the Damages Directive is expected to be implemented by all Member States in 2017. While the Damages Directive seeks to ensure that damages actions do not deter applications for leniency, there has already been an increase in follow-on damages claims against immunity applicants throughout 2016.
iii) What are the biggest opportunities and challenges for practitioners and clients?
a. The biggest challenges overall are likely to relate to navigating the unpredictable changes that will be brought about by protectionist rhetoric, the preparations for Brexit and antitrust implications of the policy shifts ushered in by the new US administration.
b. For IP and antitrust specifically, a significant challenge will relate to the evolving landscape of the assessment of IP and innovation capacity in mergers. The German transaction value threshold could make it more difficult to acquire ‘pure’ IP that has not yet been commercialised. The impact of this challenge would of course be exacerbated if the EU were also to adopt a transaction value threshold. Also, the focus on innovation in merger control means that overlaps in R&D are being scrutinised more closely, even where the overlap relates to potential or future R&D in the sector as a whole, rather than to individual products already under development. Again, this could make it more challenging for companies successfully to acquire innovation capacity through M&A.
c. While Brexit will bring some challenges, as noted, companies may find that some opportunities also emerge in light of changes to the regulation landscape. For example, there will potentially be more freedom for the UK to grant subsidies for strategically important industries, and there may generally be scope for some divergence from substantive EU competition law, for example, towards a more permissive US-style approach to abuse of dominance.
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