Current Page: HomeAboutServicesContactSubscribeSteptoe Blogs Sub-Menu 6G: A Step Beyond The FTC Inserts More Uncertainty into the HSR Review Process By Michael Weiner & Travis West on August 6, 2021 POSTED IN ANTITRUST In a blog post released on August 3, 2021, FTC Bureau of Competition Acting Director, Holly Vedova, announced that, in response to “a tidal wave of merger filings,” the FTC had begun to send standard form letters “alerting companies that the FTC’s investigation remains open and reminding companies that the agency may subsequently determine that the deal was unlawful.” Merging parties receiving such letters were warned by the blog post that although they may “choose to proceed with transactions that have not been fully investigated, they are “doing so at their own risk.” Technically, the blog post reiterates what the law already provides. The Hart-Scott-Rodino Act already states that “any failure of [the FTC or the DOJ] to take any action … shall not bar any proceeding or any action with respect to such acquisition at any time,” and that nothing in the HSR Act limits the authority of the FTC or DOJ to obtain documents, testimony, or information under the Antitrust Civil Process Act, the FTC Act, or otherwise. 18 U.S.C. § 18a(i). But, notwithstanding the recent FTC challenge to Facebook’s acquisition of Instagram and WhatsApp (albeit under §2 of the Sherman Act rather than §7 of the Clayton Act), such post-consummation challenges (or even investigations) of transactions that have previously been subject to HSR review are exceedingly rare. Accordingly, we have four take-aways from Holly Vedova’s blogpost: The blogpost is another indication that the FTC under Chairwoman Lina Khan may be more serious about challenging mergers — including consummated mergers. Parties need carefully to consider this new policy in negotiating merger agreements, because closing conditions predicated on the expiration of relevant waiting periods are likely unaffected by the receipt of such a warning letter. Parties may wish to consider whether closing conditions predicated on the absence of a pending or threatened investigation are satisfied where the FTC has issued such a warning letter stating that the “investigation remains open and ongoing.” And parties may wish explicitly to address in their merger agreements the effect of the receipt of such a warning letter. Unless the Antitrust Division of the DOJ adopts a similar policy, this creates another meaningful distinction between the federal antitrust enforcement agencies in terms of merger review practice. Because prior challenges to consummated HSR-reviewable transactions have been so rare, institutionalizing the issuance of this type of warning letter – and the potential for the perpetuation of investigations with no statutory or other limit on their duration – introduces an element of uncertainty into deal planning that runs counter to the almost 50-year course of practice under the HSR Act. Parties should pay close attention to how aggressively the FTC proceeds under this new policy over the next few months. The policy injects another dose of uncertainty at a time when merger review practice is already being changed. Tags: Antitrust, mergers Email Tweet Like LinkedIn Not Once, Not Twice, But Thrice: Vimeo’s Victory in Taking Down Objectionable Content By Pantelis Michalopoulos & Travis West on August 4, 2021 POSTED IN SECTION 230 In a little over 18 months, Vimeo has three times vindicated its rights under Section 230 to take down objectionable content. Vimeo’s victory came first in the Southern District of New York; the decision there was affirmed by the Second Circuit. In a rare procedural twist, the Second Circuit panel vacated its decision, but issued an opinion upholding Vimeo’s right to take down objectionable content the following week. The cases illustrate that Section 230’s strength is not solely in subsection (c)(1) but also in (c)(2), which protects a website’s ability to “in good faith . . . restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.” 47 U.S.C. § 230(c)(2). The trilogy of cases underscores the continued importance of Section 230 to Internet companies, even as it comes under increasing criticism from the public, politicians, and the judiciary. Continue Reading Not Once, Not Twice, But Thrice: Vimeo’s Victory in Taking Down Objectionable Content Tags: section 230 Email Tweet Like LinkedIn Section 230: Major Legislation and Its Future in 2021 By Pantelis Michalopoulos, Christopher Bjornson & Travis West on July 29, 2021 POSTED IN SECTION 230 Recently, an obscure provision of the Communications Act has been thrust into the limelight. Section 230 is now discussed nearly daily on talk shows and in newspapers, and is gaining increasing criticism from the courts. The result of this attention is that Congress is now working on reforming Section 230, with a bevy of bills proposed that could dramatically affect the free and open Internet, with the consequences difficult to predict. First, as a bit of background, Section 230 has two main subsections. The first subsection is direct: No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. 47 U.S.C. § 230(c)(1). In the words of the Fourth Circuit, Section 230 “creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service. Specifically, § 230 precludes courts from entertaining claims that would place a computer service provider in a publisher’s role. Thus, lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions—such as deciding whether to publish, withdraw, postpone or alter content—are barred.” Zeran v. Am. Online, Inc., 129 F.3d 327, 330 (4th Cir. 1997). Continue Reading Section 230: Major Legislation and Its Future in 2021 Tags: Internet, regulation, section 230 Email Tweet Like LinkedIn President Biden Signs Sweeping Executive Order Promoting Competition with Far-Reaching Effects on Antitrust Enforcement and Communications Law By Pantelis Michalopoulos, Michael Weiner, Christopher Bjornson & Travis West on July 28, 2021 POSTED IN FCC REGULATORY, NET NEUTRALITY, TELECOM ANTITRUST On July 9, 2021, President Biden signed Executive Order 14036 – Promoting Competition in the American Economy. The wide-ranging Executive Order includes 72 initiatives that aim to increase enforcement of existing antitrust laws and other consumer protection regulations. The Order targeted at least 15 federal departments, offices, and agencies, potentially affecting a wide panoply of American industries. It is designed to restore competition in the American economy and reverse the effects of corporate consolidation. The Biden Administration hopes this will drive down prices for consumers, increase wages for workers, and facilitate innovation. The Executive Order proposes to address these problems by “enforc[ing] the antitrust laws to combat the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony.” The Executive Order also “reaffirms that the United States retains the authority to challenge transactions whose previous consummation was in violation of the [antitrust laws.]” This Executive Order represents a watershed moment in competition policy in the United States, as the White House has directed the entire U.S. government to more aggressively enforce the antitrust laws. The Executive Order has far-reaching implications for antitrust enforcement and communications law alike as it calls for more rigorous antitrust enforcement by the Department of Justice and the Federal Trade Commission, and seeks new consumer protection regulations through the Federal Communications Commission, the Federal Trade Commission, and the Departments of Transportation and Commerce. Continue Reading President Biden Signs Sweeping Executive Order Promoting Competition with Far-Reaching Effects on Antitrust Enforcement and Communications Law Tags: Antitrust, DOJ, FCC, ftc, net neutrality Email Tweet Like LinkedIn Supreme Court Upholds FCC Decision to Abolish Media Ownership Rules By Pantelis Michalopoulos, Alicia Loh, Andrew Golodny & Travis West on July 19, 2021 POSTED IN FCC REGULATORY What is good for the goose is good for the gander. The saying often finds application in Washington, when a principle formerly benefiting one ideological side suddenly benefits the other due to the vagaries of the ballot box. The filibuster is a classic example. The respect that courts accord to agencies is another. In FCC v. Prometheus Radio Project, the Supreme Court reversed the Third Circuit and unanimously upheld the FCC’s relaxation of its media ownership rules, a significant deregulatory policy of the Trump Administration. But the wide latitude that the Supreme Court gave the Commission’s factual findings has become a valuable tool in the hands of the Biden-era FCC, as the FCC can command the same respect for crucial factual findings needed in support of quite different initiatives, such as new net neutrality rules. Meanwhile, in the proceeding at hand, media ownership, the Commission has subsequently issued a public notice to update the record in the 2018 Quadrennial Review proceeding for its media ownership rules and extended the comment and reply comment deadlines to September 2, 2021 and October 1, 2021, respectively. Continue Reading Supreme Court Upholds FCC Decision to Abolish Media Ownership Rules Tags: FCC, Media Ownership, Supreme Court Email Tweet Like LinkedIn The End of Skynet? The EU Takes on AI By Paul Hughes on June 22, 2021 POSTED IN EUROPEAN UNION REGULATION The EU has recently proposed a draft regulation that would address future challenges of artificial intelligence. The EU is attempting a balancing act between promoting the development of AI against over-regulation of new technologies. The regulation categorizes AI based on the perceived risk level, regulating more strictly an AI system that is deemed as being higher-risk. The draft regulation adopts a broad definition of AI to encompass software developed with a variety of machine learning techniques. These include supervised, unsupervised and reinforcement learning and a variety of methods such as deep learning, logic and knowledge-based and statistical approaches, Bayesian estimation, and search optimization methods that generate outputs. Relevant outputs include content, predictions, recommendations, or decisions influencing the environments with which the AI interacts. Below are highlights of the main aspects of the draft regulation. Continue Reading The End of Skynet? The EU Takes on AI Tags: AI, Artificial Intelligence, EU Email Tweet Like LinkedIn How to Achieve Net Neutrality? Cornering Zero Rating Has No Geo Cap By Diletta De Cicco & Charles Helleputte on May 5, 2021 POSTED IN NET NEUTRALITY Commercial practices of Internet Services Providers (ISPs) to exclude certain applications and services from being counted against customers’ data caps, a practice known as Zero-Rating, are arguably creating an economic incentive for users to prefer zero-rated apps and services. These commercial behaviors are under scrutiny on both sides of the Atlantic, but the way regulators are actually tackling the issue differs. While in the U.S., California’s net neutrality law prohibits ISPs from engaging in discriminatory Zero-Rating, the European Union’s net neutrality law only sets up a general obligation of equal traffic treatment. AT&T’s recent decision to end its Zero-Rating program across the U.S. shows that U.S. ISPs are ready to adapt their commercial strategies to strict net neutrality rules. The European Union (EU) is dealing with Zero-Rating through the prism of the first court case from the Court of Justice of the European Union (CJEU) on the topic. Continue Reading How to Achieve Net Neutrality? Cornering Zero Rating Has No Geo Cap Tags: CJEU, EU, net neutrality, Zero Rating Email Tweet Like LinkedIn Mr. Watson, Come Here. I Want To See You: A Message From the Communications Industries on How to Promote Competition in the Online Platform Space By Pantelis Michalopoulos & Andrew Golodny on April 26, 2021 POSTED IN TELECOM ANTITRUST The following originally appeared in the January 2021 issue of the CPI Antitrust Chronicle. The communications industries range from plain old telephone service, through broadband access, whether fixed or mobile, to cable and satellite video distribution. These industries are not exactly passé compared to the online platforms such as the search engine “market” that Google has so admirably revolutionized and may (or may not) dominate today. After all, Google search queries need a pipe to travel from us, the hopeful searchers toiling on our computers, tablets or smartphones, to Google servers. Even more important, the pipe is necessary for the return trip back to us, bringing a cornucopia of audio and video that condenses real and imaginary worlds on one small screen in ways that would have been incredible to time travelers visiting us from the twentieth century. And so, the communications industries and online platforms need each other: the first needs the second’s content. The second needs the first’s pipes. In that sense, they are contemporaries and codependents. But the communications industries have a history longer than that of the online platforms — after all, they go back to 1876, when Alexander Graham Bell summoned Mr. Watson on the phone. With the longer history comes longer experience with analyzing and resolving competitive issues. And the communications industries afford many useful teachings for a way forward in the Google search engine case, including a way past and around the impasses and conundrums presented by the complaint filed against Google by the Department of Justice (“DOJ”). Here are two of these lessons: be careful not to throw out the baby of the competition you want with the bathwater of the exclusivity arrangements you do not like. And, to promote competition, nurture a competitor: find a white knight or two; and give them the resources to compete. But first, a few words about what links legacy communications and online platforms together from the perspective of competition analysis. There is a lot that does. First, they are both networks prone to market power and its exercise: each additional user of the network does not merely add a proportionate unit to a provider’s market share; it takes out disproportionate quantities of oxygen away from would-be competing networks. Second, both industries are chains of intricately connected links. In the communications industry, we have electromagnetic spectrum, wireless towers, cable or satellite platforms, broadband access pipes, and online video products or cable networks that pass through these pipes. In the online platform space, we have search engines, browsers, and operating systems. And, of course, as mentioned, each industry is a link to the other’s chain in its own right: online platforms provide increasing amounts of content for the communications conduits, which in turn provide all of the transmission capacity for that content. Vertical integration over many links of the chain also gives companies with market power over one of them one more chance to leverage that power. At the same time, a presence in one link of the chain may endow a company with the wherewithal to become a credible competitor over another link. Continue Reading Mr. Watson, Come Here. I Want To See You: A Message From the Communications Industries on How to Promote Competition in the Online Platform Space Tags: Antitrust, DISH, DOJ, FCC, Google, Remedy Email Tweet Like LinkedIn From Supposed Frying Pans to Ever Hotter Fires: AT&T’s Termination of Its Zero Rating Program, and the Many Own-Goals Scored by the Internet Service Providers’ Anti-Net Neutrality Strategy By Pantelis Michalopoulos, Christopher Bjornson, Travis West & Alicia Loh on March 22, 2021 POSTED IN NET NEUTRALITY Italian historian Giambattista Vico pioneered the notion of the circles of history. In the history of net neutrality, the circles have been short, predictable and avoidable: the leitmotif has been that of Internet Service Providers (“ISPs”) inflicting injury upon themselves, through a succession of court defeats, half-defeats and half-victories, where the half-victories have been more damaging than the defeats. Even King Pyrrhus would have blanched at the devastation. The upshot is that today ISPs may not be able to engage in any zero rating—the practice of exempting online video from their customers’ data caps—even though certain zero rating arrangements may have been acceptable under the 2014 net neutrality rules, enacted under the supposedly dreaded Title II—the ISPs’ boogeyman. Suppose you are on your commuter train, and you really want to catch the final moments of Nicole Kidman’s superb acting in The Undoing. If you have reached your data cap, you will miss them, be greeted with a strangely distorted version of Ms. Kidman’s face, or perhaps have to pay extra to upgrade your plan. Boy, I bet Verizon regrets having taken the net neutrality rules to court. So joked then Chairman Tom Wheeler at the 2015 FCBA Chairman’s dinner. It was a safe bet. Here are the cliff notes of the net neutrality litigation history: in 2010, the FCC enacts a ban on blocking, throttling, and discrimination, without classifying broadband access as a telecommunications service. Verizon appeals, challenging, first and foremost, the Commission’s authority to make any net neutrality rules, and second, the rules themselves. Verizon loses on authority, but wins on the rules—they look too much like telecommunications service rules, the court says. The consequence, unintended by Verizon, is not that unpredictable: in 2015, the FCC uses the authority affirmed by the Court, and also goes ahead and classifies the service as a telecommunications service, leaving it free to impose telecommunications-service-like rules. It enacts bans on blocking, throttling, and pay-to-play, as well as a general conduct rule. Crucially, under the general conduct rule, the practice of zero rating is not per se unlawful. Rather, it is subject to a case-by-case analysis. The ISPs appeal again, and lose resoundingly in 2016. In comes the Trump administration, with abolition of the substantive net neutrality rules at the top of the new FCC’s agenda. The FCC does so. A wide coalition of pro-net neutrality parties sues, and the DC Circuit rules on October 1, 2019. The ISPs trumpet a win. Well, not quite. The court remands part of the FCC’s action, including on the ground that the FCC failed to do justice to the paramount factor of public safety. As for the rest of the FCC’s action, the court does not like it either: two of the three judges believe it to be wrong, too, but they do not throw it out only because they believe their hands are tied by the Supreme Court’s decision in Brand X. In comes California, one of a number of states to step into the void left by the federal abolition of net neutrality. California makes its own net neutrality rules. They look like the abolished 2015 rules with one important difference: zero rating is no longer subject to a case-by-case evaluation. It is restricted more heavily. A federal district court (for the Eastern District of California) denies the ISPs’ motion for a stay. And so we come to AT&T’s decision to end zero rating across the country. Continue Reading From Supposed Frying Pans to Ever Hotter Fires: AT&T’s Termination of Its Zero Rating Program, and the Many Own-Goals Scored by the Internet Service Providers’ Anti-Net Neutrality Strategy Tags: FCC, Jessica Rosenworcel, nicole kidman, Tom Wheeler Email Tweet Like LinkedIn Watch our Client Chat Series Stay Connected Twitter RSS LinkedIn Subscribe to this blog Your website url Meet the Authors Pantelis Michalopoulos PARTNER Christopher Bjornson OF COUNSEL Andrew Golodny OF COUNSEL Matt Friedman ASSOCIATE Alicia Loh ASSOCIATE Travis West ASSOCIATE About this Blog 6G: A Step Beyond, Steptoe’s Telecom Blog offers timely updates on US and international telecommunications policy, regulatory actions, and thoughtful analysis on various telecom topics. We cover the latest rulings from the FCC, FTC, DOJ, and other regulators, as well as guidance on bureau decisions and how they affect your business. Read More.... Topics SELECT CATEGORY Select Category antitrust European Union Regulation FCC Regulatory Net Neutrality Section 230 Telecom Antitrust Archives SELECT MONTH Select Month August 2021 July 2021 June 2021 May 2021 April 2021 March 2021 Recent Posts The FTC Inserts More Uncertainty into the HSR Review Process Not Once, Not Twice, But Thrice: Vimeo’s Victory in Taking Down Objectionable Content Section 230: Major Legislation and Its Future in 2021 President Biden Signs Sweeping Executive Order Promoting Competition with Far-Reaching Effects on Antitrust Enforcement and Communications Law Supreme Court Upholds FCC Decision to Abolish Media Ownership Rules 6G: A Step Beyond Steptoe & Johnson LLP 1330 Connecticut Avenue, NW Washington DC 20036 Twitter RSS LinkedIn Technology Academic Policy (TAP) Blog Threat Level: Privacy, Crime and Security Online Deeplinks Blog Tech Daily Dose PolicyBets Hillicon Valley Homeland Security Watch The Volokh Conspiracy Technorati Media Tech Dirt Privacy Lives Instapundit Privacy PolicyTerms of Use About Steptoe In more than 100 years of practice, Steptoe has earned an international reputation for vigorous representation of clients before governmental agencies, successful advocacy in litigation and arbitration, and creative and practical advice in structuring business transactions. 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