• Steering Through Uncertainty: Antitrust Regimes on Both Sides of the Atlantic

    Analysis Group antitrust and competition professionals had the opportunity to hear from practitioners and former regulators about navigating enforcement differences between the US and EU. Here are brief summaries of their guidance.

    Uncertainty Around Transatlantic Enforcement Trends

    While EU and US agencies collaborated more closely over the past few years, their regulatory priorities and investigative approaches have always remained distinct. Much uncertainty remains about the relative paths of the two jurisdictions under the current US administration. Companies facing cross-border probes must navigate a mix of procedural differences and varied jurisdictional priorities.

    Has Industrial Policy Crossed the Atlantic?

    EU competition enforcement is increasingly coupled with industrial policy objectives aimed at fostering “European champions.” By contrast, the US approach had historically remained more market driven but seems to have recently embraced a selective approach to industrial policy that uses tariffs, subsidies, and incentives to strengthen selected domestic industries.

    State Aid: A Recipe for Addressing Market Failures?

    The European Commission (EC) generally bans direct aid to particular firms as a threat to competition. There is an exception, however, for initiatives whose general economic advances outweigh the risks of market distortion. For example, EC Executive Vice President Teresa Ribera recently initiated a state aid program to help speed the transition to a green economy. Firms seeking public subsidies in the EU should consider whether the objectives associated with the subsidies and the surrounding competitive circumstances are sufficient to qualify for an exception.

    Merger Review in Europe May Expand Beyond Thresholds

    The EC has attempted to use Article 22 of the EU Merger Regulation to review below-threshold mergers, especially when they suspect “killer acquisitions.” To date, however, European courts have been unwilling to allow the EC to exercise this power through Article 22. US firms accustomed to focusing on Hart-Scott-Rodino thresholds should watch for more expansive EU reviews that may revise capitalization thresholds of the acquirer or allow competition authorities to look below the threshold on request.

    Excessive Pricing Cases Likely a Bigger Consideration than Price Gouging in the EU

    Competition authorities frequently pursue cases in which either a firm has set a price that is higher by orders of magnitude than that of other firms or a firm suddenly raises its price well above the rate of return. Excessive pricing is distinct from price gouging, which involves episodic price spikes or disruptions in the market rather than setting high prices in a more stable environment.  Firms in the US should be aware of price-gouging laws and claims, especially in times of crisis, and firms operating in Europe should be aware of potential scrutiny of sustained “high” prices.

    Dynamic Theories of Harm Likely to Raise Costs of Defending Deals

    The EU has shown an increased propensity to emphasize forward-looking market dynamics in merger review, such as in the Activision case. Because dynamic theories require evaluating the impact of present actions on complex future processes such as innovation, economies of scale, and ecosystem dynamics, mergers may involve a more intensive review of the evidence and assumptions about the dynamic world. Firms considering a merger should be aware of this shifting focus, as it may require addressing a broader set of concerns than those on which traditional merger review has focused.

    EU and US Regulators Keeping a Close Eye on Labor Market Enforcement

    EU regulators have followed the US’s lead in scrutinizing labor market practices, particularly wage-fixing arrangements, no-poach agreements, and non-compete clauses. However, non-compete clauses can serve legitimate purposes, such as safeguarding trade secrets or facilitating knowledge transfer. Effective non-compete policies that are designed to ensure clear efficiency benefits may survive regulatory scrutiny. In the US, the Federal Trade Commission (FTC) in April 2024 adopted a comprehensive ban on new non-compete agreements, but the final rule was blocked prior to implementation, and its fate is unclear under the current administration.

    EU Likely to Continue to Be the Leading Force Behind Digital Space Regulation

    EU regulators are taking a stricter approach toward dominant digital platforms than US regulators. The Digital Markets Act (DMA) has introduced new obligations for large platforms, which may result in aggressive enforcement. In addition, the Digital Services Act (DSA) imposes restrictions on a broad set of online platforms and intermediaries, as well as certain rules specific to large platforms. And competitors are closely following the platforms’ practices and bringing frequent complaints to regulators. Digital firms operating in the EU will continue to closely monitor compliance obligations under the DMA and DSA to mitigate enforcement risk and remain competitive.

    Patents Are Not a Free Pass in the Pharma Space

    Both US and EU agencies have shown a willingness to prevent pharmaceutical firms from relying on the patent process to extend the market for branded drugs or to allegedly abuse their dominant positions. Firms should continue to align patent strategies with evolving competition norms and embed antitrust considerations into patent lifecycle planning to mitigate legal exposure and preserve long-term innovation incentives.