Apr 04, 2024 View in Browser

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Tracking Key Shifts in the Legal Ecosystem

Each week, the Law.com Barometer newsletter, powered by the ALM Global Newsroom and Legalweek brings you the trends, disruptions, and shifts our reporters and editors are tracking through coverage spanning every beat and region across the ALM Global Newsroom. The micro-topic coverage will not only help you navigate the changing legal landscape but also prepare you to discuss these shifts with thousands of legal leaders at Legalweek 2025, taking place from March 24-27, 2025, in New York City. Registration will be opening soon.

The Shift: Everyone Wants a Bite of Apple

 

There is no doubt that companies are on high alert in regards to the current antitrust climate, but Apple, Inc. is certainly one of the largest companies under a global regulatory enforcement juggernaut.

 

In the U.S., the Department of Justice filed an antitrust suit accusing Apple of obstructing competitors from accessing the iPhone’s software and hardware features. In addition, there are two class actions filed against Apple in the Northern District of California, and one in the District of New Jersey, that mirror the DOJ’s claims that the company hinders other software developers’ efforts to create products for iPhone users. In the EU, the European Commission is investigating whether the company is complying with the EU’s new Digital Markets Act, which regulates many aspects of digital services.

 

The Conversation

 

One of the most significant conversations around the Apple antitrust litigation is about the choice of venue.

 

“The important thing about this case [against Apple] is that it’s filed under the monopolization provision [of the Sherman Act], which means it’s challenging unilateral conduct and not an agreement,” said Herbert Hovenkamp, an antitrust professor at the University of Pennsylvania Carey Law School.

 

“The Third Circuit is probably the best place to do it,” he added. “A district judge looks at the case law in his or her circuit first … and so that’s what I would expect will happen in this case. It will follow the Third Circuit law and Third Circuit law has been a bit of an outlier in favor of plaintiffs on these particular issues.”

 

Thomas Arthur, an Emory University School of Law antitrust professor, said the Dentsply and 3M cases are fair reasons the DOJ may have filed in New Jersey.

 

“I think the department probably feels comfortable in the Third Circuit with a case that has some of this sort of exclusionary aspect,” Arthur said.

 

In the late 1990s, the DOJ accused Microsoft of making it challenging for consumers to install competing software on Windows computers. That case was filed in federal court in Washington, D.C.

 

Hovenkamp said D.C. would have been another logical venue since the Apple case is “patterned after Microsoft.”

 

Bruce Sokler, an antitrust attorney at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, agreed, saying, “The Microsoft case proves you can go too far and hence violate the law if you impact competition.”

The Significance

 

The big question is what does this mean for the future of acquisitions for Big Tech?

 

The DOJ has been examining Apple’s interactions with other tech firms seeking to bring their products and services to the iPhone for years, dating back to the Trump administration. However, competition experts say the fact that the agency is now bringing the case demonstrates that the Biden administration appointees at the DOJ and FTC are pursuing antitrust enforcement more aggressively than any administration in decades.

 

In addition, a litany of prominent companies, including Epic Games, PayPal, Tile and Spotify, has complained that Apple employs tactics that unfairly disadvantage outside software developers.

 

However, there is also state support for the federal litigation. In fact, fifteen state attorneys general and the District of Columbia have joined with the DOJ in filing the suit.

 

Although this is creating headaches for companies, on the flip side it also means an increase in work for firms. 

 

Late last month, we reported that Apple tapped Kirkland & Ellis to represent it in the landmark antitrust lawsuit. The firm has been growing its already substantial competition and markets practice, which is loaded with former government regulators. The practice works closely with Kirkland’s M&A practice, which in 2023 ranked No. 1 for deal value in the Dealogic and London Stock Exchange Group year-end league tables, with the firm advising on 644 transactions worth more than $400 billion globally.

 

In addition, two Justice Department antitrust leaders have recently joined law firms as they ramp up their antitrust practices to meet demand.

 

The Information

 

Want to know more? Here's what we've discovered in the ALM Global Newsroom:

  • Judge Lets EEOC's Race-Bias Suit Against Tesla Proceed, Tossing Aside Claims of 'Factual Vacuity'
  • Feds Jump Into Algorithmic Pricing Suit, Say Collusion Can Occur Without Humans Uttering a Word
  • Which Law Firms Got the Work? Disney, Netflix, Sony File Mass Suit
  • Child Labor Probe Hammers Tennessee Factory, Highlighting Risks to Employers From Feds' Stepped-Up Enforcement
  • Biden Administration Mandates New AI Safeguards for Federal Agencies
  • 'Building Guardrails': Adobe's AGC on Legal's Responsibility in Generative AI

 

The Forecast

 

For where this might head, we could look at The European Commission’s actions—who has launched five noncompliance probes into American tech giants Apple, Meta and Alphabet—the bloc’s first investigations under its newly-implemented Digital Markets Act.

 

The Commission’s probes will look into whether Apple and Google-owner Alphabet unfairly favor their own app stores and whether what regulators call Meta’s “pay or consent” subscription model violates the new act.

 

The European Union’s Digital Markets Act (DMA) is an antitrust law imposing new rules on tech giants classified as “gatekeepers”—for providing a gateway between business users and consumers—to ensure open markets. Could this be foreshadowing on where the U.S. legislation could head?

 

With this being an election year, things in the antitrust world may see a seismic shift in priorities with a regime change in November. But that may not be calming the nerves of growing Big Tech companies that are currently in regulators' crosshairs.

 

Heather D. Nevitt is the Editor-in-Chief of Corporate Coverage, Corporate Counsel and Global Leaders in Law at ALM. Email her at hnevit@alm.com and find her on Twitter @HeatherDNevitt 

 

 

 

 

 
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