Latest news with #ClaytonAct
Yahoo
2 days ago
- Business
- Yahoo
The Lone Star State — and Trump — versus BlackRock
The Trump administration has waded into a politically charged Texas-led legal fight to dilute US financial giants' alleged influence over corporate America. Last week, the US Justice Department and the US Federal Trade Commission filed a joint "statement of interest" siding with Texas Attorney General Ken Paxton and 10 other Republican-led states in an antitrust case against trillion-dollar asset managers BlackRock (BLK) and its rivals State Street (STT) and Vanguard. The charge: Using their substantial stock holdings, BlackRock and its rival financial firms coordinated a "left-wing ideological" attack on US coal companies, pressuring coal producers Arch Coal, Black Hills, and Peabody to cut coal production in the South Powder River Basin and thermal coal markets, the DOJ and FTC said in the court filing. The decreased output, they said, harmed US consumers by artificially inflating energy prices. "Carbon reduction is no more a defense to the conduct alleged here than it would be to price fixing among airlines that reduced the number of carbon-emitting flights," the DOJ and FTC said in the statement supporting the states' claims. The states allege that the financial firms agreed to reduce output through commitments to carbon-reduction organizations Net Zero Asset Managers Initiative and Climate Action 100+. They also say disclosures from the defendants and public statements show that they engaged directly with coal company executives in efforts to influence production levels, and they used their voting power when engagement fell short of meeting those goals. As large yet minority shareholders, the complaint claims, the defendants have more influence than their formal equity share. The actions extend beyond shareholder advocacy and passive investing by furthering their own "green energy" or net-zero goals, rather than the goals of the coal corporations, in violation of Section 1 of the Sherman Act and Section 7 of the Clayton Act, the challengers claim. The agencies' effort to have the administration's perspective considered in the case, despite not being a party to the dispute, has drawn criticism from the defendants and others. On Wednesday, Campaign for Accountability (CfA), a nonpartisan nonprofit watchdog organization, accused the administration of targeting the money managers for political rather than law enforcement reasons. The group filed a Freedom of Information Act Request asking the agencies to disclose communications underlying their decision to weigh in on the case. CfA was co-founded in 2015 by Anne Weismann, former head counsel for the watchdog group Citizens for Responsibility and Ethics in Washington. "This case isn't about antitrust law, but about conservative opposition to even recognizing the risks of climate change," CfA executive director Michelle Kuppersmith said. "Americans deserve to know who is influencing the FTC to use its antitrust authority to attack political opponents." Meanwhile, Derek Mountford, an antitrust partner at Gunster, said the lawsuit's rhetoric also signals political motivation. But, he added, it could ultimately answer an unsettled antitrust question over how competition law applies to the actions of asset managers with significant ownership interests in competing companies. Should asset managers and index fund providers, for example, be treated differently under the law than individuals and businesses that offer products and services and control multiple firms within a singular market? "If one individual owns a significant interest in three competing companies, alarm bells start going off in your head that there could be some anticompetitive conduct going on," Mountford said. Although the BlackRock scenario isn't as cut and dried, he said, concerns have been bubbling about the competitive role that institutional shareholders are allowed to play, compared to companies and suppliers that can more directly influence market competition. "This case is going to represent a much clearer answer to that question than I think we've gotten in any other case of its kind," Mountford said. BlackRock asked for a judge to dismiss the case and accused the administration of trying to "re-write" antitrust law under an "absurd" theory that the coal companies conspired with them to reduce production outputs. "Forcing asset managers to divest from coal companies will harm their ability to access capital and invest in their businesses and employees, likely leading to higher energy prices," the company said in a statement. BlackRock CEO Larry Fink made a series of disengagements from the company's environmental, social, and governance (ESG) initiatives as bipartisan concerns spread over the financial giant's power to sway US markets. Fink publicly stated in June 2023 that he would cease using the politically sensitive acronym "ESG" because it had been "weaponized" by both the ideological right and the left. In January, before President Trump took office, the financial giant cut ties with UN-backed Net Zero Asset Managers Initiative (NZAM), an environmental advocacy group that pledged net-zero carbon emissions by 2050. The administration's legal filing came roughly six months after a GOP-controlled House Judiciary Committee issued a report accusing the three money managers of using their financial clout to force US coal companies to "decarbonize" and reach net zero. According to the report, the money managers forced coal companies to disclose and reduce carbon emissions through negotiations, stockholder proxy resolutions, and the replacement of directors at "recalcitrant companies." Democrats have also criticized the financial firms' outsized influence over US markets, but for different reasons. Sen. Bernie Sanders (D-Vt.), a vocal critic of the megamanagers' influence, described the group's stock ownership in 95% of S&P 500 (^GSPC) companies an "oligarchy." Sanders, along with Sen. Elizabeth Warren (D-Mass.) also criticized BlackRock for declining to use its weight to intervene in a coal mining labor dispute. Gunster's Mountford said the federal government's decision to weigh in on a state AG-initiated case is unusual but becoming increasingly more prevalent. "It's not something that courts have had to wrestle with, where you have the DOJ weighing in on these types of cases," he said. "It's a pretty new phenomenon, and it's one that Trump sort of pioneered ... and continued during the Biden administration." "I think," he added, "it's here to stay." Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
Yahoo
14-05-2025
- Business
- Yahoo
Warren prods DOJ to sue to block Capital One-Discover deal
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Sen. Elizabeth Warren, D-MA, urged the Justice Department to sue to block Capital One's pending acquisition of Discover, according to a letter she wrote Tuesday to the agency's antitrust leader, Gail Slater. Warren cited an address Slater gave in late April warning of the risks that consolidation could again – after the 2007-08 financial crisis – create institutions that are 'too big to fail.' 'This transaction will reveal whether you back your words with action,' Warren wrote Tuesday. The DOJ has 30 days to sue after banking regulators approve a merger application, Warren noted. The Federal Reserve and Office of the Comptroller of the Currency gave a green light April 18 to Capital One's $35.3 billion proposed transaction. Warren wrote the Fed on May 1, urging the central bank to reconsider. 'Absent a rescission of the Fed's approval order, the responsibility to prevent this dangerous transaction now falls to the DOJ,' Warren wrote Tuesday. Slater, however, determined there wasn't sufficient evidence to challenge the Capital One deal in court, publications reported last month, citing people familiar with the decision. Nonetheless, Warren pressed that the DOJ 'does not need to have previously filed an adverse comment with regulators' about a deal to attempt to block it. The senator Tuesday expressed disappointment that the DOJ had not filed such a comment – 'despite reportedly finding competitive concerns with the deal.' Warren urged Slater to lean on the Clayton Act – and the DOJ's own updated merger guidelines – to block the Capital One deal, citing that a merger may violate antitrust law if it 'significantly increases consolidation in a highly concentrated market' or 'eliminates substantial competition between firms.' Warren noted that during its initial evaluation of the Capital One-Discover merger last year, DOJ reportedly 'told regulators that it was concerned, in part, about the deal's impact on potential credit card users who had no credit' and that agency representatives showed concern that the transaction 'would harm competition in the subprime sector.' Warren asserted, in particular, that Discover 'offers interest rates two percentage points lower than Capital One' to borrowers with nonprime credit scores – but that that offer would likely go away once the firms combine. 'Less competition among those with lower credit scores could mean Capital One can raise credit card rates for vulnerable families with limited alternative options, which could be the difference between getting by month-to-month and entering a financial downward spiral,' Warren wrote Tuesday. Warren repeated concerns that, by acquiring Discover, Capital One would carry more than 30% of the nonprime credit score market, driving the Herfindahl-Hirschman Index – a legacy measure of market consolidation – up by roughly 400 points. For new-to-credit customers, she added, the Fed's analysis found 'the post-merger HHI would increase by 766 points to 1971.' The DOJ last year withdrew guidelines that leaned heavily on HHI on the idea that the gauge is outdated. But even using it, a transaction that boosts HHI by 200 points or scores above 1,800 generally has been flagged as anticompetitive. 'A merger that creates a firm with a market share over 30 percent and increases HHI by more than 100 points is presumptively illegal under antitrust law,' Warren reiterated Tuesday. Warren added that DOJ 'has previously been skeptical of deals 'that would enable firms to avoid a regulatory constraint because that constraint was applicable to only one of the merging firms.'' Capital One has said it aims to convert its debit portfolio to Discover networks, Warren asserted. 'The reason is clear: Discover is not only a card issuer but also a card network, which means it is not subject to the limit on debit card interchange fees imposed by the Durbin Amendment to the Dodd-Frank Act,' Warren said. While Capital One, before the merger, wouldn't be able to charge merchants more, Discover can, she said. 'And in case there was any doubt about whether Capital One plans to raise swipe fees, the company told its investors that converting its debit and some credit products to Discover networks would be worth an estimated $1.2 billion,' Warren wrote Tuesday. By moving some of its credit card volume to Discover's network – but not all of it – Capital One would retain the leverage to negotiate interchange fees as a credit card issuer with Discover's largest competitors. Warren labeled that 'a recipe for coordination' among Discover, Visa and Mastercard. 'The solution to an anticompetitive market is not to anoint a new giant, but to fight to level the entire playing field, like the DOJ is doing with its lawsuit against Visa for monopolization,' Warren wrote Tuesday. Warren argued, too, that a Capital One-Discover combination would put a damper on existing innovation. She noted that in the February 2024 call announcing the deal, Capital One CEO Richard Fairbank admitted that his bank's Quicksilver card was a direct response to Discover's It card. 'As Capital One absorbs a major competitor, fewer players in this market could … diminish incentives for remaining firms to offer more generous rewards,' Warren warned.
Yahoo
16-04-2025
- Business
- Yahoo
Elliott Investment Management acquires $1.5bn stake in HPE
Elliott Investment Management has amassed a stake exceeding $1.5bn in software and networking company Hewlett Packard Enterprise (HPE), Bloomberg reported, citing sources. Elliott intends to engage with the software and networking company to help enhance its value, the media outlet added. In March 2025, the company announced plans to lay off about 5% of the workforce over the next 18 months. According to CNBC report, this percentage approximates 2,500 employees and will lead to $350m in gross savings by fiscal year 2027. Elliott Investment Management is a long-term investor in Dell, a major competitor of HPE. HPE, which separated from printer and PC-maker HP in 2015, has been led by CEO Antonio Neri for the past seven years. The company has been active in acquisitions with its predecessor company snapping up Aruba Networks in 2015 for about $3bn, while HPE itself bought Nimble Storage in 2017 and supercomputer company Cray in 2019. In January, the US Department of Justice (DOJ) filed a lawsuit to prevent HPE's proposed $14bn deal to acquire rival Juniper Networks. HPE agreed to acquire networking gear maker Juniper Networks in an all-cash deal for $40 per share, valuing the latter at about $14bn, in January 2024. Filed in the Northern District of California, the DOJ's lawsuit argues that the merger would eliminate direct competition, drive up prices, stifle innovation, and limit choices for businesses and institutions, violating the Clayton Act. In November 2023, HPE partnered with Nvidia to offer an enterprise computing solution for generative artificial intelligence (GenAI) applications. "Elliott Investment Management acquires $1.5bn stake in HPE" was originally created and published by Verdict, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Reuters
11-04-2025
- Business
- Reuters
Takeaways for live sports programming from the fuboTV antitrust litigation
April 11, 2025 - In February 2024, Disney, Fox, and Warner Bros. Discovery (WBD) announced plans to form a joint venture (JV) to combine their sports programming content in the first standalone live sports-only streaming service. This service was eventually entitled Venu Sports. Shortly after the JV was announced, Fubo — a distributor offering a specialized streaming service focused on live sports — filed suit in the Southern District of New York to block it. Fubo alleged that the JV members' licensing practices violated Section 1 of the Sherman Act and that the JV would lessen competition under Section 7 of the Clayton Act. After expedited discovery and a six-day preliminary injunction hearing on the Venu-related allegations, on Aug. 16, 2024, Judge Margarett Garnett of the Southern District of New York granted Fubo's request for a preliminary injunction. See fuboTV, Inc. v. Walt Disney Co., No. 1:24-cv-01363, ECF 290 (S.D.N.Y. 2024) (the "PI Opinion"). On Dec. 13, 2024, Judge Garnett also denied Defendants' motions to dismiss Fubo's Section 1 claims. Id. at ECF 367 (the "MTD Opinion"). Venu initially planned to charge consumers $42.99/month for all of the live sports programming of Disney, Fox, and WBD, comprising 14 linear sports networks. The Court found Disney, Fox, and WBD collectively own the broadcast rights to approximately 54% of all U.S. live sports and nearly 98% of all playoff games, demonstrating how transformative the JV could have been. Fubo's Clayton Act Section 7 claim Section 7 of the Clayton Act prohibits transactions whose effect "may be substantially to lessen competition in any line of commerce in any section of the country." United States v. Phila. Nat'l Bank, 374 U.S. 321, 355 (1963). The PI Opinion found there was a substantial likelihood that Fubo would succeed on the merits of its Section 7 claim. See fuboTV, ECF 290 at 34. Judge Garnett's PI Opinion relied heavily on United States v. Columbia Pictures, 507 F. Supp. 412 (S.D.N.Y. 1980), aff'd, 659 F.2d 1063 (2d Cir. 1981), which she found "strikingly similar to this case." fuboTV, ECF 290 at 36. The Columbia Pictures defendants were film studios that collectively controlled over half of the newly released movies and sought to form a JV to create a pay TV movie channel called "Premiere." The U.S. Department of Justice (DOJ) challenged the joint venture because it would substantially lessen competition for licensing of movies, and it was enjoined in 1980. But beyond this parallel, Judge Garnett's PI Opinion was also notable for its considerations of (i) the relevant antitrust market, (ii) the application of antitrust law to a JV like Venu, and (iii) Defendants' longstanding bundling practices. Relevant market When analyzing a JV under Section 7, a court must first define a relevant market. See Brown Shoe Co. v. United States, 370 U.S. 294, 324 (1962). While Fubo proposed multiple different markets, the Court instead found that Venu likely would lessen competition in a market it defined as the "Live Pay TV Market." fuboTV, ECF 290 at 38. The Court found that the Live Pay TV Market — populated by Programmers (e.g., Defendants), Distributors (e.g., Fubo and DirecTV), and Creators (e.g., sports leagues) — properly accounted for the wide variety of consumers (e.g., fans of particular teams or sports, general sports fans, fans of niche sports). Judge Garnett rejected Defendants' proposed market — the "Pay TV Market," which would include Subscription Video on Demand (SVOD) services like Netflix — because most live sports are unavailable on SVODs. Joint ventures While the Supreme Court recently reaffirmed the potential benefits of JVs, Judge Garnett's opinion was far more skeptical. Compare Nat'l Collegiate Athletic Ass'n v. Alston, 594 U.S. 69, 88 (2021) with fuboTV, ECF 290 at 46-54. Judge Garnett viewed Venu not as a unilateral new actor, but as concerted action by the three Defendants. Judge Garnett found the structure of Venu would have provided "Defendants an unobstructed runway to establish market dominance . . . and drive out competitors [like Fubo]." Id. at 47. Additionally, Judge Garnett found Defendants' core argument — that actions by Venu should be considered unilateral — inapposite. Defendants argued the Court should not consider the underlying creation of Venu, but only Venu's existence as a new competitor in the market, as the Supreme Court did in both Verizon Commc'ns Inc. v. Law Offs. of Curtis V. Trinko, LLP, 540 U.S. 398 (2004) and Pacific Bell Tel. Co. v. linkLine Communications, Inc., 555 U.S. 438, 442 (2009). These cases stand for the proposition that competitors — like Venu would have been to Fubo — have no "duty to deal" with one another. But Judge Garnett found this inapplicable because this case was in the Section 7 context and those cases were in the Section 2 context, which may have broader implications for future JVs among horizontal competitors. Bundling Judge Garnett's PI Opinion did not reach the merits of Fubo's allegations that Defendants' longstanding bundling practices constituted unlawful tying under Section 1 of the Sherman Act. Nevertheless, the Court found bundling served as "crucial context" for Fubo's Section 7 claim. See fuboTV, ECF 290 at 46. Without ruling on the issue, the Court found that Defendants' bundling "ha[d] been uniformly and systematically imposed on each distributor in the live pay TV industry except the joint venture." See id. at 45. So, the unbundled nature of Venu would have increased its attractiveness to consumers, further enabling the JV to harm future competition as the only live sports-only streaming service. Id. at 40, 45-48. The appeal Defendants immediately appealed the PI Opinion on various grounds to the 2nd U.S. Circuit Court of Appeals. The appeal drew significant attention and amicus briefing from antitrust commentators, sports TV industry groups, state attorneys general, and representatives of the federal government — including the DOJ. Fubo's Sherman Act Section 1 claims After the PI Opinion was issued, Defendants filed renewed motions to dismiss Fubo's Section 1 claims. These claims were separate from Venu and alleged that (i) Fox's and Disney's bundling practices constituted illegal tying of their sports channels with their non-valuable channels, and (ii) all Defendants had separately agreed with their owned subsidiaries to set a price floor through the use of most-favored nation (MFN) clauses. Under Section 1, tying (i.e., the requirement that a customer purchases a different product alongside the one it wants) can be an antitrust violation when the seller has sufficient power in the relevant antitrust market for the product the customer wants to "coerce" the customer to purchase another product. See Jefferson Parish Hospital Dist. No. 2 et al. v. Hyde, 466 U.S. 2, 3 (1984). Similarly, under Section 1, vertical restraints like MFN clauses can be considered anticompetitive when used by firms with market power. See United States v. Apple, Inc., 791 F.3d 290, 320 (2d Cir. 2015). After oral argument on Dec. 13, 2024, Judge Garnett again ruled for Fubo. She found that Fox and Disney had tied two distinct products — sports and non-sports channels — and that Fubo plausibly alleged actual coercion. She also found that even though Fox and Disney had presumptively insufficient market shares to infer either had market power, the combination of their live sports licenses and market shares created market power for both. She found that Fubo sufficiently pleaded that bundling caused Fubo to pay more and pass that cost on to consumers. Regarding the MFN claims, she found that Fubo had plausibly alleged (i) Defendants each had market power and (ii) a connection between the price Fubo pays and the alleged price floor set by Defendants. Aftermath This litigation was ultimately resolved on Jan. 6, 2025, just hours before the parties were set to argue Defendants' appeal before the 2nd Circuit, when Disney announced it was purchasing approximately 70% of Fubo and would combine it with its Hulu + Live TV business. As part of a settlement, Defendants agreed to pay Fubo a total of $220 million and Disney provided Fubo a $145 million loan. Defendants then announced they would be relaunching Venu, but after receiving letters from DirecTV and EchoStar, Dish Network's parent, on Jan. 10, 2025, Defendants decided to "discontinue" Venu to "focus[] on existing products and distribution channels." Press Release, Joint Statement from ESPN, Fox and WBD (Jan. 10, 2025). The Disney/Fubo transaction is being reviewed by the DOJ and has drawn attention from elected representatives like Senator Elizabeth Warren. See Letter from Senator Elizabeth Warren to the DOJ Acting Assistant Attorney General, opens new tab (Feb. 19, 2025). Beyond the eventual fate of Fubo and the live pay TV industry, Judge Garnett's two opinions signal potentially greater judicial skepticism of both horizontal competitor JVs and bundling more broadly. It remains to be seen if these decisions were fact dependent or the start of a growing trend. Notably, from the ashes of Venu came MySports, a $69/month sports-only package from DirecTV containing many of the channels Venu would have included. This emphasized the continued malleability of the live pay TV industry, and it remains to be seen whether or to what extent antitrust law may play a role in such future shifts.
Fox News
21-02-2025
- Politics
- Fox News
I was a White House lawyer and I found Trump's way around the left's lawfare roadblocks
A federal judge has ordered the Trump administration to reinstate millions in paused foreign aid. It is the latest in a string of cases in which activists have won preliminary injunctions blocking almost every major Trump administration reform. These are pre-trial injunctions, meaning the blocked reforms may ultimately be upheld, just as the Supreme Court upheld the travel ban over a year after it was halted just weeks into President Donald Trump's first term. But the judges issuing these injunctions are themselves breaking the law by failing to require the plaintiffs to post injunction bonds in case they ultimately lose. Federal district courts are governed by a set of rules proposed by the Supreme Court and ratified by Congress. They have the full force of law. Rule 65(c) permits courts to issue preliminary injunctions "only if" the plaintiff posts bond in an amount that "the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined." The rule is designed both to make the defendant whole and to deter frivolous claims. As Justice Stevens explained, the bond is the plaintiff's "warranty that the law will uphold the issuance of the injunction." The language of the injunction bond requirement is mandatory and that is how it was enforced for 40 years. Then, as liberal activists adopted litigation as a policy weapon, these bonds "which may involve very large sums of money," emerged as a major "obstacle" to their agenda. Sympathetic judges came to the rescue by declaring injunction bonds discretionary. The pivot began with just two sentences in a Sixth Circuit opinion. The court reasoned that the rule's directive to set the amount of the bond at "such sum as the court deems proper" allows the trial judge to dispense with the bond altogether. The problem is that this is not what 65(c) says. The court deceptively edited the rule's text by truncating the end which directs judges to choose an amount proper to pay a wrongfully enjoined defendant's "costs and damages." University of North Carolina law Prof. Dan B. Dobbs criticized the decision, noting that there "was no other discussion of the point, by way of analysis, legislative history, or precedent, which, indeed, seems to have been wholly lacking." Nevertheless, other courts followed suit and, by 1985, about half of jurisdictions treated the bond requirement as discretionary, either by ignoring it or nominalizing the amount. Their approach is flatly contradicted by both the text and history of 65(c), which demonstrate a deliberate decision to make bonds mandatory. Rule 65(c) dates to the Judicial Code of 1926. Its language came directly from the Clayton Act which provided that no injunction shall issue "except upon the giving of security" and explicitly repealed a provision in the Judiciary Act of 1911 placing injunction bonds "in the discretion of the court." Similarly, without any textual basis, activist judges have concocted a public interest exception. It began in the '60s with welfare recipients suing to remove limits on their benefits and environmentalists trying to block projects like the expansion of the San Francisco airport. Soon, judges were issuing injunctions without any bond if they felt the cases implicated "important social considerations." In a case involving union elections, the First Circuit fashioned a balancing test weighing factors including the impact on the plaintiff's federal rights, the relative power of the parties, and the ability to pay. None of this finds any warrant in the code. At best, these policy considerations justify amending the bond requirement, not ignoring it. The claimed public interest exception also proceeds from the false premise that activist lawsuits necessarily serve the public interest. Huge swaths of the public support Trump's policies on foreign aid, immigration and shrinking the federal workforce. To them, preliminary injunctions are thwarting the public interest not serving it. Accordingly, there is no moral justification for an exception to the bond requirement. The Trump administration needs to put judges on notice that it will follow the law, but they must too. This means complying with preliminary injunctions only if the judge includes an appropriate bond as required by rule. For example, a judge recently ordered the administration to reinstate foreign aid contracts worth at least $24 million to the litigants. But since the injunction covers all foreign aid contracts the total cost could be in the billions. Yet the judge demanded no bond and did not even reference Rule 65(c). To aid judges in setting the bond amount, the Justice Department should include in its briefs expert cost estimates from government economists. Importantly, plaintiffs who cannot afford to post these bonds can still challenge administration policies. But they will have to actually prove their case instead of scoring a quick pre-trial win that kills the administration's momentum even if later reversed. The pivot began with just two sentences in a Sixth Circuit opinion. The court reasoned that the rule's directive to set the amount of the bond at "such sum as the court deems proper" allows the trial judge to dispense with the bond altogether. Some Republicans may worry that 65(c) could be turned against them by a future Democrat administration facing legal challenges. But as an empirical matter, Republicans have far more to gain since over half of all the nationwide injunctions issued since 1963 were issued against Trump administration policies. And that's data from 2023 before the avalanche of injunctions that began after Trump's second inauguration. Forcing judges to comply with the plain language of Rule 65(c) is an elegant solution that respects the legal system by restoring the rule of law.
