Antitrust legendarily unpredictable despite Epic
12/12/2023 18:21
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
By Jonathan Guilford
NEW YORK, Dec 12 (Reuters Breakingviews) - American
trustbusters have a happy case of the Mondays. The United States
Federal Trade Commission kicked off the week yesterday by
successfully killing drug giant Sanofi’s SASY.PA $750 million
agreement to exclusively license a treatment for a rare genetic
disease from Maze Therapeutics. The same day, a jury sided
against Alphabet’s GOOGL.O Google in a case that should offer
competition cops some reassurance that their arguments are
taking root. The silver lining for dealmakers is that, as
success for a $43 billion deal by Pfizer PFE.N on Tuesday
shows, antitrust agencies aren’t omnipotent.
The first blow to big companies came when a California jury
sided with video-game maker Epic Games, which had launched a
case against Google over its strict rules controlling the
download and payments systems of apps. Despite thus far fighting
to a draw against Apple AAPL.O on similar charges, it won
versus Sundar Pichai’s company on all counts.
There was a wild card. Unusually for antitrust cases, Epic’s
included a jury trial. That naturally pushes litigators towards
a more emotive, less legalese-burdened, approach. And Epic had
an ace to play: allegations that Google had deleted internal
messages is a decidedly bad look for a skeptical panel of peers
less steeped in the particulars of legal precedent. That may
loom large for the technology giant in another case brought by
the Department of Justice, which has also requested a jury
trial. The public consciousness has also now been seeded with
the idea that Big Tech can be defeated.
Of course, the easiest victories come outside of court, and
here the FTC continues to make progress. Drugmaker Sanofi
preemptively dropped its deal with Maze in the face of
resistance from the agency led by Lina Khan. Again, a clampdown
happened unusually. The drug that Sanofi wanted is years from
hitting the market. Nonetheless, it’s a success in an area
agencies have long prioritized, where potentially disruptive
upstarts are acquired early to protect a monopoly.
Yet rainmakers can’t be blamed for feeling the Terrific
Tuesdays nonetheless. Pfizer’s $43 billion deal for Seagen
SGEN.O has hung in limbo for eight months as investors feared
an unpredictable FTC would sue no matter the merits. That the
deal received clearance today is a relief for dealmakers
searching for limits beyond which the agencies won’t push. It
wasn’t exactly amicable. Trustbusters issued a form letter
warning that they could find the deal unlawful down the road,
according to a source familiar with the situation. But, for now,
it’s but a small reminder that even the most aggressive
consolidation fighters in a generation can’t stop everything.
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CONTEXT NEWS
A jury in the United States District Court for the Northern
District of California on Dec. 11 unanimously sided with
video-game maker Epic Games in its antitrust lawsuit against
Alphabet’s Google. The jury found that Google violated antitrust
laws in the markets for app distribution and billing on its
Android operating system.
The United States Federal Trade Commission said on Dec. 11
that it moved to block pharmaceutical giant Sanofi from
acquiring an exclusive license to develop a drug targeting a
rare genetic disease, Pompe, from Maze Therapeutics. Sanofi
subsequently announced that it had terminated the deal.
The following day, Dec. 12, pharmaceutical company Pfizer
announced that the regulatory waiting period for its $43 billion
acquisition of Seagen had expired without objection, meaning
that it had now had all required clearances to close. The
company said that it had agreed to donate the rights to
royalties from sales of a cancer drug co-developed with Merck to
charity in order “address” FTC concerns.
(Editing by Lauren Silva Laughlin and Sharon Lam)
((For previous columns by the author, Reuters customers can
click on GUILFORD/
Jonathan.Guilford@thomsonreuters.com; Reuters Messaging:
Jonathan.Guilford.thomsonreuters.com@reuters.net))