State Series: Antitrust and M&A

Key Features

Key Feature

Description/Examples

Pre-Merger Notifications (Figure 1)

Contemporaneous Notifications of HSR Reportable Transactions

Based on the Model Law, “Uniform Antitrust Pre-Merger Notification Act” (e.g., CO, WA)

• A merging party that must file a Hart-Scott-Rodino (HSR) pre-merger notification with the federal government (filing threshold is based on the size of a transaction) must also provide notice to the state AG
• Notification is due to the state AG contemporaneously with the HSR filing if the party:
  • Has its principal place of business in the state, or
  • Has annual net sales of the goods or services involved in the transaction derived in the state equal to or more than a minimum percentage (e.g., 20 percent) of the HSR filing threshold
• Notifications are subject to the same confidentiality protections as HSR filings
• Civil penalties may be assessed for failure to comply with the notification requirements.

Other similar legislation (e.g., NY)

• Requires a merging party that must file a Hart-Scott-Rodino (HSR) pre-merger notification with the federal government (threshold based on sales) to also provide notice to the state AG at the same time
• Applies to all parties conducting business in the state
• Directs the state AG to consider the impact of the transaction on the labor market and allows affected workers to submit comment

Expansion of Healthcare Transaction Reviews

• Expansion of existing notification requirements along with the definition of “material change” requiring notice to include significant equity investments (e.g., MA)
• Expansion of review requirements to include the state AG’s written consent to transactions that include financing from private equity groups or hedge funds (e.g., IL)
• Expansion of the definition of a “transaction”, 120-day pre-closing notices and review period, and the addition of whistleblower protections, (e.g., NM)

Non-Compete Agreements (Figure 2)

Non-Compete Agreements

• Limits or bans the use of non-compete agreements for most employees (with limited exceptions), or based on specific factors such as occupation (e.g., healthcare practitioners), minimum income threshold, industry or role (e.g., “reasonable and necessary” to protect the employer) (e.g., AR, IN, TX)
• Establishes new types of contracts, enforceable under state law, including certain notice and review period requirements for employees/employers (e.g., FL)

Algorithmic Pricing (Figure 3)

Algorithmic Pricing

• Prohibits the use of pricing algorithms trained on competitor data as a violation of antitrust law (e.g., CA, OH)
• Prohibits price setting/adjustments based on personal data/characteristics
• Regulates real-time price changes based on factors such as demand or time

Key Features

Key Feature

Description/Examples

Proxy Voting

• Allegations against asset managers thought to use their proxy votes and engagement with management to reduce production within an industry, impacting competition (e.g, TX, AL, AR, WV)

Employment and Workers

• Actions against perceived anti-competitive practices in employment, such as "no-poach" and non-compete agreements (e.g., NJ, NY)

Federal Joint
Action

• Joint lawsuits with the FTC against retailers for anticompetitive business practices (e.g., AZ, IL, MI, MN, WI)
• Partner with the DOJ to block mergers in the airline industry perceived as anticompetitive (e.g., CA, MA, MD, NJ, NY, NC)

Multistate Action

• Form a 50-state coalition to file a memorandum in federal court urging a specific settlement agreement in a case alleging anticompetitive practices in the pharmaceutical industry
• Participate in the NAAG “bid-rigging and criminal enforcement group” (BRACE), which is likened to the DOJ Antitrust Division’s Procurement Collusion Strike Force