Healthcare, high-tech and transportation companies should expect continued heightened antitrust enforcement in the next year, according to officials at the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ). At the American Bar Association’s (ABA’s) Antitrust Section Spring Meeting, both the FTC and DOJ suggested they would concentrate on behavior causing the greatest consumer harm, particularly in light of budget constraints.

In addition to cartel enforcement, Assistant Attorney General William Baer said that the DOJ will continue to focus resources on the following markets:

FTC Chairwoman Edith Ramirez emphasized the FTC’s ongoing efforts to investigate potential competitive harm to consumers resulting from:

Additionally, Chairwoman Ramirez wants to devote resources to policy efforts in high-tech markets, like the recent workshops held on patent assertion entities. She also recommended that the FTC conduct merger retrospectives to inform future decision-making in the merger area.

Merging parties should apply the tips offered by FTC and DOJ officials at the ABA’s Spring Meeting for dealing more efficiently with the agencies during the merger review process.

Leslie Overton, Deputy Assistant Attorney General for Civil Enforcement, spoke about the growing costs and delays associated with e-discovery during the Second Request phase. To handle document productions more efficiently, Overton advised that counsel for merging parties should:

Howard Shelanski, Director of the FTC’s Bureau of Economics, emphasized the importance of coming in with the right data early during the merger review process, including:

Shelanski said that merging parties are now delivering this type of data sooner and hiring economists earlier in the process.

For more information on the antitrust agencies’ merger review process, see Practice Notes, Corporate Transactions and Merger Control: Overview and How Antitrust Agencies Analyze M&A.

Companies that advertise online, including on mobile devices and social media sites, should ensure that their disclosure practices comply with the FTC’s newly revised guidance document, .com Disclosures: How to Make Effective Disclosures in Digital Advertising.

The revised guide:

To avoid liability for deceptive marketing, advertisers must ensure that all express and implied claims in their ads are truthful and substantiated. If information must be disclosed to make an ad claim accurate, the FTC requires the disclosure to be “clear and conspicuous.” While there is no standard test for determining compliance with this requirement, the revised guide provides several factors for advertisers to consider, including:

The revised guide also offers practical tips and illustrations for compliance. For example, advertisers should:

The FTC notes that because of space constraints it may be impossible to make clear and conspicuous disclosures on certain mobile platforms. The revised guide states that if disclosure is not possible on a certain platform, that platform should not be used to disseminate ads that require disclosures.

For more information on online advertising regulation and compliance, see Practice Note, Online Advertising and Marketing.

While public companies and their counsel may welcome recent SEC guidance on corporate social media communications under Regulation FD, they should not forget other important securities law compliance risks implicated by social media.

The SEC recently issued a report on its investigation of Netflix, Inc. and its CEO for a potential violation of Regulation FD after the CEO posted an important performance metric on his personal Facebook page. The report clarified that:

Despite this tentative green light under Regulation FD, companies should remain vigilant about other important compliance risks. The challenge of providing appropriate context within the space limitations of Twitter and other forums and the casual, spontaneous nature of social media lead to risks of:

For more information on the new SEC guidance on corporate social media, see Article, Social Media and Regulation FD.

For sample corporate policies, with explanatory notes and drafting tips, see Standard Documents, Social Media Guidelines (Public Company Long Form) and Social Media Guidelines (Public Company Short Form).

Financial institutions involved in leveraged lending should ensure compliance with new supervisory guidance recently published by US federal bank regulators. The guidance becomes effective May 21, 2013, and will be taken into account during assessments of an institution’s risk management framework.

The Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Federal Reserve Board of Governors jointly published updated guidance on leveraged lending in the Federal Register. The guidance focuses on, among other things:

For general information on leveraged lending, see Practice Note, Lending: Overview.

Companies that rely on copyright protection and manufacture works abroad may face new challenges following the US Supreme Court’s recent decision in Kirtsaeng v. John Wiley & Sons, Inc. The decision allows parties that acquire copyrighted works made and lawfully purchased outside the US to import them for sale in the US and not face copyright infringement liability.

In Kirtsaeng, the Supreme Court considered whether the first sale doctrine applies to foreign-manufactured goods imported for resale in the US without the permission of the copyright owner. The first sale doctrine, codified as Section 109(a) of the Copyright Act, gives the owner of a copy that is “lawfully made under [the Copyright Act]” the right to sell or otherwise dispose of the copy without the copyright owner’s permission. The Supreme Court found that the doctrine applies to copies of copyrighted works lawfully made abroad, embracing a non-geographical interpretation of the first sale doctrine.

The decision removes copyright law as a potentially valuable tool for companies facing “parallel importation” or “gray markets” for goods involving copyrighted works or aspects of goods that are copyrightable. Companies that rely on copyright protection and manufacture works abroad should consider:

Copyright holders and parties that avail themselves of first sale protection should monitor:

For more information on Kirtsaeng, see Practice Note, In Dispute: Kirtsaeng v. John Wiley & Sons, Inc.

For more information on protecting against gray market goods, see Practice Note, Protecting Against Counterfeit Trademarks and Gray Market Goods.

Employers with threatened or pending class action litigation should be aware of a recent US Supreme Court decision reinforcing the standard for class certification under Rule 23(b)(3) of the Federal Rules of Civil Procedure. Although Comcast Corp. v. Behrend involved alleged violations of federal antitrust law, the holding has potential ramifications for employment-related class actions.

The Supreme Court, in a five to four decision, held that the Third Circuit erred by refusing to consider arguments against the plaintiffs’ damages model that bore on the propriety of class certification simply because the arguments were also pertinent to the merits determination. Courts must determine whether Rule 23(b)(3) prerequisites have been met even when that requires inquiring into the merits of the claims.

In light of this decision, employers should:

A recent decision by the Seventh Circuit highlights the need for companies purchasing the assets of a business to conduct thorough due diligence into actual and potential employment-related liabilities of the target company, in addition to other liabilities.

In Brian Teed v. Thomas & Betts Power Solutions, the Seventh Circuit held that an asset purchaser may be liable as a successor for the target company’s Fair Labor Standards Act (FLSA) violations, even when the purchaser specifically disclaimed that it was assuming the target company’s liabilities when it acquired the assets. The Seventh Circuit noted, however, that disclaiming liability of a predecessor still may be useful against state law claims.

Given this case, which may have implications beyond the Seventh Circuit, asset purchasers should inquire into a target company’s employment-related matters, including:

Based on liabilities exposed during due diligence, purchasers should consider:

For more information on strategic considerations and hidden liabilities relating to labor and employment issues in M&A, see Practice Note, Labor and Employment Issues in Corporate Transactions: Strategic Considerations and Hidden Liabilities and Checklist, Due Diligence Checklist: Labor and Employment.

A recent Second Circuit decision provides greater clarity for employers and their counsel on the burden-shifting framework applicable to whistleblower retaliation claims under SOX. This decision reflects a movement by courts toward a more consistent application of SOX.

Joining several other circuits, in Bechtel v. Administrative Review Board, the Second Circuit held that, to prevail on a SOX retaliation claim, an employee must prove by a preponderance of the evidence that:

An employer may rebut these four elements by presenting clear and convincing evidence that it would have taken the same adverse action in the absence of any protected activity.

This decision:

For more information on SOX whistleblower protections, see Practice Note, Whistleblower Protections under Sarbanes-Oxley and the Dodd-Frank Act.

The Delaware State Bar Association’s Section of Corporation Law will meet to consider several significant proposed amendments to the Delaware General Corporation Law (DGCL) and the Delaware Limited Liability Company Act (LLC Act). The amendments to the DGCL would streamline the process for acquirers conducting mergers through a tender offer. If approved by the Delaware legislature, most of the amendments would take effect on August 1, 2013.

Among other changes, the proposed amendments address the following:

For more detailed information on the amendments, including other proposed changes to the DGCL, see Legal Update, Proposed Changes to Delaware Law: No More Top-up Options and Default Fiduciary Duties for LLC Managers.

Online retailers should consider the implications of the New York State Court of Appeals’ recent decision upholding the state’s Amazon law against a constitutional challenge brought by Amazon.com and Overstock.com. This decision may encourage states that have not yet adopted an Amazon law to enact similar click-through nexus statutes.

Under New York’s statute, an out-of-state retailer with no physical presence in the state (such as an online retailer) is presumed to have sales tax nexus with the state, and therefore is obligated to collect New York sales tax on sales to New York customers, if it both:

The presumption of sales tax nexus exists if the out-of-state retailer generated more than $10,000 in New York sales during the previous four quarterly sales tax periods from website referrals by in-state residents. A retailer can rebut the presumption if it shows that the in-state website owner did not engage in any customer solicitation in the state that would satisfy US constitutional nexus requirements.

In Overstock.Com, Inc. v. New York State Dep’t of Taxation and Finance, the New York State Court of Appeals, the state’s highest court, held that New York’s click-through nexus statute is not facially unconstitutional under either the commerce or due process clauses of the US constitution. During the course of legal proceedings, Amazon and Overstock withdrew their challenges that the statute was unconstitutional as applied.

For more information on New York’s Amazon law, see State Q&A, Sales and Use Taxes: New York.