I. Antitrust

A. Developments in Telecommunications, Cable, and the Internet

1. Google Continues to Fight Numerous Antitrust Lawsuits

Google has continued to face extensive antitrust legal challenges, and several ongoing lawsuits are expected to continue. In December 2023, Google agreed to pay $700 million and implement modifications to its Play Store as settlement for an antitrust lawsuit. The lawsuit accused the Play Store of operating as an unlawful monopoly. A separate lawsuit filed by Epic Games, the developer of Fortnight, played a pivotal role in the resolution. The litigation from Epic Games resulted in the determination that Google violated antitrust regulations by leveraging its monopoly power in promoting Android apps and in-app billing services. This leveraging negatively impacted competition and unlawfully tied its Play Store to “Google Billing Services.” Additionally, the states alleged that Google imposed fees of fifteen to thirty percent on app purchases, resulting in annual profits significantly exceeding what would be possible in a more competitive market.

Epic Games, the U.S Department of Justice (DOJ), and state attorney generals have all brought cases against Google signaling widespread antitrust concerns. On August 4, 2023, U.S. District Judge Amit P. Mehta ruled the DOJ’s allegations that Google anticompetitively monopolized online search and search advertising were sufficient to overcome summary judgment and proceed to trial. Specifically, the DOJ alleges that Google’s web of contracts with phone makers like Samsung, developers like Mozilla and Apple, and wireless carriers like Verizon have given its search engine a monopoly in violation of federal antitrust laws. While Judge Mehta rejected the DOJ’s attempt to aggregate all of Google’s conduct, irrespective of whether it was anticompetitive or not, he found at least one “genuine dispute of material fact as to whether Google’s browser agreements are, at least, de facto exclusive.” The company and DOJ recently completed closing arguments following a lengthy bench trial. Google has two additional trials scheduled by the DOJ and a state attorney general regarding its involvement in display advertisement. A New York federal judge also rejected a number of claims but held that Google must continue to face other claims from publishers and advertisers.

2. Amazon Antitrust Litigation

On September 26, 2023, the Federal Trade Commission (FTC), alongside seventeen states in the Western District of Washington, filed a lawsuit against Amazon, alleging antitrust violations. These violations were purportedly linked to policies penalizing sellers for offering lower prices on other platforms and mandates allegedly coercing merchants to utilize specific logistics services. Alongside the complaint, enforcers submitted a pair of notices detailing various cases and enforcement actions that had been pending previously. These practices involve allegedly manipulating Amazon search results. Similarly, in the United Kingdom, Amazon has come under scrutiny for its method of product selection, particularly how it decides which products are showcased. The FTC noted a lawsuit filed in November 2022 in the Southern District of New York by consumers from multiple states under state antitrust and consumer protection laws. This lawsuit also targeted a specific policy that allegedly restricted sellers from offering lower prices.

In February 2024, two consumers initiated legal proceedings against Amazon through a proposed class action lawsuit. The suit alleges that millions of customers were charged excessive prices for items due to Amazon’s manipulated algorithms, which favored the sales of its own retail products and those of third-party sellers engaged in its fulfillment service. Amazon has a range of lawsuits alleging unfair business practices, potentially impacting the technology industry.

3. Apple Monopolization Litigation

The U.S. Court of Appeals for the Ninth Circuit declined to resurrect an antitrust lawsuit against Apple filed by a competitor app store developer. SaurikIT owns the Cydia app distribution that sued Apple in 2020. SaurikIT alleged that the technology giant blocked alternative app stores and required the use of its own app payment systems in order to monopolize the market for app distribution. The Ninth Circuit panel concurred with the district court decision, stating that the technology policies preventing the installation of alternative app stores on iPhones do not constitute new conduct that would reset the four-year statute of limitations.

Apple constantly designs and innovates new technological products and features. This innovation was subject to a lawsuit in 2021 when AliveCor claimed that Apple was illegally blocking it from the marketplace of smartwatches. AliveCor alleged that Apple was inspired by AliveCor’s products innovation and design. AliveCor also filed a similar patent suit. In February 2024, a California federal judge sided with Apple and rejected AliveCor’s argument that the development of Apple Smart Watches was anticompetitive.

On March 20, 2024, a California customer proposed a class action lawsuit alleging that Apple’s restrictions on third-party cloud storage services violates anti-tying laws and contributes to price inflation through unlawful monopoly. The lawsuit contends that any storage service of backing up iPhone photos and videos should be allowed to be used for the “restricted” data that Apple prevents from being backed up elsewhere. The California federal judge certified the class of consumers and found that they met the requirements of a class action.

The DOJ completed its final prong of antitrust technology enforcement actions on March 21, 2024. Specifically, DOJ and numerous state attorney generals filed an antitrust lawsuit against Apple, alleging that the company maintains an anticompetitive monopoly through its control over the iPhone. The lawsuit alleges that Apple imposes limitations on its App Store and developer agreements to stifle competitive alternatives, while also charging app developer commissions up to thirty percent. The states claim Apple hampers the functionality of non-Apple smartwatches, thereby restricting third-party digital companies and driving competitors out of the market.

4. District Court Rejects FTC’s Challenge to Microsoft-Activision Merger

On July 11, 2023, the U.S. District Court for the Northern District of California refused the FTC’s request for a preliminary injunction to block the proposed merger between Microsoft and gaming developer Activision Blizzard, rejecting nearly every aspect of the FTC’s challenge to the merger. A key dispute surrounding the proposed merger stemmed from the FTC’s allegations that the new combined entity would restrict the availability of Activision’s popular game—Call of Duty—to owners of Microsoft’s Xbox gaming console, harming potential users of a Sony PlayStation or Nintendo Switch. However, the court soundly rejected this argument because, while Microsoft may theoretically have the “ability” to foreclose competition, the court found no incentive and no factual evidence to support that Microsoft actually intended to do so. Further, the court found that the proposed merger may actually result in increased availability of Activision’s content on cloud-streaming services, which would “enhance, not lessen, competition in the cloud-streaming market.” The court also rejected the FTC’s proposed burden that it only need to show the merger could harm competition, instead finding that the Clayton Act required the FTC to show that competition would be “substantially” harmed.

5. DOJ Opens Investigation Against RealPage for Alleged Online Data Sharing

In November 2023, the DOJ initiated an investigation into RealPage and major landlords for suspected algorithmic price fixing, allegedly breaching the Sherman Act. RealPage, a software utilized for gathering data from property owners and managers to facilitate pricing strategies, is under scrutiny. The inquiry stems from concerns surrounding the 2017 merger between RealPage and its primary competitor. The DOJ asserts that the algorithms, serving as conduits for data sharing, pose a heightened threat to competition. RealPage is being accused of collaborating to incorporate confidential pricing and supply data into these algorithms, influencing pricing decisions. The DOJ contends that RealPage was aware of and anticipated such practices among its competitors. RealPage refuted these allegations.

B. Developments in Utilities, Electrical Power, Nuclear, and Renewable Energy

1. Texas Court Rulings Continue in Winter Storm Fallout

In March 2023, a Texas appeals court held that the Public Utility Commission of Texas overstepped when it capped the price of energy at $9,000 per megawatt-hour in the first days of Winter Storm Uri in 2021. The panel found that “[i]n extreme circumstances under extraordinary pressure, the commission exceeded its power by eliminating competition entirely.” The court’s order directs the Commission to reprice transactions that occurred under the pricing order, which may have overcharged electric companies by $16 billion and forced some companies into debt and bankruptcy. If left standing, the court’s order would effectively mean that the Commission cannot place a market cap on electricity and must let the price be determined by market competition. The decision has been appealed to the Texas Supreme Court.

C. Developments in Transportation

1. Airline Merger Grounded

On May 19, 2023, a Massachusetts federal court struck down the proposed “Northeast Alliance” between American Airlines and JetBlue Airways, finding that it improperly stifled competition in an already heavily consolidated airline industry. The court issued the decision in favor of the DOJ and enforcers from six other states, finding that the proposed Alliance “is just the sort of ‘unreasonable restraint on trade’ the Sherman Act was designed to prevent.” Specifically, the court wrote that “there is simply no credible evidence that American and JetBlue have continued to treat each other as competitors” and any claimed benefits arising from the Northeast Alliance simply come from “a naked agreement not to compete with one another.”

Although not technically a merger, the proposed Northeast Alliance entailed code-sharing, slot swaps, new international and domestic routes, and better schedules that both airlines claimed would benefit travelers in the greater Boston and New York areas. In early 2021 at the tail end of the Trump administration, the Department of Transportation (DOT) approved the proposed Alliance after securing commitments from both airlines to divest routes and slots at airports in New York and Washington, D.C. However, the Biden-era DOT reversed course, issuing a statement that there was “no divergence between the [DOT] and the [DOJ] when it comes to promoting competition in the airline industry” and rejecting the suggestion by the airlines that it came to a different conclusion than the DOJ regarding the Northeast Alliance as “not true.”

After the May 19, 2023, decision, JetBlue announced it would be pulling out of the Alliance and would not appeal the court’s decision. American, however, announced its intent to “move forward with an appeal” based on its “belief that the [Northeast Alliance] has been highly pro-competitive and that an erroneous judicial decision disregarding the [Alliance’s] consumer benefits has led to an anticompetitive outcome.”

2. JetBlue Continued Attempts to Appease Regulator Concerns over Spirit Acquisition

Aside from its dealings with American Airlines, JetBlue struck yet another deal aimed at fixing concerns raised by DOJ and state enforcers over its planned $3.8 billion purchase of Spirit Airlines by agreeing to unload Spirit’s operations at airports in Boston and New Jersey to Allegiant. This deal proposed to transfer gates and ground facilities in Fort Lauderdale to Broward County for use by Allegiant. In January 2024, the DOJ successfully blocked the proposed $3.8 billion merger of JetBlue-Spirit Airlines. Following the U.S. District Court for the District of Massachusetts’s decision enjoining the merger, JetBlue and Spirit Airlines appealed to the U.S. Court of Appeals for the First Circuit. JetBlue and Spirit argued that the merger was not anticompetitive and was good for consumers; however, the parties ended their pursuit of the merger in March 2024 because the parties said they were unlikely to meet the closing conditions required in the agreement before resolution of their appeal.

3. Norfolk Southern Denied Immunity from Antitrust Claims in Railroad Dispute

On June 30, 2023, a U.S. Court of Appeals for the D.C. Circuit panel affirmed the finding of the Surface Transportation Board (STB) that Norfolk Southern Railway Co. was not immune from antitrust claims brought in the Eastern District of Virginia by CSX Transportation Inc. regarding a small railroad that both companies own in southern Virginia. Specifically, CSX alleges that Norfolk Southern and its parent company conspired to impede CSX’s access to the railroad’s main switching terminal. Norfolk Southern moved to dismiss the case based on the Interstate Commerce Act’s corporate-family exemption, which provides antitrust immunity to companies within the same corporate family for certain transactions. The STB determined that neither Norfolk Southern nor its parent company was ever granted “control authority” over the switching terminal and, thus, could not claim immunity from the suit. On appeal at the D.C. Circuit, the panel held that the STB correctly applied federal law when finding that Norfolk Southern’s parent company was never granted control authority over the railroad when it acquired a majority interest in it in 1982 and, thus, antitrust immunity was not available. Because control authority cannot be argued retroactively, Norfolk Southern is now prohibited from arguing that it is immune from antitrust claims under the Interstate Commerce Act’s corporate-family exemption. CSX’s case is pending appeal to the U.S. Court of Appeals for the Fourth Circuit.

D. Developments in Oil and Gas

1. Shale Oil Producers and OPEC Face Collusion Lawsuit

In 2023, eight of the largest shale oil producers in the country faced antitrust lawsuits in Nevada federal court, alleging that they conspired with Organization of the Petroleum Exporting Countries (OPEC) to maintain high gas prices. Consumers claim that these U.S.-based shale producers are bound by the Sherman Act. The proposed class argued in court that amidst the “economic turmoil” triggered by the pandemic, both the defendants and OPEC indicated a readiness to cease the price war and competition for market share. The case is still ongoing, but seeks to set a precedent for the gas industry.