On May 18, 2026, the FTC and DOJ filed an unopposed motion asking the Fifth Circuit to hold their appeal in abeyance through December 31, 2026. The agencies say they are weighing revisions to the vacated 2024 HSR rule, building on the March 25, 2026 request for information (comments close May 26). They aim to issue a notice of proposed rulemaking by the end of the year and will report to the court every 60 days. The plaintiffs—the U.S. Chamber of Commerce and three other trade associations—do not oppose.

For the back story—the February 12 vacatur in the Eastern District of Texas, the short administrative stay, and the March 19 denial of the FTC’s stay motion—see our earlier post, HSR in Turmoil: Back to the Old Form, at Least For Now.

The Gate to the Kingdom May Be Closing for Good: Apple Puts Google Inside Siri

Author: Luis Blanquez

On January 12, 2026, Apple and Google announced a multi-year deal—reported at roughly $1 billion a year—under which a custom Google Gemini model will run as the backend “brain” of the rebuilt Siri and the next generation of Apple Intelligence. Apple plans to unveil the new assistant at WWDC on June 8, 2026, and ship it with iOS 27 in September. Apple’s own on-device Foundation Models will handle simpler, privacy-sensitive tasks. Heavier queries will route to Gemini on Apple’s private cloud. Siri’s cognitive core will no longer be Apple’s. It will be Google’s.

Meanwhile, ChatGPT—the model Apple spent 18 months positioning as the future of iPhone AI, and the one still at the center of the xAI antitrust lawsuit pending in the Northern District of Texas—continues to sit where it has always sat: in a separate, opt-in, off-by-default layer that users have to turn on themselves. In iOS 27, Apple will expand that layer into an “Extensions” framework that lets users pick from Claude, Grok, Copilot, Perplexity, and a user-selectable Gemini chatbot app alongside ChatGPT.

On the surface, the Gemini deal looks like Apple conceding ground—admitting it cannot build a frontier AI model of its own and paying Google to fill the gap. It is not. Apple does not fear a better chatbot. It fears losing the user to one. By routing Siri’s cognition through a supplier Apple controls contractually, it keeps the interface, the invocation, the defaults, the billing, and the brand—everything that makes an operating system a platform—while outsourcing the only layer it never wanted to own: the AI model. It is classic Apple, but this time with Google as an ally instead of a threat.

Where The xAI Case Stands

Elon Musk’s X Corp. and xAI sued Apple and OpenAI on August 25, 2025, in the Northern District of Texas.

The theory of harm has two layers. First, ChatGPT’s integration into iOS, iPadOS, and macOS—announced in June 2024—delivers billions of iPhone-originated prompts to a single model. Second, the complaint alleges that Apple deprioritized rival chatbots in App Store rankings, making it harder for Grok and others to reach users even outside the system layer.

In late September 2025, Apple and OpenAI moved to dismiss. Apple argued the deal is “expressly not exclusive.” OpenAI called the suit part of a “lawfare” campaign. Judge Mark T. Pittman denied both motions on November 13, 2025, in a one-page order signaling the case is “more well-suited for adjudication through a motion(s) for summary judgment.” Discovery opened on October 10, 2025, and closes on May 22, 2026.

Two rulings tell us the real story.

The source-code ruling: Courts don’t want to become engineers, they just want evidence of platform foreclosure

On January 22, 2026, Magistrate Judge Hal R. Ray Jr. denied X’s motion to compel OpenAI to produce ChatGPT’s source code. X argued it needed the code to rebut any defense of lack of feasibility, to establish whether Apple could integrate Grok into the Apple iOS, and whether it would be feasible to integrate multiple AI products from various providers on the iPhone. The court disagreed on both relevance and proportionality.

On relevance, the order is blunt: “At this stage, it is unclear how the source code is relevant to whether Apple unlawfully excluded Grok from its products and conspired with the other defendants to create a monopoly.” On proportionality, the court noted that OpenAI had already produced API documentation and offered to stipulate that neither side would rely on proprietary source code. X refused the compromise. The court refused the production.

For a platform-exclusion case, that ruling is not a setback. It is a roadmap. Courts do not want plaintiffs dissecting competitor IP to infer what could have happened. They want direct evidence of platform misconduct—integration terms, routing logic, default settings, App Store treatment. That is where antitrust liability lives in a case like this. The court said so in plain terms, and future plaintiffs should take the hint.

The April 2026 motion to compel: Valuation and training data

X filed a second motion to compel on April 10, 2026, this one aimed squarely at OpenAI’s document production. The motion accuses OpenAI of having “persistently evaded its discovery obligations,” noting that OpenAI had produced 7,475 documents compared with X’s 32,116. The requested materials include valuation studies, financial projections through 2030, ChatGPT usage by country, and documents about OpenAI’s use of X data to train its models.

The valuation request is the one to watch. X tells the court that OpenAI’s valuation grew by more than $500 billion in the past year—from $300 billion at the end of March 2025. X argues the jump “does not make sense unless OpenAI and its investors understand that ChatGPT’s exclusive deal with Apple is cementing OpenAI’s dominance.” That is a causation theory built on investor behavior, not technology.

The training-data request matters for a different reason. OpenAI has defended the case in part by arguing that Grok’s foreclosure from iPhone-originated prompts is insubstantial because xAI has asymmetrical access to X data. X’s response is direct: if OpenAI also trains on X data, the asymmetry disappears. That question—who gets to learn from where—sits at the center of every theory of harm in generative AI.

Both motions, taken together, ask the court to analyze platform foreclosure through evidence: deal terms, integration architecture, valuation impact, data flows. None of it is specific to OpenAI nor depends on getting inside OpenAI’s code.

That same framework applies to Gemini.

Gemini Isn’t Apple’s Competitor. It’s Apple’s Supplier.

Apple’s decision to build Siri on Gemini at the backend, while offering third-party chatbots through Extensions on top, reshapes the competitive picture more than any filing in Texas has.

Apple did not retreat from AI. It relocated AI. Every layer a platform needs—distribution, defaults, billing, invocation, user interface, identity—remains Apple’s. When a user says, “Hey Siri” and Gemini answers, Apple delivers the answer. The supplier is invisible. Apple owns the user relationship.

That is the Google Search playbook applied one floor up in the stack. The existing Apple–Google deal to make Google the default search engine in Safari has existed for over a decade, with payments roughly reaching $18–$20 billion a year in the early 2020s. Google delivered the search results. Apple kept the browser, the UI, the defaults, and the customer. Nobody ever thought of Safari as “the Google browser.” That deal survived the U.S. v. Google antitrust trial not because it was invisible, but because it proved how much Apple gained by making a dominant rival pay for access instead of competing on equal terms.

The Gemini arrangement reuses the same design. At the foundational layer, Gemini is Siri’s cognitive backend—contractual, invisible, and not subject to user choice. At the visible layer, the iOS 27 Extensions framework lets users swap among ChatGPT, Claude, Grok, Perplexity, and a Gemini chatbot app for certain requests. Apple will point to that second layer as evidence of openness. But the first layer is where platform control actually lives. Whatever model a user picks through Extensions runs on top of an infrastructure Apple has already built around Gemini. Apple does not compete with Gemini. Apple neutralizes it by absorbing it. History doesn’t repeat itself, but it often rhymes.

Forget the App Store. This is Microsoft All Over Again

The App Store line of cases is a distraction here. The real analogue is the Microsoft browser and search monopolization litigation, both in the United States and the EU.

In those cases, Microsoft did not win the browser wars because Internet Explorer was better. And it did not win search because Bing was better. Microsoft used the operating system as a default-distribution layer—embedding its browser and search entry points directly into Windows, controlling invocation and placement, steering user behavior at scale through defaults and friction. Microsoft’s core defense was that users could still download alternatives. Courts rejected that defense. Default placement and UI control at the moment of choice shape markets more than theoretical availability does.

Apple’s Gemini integration tracks that logic almost perfectly, but at a more consequential layer. Apple is not merely preinstalling an assistant. It is controlling the cognitive interface itself, the point where users express intent, ask questions, and issue commands. Siri is the AI-era equivalent of the Windows Start menu or the browser toolbar. And Apple is making sure it stays that way whether the underlying model is ChatGPT, Gemini, or whatever comes next.

The most important doctrinal lesson from Microsoft applies directly here: supplier substitution does not defeat monopoly power. Microsoft rotated technologies, features, and partners over time, and courts still found monopoly maintenance because Microsoft never gave up the interface layer. Apple’s move from ChatGPT to Gemini is the same pattern. Apple did not open the platform. It reaffirmed its control. In antitrust terms, the fact that Apple can swap AI “brains” without changing the user experience strengthens the inference of monopoly power—it shows that the binding competitive constraint is not OpenAI or Google, but Apple’s control over defaults, invocation, UI, and routing.

Apple’s “We’re Not Exclusive” Defense Will Age Badly

Apple has told the Texas court that its ChatGPT deal is “expressly not exclusive” and that it plans to partner with others. The iOS 27 Extensions framework is how Apple plans to prove it. In that framework, users can plug ChatGPT, Claude, Grok, Copilot, Perplexity, or a Gemini chatbot app into Siri for certain requests. Apple will present that menu as the answer to any foreclosure claim.

That defense tracks Microsoft’s argument that alternative browsers were “available.” It works only if formal choice produces functional parity. But here it does not. Apple controls the default assistant, the invocation layer, the UI surface, the routing of tasks between Apple Intelligence and third parties, and the subscription economics through the App Store. A user who says “Hey Siri” gets whatever Apple decides to serve—from a cognitive engine already running on Gemini. Extensions sit on top of that engine. The choice among chatbots happens downstream, inside Apple’s frame, on Apple’s terms, and with no effect on the foundational model Apple has already selected. In other words, because Apple controls iOS’s integration chokepoints, it can privilege Gemini with first-class Siri/Apple Intelligence hooks while boxing rivals like OpenAI, Claude, or Grok into higher-friction, permission-gated, sandboxed “extensions” that can’t match system-level features.

The January 22 ruling in the xAI case fits the same pattern from a different angle. Feasibility, in a platform case, is about platform access on equal terms—not about whether a rival’s code could technically run somewhere. That is why the court sent X back to integration evidence. It is also why the “expressly not exclusive” defense will not do the doctrinal work Apple needs it to do. The relevant question is whether an AI model rival can reach a user without going through Apple’s interface. Under the current architecture, it cannot.

The Next Wave of Apple Antitrust Claims

The Gemini pivot does not close the xAI case. It widens the set of plaintiffs who have a theory.

An AI model company that powers Siri becomes a commodity. Its brand disappears. Its direct relationship with the user disappears. That is true for any model Apple selects next, whether OpenAI, Anthropic, xAI, or a company that does not yet exist. AI-native startups lose their distribution path. Vertical AI companies face Apple’s historical “Sherlocking” risk—once a feature proves useful, Apple absorbs it into the operating system. Device competitors without comparable partnerships face lock-in of their own. Content and app platforms whose users reach them through Siri lose direct control of the customer relationship.

Many of these companies will not see exposure until Siri/Apple Intelligence is the default entry point for user intent on more than a billion devices. By then, Apple—not the AI model, not the app—owns the interaction.

The theory of harm in each of these cases is Microsoft, not the App Store. It is not about commissions. It is about defaults, invocation, UI control, and routing—the chokepoints that decide whether competition can reach the user at all. The xAI case is the first to test that framework in the AI context and will not be the last.

What Companies In The AI Ecosystem Should Be Doing Now

Three things are worth doing in 2026, before the next round of filings.

First, map your exposure to Siri/Apple Intelligence as infrastructure, not as a platform partner. If Siri’s routing logic can send user intent to an Apple-selected supplier instead of your product, you have a platform-foreclosure risk whether or not Apple names a model that competes with yours.

Second, preserve the evidence of foreclosure the court in Texas has already told us matters: integration terms, API documentation, default behavior, routing tests, any communications with Apple about access, and any data reflecting pre- and post-integration user behavior. The January 22 ruling made clear that platform conduct evidence—not competitor code—is the currency of these cases.

Third, take the “formal choice” defense seriously. If Apple offers you access through an Extensions framework, the question that matters is whether that access produces functional parity at the point of user invocation. If it does not, your competitive position is worse than it looks, and your antitrust position is stronger than you think.

The xAI Case Is Just a Preview

The discovery fights in Texas will shape how platform foreclosure claims are tried in the AI era. But the xAI complaint was filed before the Gemini pivot. It was built around a specific ChatGPT integration and a specific exclusivity theory. The actual competitive problem—Apple consolidating control over the AI interface layer by absorbing rival models into its own stack—is bigger.

Apple did not give up ground when it picked Gemini. It locked it in. Under Microsoft precedent, and under the framework the Texas court is already applying, that is where the next generation of antitrust litigation will be fought. Apple is building the wall now. Companies whose access to customers run through Siri/Apple Intelligence can start building their case, or they can wait and explain to their board why they let Apple turn Siri into iGoogle.

Image by Tumisu from Pixabay

Author: Aaron Gott

Seven U.S. cities have filed antitrust suits in five weeks against two manufacturers of “fire apparatus”—and the lawsuits are consolidating into a federal multidistrict litigation in the Eastern District of Wisconsin.

The case is about fire trucks. If you have ever been the parent of a five-year-old, you probably have heard about just how awesome fire trucks can be. But you probably don’t make fire trucks or use them in your business.

You should still take note of this litigation. Especially if you’re in private equity, at an acquisition-driven company, or serve markets involving specialized products or institutions like municipalities.

The defendants—REV Group and Oshkosh Corporation’s Pierce Manufacturing subsidiary, along with several entities connected to private equity investor American Industrial Partners—are accused of violating Sections 1 and 2 of the Sherman Act and Sections 3 and 7 of the Clayton Act. The theory is straightforward: through a series of acquisitions, two players came to dominate the fire apparatus market, and the alleged result is what antitrust lawyers call an “acquisition monopoly.”

This is not a new legal theory, but it is a legal theory that, just a few years ago, was unlikely to turn into a major MDL. A plaintiff’s burden on a monopolization claim under Section 2 is historically much more difficult to meet than a price-fixing claim under Section 1 because the latter is per se illegal, requiring no proof of anticompetitive effect, and face fewer doctrinal hurdles. So the antitrust class plaintiffs’ bar rarely brought them.

That’s changing, and acquisition-based monopolization claims could be a driving factor. The fire apparatus MDL is an example: just look at the pace at which top plaintiffs’ firms are filing cases, the involvement of municipalities as plaintiffs, and the rapid MDL consolidation. This could be a new era of sprawling antitrust blockbusters not centered on allegations of a price-fixing cartel.

Here is what you need to understand about acquisition monopolies.

What “Acquisition Monopoly” Actually Means

Section 2 of the Sherman Act prohibits monopolization—defined as (1) the possession of monopoly power in a relevant market, and (2) the willful acquisition or maintenance of that power, as distinguished from growth or development as a consequence of superior product, business acumen, or historical accident.

The word “willful” is where acquisitions get complicated. Courts have long recognized that a company can violate Section 2 not by outcompeting rivals, but by buying them. Where each acquisition is a deliberate step in a strategy to eliminate competition and entrench market dominance, the cumulative pattern can satisfy Section 2’s willfulness requirement even if any individual deal was commercially rational on its face.

The Clayton Act adds another layer. Section 7 prohibits any acquisition—of stock or assets—where the effect “may be substantially to lessen competition, or to tend to create a monopoly” in any line of commerce or any section of the country. Note the word “may.” Section 7 is forward-looking: it catches transactions at the point where competition might be substantially harmed, not only after the damage is done. When a series of acquisitions is alleged, plaintiffs can argue both that individual deals violated Section 7 as they occurred and that the pattern of acquisitions collectively violates Section 2.

That is the double-barrel structure: Clayton Act Section 7 targets the deals as they happened; Sherman Act Section 2 targets the market power that resulted. Both claims are in the fire apparatus complaints.

The Specialized Market Problem

Antitrust liability under Section 2 depends critically on how the relevant market is defined. Market concentration and power can more easily be established where product specifications are highly customized, procurement cycles are long, and the number of qualified suppliers is small by nature.

Fire apparatus is that kind of market. Municipal fire departments operate under precise technical specifications—apparatus must meet NFPA standards, comply with state fire codes, and satisfy local procurement requirements. Fire trucks are not commodity equipment. The design, engineering, and production timelines make this a market with high barriers to entry, long customer relationships, and limited competitive alternatives.

Plaintiffs in specialized-equipment cases have an easier time with market definition because the product’s own characteristics draw the boundary. When you make the only commercially viable product for a specific application—or one of two—that fact does much of the plaintiffs’ work and makes it harder for defendants to argue a broader market such that monopoly power disappears.

How Courts Evaluate Roll-Up Claims

Plaintiffs’ antitrust lawyers have learned how to structure acquisition-monopoly cases, and the template is worth understanding.

The theory typically runs like this: defendant or its PE sponsor conducted a buy-and-build strategy, acquiring companies A, B, C, and D over a period of years; each acquisition eliminated a meaningful competitor; post-acquisition, defendant raised prices, reduced product quality, or restricted output; and the cities or businesses that purchased the product paid more than they would have in a competitive market.

Courts do not require plaintiffs to prove that every individual acquisition was anticompetitive. The question is whether the acquisitions, viewed as a course of conduct, reflect a willful strategy to acquire monopoly power. Internal communications—board materials, deal memos, strategic plans—that discuss market consolidation, competitor elimination, or pricing power post-acquisition are among the most damaging documents defendants face in discovery.

Private equity creates a particular documentation problem here. PE sponsors routinely model acquisitions in terms of EBITDA multiples, synergies, and market positioning. Investor presentations may explicitly reference competitor acquisition as a strategy for pricing power. That framing, which is entirely normal in PE deal documents, can look incriminating in an antitrust complaint. The plaintiffs in fire apparatus cases almost certainly obtained public filings, investor presentations, and press releases in which the defendants’ market consolidation strategy was described in terms that plaintiffs’ counsel will characterize as an admission.

Private Plaintiffs, Treble Damages, and the Municipal Angle

What makes the fire apparatus MDL structurally significant is the identity of the plaintiffs: cities. Municipal governments purchase specialized equipment through formal procurement processes, maintain records of every competitive bid, and have institutional incentives to pursue antitrust damages aggressively. Unlike a private commercial buyer who might want to preserve a supplier relationship, a city has no such constraint. Seven cities have filed antitrust lawsuits in five weeks. Others almost certainly will.

This matters because municipal plaintiffs bring several advantages. They have standing under Section 4 of the Clayton Act as direct purchasers—there is no Illinois Brick problem because municipalities buy from the manufacturers, not through distributors. They have procurement records establishing exactly what they paid and when. They have public records laws that make their own purchasing history readily available—and easy for the plaintiffs’ bar to mine for cases. And they have political incentives to pursue large defendants aggressively.

The treble damages provision of the Clayton Act—Section 4—means that if cities prove they paid supracompetitive prices for fire apparatus over a period of years, the damages figure gets multiplied by three. A $500 million overcharge claim becomes a $1.5 billion exposure before attorneys’ fees. With seven cities already in the MDL and more likely coming, the aggregate damages exposure could be substantial.

What Acquisition-Driven Companies Should Know and Do

The fire apparatus MDL could be a bellwether rather than an outlier. Across specialized manufacturing, healthcare equipment, agriculture, and industrial supply, PE-backed consolidation has produced highly concentrated markets in niches where buyers have few alternatives.

If your company has grown through acquisitions in a specialized market, you should:

1. Understand your market and market share. “Market” is a legal term of art, not a business concept. The relevant market for antitrust purposes may be considerably narrower than the market your sales team tracks. If you have 60% of a narrowly defined relevant market—and you reached that share through acquisitions—you have meaningful Section 2 exposure.
2. Conduct an antitrust audit of your acquisition documents. Internal materials describing buy-and-build strategy, competitor elimination, or post-acquisition pricing power are a standing discovery liability. You need to be aware of what exists, what the litigation risk profile looks like, and whether your antitrust compliance policies extend to deal documentation and integration planning.
3. Not view a successful merger clearance as sanitizing. A transaction that cleared HSR review—or that was too small to require filing—can still be challenged afterward under Section 2. The HSR process is a predictive, pre-merger screen; it does not immunize completed transactions from post-hoc antitrust challenge. Section 2 claims are not time-barred until four years after the plaintiff discovered the injury, and ongoing overcharge claims may reset the limitations clock.
4. Consider the litigation risk calculus before you find yourself in an MDL. Once an MDL coalesces and plaintiffs’ counsel is coordinating, defense costs escalate sharply. Companies in highly concentrated markets—particularly in sectors where municipalities, hospitals, agricultural cooperatives, and other institutions are the buyers—should assess their exposure regularly.
5. Involve outside antitrust counsel now. Antitrust counsel is a critical component at each of these steps.

The Takeaway

The fire apparatus MDL illustrates an antitrust theory that plaintiffs’ lawyers are deploying with increasing frequency. The theory is not complicated: if you acquired your way to dominant market power in a specialized market, you may have a Section 2 problem.

None of this means that every buy-and-build strategy is illegal, or that companies should stop making acquisitions. Strategic acquisitions in concentrated markets can be pro-competitive. But that argument needs to be developed proactively—not assembled in litigation after the fact.

Authors: Pat Pascarella & Luke Hasskamp

Recent proceedings involving Apple Inc.—including the U.S. Department of Justice case and Epic Games v. Apple—together with developments in AI markets, suggest an evolving framework for platform-focused antitrust analysis. This article considers how those threads may fit together. 

I. The DOJ Has Done Substantial Groundwork

Begin with market power. In U.S. v. Apple, the district court accepted as plausible a U.S. smartphone market in which Apple holds roughly 65%—now closer to 70%—reinforced by barriers to entry, network effects, and switching costs.

The DOJ also presents an alleged pattern of exclusionary conduct: the repeated neutralization of technologies that reduce platform dependence, including middleware, super apps, cloud streaming, smartwatches, messaging, and digital wallets. According to the complaint, each time a product threatened to make device choice less consequential, Apple constrained or neutralized it. If this allegation is supportable, such a pattern could address concerns about improperly “punishing success.”

II. The Markets Apple Controls at 99 Percent

If a higher market share is needed, the more compelling market is not some smartphone submarket. Rather, it will be markets Apple controls at 99 percent: the iOS functionalities and apps themselves. While not every function is a separate product, some may well  be—particularly those Apple allegedly targets.

Epic v. Apple is instructive on this point, and not fatal. The court did not hold that iOS-tethered markets are inherently non-cognizable—only that Epic failed to establish that consumers lacked awareness of iOS restrictions and could not factor them into purchasing decisions. But those gaps seem addressable.

The full scope of any restraints—and their costs—is obscured in a dense web of contractual and technical restrictions. No reasonable consumer could anticipate the extent to which app review, API access, and distribution control could be wielded against rivals. Nor should antitrust liability turn on whether consumers anticipated unlawful conduct.

Even if consumers had advance knowledge of such restraints, a single-brand market is not foreclosed. Apple’s own counsel acknowledged in Epic that consumers entering the iOS ecosystem cannot predict downstream costs related to app distribution, in-app payments, or aftermarkets. If the costs of any restraints are unknowable at the time of purchase, foremarket competition cannot discipline aftermarket conduct. The remaining elements of a single-brand iOS functionality or app market also appear to be present, including allegations of intentional degradation of interoperability to maintain switching costs—without corresponding loss of share or margin.

III. CoStar, Exclusive Dealing, and the End User License Agreement

Some claims may not require pleading a single-brand market. For example, under the Ninth Circuit’s decision in CoStar v. CREXi, “substantial foreclosure” is sufficient to plead an exclusive dealing agreement.

The agreement? The EULA itself. While a web of contractual and technical restrictions might enable foreclosure, the enforceable agreement between Apple and the user is embodied in the EULA. In that sense, Apple may have supplied potential plaintiffs with the central instrument of its own potential liability.

IV. The EULA as a Negative Tie

The EULA may also provide a foundation for tying claims. Courts often resist tying theories in platform cases, frequently reasoning that coercion must be directed at consumers rather than suppliers. That argument, though contestable, is predictable.

A potential response may be that it is the EULA that effectively conditions use of the platform on the consumer’s agreement not to obtain competing products, services, or apps outside Apple’s approval.

V. Attempted Monopolization and Dangerous Probability of Success

Tying allegations also expand the analytical framework, though courts ultimately may analyze them as attempted monopolization. On the “dangerous probability of success,” a defendant such as Apple likely would invoke concerns about outdated leveraging theories. But this would not be a classic leveraging case.

Any company that demonstrates both the ability and the willingness to neutralize technologies or rivals that threaten its market position may struggle to characterize that conduct as competing on the merits. Such a pattern should reduce concerns about punishing a company simply for being successful. Where a company has demonstrated a pattern of exclusion and retains the ability to repeat it, the “dangerous probability” standard should be satisfied.

VI. Inextricably Intertwined—and Antitrust Standing

A direct monopolization claim targeting the U.S. smartphone market faces a threshold question: standing. Developers and rivals operating at the functionality level are neither customers nor competitors in the smartphone market.

Consider: “Inextricably intertwined.” Any firms harmed directly by conduct designed to entrench Apple’s ecosystem and raise switching costs are likely not incidental victims. Their injury would be the very mechanism through which competition is allegedly harmed. That alignment supports standing without requiring plaintiffs be competitors or buyers in the smartphone market.

These plaintiffs also are likely well-positioned as the most efficient enforcers due to their unique ability to detect predatory conduct. And because the alleged harm is direct, there is little risk of duplicative recovery.

VII. Microsoft, Not U.S. v. Apple, is the Precedential Anchor

While U.S. v. Apple and Epic are instructive, U.S. v. Microsoft is more likely the template to challenge any anticompetitive conduct by a platform. Microsoft established that a dominant platform’s use of contractual restrictions and technological shackles to exclude middleware that threatens its operating-system monopoly is exclusionary conduct under Section 2—not competition on the merits.

The historical irony is worth noting: during the Microsoft trial, an Apple executive testified about Microsoft’s efforts to undermine Apple’s cross-platform technology, QuickTime, to preserve its operating system dominance. The resulting ruling constrained Microsoft’s conduct and helped create the competitive space in which Apple introduced the iPod, iTunes, and ultimately the iPhone.

Author: Aaron Gott

The 2026 Stanley Cup Playoffs are underway. For an antitrust lawyer and hockey fan, it is a fitting moment to take stock of professional hockey’s rich antitrust history.

Professional sports leagues create unusual market dynamics. Their products are produced jointly by competitors—teams that need each other to put on games, sell tickets, and negotiate broadcast deals—but those same competitors must hold themselves apart enough to compete for talent, fans, and championships. That tension between cooperation and competition is a recipe for antitrust scrutiny, and hockey has produced some instructive case law in the field. The lessons are not just for sports lawyers; the same dynamics increasingly play out in technology platforms, healthcare networks, and other ecosystems where rivals must coordinate to deliver a product.

Below is a tour of professional hockey’s antitrust story, from the reserve clause to the modern lockout, with stops along the way at relocation fights, the single-entity defense, and the league’s nine-figure expansion fees.

Player Mobility and the Reserve Clause

For most of the twentieth century, professional hockey players could not freely move between teams. The reserve clause, written into nearly every standard player contract, gave the team perpetual rights to renew the contract on its own terms. The practical effect was that NHL teams collectively suppressed labor competition: a player drafted by Toronto stayed in Toronto unless Toronto chose to trade him, and the league’s structure ensured no other employer could compete for his services.

That arrangement looked exactly like what it was—an agreement among competitors to control the labor market. When the World Hockey Association launched in 1972 and began signing NHL players, federal courts examined the reserve clause and found Sherman Act problems. The leading decision is Philadelphia World Hockey Club, Inc. v. Philadelphia Hockey Club, Inc., in which the Eastern District of Pennsylvania issued a preliminary injunction against the NHL’s enforcement of the reserve clause and held that the league’s restrictive practices likely violated the antitrust laws.

Labor markets are markets, and agreements among horizontal competitors to suppress wages or restrict labor mobility receive scrutiny under the Sherman Act. The Justice Department and the FTC have in recent years returned to that principle in the form of no-poach and wage-fixing prosecutions across industries, from fast food to nursing to engineering. Hockey just got there first.

Rival Leagues and Group Boycotts: The NHL v. WHA

The reserve clause was only one piece of the NHL’s response to the WHA. The league also coordinated with arena operators to restrict the WHA’s access to facilities, leaned on broadcasters and equipment suppliers, and otherwise marshaled the resources of incumbents against an entrant.

That is classic group boycott territory. When dominant firms join forces to deny a rival the inputs it needs to compete—facilities, supplies, distribution—the conduct sits at the heart of Section 1 concern. The legal pressure on the NHL, combined with the WHA’s financial difficulties, ultimately produced a partial merger: four WHA teams (the Edmonton Oilers, Hartford Whalers, Quebec Nordiques, and Winnipeg Jets) joined the NHL in 1979, and the rival league dissolved.

The pattern repeats in technology, healthcare, finance, and transportation. Dominant platforms do not just compete with entrants; they shape the rules of competition, and they often do so collectively with other incumbents who depend on those rules. Hockey just happens to have litigated it earlier (and on skates!).

Drafts, Salary Caps, and the Non-Statutory Labor Exemption

Sports drafts and salary caps look like textbook Sherman Act problems. A draft is an agreement among competitors not to compete for entry-level talent. A salary cap is an agreement among competitors to fix the price of labor. In any other industry, both would be candidates for per se antitrust condemnation.

In professional sports, they usually survive because of the non-statutory labor exemption, a judicially crafted doctrine that immunizes certain restraints adopted through collective bargaining. The Court’s decision in Brown v. Pro Football, Inc. set out the contours: a restraint is exempt if it concerns a mandatory subject of bargaining, primarily affects the parties to the collective bargaining relationship, and is reached through bona fide arm’s-length bargaining.

Hockey has worn the exemption well. Drafts, entry-level contract restrictions, restricted free agency, and the salary cap all flow from collectively bargained agreements between the NHL and the National Hockey League Players’ Association. They have not been seriously vulnerable to antitrust challenge so long as the bargaining relationship holds.

The takeaway is not that drafts and salary caps are competitively benign. It is that how a restraint is adopted can matter as much as what the restraint does. That distinction has implications well beyond sports—particularly in industries where standard-setting bodies, joint ventures, and trade associations make rules that look a great deal like restraints on competition.

Territories, Relocation, and Market Allocation

NHL teams do not move freely. League rules grant existing teams territorial rights and condition relocation and expansion on supermajority votes of the other owners. The result is a system in which incumbents collectively decide who can enter their markets and on what terms.

Geographic market allocation among horizontal competitors is normally per se illegal under Section 1. Yet the NHL has largely avoided antitrust liability in this area. Part of the explanation is doctrinal: courts have moved away from the per se rule for sports league rules, applying the rule of reason instead in light of the joint-venture features of professional sports. Part of it is pragmatic. The NHL has historically resolved territorial disputes through indemnity payments rather than through litigation. When the Disney-owned Mighty Ducks of Anaheim entered the league in 1993, Disney was required to make a substantial payment to the Los Angeles Kings, whose territorial rights covered the Anaheim market.

The NFL has not been as fortunate. In Los Angeles Memorial Coliseum Commission v. National Football League, the Ninth Circuit affirmed a treble-damages verdict against the NFL for blocking the Oakland Raiders’ relocation to Los Angeles. Applying the rule of reason, the court found that the NFL’s three-quarters approval requirement for franchise relocation was not justified by procompetitive benefits—particularly given that the league had invoked the rule to protect the L.A. Rams, who had themselves moved from Los Angeles to Anaheim.

More recently, the NHL itself flirted with similar trouble. The 2009 bankruptcy of the Phoenix Coyotes produced a high-profile dispute over Jim Balsillie’s bid to buy the team and move it to Hamilton, Ontario. The NHL invoked its relocation rules to block the move, and Balsillie pressed antitrust counterclaims accusing the league of conspiring to allocate the southern Ontario market to the Toronto Maple Leafs and Buffalo Sabres. The bankruptcy court ultimately rejected Balsillie’s bid on other grounds, and as a result the antitrust questions were not resolved. They will likely arise again in the next dispute spurred by the relocation rules.

When they do, courts will likely apply the rule of reason, but even with the special treatment of professional sports, an agreement among competitors to divide the market is dangerous territory.

Lockouts and Concerted Refusals to Deal

The NHL has locked its players out three times since 1994, costing the league a half-season in 1994–95, all of 2004–05, and another half-season in 2012–13. From the players’ side, a lockout looks like a concerted refusal to deal, or group boycott: the team employers, acting through the league, jointly impose terms after a bargaining impasse and jointly refuse to hire players except on those terms.

That theory has gotten some traction in football and basketball. In Brady v. NFL, NFL players responded to the 2011 lockout by decertifying their union and bringing antitrust claims. NBA players brought parallel claims during their 2011 lockout. The leagues raised the non-statutory labor exemption in defense, and the courts have generally accepted that defense as long as a bargaining relationship is ongoing—but the threat of antitrust exposure if that relationship breaks down has done meaningful work at the bargaining table.

Decertification is the players’ nuclear option. By disclaiming the union’s representational authority, players strip the league of its labor exemption and convert the lockout into a Section 1 problem. The threat has driven settlements in football and basketball, and it remains available in hockey. The NHLPA has not yet pulled the lever. But it has come close, and the doctrine will continue to shape what is and is not on the table when the next CBA expires.

A breakdown of competition often produces antitrust claims. In platform markets, so does a breakdown of cooperation. The lockout cases are a useful reminder that the line between the two can turn on the contract that ties the parties together.

The Single-Entity Defense After American Needle

Today, it is well-settled law that whenever sports teams interact through their league, they are a group of competitors capable of conspiring in violation of Section 1 of the Sherman Act. But the argument that a professional sports league is a single entity incapable of conspiring with itself for purposes of Section 1 was made by the NFL, and it resulted in the classic antitrust case of American Needle, Inc. v. National Football League. In American Needle, the Supreme Court held that the NFL’s exclusive headwear licensing agreement with Reebok was concerted action subject to Section 1 scrutiny. The Court’s decision was unanimous and decisive: the teams remained separately owned, separately managed, and economically independent enough to be capable of conspiring, even when they acted through a league office.

American Needle did not abolish the single-entity defense, but it did make it unviable for most professional sports leagues. One league that might still find success in arguing it is a single entity comes to mind: the Professional Women’s Hockey League. All eight teams in the PWHL are owned by the league and, for economic purposes, are managed top-down. A single entity may not have to face a Section 1 claim, but it would not have that defense for a claim under Section 2 of the Sherman Act, which deals with monopolization.

And while American Needle may have been a professional sports case, it is invoked in antitrust litigation all the time—often in the context of joint ventures, trade associations, and other cooperative bodies. Under American Needle, those organizations are not judged by their legal structure or the labels applied to them, but rather whether they deprive the market of “independent centers of decisionmaking.”

Expansion Fees and Pricing Access to the Market

When the NHL added the Vegas Golden Knights for the 2017–18 season and the Seattle Kraken for the 2021–22 season, each new team paid a substantial expansion fee—roughly $500 million in Vegas’s case and $650 million in Seattle’s. Those fees were divided among existing owners.

On one hand, an expansion fee is a reasonable price for the costs of integration into the league—shared revenue dilution, scheduling, and the like. On the other hand, it is incumbent competitors collectively pricing entry into their market. The same antitrust questions that haunt territorial restrictions apply with even more force when the price of entry is set by the sellers of access. While the NHL has not faced an antitrust challenge to its expansion fees, an entrant denied entry or required to pay an obviously supracompetitive fee for entry might have a colorable claim.

This is not just a hockey problem. Many regulated and self-regulated markets feature entry fees, certification charges, or membership dues set collectively by incumbents who are themselves competitors of would-be entrants. The economics are the same whether the gate is to an NHL franchise or to an electronic trading network.

Beyond the Rink

Professional hockey is not the most economically significant sports league in the United States, and its antitrust litigation history is shorter than baseball’s, football’s, or basketball’s. But the sport has produced clear, accessible illustrations of the major doctrines that govern joint ventures of competitors: the per se rule, the rule of reason, the labor exemption, the single-entity defense, and the antitrust treatment of standard-setting and rulemaking that have implications far beyond professional sports.

The antitrust questions hockey has had to answer are the questions that any market run by its own participants must answer. Who gets to compete? On what terms? At what price? Who sets the rules, and how? These are questions that apply equally to technology, healthcare, financial markets, and the platforms that increasingly mediate everyday commerce.

Image by soerli from Pixabay

Bona Law was well represented at the annual largest antitrust conference, the 2026 American Bar Association Antitrust Law Section Spring Meeting in Washington, D.C. Steve Cernak spoke at a panel discussing Robinson-Patman and other issues with big companies; Cansu Gunel attended the Section’s inaugural Trial Skills Academy; and Luis Blanquez and Sabri Siraj attended many panels and led our Bona Law meetings with clients and other firms. With dozens of panels and countless opportunities to meet with friends old and new from nearly 70 different countries, each of us could write an entire post on what we learned last week; however, to keep the length manageable, we each limited ourselves to just the key takeaways for our readers.

Steve Cernak

Authors: Steve Cernak, Luis Blanquez, and Kristen Harris

On March 19, 2026, the Fifth Circuit denied the FTC’s motion to stay a lower court’s February decision vacating the new HSR form and rules.

As a result, the FTC immediately said it would be accepting the old, less burdensome, form going forward, while recognizing that the agencies continue to wield significant investigatory tools beyond the filing itself At least for the time being, the new form will continue to be accepted too. The FTC will be updating its website with the old form and rules shortly.

The Agency has not announced if it will continue to appeal the lower court’s ruling or re-start the process to develop a different new form. So, the merits appeal remains pending at the Fifth Circuit, meaning the litigation is far from over. A future appellate decision could reinstate the expanded form, require further rulemaking, or affirm the vacatur. For now, however, the legal baseline has reverted to the pre‑2025 HSR regime.

1. A Sweeping Rulemaking Meets Strong Opposition

In early 2025, the Federal Trade Commission undertook the most ambitious redesign of the Hart‑Scott‑Rodino premerger notification form since the statute was passed in 1976. The dramatically expanded filing framework required parties to submit far more information at the outset of the merger‑review process. The revised form demanded narrative descriptions of competitive dynamics, deeper maps of ownership and governance, detailed horizontal and vertical overlap disclosures, and, often, the submission of certain ordinary‑course business documents never previously required. The stated goal was to help the FTC and the Department of Justice identify problematic deals earlier and reduce friction later in investigations.

The business community was not persuaded. Trade associations, led by the U.S. Chamber of Commerce, argued that the new rule imposed crushing burdens on companies, with compliance costs soaring and preparation time roughly tripling. Many pointed out that the vast majority of HSR filings do not trigger substantial investigations, yet all filers would bear the heightened costs regardless of competitive risk. Even before the rule took effect in February 2025, these groups filed suit in the Eastern District of Texas, claiming the agency had exceeded its statutory authority and failed to justify the new demands.

Their challenge succeeded—at least initially. On February 12, 2026, Judge Jeremy D. Kernodle vacated the rule in its entirety. He found that the agency had not shown the new requirements were “necessary and appropriate” under the HSR Act and had failed to meaningfully weigh costs and benefits as required by the Administrative Procedure Act. The court also found the rule arbitrary and capricious—the FTC failed to show that the rule’s benefits “bear a rational relationship” to its costs. The ruling emphasized that the FTC could not identify even one past transaction that the expanded form would have flagged but the old form would have missed, while acknowledging the enormous cost imposed on every filer. For the court, the disconnect between burden and proven benefit was fatal.

2. Procedural Whiplash: From Vacatur to Revival

Though the district court vacated the rule, it paused its own order for seven days to allow the FTC to seek appellate relief. The agency scrambled to preserve the status quo. It asked the district court for a stay pending appeal; that request was denied. It then immediately appealed to the Fifth Circuit, filing both an emergency motion for a stay and a separate, narrower request for a short administrative pause.

The Fifth Circuit moved faster than many anticipated. On February 19, 2026—one day before the district court’s stay was set to expire—the appellate court issued an administrative stay of the vacatur “until further order.” The effect was simple but consequential: the 2025 HSR form, despite the district court’s ruling, remained in force. The FTC’s own Premerger Notification Office quickly announced that filers must continue to use the new form while the appeal proceeds.

The court simultaneously set an expedited briefing schedule, requiring the appellees’ response by February 23 and the FTC’s reply by February 26.  On March 19, the court issued a brief per curiam opinion denying the stay. Within hours, the FTC announced on its website that the pre-February 2025 form would be accepted immediately, although filers could also continue using the new form. The FTC expects to further update its website with the old form and rules very soon.

3. A Landscape of Uncertainty for Dealmakers

Even under the old form, the FTC and DOJ retain broad discretion to request voluntary information during the waiting period.

In practice, the reversion to the legacy form could accelerate back‑end inquiries, replacing formal up‑front requirements with more piecemeal requests. Some of the same burdens—though more targeted—may reappear through this alternate channel. Filers should not assume a lighter overall enforcement posture. Even under the legacy form, the FTC and DOJ retain broad authority to issue voluntary access letters, requests for additional information during the waiting period, and—where warranted—second requests. Some of the information previously required up front may now be sought on a more targeted, transaction‑specific basis.

Most transactions can once again be filed without extensive narratives and expanded document production. Ordinary‑course documents and detailed competitive analyses are no longer categorically required at filing. And parties that have already invested substantial effort in preparing a 2025‑form filing may elect to submit it voluntarily, particularly if they anticipate close agency scrutiny.

Meanwhile, the litigation has no bearing on HSR thresholds, reportability tests, or statutory waiting periods. Those components of the regime remain intact regardless of how the Fifth Circuit ultimately rules.

Notably, several commentators have observed that even within the Commission there were early signs of discomfort with aspects of the overhaul. That opens the possibility that, regardless of how the litigation unfolds, the agency might revisit the form, adjusting or abandoning the most contentious requirements while preserving elements it views as essential; however, doing so would take some time to ensure that any other new form would not meet the same fate as the prior one

In the world of merger control, the only certainty right now is that nothing is settled—and the finish line may move again before anyone reaches it.

Image by jacqueline macou from Pixabay

Author: Sabri Siraj

In February 2026, Paramount Global signed a $110 billion agreement to acquire Warner Bros. Discovery, setting the stage for one of the largest media combinations in recent memory. The transaction follows a competitive process that included a proposal from Netflix late last year to merge with Warner Bros. Discovery. Netflix ultimately withdrew its bid, citing financial considerations.

While much of the public conversation has centered on personalities and politics, the more meaningful takeaway for businesses lies elsewhere. This transaction offers a clear window into how regulators, both state and federal, are approaching major mergers in industries that are consolidating after years of rapid growth.

For companies contemplating transformative deals in their own sectors, the Paramount–Warner transaction signals an important shift in merger review: agencies are looking beyond simple market share metrics and focusing more closely on how consolidation reshapes long-term competitive dynamics.

Transaction Background

Under the reported agreement, Paramount would acquire Warner Bros. Discovery in a transaction valued at approximately $110 billion, including assumed debt. The combined company would control a substantial portfolio of film studios, premium cable brands, broadcast networks, and direct-to-consumer platforms.

The deal emerges at a time when the media industry is recalibrating. Subscriber growth has slowed, content production costs remain high, and companies are under pressure to improve profitability. In December, Netflix explored strategic transactions involving studio and streaming assets, underscoring the broader industry push toward scale and operational efficiency.

If completed, the merger would reduce the number of diversified, large-scale competitors operating across film production, content licensing, advertising, and subscription services. As a result, the transaction is likely to receive scrutiny from U.S. federal and state and international enforcers.

The Legal Framework Governing the Review

Section 7 of the Clayton Act prohibits acquisitions whose effect “may be substantially to lessen competition, or to tend to create a monopoly.” The inquiry is forward-looking and predictive. Regulators assess whether a transaction is likely to reduce output, raise prices, diminish innovation, or otherwise weaken competitive rivalry.

In a conventional horizontal merger analysis, agencies examine relevant product and geographic markets, the degree of overlap between the merging firms, and changes in market concentration. Structural indicators often provide the starting point for the analysis.

Modern merger review, however, does not end there. Particularly in capital-intensive industries with relatively few major competitors, agencies increasingly evaluate how consolidation affects incentives and industry structure over time. That broader structural focus is likely to shape review of the Paramount–Warner transaction.

State antitrust enforcers have been increasingly active in reviewing mergers that affect the citizens and consumers of their states. For example, multiple state attorneys-general challenged the Kroger-Albertsons merger. Here, the California Attorney General, at least, has signaled that he plans to investigate the merger.

The Key Signal: Structural Scrutiny in Consolidating Industries

The most instructive aspect of this deal is not simply that two competitors are combining. Rather, it is how enforcement agencies are likely to assess consolidation in a mature, high-fixed-cost industry.

Media production and distribution share structural features common to many other sectors: significant upfront investment, repeated interaction among a limited number of firms, and publicly observable pricing and strategic behavior. When markets exhibit these characteristics, regulators may evaluate not only whether the merged firm could raise prices unilaterally, but also whether reducing the number of independent competitors makes coordinated outcomes more likely.

This coordinated-effects lens focuses on market structure. Agencies may ask whether having fewer major decision-makers increases the risk of parallel pricing behavior, output discipline, or softened rivalry over time—even in the absence of explicit agreement.

That analytical approach has implications far beyond media. Healthcare systems, aerospace and defense contractors, energy infrastructure providers, and industrial manufacturers all operate in industries with high fixed costs and limited numbers of national competitors. In those sectors, consolidation may attract scrutiny not solely because of market share thresholds, but because of how it alters competitive incentives across the industry.

The Paramount–Warner deal therefore serves as a useful case study in how agencies are examining the broader competitive environment—not just arithmetic concentration metrics.

Practical Guidance for Companies and Practitioners

For businesses evaluating major transactions in consolidating industries, several lessons emerge.

First, assess industry structure as carefully as market overlap. Companies should evaluate how many meaningful competitors will remain after a transaction and how those firms interact across product lines and business segments. A merger that appears moderate in terms of market share may still draw scrutiny if it materially reduces the number of independent players or otherwise increases the possibility of coordination.

Second, develop and document procompetitive justifications with precision. Efficiencies tied to scale, innovation, or consumer benefits should be supported with data and internal analysis. Vague assertions that a merger is necessary to “compete more effectively” are unlikely to carry weight in a structural review.

Third, align internal communications with the anticipated regulatory narrative. Strategic discussions referencing pricing discipline, market rationalization, or reduced competitive pressure can become focal points in an investigation. Clear and disciplined internal messaging is essential.

Early engagement with antitrust counsel can help identify coordinated-effects risks, refine transaction structure, and shape advocacy strategies before agencies frame the competitive story themselves.

Conclusion

The Paramount–Warner Bros. transaction underscores a broader reality in 2026 and beyond: merger review in consolidating industries increasingly centers on how a deal reshapes competitive structure, not merely on whether it creates dominance in a narrowly defined market.

For companies pursuing transformative mergers, the key takeaway is straightforward. In industries characterized by high fixed costs and a limited number of significant competitors, regulators are likely to scrutinize how consolidation affects long-term rivalry and competitive incentives. Careful planning, rigorous economic analysis, and strategic internal discipline are critical to navigating that review successfully.

As consolidation continues across multiple sectors, the signals from this deal will resonate far beyond Hollywood.

Author: Ruth E. Glaeser

Federal officials are reportedly considering an antitrust review of major U.S. homebuilders, particularly around how competitors share information through groups like the Leading Builders of America. The Department of Justice has not yet confirmed a formal investigation, but the discussion highlights risks that extend well beyond the largest national builders.

The size and visibility of large builders make them more likely to attract regulatory attention, particularly when housing affordability has become a major political issue. Policymakers are under pressure to examine whether industry practices, or market structure more broadly, are contributing to supply constraints that make housing less affordable.

But for developers of all sizes, this is a reminder that ordinary industry practices can end up under a microscope. Even conduct that seems routine and well-intentioned can become the focus of a costly and disruptive investigation.

The Issue of Trade Associations

At the center of the concern is information sharing among competitors. Trade associations, like Leading Builders of America, serve legitimate and important purposes. They serve as industry advocates, promote best practices, and provide a forum for discussing common challenges among builders. But regulators have long viewed trade associations as environments where competitors may be tempted to share sensitive information.

United States antitrust law does not prohibit companies from participating in trade associations or gathering market intelligence. What it does require is that each company make its own independent decisions about pricing, production, and strategy and not all information sharing is inherently anticompetitive.

Indeed, the DOJ and FTC have long provided guidance on competitor information sharing to help companies understand how antitrust laws apply to things like collaborations, benchmarking, and exchanging data. For many years, the Antitrust Guidelines for Collaborations Among Competitors, issued jointly by the agencies, offered a framework for assessing when information‑sharing and other activities among competitors might raise antitrust concerns. Although the original 2000 Collaboration Guidelines were withdrawn in December 2024, the agencies have recently requested public comment to develop updated guidance that would cover collaborations and information exchanges for today’s economic and technological landscape.

In practice, problems can arise when communications, including informal ones, suggest that competitors are aligning their behavior. Regulators are especially focused on exchanges involving non-public information about future business plans, because that kind of information is more likely to influence how competitors behave and ultimately affect prices, supply, or quality. Emails, text messages, and meeting notes discussing pricing, future plans, or competitors’ actions can appear more nefarious when viewed in hindsight by regulators.

It’s Not Just the Government

Government investigations are only part of the risk. Antitrust scrutiny often leads to follow-on lawsuits by private parties like homebuyers and investors—an antitrust blizzard of sorts—who have an easier time prosecuting their claims by copying the arguments and evidence from the government’s case. Even when defendant companies believe they’ve done nothing wrong, responding to investigations and defending lawsuits can be expensive, time-consuming, and disruptive.

Economic and Market Forces Can Complicate the Picture

Homebuilders also face challenges unique to the industry. Builders operating in the same markets often respond to the same economic pressures at the same time. Interest rates, material costs, labor availability, and local regulations all affect how many homes are built and how they are priced. When mortgage rates rise, demand slows. Builders may respond by adjusting pricing, slowing production, or delaying projects. Similarly, when lumber prices increase or labor becomes scarce, builders may raise prices or build fewer homes. Local regulation can have the same effect—zoning restrictions, permitting delays, and approval timelines often affect every builder in a given area. Supply chain disruptions can create similar patterns. And if materials are delayed or unavailable, multiple builders may pause or reschedule construction.

It is not unusual that, when faced with similar prevailing market conditions and constraints, similarly situated competitors would independently respond in similar ways. But from the outside, those similar responses can sometimes raise questions of independence if competitors make similar decisions at roughly the same time. Antitrust law recognizes that competitors often react similarly to the same market conditions. But regulators may still look closely at whether those decisions were truly independent, or whether information sharing played a role.

The Key Takeaway

Liability is not inevitable, but preparation matters. Builders who understand how antitrust law applies to their business are better positioned to avoid problems and respond appropriately if they occur. That includes being thoughtful about communications, particularly in group settings where competitors are present, and ensuring employees understand appropriate versus inappropriate contacts. Early involvement of experienced antitrust counsel can also help companies evaluate their practices and respond effectively if regulators come calling.

Right now, there is no confirmed investigation, no specific allegations of wrongdoing, and no clear indication that any laws were violated. But the fact that federal officials are reportedly looking at the industry is a reminder that antitrust enforcement remains active.

Homebuilders operate in a challenging environment shaped by economic pressures, regulatory constraints, and political attention. That environment isn’t likely to get easier. But builders who stay informed and prepared will be in the best position to manage risk and continue contributing to America’s much-needed housing supply.

Image by Eglantine Shala from Pixabay

Authors: Steven Cernak and Cansu Gunel

In May 2024, this blog discussed a rare plaintiff victory in a Robinson-Patman case. In February 2026, the Ninth Circuit affirmed that victory in L.A. International Corp. v. Prestige Brands Holdings, Inc. In doing so, the court confirmed our key takeaways from 2024 — a successful Robinson-Patman case, while possible, will be expensive and lengthy and will only get easier if more plaintiff-friendly opinions, like this one from the Ninth Circuit, are written. In crafting that opinion, however, the court might have created a split with at least the Second Circuit that the Supreme Court could find interesting.

Robinson-Patman and Case History

This blog has recounted the elements and history of Robinson-Patman in prior posts. In summary, RP is a Depression-era amendment of the Clayton Act that makes certain manufacturer discounts to some (usually large) resellers but not to other (usually small) resellers illegal if there is the requisite harm to competition.

For decades, the FTC and private plaintiffs brought numerous cases that generated many opinions, including from the Supreme Court. As antitrust law evolved to focus nearly exclusively on benefits to consumers, especially lower prices, the FTC stopped bringing cases and private cases dwindled. The few cases brought often resulted in plaintiff losses and defendant-friendly precedent. Still, the non-zero risk of RP enforcement meant that most manufacturers and retailers paid at least some attention to RP. Because the FTC has become more interested in RP enforcement, including bringing two cases recently, RP clearly is not “gone” and now might not even be “forgotten.”

L.A. International Corp. v. Prestige Consumer Healthcare, Inc., is one of those rare private RP suits and even rarer plaintiff wins. As we detailed in 2024, Defendants manufacture and distribute Clear Eyes eye drops. The suit alleged that Defendants sold Clear Eyes at a lower price and with greater promotional allowances to Costco (specifically, Costco Business Centers that resell to retailers) than to Plaintiffs. Plaintiffs are several distributors that also buy and resell such products to retailers like local convenience stores.

After years of litigation, the case was tried to a jury, which found for Plaintiffs and allocated around $700,000 in damages among the several distributors. The lower court rejected various objections to its jury instructions by Defendants, which formed the basis of Ninth Circuit appeal.

Competitive Injury Standards: A Circuit Split

The Ninth Circuit’s “Geographic Proximity” Approach

The Ninth Circuit affirmed, applying what it characterized as the traditional “chain-store paradigm,” where wholesalers and large retailers like Costco both “carried and resold an inventory of [a product] to all comers.” The court found that “to establish that two customers are in general competition, it is sufficient to prove that:

• one customer has outlets in geographical proximity to those of the other;
• the two customers purchased goods of the same grade and quality from the seller within approximately the same period of time; and
• the two customers are operating on a particular functional level such as wholesaling or retailing.”

Critically, the Ninth Circuit rejected any requirement that competitive injury be “substantial,” holding that “Congress strung together the clauses in Section 2(a) with the disjunctive ‘or,’ which requires that we treat the clauses separately.” Section 2(a), in relevant part, states:

. . . where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition . . .

Thus, in rejecting the Defendants’ claim that the instructions should have included the “substantial” requirement because “the word ‘substantially’ … modifies the phrase ‘to injure, destroy, or prevent competition,” the court concluded that “[w]holesalers needed to show only that the effects of Prestige’s discriminatory actions ‘may be … to injure, destroy, or prevent competition’” and that “the district court did not err when it instructed the jury that the plaintiff was required to establish ‘a reasonable possibility of harm to competition.’”

The Ninth Circuit rejected Defendants’ argument for three reasons:

• the ABA Model Jury Instructions only requires plaintiffs to show “a reasonable possibility of harm to competition;”
• standard canons of construction would not have “substantially” in the first element of the list modify the third element; and
• Ninth Circuit precedent never addressed the issue explicitly but did describe the element as “a reasonable possibility that a price differential may harm competition.”

The Ninth Circuit buttressed this finding with a reference to the Supreme Court’s most recent RP opinion, Volvo v. Reeder-Simco, noting that the Court “omitted the word ‘substantially’ when recounting the elements for secondary-line injury, requiring that a plaintiff need only show that ‘the effect of [the price] discrimination may be to injure, destroy, or prevent competition.’”

Importantly, and consistent with its rejection of any “substantial” harm requirement, the Ninth Circuit also clarified that the Morton Salt inference—which permits courts to presume competitive injury from substantial price differences sustained over time—operates as an affirmative presumption once such a sustained price disparity is shown. As the court explained, this presumption generally suffices to establish a reasonable possibility of injury to competition without requiring proof of substantiality or significant direct lost sales. This approach aligns with the foundation laid by the Supreme Court in Federal Trade Commission v. Morton Salt Co. which held that a factfinder may infer injury to competition from a sustained, substantial price differential because such disparities can impair the competitive opportunities of individual merchants and thereby create a “reasonable possibility” that competition itself may be harmed.

The Second Circuit’s “Substantial Harm” Requirement

This Ninth Circuit language seems inconsistent with the Second Circuit’s opinion in 2015’s Cash & Henderson’s Drugs, Inc. v. Johnson & Johnson. There, the Second Circuit affirmed a summary judgment for Defendants because Plaintiffs’ showing of a loss of approximately .25% of customers to the favored purchasers was de minimis, thus inadequate to show the requisite harm to competition. In doing so, the court found that plaintiffs “failed to raise a question of material fact as to whether they suffered competitive injury” because they “could not generate evidence tending to show that they lost more than a de minimis number of customers to the favored purchasers, indicating that competition was not substantially harmed or threatened by the price difference in question.” [emphasis added]

The Second Circuit referenced a different portion of the Volvo opinion, explaining that “[t]he [Supreme] Court also made clear that any ‘price discrimination’ must ‘affect substantially’ competition between the favored purchaser and the plaintiff. …15 U.S.C. § 13(a) (prohibiting price discrimination where the effect ‘may be substantially to lessen competition’).” As a result, the Second Circuit found “that if the loss attributable to impaired competition is de minimis, then the challenged practice cannot be said to have had a ‘substantial’ affect [sic] on competition.” The Second Circuit also found support in cases from the Fifth, Seventh, and D.C. Circuits in holding that “[RP’s statutory language] itself thus requires at least the potential for substantial harm to competition.” [emphasis added]

The Ninth Circuit’s approach to the Morton Salt inference is also inconsistent with the Second Circuit’s approach in Cash & Henderson. Specifically, where the Ninth Circuit held that the Morton Salt inference is an operative presumption, the Second Circuit treated it as a rebuttable presumption, establishing a framework that allows defendants to rebut the Morton Salt inference “by evidence that favored purchasers were diverting only a de minimis number of customers.” The Second Circuit’s approach is more stringent, requiring that the Morton Salt inference be supported by more than minimal diverted sales to be actionable and imposes a substantial effect threshold.

Takeaways

Ultimately, Volvo, Cash & Henderson, and L.A. International Corp. reveal significant variations in how courts analyze RP secondary‑line price discrimination claims, particularly regarding competitive‑injury standards. The Ninth Circuit in L.A. International Corp. applied a more plaintiff‑friendly approach, rejecting any requirement of “substantial” competitive injury and permitting geographic proximity to establish competition, a stance that contrasts sharply with the Supreme Court’s restrictive framework in Volvo and the Second Circuit’s in Cash & Henderson, both of which emphasized substantial competitive harm.

At the same time, the differing outcomes may be reconcilable: de minimis lost sales would be insufficient to show “harm to competition” just as they would be insufficient to show “substantial harm to competition,” and the apparent conflict may reflect which part of the RP language the moving party argued “substantially” should modify. And even if there is a circuit split, it is not clear that the Supreme Court would find it interesting enough to weigh in. Still, the interpretation of RP’s language—and the Supreme Court’s gloss on it in Volvo—diverges meaningfully in these two appellate opinions.

What is more certain is that this 2018 case, even after the Ninth Circuit opinion, might not be over and damages and attorney fees might not be collected soon. So, the key takeaways now remain the same as we listed in 2024: RP litigation is time-consuming and fact-intensive for all participants; more plaintiff-friendly opinions like this Ninth Circuit one will be necessary to overcome decades of defendant-friendly precedent if RP is to be truly revived; but, yes, even now, it is possible to win an RP case.

Image by Agata from Pixabay