Antitrust Compliance for North Carolina Construction Companies: Avoiding Legal Pitfalls
The construction industry has long been a target for antitrust enforcement.
For construction company owners and managers, understanding antitrust laws and implementing effective compliance measures isn’t just good business practice, it’s essential protection against potentially devastating legal consequences.
Why Antitrust Matters in Construction
Antitrust laws are designed to protect consumers and the competitive marketplace from behaviors that restrict competition or trade. They apply to businesses of all sizes, including construction companies, and carry serious penalties for violations.
The construction industry faces particular scrutiny for several reasons. The project-based nature of the business creates numerous opportunities for competitors to interact on bids and contracts. The prevalence of subcontractor relationships often blurs the lines between competitors and partners. Local trade associations often bring competitors together, creating environments where improper discussions may occur. Additionally, the substantial dollar values involved in many construction projects naturally increase regulatory interest in ensuring fair and competitive practices.
Understanding the Legal Landscape
Antitrust laws operate at both federal and state levels and can create both civil and criminal liability. The core federal antitrust statutes include three primary laws that construction company managers should understand.
The Sherman Act serves as the foundational antitrust law, outlawing conduct that unreasonably restricts trade and criminalizing monopolization. It creates both civil and criminal liability for anti-competitive behaviors, making it particularly powerful in enforcement actions.
The Clayton Act, prohibits specific anti-competitive practices. These include price discrimination between customers when harmful to competition, “refusal to deal” arrangements, “tying” arrangements that stifle competition, and selling goods at unreasonably low prices specifically to destroy competition.
The Federal Trade Commission Act broadly bans “unfair methods of competition” and “unfair and deceptive acts or practices,” providing a flexible tool for regulators to address emerging anti-competitive behaviors that might not fit clearly into other statutory frameworks.
While these laws might seem abstract, courts have translated them into very specific prohibitions that affect day-to-day decisions in construction management.
“Per Se” Violations: The Highest Risk Activities
Certain behaviors are considered so inherently anti-competitive that they are deemed “per se” violations—meaning they’re automatically illegal regardless of their actual effect on competition. For construction companies, the most common per se violations fall into three categories: price fixing, market division, and bid rigging.
Price Fixing
Price fixing occurs when competitors agree to raise, fix, or maintain prices rather than allowing market forces to determine them. This doesn’t require an explicit agreement to charge exactly the same price—almost any coordination on pricing elements can violate the law.
Common examples in construction include agreements among competitors to establish or adhere to certain price discounts, hold prices firm, adopt standard formulas for computing prices, or adhere to minimum fee schedules. Each of these practices undermines the competitive pricing that antitrust laws are designed to protect.
Several warning signs might indicate potential price fixing. These include identical prices among competitors, especially when they previously varied; simultaneous price increases not supported by increased costs; or elimination of discounts that were historically offered. Any of these patterns should prompt careful review of competitive practices.
Market Division
Market division schemes involve competitors agreeing to divide markets among themselves, whether by geographic area, customer type, or project category. For example, if two contractors whose footprints previously overlapped agree that one will only pursue projects in eastern North Carolina while the other focuses on the Piedmont region, that may be an illegal market division.
These agreements also can manifest in more subtle ways. Even bidding behaviors like consistently declining to bid in certain areas or for certain customers, or submitting intentionally high bids outside your “territory,” can suggest market division. Both refusing to sell in certain markets and quoting intentionally high prices in those markets can raise suspicions of market allocation agreements.
Bid Rigging
Bid rigging is particularly relevant to construction companies and takes many forms. In bid suppression schemes, competitors agree that some will refrain from bidding or withdraw bids so that another can win. The winning bidder often rewards the others with subcontracts as compensation for not competing. With complementary bidding, competitors submit “cover bids” that are intentionally too high or contain special terms ensuring they won’t be accepted, creating the illusion of competition while guaranteeing a predetermined winner. In bid rotation schemes, all competitors submit bids but take turns being the lowest bidder according to a predetermined pattern.
Each of these practices artificially inflates prices and undermines the competitive bidding process that public and private owners rely on to obtain fair market prices. Government enforcement agencies are particularly vigilant about bid rigging in public construction projects, where taxpayer funds are at stake.
High-Risk Situations: When to Be Especially Vigilant
Certain business situations potentially create higher antitrust risk and deserve special attention from construction company managers and owners.
Interactions with Competitors
Direct communication with competitors presents the highest risk of antitrust violations. When interaction becomes necessary, construction managers should keep communications concise and strictly business-related. Any discussion of pricing, costs, or bidding strategies should be scrupulously avoided. It’s important to remember that all written communications, including emails and text messages, are potentially discoverable in litigation. Never fall into the trap of justifying questionable practices because “everyone else is doing it”—this provides no legal protection and may actually make the violation appear more deliberate.
Trade Association Meetings
Trade associations are typically the first place government investigators look when suspecting antitrust violations. While these organizations provide valuable industry benefits, they also create regular opportunities for competitors to interact. When participating in trade association activities, construction managers should avoid any discussions of prices, terms or conditions of sale, costs, future production, or marketing plans—even in informal settings like dinners or social events. Reviewing meeting agendas in advance can help identify potentially problematic discussion topics. If conversations venture into sensitive competitive areas, consider leaving the meeting to avoid even the appearance of participating in improper discussions. Having legal counsel review any information-sharing programs before participation can provide additional protection.
Joint Ventures and Partnerships
Joint ventures between competitors can serve legitimate business purposes but require careful structuring to avoid antitrust issues. If you’re considering a joint venture with a potential competitor, consulting legal counsel at the earliest possible stage can help ensure the arrangement is properly structured to achieve business objectives without creating antitrust exposure.
Communications About Pricing and Bidding
Any exchange of price information between competitors is dangerous under antitrust laws—even if the information is publicly available. This extends to all discussions about competitive bids, which are legally equivalent to discussions about prices and other sales terms. Even seemingly innocent sharing of pricing strategies or bidding approaches between competitors can create significant legal risk.
While you cannot discuss pricing with competitors, antitrust laws don’t prohibit gathering market intelligence from non-competitor sources. Customers, vendors, and publications can provide legitimate market insights without creating legal exposure. These channels allow construction companies to understand market conditions without engaging in direct communications with competitors.
Practical Compliance Strategies for Construction Managers
To protect your company and yourself from antitrust liability, several practical strategies can be implemented:
Developing a clear compliance policy is essential—this written document should clearly identify prohibited behaviors and provide guidance for high-risk situations. Regular review and updates ensure this policy remains current with changing enforcement priorities.
Implementing regular training for all employees involved in pricing, bidding, or competitive decision-making ensures everyone understands not just what’s prohibited but why these rules matter. These educational efforts should be documented and refreshed annually.
Establishing standardized protocols for bid development emphasizes independent decision-making and creates documentation showing the legitimate business basis for bidding decisions. These procedures help demonstrate that pricing decisions reflect individual business judgment rather than collusion.
Creating confidential channels for employees to report potential violations without fear of retaliation supports early internal detection of problems, allowing for corrective action before government involvement. This reporting system should include protections for whistleblowers and clear procedures for investigating concerns.
Maintaining clear records that show the legitimate business justifications for pricing decisions, market strategies, and joint ventures with competitors provides valuable evidence if questions ever arise. These records should document the business rationale, market factors, and cost considerations that drove important competitive decisions.
Implementing thorough due diligence procedures for activities like joint ventures and trade association participation helps identify and mitigate antitrust risks before they become problems. This assessment process should involve legal counsel when appropriate.
If You’re Contacted by Investigators
If government investigators contact you about a potential antitrust matter, your initial response is critical. Always treat investigators professionally and courteously, but avoid answering substantive questions until speaking with legal counsel. Limit your responses to basic identification information regarding your employment, and politely explain that any document requests must be directed to company legal counsel.
Resources
For additional guidance, valuable resources include the Department of Justice’s primer on “Price Fixing, Bid Rigging, and Market Allocation Schemes” and the FTC’s Competition Guidance Documents, both available online.
Throwing Away the Toaster: Where AI Controls Are Now and May be Heading
Years ago, when I was a baby lawyer living in a group house in DC, we had a toaster—my toaster. I had owned the toaster since college and it was showing its age. Eventually, you had to hold down the thing[1] to keep the bread lowered in the slots and toasting. But the appliance still heated bread and produced toast. One morning, I became so frustrated with that toaster and the thing-holding-down effort that I threw the toaster out, fully intending to get a new toaster.
The following day, my housemate, we’ll call him Mike,[2] raised an important series of questions:
Mike: Did you throw away the toaster?
Me: Yes. I was frustrated that it did not work right.
Mike: Did you get a new toaster?
Me: No, but I will soon.
Mike: Did our old toaster make toast?
Me: [pause] Ah . . . well, I mean, umm, yes. I see your point.
Anyhow, on a possibly related note, on May 14, 2025, BIS announced that it will rescind the AI Diffusion Rule and that, until the time of the official recission, would not enforce the Biden-era regulation.
Stop-Gap Stopped
Reading the BIS announcements, it appears that, once the AI Diffusion Rule is officially rescinded, there will not be any U.S. export control that restricts the provision of cloud computing through Infrastructure as a Service (IaaS). While the export of the certain ICs will still be controlled, ICs already owned or lawfully obtained could be put to any purpose, such as providing IaaS services for the development of AI in China.
If we return to October 2023, we see a comment made regarding the 2022 semiconductor regulations, highlighting that those rules, as then written, “may give China computational access to their equivalent ‘supercomputers’ via an IaaS arrangement.” (88 Fed. Reg. 73467). BIS acknowledged that the semiconductor regulations did not then cover IaaS, when it recognized that it was “concerned regarding the potential for China to use IaaS solutions to undermine the effectiveness of the October 7 IFR controls and [BIS] continues to evaluate how it may approach this through a regulatory response.” A plain reading of that statement indicates that the semiconductor regulations were not meant to (or could not be read to) cover IaaS.
However, the 2025 AI Diffusion Rule attempted to cover to that regulatory loophole and prohibit IaaS access for Chinese AI development. The Rule created ECCN 4E091 to cover certain AI models and then created a presumption that certain IaaS services would result in an unauthorized export of those 4E091 AI models. Effectively, that presumption created a restriction on cloud service providers to be able to provide certain IaaS services to entities in the PRC. With the recission of the AI Diffusion Rule, it appears that the loophole has been reopened.
Guidance Through and Inter-Rule Interim
In tandem with the rescission of the AI Diffusion Rule, BIS also issued three guidance documents that (1) put companies on notice that the Huawei Ascend 910 series chips are presumptively subject to General Prohibition 10[3], (2) provides guidance on due diligence that companies can conduct to prevent diversion of controlled ICs, and (3) reiterates existing controls that put restrictions on certain end-users and end-uses.
Those three guidance documents give the impression of a certain tension in the rulemaking process and they provide some hints as to be in store for the replacement AI rule:
On one hand, the new administration rescinded the AI Diffusion Rule in line with, if not in response to, calls from U.S. AI-related industry. The administration also recognized that there may have been flaws with the AI Diffusion Rule. For instance, the tiered approach to limiting and restricting exports of controlled ICs exclude many countries that are friendly to the U.S.—such as Iceland, Israel, and much of the EU and Eastern Europe. The AI Diffusion Rule did not put those U.S.-aligned countries on a tier in which they could freely acquire U.S. AI-supporting chips and, additionally, did not present a clear path for how those countries could move into the more favored tier.
As an alternative to the tiered approach researchers have suggested the idea of a country-by-country approach. That approach appears to be consistent with the administration’s recent trip to the Middle East, where it is reported that agreements with Saudi Arabia and the UAE have been negotiated to purchase U.S. producers’ GPUs (notwithstanding the fact that, under current regulations, those countries face restrictions on the purchase of certain advance semiconductors because of diversion risk).
While major semiconductor manufacturers have been the face of the recission effort, other major AI infrastructure players have been lobbying the administration to have the rule rescinded. Those companies had established or were working on data center projects in countries like Malaysia, Brazil, or India that were affected by the AI Diffusion Rule, particularly in how it limited compute capacity in those countries and restricted the use of the data centers.
On the other hand, with the AI Diffusion Rule scrapped, and no replacement ready, we suspect that officials at Commerce could be concerned about the re-opening of the IaaS loophole. The guidance documents appear to attempt to try to cover the gap left by the recission of the AI Diffusion Rule. In those guidance documents, BIS explains a policy whereby sellers of controlled ICs would need to conduct additional due diligence of IaaS providers when red flags are present. That approach stands in contrast to the AI Diffusion Rule, which put some diligence requirement on the service providers. In that we see a significant clue that a new replacement rule will likely find some way to restrict IaaS providers, but balance the interests of U.S. chip manufacturers and AI hyperscalers.
The guidance also announced the Huawei Ascend 910-series chips were presumptively a foreign direct product and subject to the EAR, presumptively violative of the EAR, and ultimately subject to General Prohibit 10. Ostensibly, that guidance could have a chilling effect on the purchase of Huawei chips, particularly in countries that wish to align with U.S. policy, and would help U.S. semiconductor manufacturers regain any ground lost to Huawei in those markets.
Striking a Balance in the New AI Rule
Looking to the future, the yet-to-be-seen replacement rule is going to have to balance the competing interests of a U.S. semiconductor and AI industry that want to expand freely and globally, and the national security concerns of those in government who would want restrict access to advanced semiconductors and AI technology by countries of concern.
For example, U.S. chipmakers will want to continue selling their leading edge GPUs to data centers in Malaysia and India. At the same time, U.S. export policy hawks would want to mitigate the risk of putting immense compute power proximate to, and potentially at the disposal of, PRC AI developers. Additionally, cloud service providers in Southeast Asia will want to be able to sell their services to the largest customer in the region, and would consider using Huawei chips over U.S. alternatives if it meant they could do so. That may mean that BIS cannot put too many restrictions on the region before the chipmakers and hyperscalers begin to voice objections and press to reduce the regulation.
Now that we have thrown away the toaster, selecting a new one—writing a new AI diffusion regulation—will require regulators to walk a narrow line to satisfy the interests of both industry and national security. Those interests are not necessarily opposed to one another, but their interests may be divergent, and it will be up to drafters to find a potentially very narrow common ground.
FOOTNOTES
[1] You know. The thing. It’s a technical term in the appliance repair world.
[2] Because that was his name. In fact, it still is.
[3] General Prohibit 10—or GP10 as it is affectionately known around the Sheppard Mullin offices—is a comprehensive prohibition on essentially doing anything with an item, including destroying or moving the item, if has caused a violation or will cause a violation of the EAR.
Competition Currents | May 2025
United States
A. Federal Trade Commission (FTC)
1. FTC requests public comment on EnCap, Verdun, XCL petition to modify order.
On April 2, 2025, the FTC announced it was seeking public comments through May 2, 2025, on a petition to reopen and modify its 2022 consent order relating to Verdun Oil Company II LLC’s acquisition of EP Energy LLC. Specifically, the parties asked to remove a prior approval requirement in the consent order (requiring the parties to seek prior approval from the FTC before engaging in certain related transactions in the future) that covered Verdun, which was under common management with XCL Resources Holdings, LLC at the time of the transaction, and their parent entities, EnCap Energy Capital Fund XI, L.P. and EnCap Investments L.P. (together, EnCap). See GT’s April 2022 Competition Currents for more information regarding the original consent order. In their request, the parties noted market changes since the consent decree was entered (including EnCap’s and XCL’s exit from crude oil exploration and production in the Uinta Basin area in Utah after a 2024 sale), which they argue obviates the need for a prior approval requirement.
2. FTC approves modification of Enbridge Inc. final order.
On April 8, 2025, the FTC approved a petition by Enbridge Inc. to set aside the 2017 final consent order in Enbridge’s merger with Spectra Energy Corp. At the time of the Spectra acquisition, Enbridge received an indirect ownership interest in the Discovery Pipeline, a competitor to the Walker Ridge Pipeline that Enbridge owns. The FTC was concerned that the acquisition would give Enbridge access to competitively sensitive information about the Discovery Pipeline and required Enbridge to establish firewalls to limit its access to information relating to the Discovery Pipeline as well as requiring Discovery Pipeline board members affiliated with Spectra to recuse themselves from votes involving the pipeline. In December 2024, Enbridge asked the FTC to reopen and set aside the 2017 order after it sold its interest in the Discovery Pipeline, making the consent decree terms obsolete.
3. Mark Meador confirmed as FTC commissioner.
President Trump nominated Mark Meador as FTC Commissioner, the Senate confirmed him on April 10, 2025, and he was sworn in as commissioner on April 16, 2025. Most recently, Meador worked in private practice and served as a visiting fellow at the Heritage Foundation Tech Policy Center. Previously, he was the deputy chief counsel for antitrust and competition policy for Sen. Mike Lee (R-Utah), as well as a trial attorney in the DOJ Antitrust Division. His term as FTC commissioner will expire on Sept. 25, 2031.
4. FTC seeks public comment on petition to modify Chevron-Hess final order.
The FTC announced on April 11, 2025, that it is seeking public comment through May 12, 2025, on a petition to set aside its final consent order (issued in January 2025) relating to Chevron Corporation’s acquisition of Hess Corporation. The consent order prohibited Chevron from appointing Hess CEO John B. Hess to its board of directors, as called for in the transaction’s merger agreement.
5. FTC seeks public comment on petition to modify Exxon-Pioneer final order.
Similarly, the same day, the FTC also announced that it is also seeking public comment through May 12, 2025, on a petition to set aside its final consent order (also issued in January 2025) relating to Exxon Mobil Corporation’s acquisition of Pioneer Natural Resources. The consent order prohibited Exxon Mobil from appointing Scott Sheffield (founder and former CEO of Pioneer) to its board of directors or from having him serve in any advisory capacity.
6. FTC launches public inquiry into anticompetitive regulations.
On April 14, 2025, the FTC announced that in response to President Trump’s executive order “Reducing Anticompetitive Regulatory Barriers,” it was launching a request for information on the impact of federal regulations on competition (to determine whether any regulations unnecessarily exclude new entrants or protect incumbents, for example). Comments can be submitted through May 27, 2025.
7. Illinois and Minnesota join FTC lawsuit challenging medical device coatings deal.
In March 2025, the FTC sued to block GTCR BC Holdings, LLC’s proposed acquisition of Surmodics, Inc., both of whom engage in manufacturing medical device coatings. GTCR is a private equity firm that also owns a majority of Biocoat, Inc., which per the FTC is the second-largest provider of outsourced hydrophilic coatings, with Surmodics being the largest. The FTC’s complaint alleges that the proposed acquisition is anticompetitive because it would give the combined company more than 50% of the market share for outsourced hydrophilic coatings, which medical device manufacturers use in devices including catheters and guidewires. On April 17, 2025, the FTC amended its complaint to add Illinois and Minnesota as co-plaintiffs.
8. FTC and DOJ issue letter seeking identification of anticompetitive regulations across the federal government.
Also as part of the antitrust agencies’ response to the executive order “Reducing Anticompetitive Regulatory Barriers,” on May 5, 2025, the FTC and DOJ issued a joint letter to all federal government agency heads requesting a list of anticompetitive federal regulations within the respective agency’s rulemaking authority that could reduce competition and innovation – including the agency’s recommendation for whether the regulation should be kept, amended, or rescinded. After receiving public and agency comments, the FTC and DOJ will provide the Office of Management and Budget with its consolidated recommendations.
B. Department of Justice (DOJ) Civil Antitrust Division
1. Justice Department hosts roundtables to address competition issues in the entertainment industry and unfair practices in the labor market.
On April 4, 2025, the DOJ hosted discussions centered on competition issues in the entertainment industry. First, DOJ Assistant Attorney General (AAG) Gail Slater met with union members and legal experts to discuss how non-compete agreements and no-poach agreements impact employees, with experts weighing in on strategies to protect workers. Second, AAG Slater discussed unfair practices in the live entertainment market in order to identify labor-market conduct that harms workers.
2. AAG Gail Slater welcomes Antitrust Division leadership team.
On May 1, AAG Slater appointed Dina Kallay to serve as DOJ deputy assistant attorney general for international, policy and appellate, joining the DOJ leadership team of Roger Alford (principal deputy assistant attorney general), Omeed Assefi (acting deputy assistant attorney general), Mark Hamer (deputy assistant attorney general), William “Bill” Rinner (deputy assistant attorney general), Dr. Chetan Sangvhi (deputy assistant attorney general), and Sara Matar (chief of staff).
3. Justice Department and FTC seek information on unfair and anticompetitive practices in live ticketing.
On May 7, 2025, the DOJ announced that in response to President Trump’s executive order “Combating Unfair Practices in the Live Entertainment Market,” it was launching, jointly with the FTC, a public inquiry aimed at identifying unfair and anticompetitive practices in the live entertainment market. AAG Slater stated of the inquiry, “Competitive live entertainment markets should deliver value to artists and fans alike,” while FTC Chair Ferguson also added, “Many Americans feel like they are being priced out of live entertainment by scalpers, bots, and other unfair and deceptive practices.” Comments can be submitted through July 7, 2025.
C. U.S. Litigation
1. Chalmers v. National Collegiate Athletic Association, Case No. 1:24-cv-05008 (S.D.N.Y. April 29, 2025).
On April 29, U.S. District Judge Paul A. Engelmayer dismissed a proposed class action by 16 former men’s basketball players against the National Collegiate Athletic Association (NCAA). The antitrust suit was filed last July, a month after the announcement of the $2.78 billion settlement that would compensate past athletes for their name, image, and likeness (NIL) and put a future revenue sharing plan in place. The players’ college careers spanned from 1994 to 2016, and Engelmayer agreed with the NCAA’s argument that the statute of limitations on their claims expired, noting in his opinion that “the NCAA’s use today of a NIL acquired decades ago as the fruit of an antitrust violation does not constitute a new overt act restarting the limitations clock.”
2. Compass Inc. v. Northwest Multiple Listing Services, Case No. 2:25-cv-00766 (W.D. Wash. Apr. 28, 2025).
On April 28, Compass Inc. sued the broker-led Northwest Multiple Listing Service (MLS), claiming that the MLS’s rules in Washington that prohibit “premarketing” real estate before they are officially listed for sale is an anticompetitive boycott. Compass—a broker service operating in Washington—engages in “office exclusive” listing that tests the asking price, pictures, and home specifications to a small set of potential buyers before the home is actually put up for sale. Compass alleges that the practice is used in other states, but that Washington prohibits this premarketing because it is “fundamentally unfair and perpetuates inequities that have long plagued the housing system.”
3. Mack’s Junk Removal LLC v Rouse Services LLC, Case No. 2:25-cv-03565 (N.D. Ill. Apr. 23, 2025).
A nationwide class action was filed alleging several large construction equipment rental companies utilized RB Global Inc.’s product, Rouse, to set rates for construction equipment rental. According to the allegations, rental companies defer all rental-pricing decisions to Rouse, which uses an AI algorithm to set rates at anticompetitive levels. The complaint also alleges that Rouse allows participants to get detailed sales data of local competitors, allowing for a greater chance of price fixing.
4. Regeneron Pharmaceuticals Inc. v. Amgen Inc., Case No. 1:22-cv-00697 (D. Del. Apr. 11, 2025).
On April 11, 2025, U.S. District Judge Jennifer L. Hall denied defendant Amgen Inc.’s motion to dismiss an antitrust lawsuit. In the lawsuit, competitor Regeneron Pharmaceuticals alleges that Amgen improperly bundled discounts of its other medications—in which it has market dominance—to pharmacy benefit managers if they would agree to exclusively cover Amgen’s Repatha, a cholesterol-reducing medication. Regeneron, which offers a competing cholesterol medication, claims that such bundling schemes effectively drive other competitors out of the market. In her ruling, Judge Hall held that Regeneron has presented evidence of both improper bundling and “de facto exclusive dealing arrangements” to proceed to further discovery.
The Netherlands
ACM
1. The ACM approves sustainability collaboration in textile sector under competition rules.
The Dutch competition authority (ACM) has issued an informal assessment of the Textile Alliance — an initiative involving companies, trade associations, and civil society organizations in the garments, shoes, leather, and textile sectors — concluding that the initiative complies with Dutch and EU competition law.
The Textile Alliance aims to promote international corporate social responsibility by improving compliance with human rights, environmental, and animal-welfare standards in production and supply chains. According to ACM’s assessment, the arrangements focus on individual company commitments and voluntary tools, such as a collective risk assessment, without mandating uniform actions or exchanging competition-sensitive information. The assessment affirms that competition law does not necessarily pose a barrier to sector-wide sustainability agreements.
2. The ACM approves FincoEnergies’ acquisition of Klaas de Boer with conditions.
The ACM has approved FincoEnergies’ acquisition of Oliehandel Klaas de Boer with conditions to maintain competition in the marine fuel supply market. Both companies are major suppliers of marine fuels in several Dutch ports. The ACM had competition concerns due to limited alternative suppliers and high costs for buyers to switch ports. To address this, FincoEnergies and Klaas de Boer must sell various assets, including tankers and a storage terminal, to GMB Groep and Slurink Transport Services, ensuring continued competition in the affected ports and eliminating competition concerns.
3. The ACM emphasizes the importance of competition for European competitiveness in joint statement.
Certain European competition authorities, including the ACM, have issued a joint statement highlighting the crucial role of competition in enhancing European competitiveness. The statement aligns with the European Commission’s recently presented “Competitiveness Compass” and emphasizes that competition fosters productivity, innovation, and investment. The authorities assert that competition and economies of scale go hand in hand and that competition rules are essential for well-functioning markets. The statement specifically addresses competition in the telecom sector, where the authorities warn that reduced merger scrutiny, particularly in telecommunications, may result in fewer incentives to improve networks, services, and innovation. As such, careful oversight of mergers is deemed necessary. Mergers that harm competition should either be blocked or approved only under strict conditions. The national competition authorities of Belgium, Portugal, Austria, Czech Republic, Ireland, and the Netherlands signed the joint statement.
4. The ACM informs healthcare institutions of competition rules for new cancer and vascular surgery standards.
The ACM has issued guidance to healthcare providers on how to comply with competition law when making regional agreements on the redistribution of care, following new national volume norms for cancer and vascular treatments. These norms limit certain complex procedures to hospitals that perform them frequently, starting in 2026. The ACM emphasized that while cooperation is allowed, such agreements must not amount to unlawful market sharing. The ACM will not intervene in regional care arrangements if all relevant stakeholders are involved and the cooperation pursues clear, measurable goals aimed at improving care accessibility, affordability, and quality.
Poland
A. UOKiK issues conditional clearance for Medicover’s acquisition of CityFit Gyms.
On March 31, 2025, the President of the Polish Office of Competition and Consumer Protection (UOKiK) conditionally approved ABC Medicover Holdings B.V.’s acquisition of 16 fitness clubs. ABC Medicover is a member of the Medicover group, a major private healthcare provider. The transaction consists of the acquisition of sole control over 16 companies operating under the CityFit and CityFit Blue brands. Medicover already has a strong presence in the Polish fitness sector through such brands as Just Gym, Well Fitness, McFit, Stellar, Platinum Fitness, Smart Gym, and Premium Fitness & Gym, operating over 150 clubs nationwide.
Based on its competition assessment, the UOKiK President concluded that while the concentration would not significantly restrict competition on most relevant markets, serious concerns arose in two cities (Bielsko-Biała and Gliwice) where the post-transaction market shares would be particularly high. To address these concerns, the clearance was made conditional on structural remedies. Medicover must divest one club in each of the two concerned cities — either an existing Medicover location or a CityFit club included in the acquisition. The buyer must be an independent third party the UOKiK President approves, with a credible commitment to operating a fitness facility at the divested location for a minimum of two years.
B. UOKiK launches investigation and conducts dawn raids in home appliances sector.
On March 31, 2025, the UOKiK President announced it was launching a preliminary investigation into a suspected price-fixing agreement between Electrolux Poland and major electronics retailers. The proceedings focus on suspicions that Electrolux Poland may have coordinated the retail prices of household appliances—including refrigerators, washing machines, dishwashers, coffee machines, ovens, vacuum cleaners, irons, and kettles—sold under the Electrolux and AEG brands. According to the authority, these practices may have prevented consumers from benefiting from lower prices, both online and in brick-and-mortar stores.
Based on signals received from the market indicating potential antitrust violations, the UOKiK President, after securing court approval, conducted unannounced inspections at the headquarters of Electrolux Poland and several entities operating retail chains, including companies running major home appliances chain stores. The case is still at its preliminary stage and is conducted in rem, meaning that it is not yet directed at any specific undertakings. Should evidence confirm the suspicions, the UOKiK President may open formal antitrust proceedings and bring charges against identified entities.
The investigation follows recent enforcement actions in the sector. Notably, in 2024, the UOKiK imposed over PLN 66 million in fines on companies involved in a decade-long price-fixing scheme concerning Jura-brand coffee machines. That decision also included a close to PLN 250,000 fine on an individual responsible for the agreement.
Italy
Italian Competition Authority (ICA)
1. ICA launches investigation against CNF for alleged concerted practice.
On March 25, 2025, ICA opened an investigation into the National Bar Council (CNF) for an alleged concerted practice in violation of Article 101 of TFEU. The investigation concerns the application of the “fair compensation rule” for lawyers, introduced by Law No. 49/2023. The “fair compensation rule” aims to provide specific protections for legal professionals when dealing with large clients, based on the presumption lawyers are often compelled to accept reduced fees from such clients.
According to ICA, CNF’s interpretation and enforcement of these rules—particularly through the new Article 25-bis of the Lawyers Code of Ethics—exceeds the scope of the law and may restrict competition among lawyers. ICA specifically challenged CNF’s use of ambiguous language prohibiting lawyers from agreeing upon or estimating fees, without specifying the context or limits. In ICA’s view, this lack of clarity failed to specify that the fair compensation obligations (and related disciplinary consequences) apply only to relationships with large corporate clients. By doing so, CNF is allegedly attempting to directly influence the economic behavior of lawyers under its supervision, potentially deterring them from negotiating fees below the indicated benchmarks.
ICA has given CNF a 60-day deadline, starting from the date of notification of this decision, to exercise its right to be heard by the legal representatives of the party. ICA has established that the procedure must conclude by the end of December 2026.
2. Unfair commercial practice: fine of almost EUR 20 million has been imposed on CoopCulture and other tourist operators.
On March 25, 2025, ICA fined Società Cooperativa Culture (CoopCulture) and the following tourist operators: Tiqets International BV, GetYourGuide Deutschland GmbH, Walks LLC, Italy With Family S.r.l., City Wonders Limited, and Musement S.p.A. almost EUR 20 million for making it difficult to purchase tickets online to access the Colosseum Archaeological Park. Specifically, the ICA found that CoopCulture failed to take adequate measures to counter ticket hoarding using automated methods while also reserving significant quantities of tickets for sales offered during its own educational tours, from which it gained considerable economic benefits. This forced consumers to turn to tour operators and platforms that resold tickets bundled with additional services (such as tour guides and pick-up) at significantly higher prices.
At the same time, the six tourist operators purchased tickets using bots or other automated tools, thus contributing to the rapid depletion of base-price tickets on the CoopCulture website. By doing so, these operators took advantage of the systematic unavailability of tickets, which forced consumers who wished to visit the Colosseum to obtain tickets bundled with additional services. ICA found that CoopCulture’s conduct constitutes an unfair commercial practice in violation of Article 20, paragraph 2, of the Italian Consumer Code. Also, the conduct of Tiqets International BV, GetYourGuide Deutschland GmbH, Walks LLC, Italy With Family S.r.l., City Wonders Limited, and Musement S.p.A. was found to be unfair under Articles 24 and 25 of the Italian Consumer Code.
3. Key takeaways from ICA’s annual report.
On March 31, 2025, ICA published its annual report on its 2024 activities. During 2024, ICA’s activity recorded a notable increase, both in quantitative and qualitative terms, confirming a trend established in recent years. Notably, between January 2024 and March 2025, ICA received 1,452 competition-related reports, examined 121 merger transactions, and concluded two proceedings on restrictive agreements and nine on abuse of dominant position.
In particular, the number of merger filings ICA reviewed increased by approximately 50% compared to the average of the past 10 years. Moreover, in seven cases, ICA exercised its call-in power, pursuant to Article 16, paragraph 1-bis, of Law No. 287/1990, to require notification of a merger not reaching the turnover thresholds for mandatory notification. According to the ICA, recent legislative amendments strengthened its investigative and intervention tools, also contributing to reinforcing enforcement activities against cartels. ICA initiated four proceedings, with over eight investigations covering as many sectors and over 30 companies. ICA reported that the intensified efforts to counter the most serious antitrust violations is also attributable to the establishment of the whistleblowing platform, which received over 200 reports, and to the leniency program, which was recently enhanced.
As for consumer protection, between January 2024 and March 2025, ICA examined 36,900 reports and concluded 71 proceedings; 46 with confirmation of the infringement, 17 with acceptance of commitments, and eight with no violations. According to the ICA’s estimates, the consumer protection activities carried out between 2023 and 2024 enabled savings of over EUR 28 million, as well as the restitution of more than EUR 150 million to 900,000 consumers.
European Union
A. European Commission
1. The European Commission opens investigation into UMG’s acquisition of Downtown after referral from the Netherlands and Austria.
The European Commission has accepted a referral request from the ACM to investigate Universal Music Group’s proposed acquisition of Downtown, a service provider to independent labels and artists. The ACM expressed concerns that the acquisition may negatively affect competition in the Netherlands and potentially other EU countries. Universal Music Group, the world’s largest record company, has a history of acquiring smaller industry players, often without regulatory oversight due to low turnover thresholds.
In this case, the ACM was notified about the acquisition in February 2025, and the deal prompted complaints from industry stakeholders. The Austrian competition authority supported the ACM’s request for a European-level review. The ACM reiterated its call for a “call-in power” to enable review of smaller, potentially harmful mergers even when they fall below standard notification thresholds. The European Commission has now launched a formal investigation into the deal’s cross-border competitive effects.
2. European Commission fines car manufacturers and ACEA EUR 458 million for cartel on end-of-life vehicle recycling.
The European Commission has fined 15 major car manufacturers and the European Automobile Manufacturers’ Association (ACEA) approximately EUR 458 million for their involvement in a long-running cartel concerning the recycling of end-of-life vehicles (ELVs). The cartel, which lasted over 15 years, involved coordination on avoiding payments to car dismantlers and restricting transparency around recycling rates in new vehicles.
Mercedes-Benz was granted immunity under the leniency program for informing the European Commission of the anticompetitive behavior. Other companies admitted their involvement and agreed to settle the case. Some companies received a reduction of their fine for cooperation under the leniency program. This decision is part of the European Commission’s broader efforts to enforce EU competition rules and address anticompetitive practices in the automotive sector.
3. The European Commission approves Safran’s acquisition of Collins Aerospace, with conditions.
The European Commission has approved Safran USA Inc.’s acquisition of parts of Collins Aerospace’s actuation business, subject to commitments to address competition concerns. Safran’s and the target’s businesses are largely complementary, but the initial transaction raised competition concerns, particularly in the market for trimmable horizontal stabilizer actuator (THSA) systems. These systems, used in civil aircraft, were found to have insufficient alternative suppliers post-merger.
To resolve these concerns, Safran committed to divesting its North American THSA business. A market test confirmed the remedy’s effectiveness, and the European Commission approved the deal subject to full compliance, which will be monitored by an independent trustee.
B. European General Court
General Court upholds Symrise raids in cross-border fragrance cartel investigation.
The EU’s General Court has rejected Symrise’s challenge to annul European Commission’s raids of its premises during a 2023 cross-border cartel investigation into the fragrance industry. The court found that the European Commission had sufficient grounds for inspections, based on credible evidence, including open-source intelligence, suspiciously similar tender bids, and confidential information exchanges. Symrise argued that the raids infringed its privacy and defense rights due to an alleged lack of reasonable suspicion. However, the court ruled that the broader context of international cartel suspicion, including indications from Symrise’s own activities and third-party findings, justified the European Commission’s actions. Symrise stressed that the ruling does not equate to the finding of guilt and reaffirmed its denial of any anticompetitive behavior, stating it continues to cooperate with authorities.
1 Due to the terms of GT’s retention by certain of its clients, these summaries may not include developments relating to matters involving those clients.
Additional Authors: Holly Smith Letourneau, Sarah-Michelle Stearns, Yongho “Andrew” Lee, Alexa S. Minesinger, Alexander L. Nowinski, Miguel Flores Bernés, Valery Dayne García Zavala, Hans Urlus, Dr. Robert Hardy, Chazz Sutherland, Manish Das, Johnny Shearman, Robert Gago, Filip Drgas, Anna Celejewska-Rajchert, Ewa Głowacka, Edoardo Gambaro, Pietro Missanelli, Martino Basilisco, Yuji Ogiwara, Mari Arakawa, Philip Ruan, and Dawn (Dan) Zhang.
Brussels Regulatory Brief: April 2025
Antitrust and Competition
European and UK Antitrust Enforcers Impose Fines Over End-of-Life Vehicles Recycling Cartel
On 1 April 2024, both the European Commission (the Commission) and the UK Competition and Markets Authority (CMA) fined major car manufacturers and trade associations for participating in a 15-year long cartel concerning end-of-life vehicle recycling. The Commission’s and CMA’s decisions highlight the authorities’ interest in pursuing novel theories of harm that may have an adverse impact on the green transition.
Financial Affairs
EU Institutions Finalize Omnibus I; EFRAG adopts Work Plan to Simplify ESRS
The European Parliament and the Council of the European Union finalized the legislative procedure for Omnibus I, while the European Financial Reporting Advisory Group (EFRAG) adopted the work plan detailing next steps for European Sustainability Reporting Standards (ESRS) simplification.
Commission Presents Savings and Investments Union
The Commission presented its Savings and Investment Union, outlining future legislative and nonlegislative initiatives to strengthen EU capital markets.
Sanctions
European Court of Justice Confirmed that the Ban on the Export of EU Banknotes to Russia Also Applies when the Money Is Intended to Finance Medical Treatments
The European Court of Justice ruled that only amounts strictly necessary for travel and basic living expenses may be brought into Russia.
Antitrust and Competition
European and UK Antitrust Enforcers Impose Fines Over End-of-Life Vehicles Recycling Cartel
On 15 March 2022, the European Commission (Commission) and the UK Competition and Markets Authority (CMA) conducted parallel unannounced inspections (dawn raids) at the premises of companies and trade associations active in the automotive sector in several EU member states and in the United Kingdom. On 1 April 2025, the Commission fined 15 major car manufacturers and a trade association a total of approximately €458 million for participating in a 15-year-long cartel concerning the recycling of end-of-life vehicles (ELVs), i.e., cars that are no longer fit for use, either due to age, wear and tear, or damage. On the same day, the CMA imposed fines against 10 car manufacturers and two trade associations of approximately £77.7 million for breaching UK competition law for a similar conduct affecting the UK market.
Both the Commission and the CMA found that the parties infringed EU and UK competition law by colluding on two aspects:
Car manufacturers agreed not to pay car dismantlers for processing ELVs and shared commercially sensitive information on their individual agreements with car dismantlers. The car dismantlers were therefore unable to negotiate a price with the car manufacturers.
The parties also agreed not to advertise how ELVs could be recycled, recovered, and reused, and how much recycled materials are used in new cars. The Commission stated that the car companies’ objective was to prevent consumers from considering recycling information when choosing a car, which could lower the pressure on companies to improve their environmental efforts and go beyond legal requirements on recyclability.
The Commission’s and CMA’s investigations involved trade associations that were found to act as a facilitator of the cartel by arranging meetings and contacts between car manufacturers.
Both investigations were triggered by a leniency application submitted by one of the cartel participants. As this participant has revealed the cartel, it was not fined and received full immunity from penalties. In addition, all companies admitted their involvement in the cartel and agreed to settle the case, which reduced the fine by 10% in the Commission’s investigation and 20% in the CMA’s investigation.
Teresa Ribera, executive vice president for Clean, Just and Competitive Transition, commented:
We will not tolerate cartels of any kind, and that includes those that suppress customer awareness and demand for more environmental-friendly products. High quality recycling in key sectors such as automotive will be central to meeting our circular economy objectives, not only to cut waste and emissions, but also to reduce dependencies, lower production costs and create a more sustainable and competitive industrial model in Europe.
The Commission also stated that this investigation was the largest settlement case it has concluded so far. This shows that the Commission can use the settlement procedure in exceptionally large settlement cases. Also, this parallel investigation illustrates the Commission’s and the CMA’s close coordination in investigating novel theories of harm that may have an adverse impact on the green transition.
Financial Affairs
EU Institutions Finalize Omnibus I; EFRAG Adopts Work Plan to Simplify ESRS
On 3 April, the European Parliament approved the text of the first part of the Omnibus package (Omnibus I). Omnibus I postpones the application date of the reporting requirements under the Corporate Sustainability Reporting Directive (CSRD) by two years for certain groups of companies, and it also postpones the transposition deadline as the first wave of application of the Corporate Sustainability Due Diligence Directive by one year. Members of the European Parliament (MEPs) largely supported the proposal: 531 voted in favor, 69 against, and 17 abstained. The pro-European political groups (the European People’s Party, the Socialists and Democrats, and Renew Europe) were able to reach an agreement to approve the content of the proposal a few hours before the votes. Further, the final text of Omnibus I was published in the Official Journal of the European Union on 17 April and is now in force at the EU level. The directive mandates member states to transpose it into national law by 31 December 2025.
In a related development, the European Financial Advisory Reporting Group (EFRAG) adopted its work plan on the simplification of European Sustainability Reporting Standards (ESRS) under CSRD. This review is part of EFRAG’s broader mandate to assess the entire ESRS framework, as set out in a mandate letter from Commissioner Maria Luís Albuquerque. EFRAG is expected to submit its technical advice to the Commission by 31 October 2025.
Now that the first part of the package is completed, MEPs and member states at the Council of the European Union are discussing internally their approach to the second part (Omnibus II), which introduces substantial simplification amendments to the obligations and requirements notably comprised in these two frameworks. Check this article for a summary of the proposed amendments by Omnibus II.
Commission Presents Savings and Investments Union
On 19 March, the Commission issued a Communication on the Savings and Investments Union, seeking to offer EU citizens broader access to capital markets and better financing opportunities for businesses. The strategy focuses on four key pillars: (i) citizens and savings, (ii) investments and financing, (iii) integration and scale, and (iv) efficient supervision in the single market. For each pillar, the Commission underlined both legislative and nonlegislative actions to be adopted throughout 2025 and 2026.
For citizens and savings, the Commission underlined that it would facilitate negotiations between the European Parliament and member states on the Retail Investment Strategy, but it will not hesitate to withdraw the proposal if the negotiations do not meet the objectives of the strategy. Key initiatives include a review of pension frameworks to bolster retail investor participation, a financial literacy strategy by Q3 2025, and a EU-wide framework for savings and investment accounts. For the investment and financing pillar, the Commission aims to facilitate equity investments by institutional investors, revise Solvency II criteria for long-term equity investments, and streamline securitization requirements by mid-2025, with additional reforms targeting private market liquidity due in 2026.
On integration and supervision, the Commission plans to reduce capital market fragmentation and enhance cross-border activity through emerging technologies such as artificial intelligence, simplifying rules for asset managers and potentially reviewing the Shareholders Rights Directive. In the context of capital markets integration, the Commission launched a public consultation to gather views on obstacles to financial markets integration across the European Union. On oversight, reforms to the European Supervisory Authorities could delegate supervisory powers to EU-level bodies, particularly for crypto services and large cross-border managers.
The Commission will conduct a midterm review of the strategy by mid-2027 to assess progress and refine initiatives.
Sanctions
European Court of Justice Confirmed that the Ban on the Export of EU Banknotes to Russia Also Applies when the Money Is Intended to Finance Medical Treatments
Under EU sanctions imposed on Russia, it is prohibited to sell, supply, transfer, or export banknotes denominated in any official currency of an EU member state to Russia or to any natural or legal person, entity, or body in Russia, including the Russian government and the Central Bank of the Russian Federation, or for use in Russia. Only three limited exemptions to this general ban exist: (i) export of banknotes for the personal use of natural persons traveling to Russia or members of their immediate families traveling with them, (ii) export of banknotes for the official purposes of diplomatic missions, or (iii) export necessary for civil society and media activities that directly promote democracy, human rights, or the rule of law in Russia.
In case C-246/24, Generalstaatsanwaltschaft Frankfurt am Main, delivered on 20 April 2025, the European Court of Justice addressed the situation where German customs officers discovered a passenger heading to Russia carrying nearly €15,000 in banknotes. The passenger stated the money was intended not only for travel costs but also for medical procedures in Russia, including dental work, hormone therapy for fertility, and follow-up care after breast surgery. Authorities confiscated most of the money, permitting the passenger to retain around €1,000 for travel-related needs.
The court ruled that carrying banknotes to Russia for medical treatment does not qualify as personal use under the exemption. The court reiterated that exceptions are to be interpreted strictly so that general rules are not negated. A broad interpretation of the exemption would result in a situation where it would be possible to transfer to Russia, without restriction, large sums of banknotes to make personal purchases of any kind there, and, moreover, it would be difficult to verify that such purchases are carried out.
The exemption in question is limited to covering costs directly related to the journey and stay—medical treatments do not fall within that scope, as the EU sanctions are ultimately intended to prevent the Russian economic system from gaining access to cash denominated in any currency of a EU member state to support Russia’s activities in the war in Ukraine.
Additional Authors: Petr Bartoš, Vittoriana Todisco, Kathleen Keating, Sara Rayon Gonzalez, Covadonga Corell Perez de Rada, Simas Gerdvila, Edoardo Crosetto, and Martina Pesci.
Part 2: Children and Location: Ferguson’s FTC Privacy Enforcement Priorities
While Andrew Ferguson advocates for a restrained regulatory approach at the FTC, his statements and voting record reveal clear priority areas where businesses can expect continued vigorous enforcement. Two areas stand out in particular: children’s privacy and location data. This is the second post in our series on what to expect from the FTC under Ferguson as chair.
Our previous post examined Ferguson’s broad regulatory philosophy centered on “Staying in Our Lane.” This post focuses specifically on the two areas where Ferguson has shown the strongest commitment to vigorous enforcement, explaining how these areas are exceptions to his generally cautious approach to extending FTC authority.
Prioritizing Children’s Privacy
Ferguson has demonstrated strong support for protecting children’s online privacy. In his January 2025 concurrence on COPPA Rule amendments, he supported the amendments as “the culmination of a bipartisan effort initiated when President Trump was last in office.” However, he also identified specific problems with the final rule, including:
Provisions that might inadvertently lock companies into existing third-party vendors, potentially harming competition;
A new requirement prohibiting indefinite data retention that could have unintended consequences, such as deleting childhood digital records that adults might value; and
Missed opportunities to clarify that the rule doesn’t obstruct the use of children’s personal information solely for age verification.
Ferguson’s enforcement record as commissioner reveals his belief that children’s privacy represents a “settled consensus” area where the commission should exercise its full enforcement authority. In the Cognosphere (Genshin Impact) settlement from January 2025, Ferguson made clear that COPPA violations alone were sufficient to justify his support for the case, writing that “these alleged violations of COPPA are severe enough to justify my voting to file the complaint and settlement even though I dissent from three of the remaining four counts.”
In his statement on the Social Media and Video Streaming Services Report from September 2024, Ferguson argued for empowering parents:
“Congress should empower parents to assert direct control over their children’s online activities and the personal data those activities generate… Parents should have the right to see what their children are sending and receiving on a service, as well as to prohibit their children from using it altogether.”
The FTC’s long history of COPPA enforcement across multiple administrations means businesses should expect continued aggressive action in this area under Ferguson. His statements suggest he sees children’s privacy as uniquely important, perhaps because children cannot meaningfully consent to data collection and because Congress has provided explicit statutory authority through COPPA, aligning with his preference for clear legislative mandates.
Location Data: A Clear Focus Area
Ferguson has shown particular concern about precise location data, which he views as inherently revealing of private details about people’s lives. In his December 2024 concurrence on the Mobilewalla case, he supported holding companies accountable for:
“The sale of precise location data linked to individuals without adequate consent or anonymization,” noting that “this type of data—records of a person’s precise physical locations—is inherently intrusive and revealing of people’s most private affairs.”
The FTC’s actions against location data companies signal that this will remain a priority enforcement area. Although Ferguson concurred in the complaints in the Mobilewalla case, he took a nuanced position. He supported charges related to selling precise location data without sufficient anonymization and without verifying consumer consent. However, he dissented from counts alleging unfair practices in categorizing consumers based on sensitive characteristics, arguing that “the FTC Act imposes consent requirements in certain circumstances. It does not limit how someone who lawfully acquired those data might choose to analyze those data.”
What This Means for Businesses
Companies should pay special attention to these two priority areas in their compliance efforts:
For Children’s Privacy:
Revisit COPPA compliance if your service may attract children
Review age verification mechanisms and parental consent processes
Implement data minimization practices for child users
Consider broader parental control features
For Location Data:
Implement clear consent mechanisms specifically for location tracking
Consider anonymization techniques for location information
Document processes for verifying consumer consent for location data
Be cautious about tying location data to individual identifiers
Implement and document reasonable retention periods for location data
While Ferguson may be more cautious about expanding the FTC’s regulatory reach in new directions, these established priority areas will likely see continued robust enforcement under his leadership. Companies should ensure their practices in these sensitive domains align with existing legal requirements.
Listen to this post
Global Trade in 2025: Outbound Investment Restrictions
Motivated by a rapidly evolving geopolitical climate, governments around the globe have increasingly scrutinized and intervened in transactions under foreign direct investment (FDI) screening regimes in recent years. Rising protectionism, concerns over cybersecurity threats, Covid-19 and the desire to protect critical domestic industries have driven the expansion of FDI regimes beyond purely national security or defense specific industries.
More than 100 jurisdictions now apply FDI screening in some form. The notification triggers and review processes vary significantly between these regimes, and their proliferation has significantly increased complexity for investors planning cross-border investments.
The New Frontier: Outbound Investment Screening
Having spent the last few years building and/or refining inward investment screening, governments are now turning to outbound investment screening, amidst concerns about economic dependence and technology leakage. Governments are increasingly concerned about offshoring of critical capabilities, which can facilitate the development of sensitive technologies in potentially hostile states and lead to over reliance on third countries, creating economic dependencies that can be exploited for geopolitical purposes.
The People’s Republic of China (PRC), Japan, South Korea and Taiwan already have outbound investment screening for domestic entities, primarily in sectors considered critical to national security and technological competitiveness. The US and Europe are now catching up, with US screening for outbound investments into certain sectors in “Countries of Concern” applicable from January 2025, and the EU launching an outbound investment monitoring exercise in similar categories of critical technology. While the EU and UK have not implemented formal outbound investment screening, each has signaled its concerns.
US: Outbound Investment Program (Executive Order 14105)
Regulatory expansions to maintain US technological leadership have included rules to monitor and restrict outbound investment – so-called “reverse CFIUS.” On August 9, 2023, President Biden issued Executive Order 14105 – “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern.” On October 28, 2024, the US Department of the Treasury issued final regulations implementing Executive Order 14105, which address investments by US persons in certain identified technologies in “Countries of Concern”, including PRC and the Special Administrative Regions of Hong Kong and Macau.
The regulations, which became effective January 2, 2025, prohibit certain transactions by US persons implicating highly strategic technologies, and create a post-closing notification requirement for certain other transactions. Under the regulations, the obligations on US persons will apply if such person has actual or constructive knowledge of relevant facts or circumstances relating to a transaction. A US person has such knowledge under the regulations if it possesses actual knowledge that a fact or circumstance exists or is substantially certain to occur; an awareness of a high probability of the existence or future occurrence of a fact or circumstance, or could have possessed such awareness through a reasonable and diligent inquiry.
The categories of covered transactions include the acquisition of an equity interest or a contingent equity interest, certain debt financing that grants certain rights to the lender, the conversion of a contingent equity interest, certain “greenfield” investments (building a new facility) or other corporate expansions, the entry into a joint venture, and certain investments as a limited partner or equivalent (LP) in a non-US person pooled investment fund. Excepted transactions include investments in publicly traded securities, certain LP investments with a threshold of $2,000,000, derivatives, buyouts of country of concern ownership, intracompany transactions, certain pre-final rule binding commitments, certain syndicated debt financings, and equity-based compensation.
The regulations apply to the conduct of US persons only and defines a US person as “any United States citizen, lawful permanent resident, entity organized under the laws of the United States or any jurisdiction within the United States, including any foreign branch of any such entity, or any person in the United States.” Under the America First Investment Policy issued in February 2025, the US administration is considering new or expanded restrictions on US outbound investment in the PRC in sectors such as semiconductors, artificial intelligence, quantum, biotechnology, hypersonics, aerospace, advanced manufacturing, directed energy, and other areas implicated by the PRC’s national Military-Civil Fusion strategy.
EU: Market Monitoring to Inform Future Policy on Outbound Investment Screening
On January 15, 2025, the European Commission published a Recommendation on reviewing outbound investments in technology areas critical for the economic security of the Union. The Recommendation asks EU Member States to review investments made between January 2021 and June 2026 by EU-based investors into third countries in three critical technologies for economic security: semiconductors, artificial intelligence and quantum technologies.
The EU Recommendation applies to acquisitions, mergers, “greenfield” investments, joint ventures, venture capital investments and the transfer of certain tangible and intangible assets, including IP or know-how. Non-controlling investments limited to seeking a return on invested capital are excluded. Member States are requested to gather information through mandatory or voluntary notification processes, and to perform a risk assessment of covered transactions with the European Commission.
The EU Recommendation covers the same three technologies as the US outbound regulations, although some of the definitions are narrower. The US outbound regulations also apply to non-controlling investments, although in other respects the EU Recommendation is wider because it covers all third countries as well as IP licensing.
This will be a significant information gathering exercise for transaction parties, Member States and the European Commission, with Member State progress reports due in July 2025 and final reports in July 2026. The review will inform a decision on whether further action is needed to regulate outbound investment at EU and/or national level.
In the meantime, Member States are continuing to expand FDI screening regimes for inward investment, with Ireland’s the latest to come into force in January, and Greece publishing its proposed screening framework in April. On May 8, 2025, the European Parliament endorsed revised rules for screening foreign investments into and within the EU. Under the proposed new rules, certain sectors such as critical raw materials and transport infrastructure will be subject to mandatory FDI screening by Member States. National procedures will be harmonized, and the Commission will have the power to intervene. Member States are now negotiating the text of the legislation, currently aiming to reach agreement in June.
UK: Position on Outbound Investment
In May 2024, the UK government published updated guidance on the National Security and Investment Act (NSIA), emphasizing that it can apply to “outward direct investment” from the UK. The NSIA may apply to the acquisition of an entity or asset outside the UK if the entity carries on activities in the UK or supplies goods or services to the UK, or the asset is used for these purposes.
This is not a change. It has been the position since the NSIA came into force in January 2022. However, it is noteworthy that the UK government chose to underline these powers and provide examples of when the NSIA would apply to acquisitions of a non-UK entity or asset.
The UK government has indicated that it is considering more substantive rules on outward investment screening, to complement the existing tools of export controls and inbound investment screening.
Strategies For Asset Managers to Mitigate Risks to Deal Certainty, Timelines and Costs
Conduct outbound investment reviews early in the deal process to assess exposure to “countries of concern” (e.g., China, Hong Kong, Macau).
Screen for sector sensitivity — artificial intelligence, quantum technology and semiconductors.
Include side-letter language addressing outbound investment screening compliance.
Diligence efforts should conform to the knowledge standard in the US outbound regulations and include:
inquiries to the relevant counterparty (e.g. the prospective portfolio company, fund manager or seller).
contractual representations or warranties that the target portfolio company does not engage in the in-scope technologies; or that the target fund is not a covered foreign person.
consideration of relevant public and non-public information, including the use of available public and commercial databases to verify information provided by the counterparty.
Monitor the evolving regulatory landscape and be prepared to adjust investment strategies and structures accordingly. Understanding the underlying policy drivers will enable investors to navigate regimes more effectively and reduce execution risk.
And finally…reconsider your government relations strategy: governments are trying to strike a balance between protecting national interests and encouraging investment, so they are continually seeking feedback and there are many opportunities to shape the policy debate.
Todd J. Ohlms, Robert Pommer, Seetha Ramachandran, Nathan Schuur, Jonathan M. Weiss, Mary Wilks, William D. Dalsen, Adam L. Deming, Adam Farbiarz, and Hena M. Vora contributed to this article
Private Equity in Australia: Upcoming Mandatory Merger Laws and Foreign Investment Changes
WHAT’S ON THE AUSTRALIAN REGULATORY HORIZON?
In this publication, we provide an overview of certain upcoming changes for private equity funds and their investors (both Australian and foreign) investing in Australia.
The key takeaways are set out below.
New Mandatory Merger Control Regime
A new mandatory merger control notification regime will be introduced effective from 1 January 2026, with transitional provisions starting from 1 July 2025.
Draft Guidelines by the Australian Competition and Consumer Commission (ACCC) and draft Determinations by the Australian Government have been released for consultation. However, there remains uncertainty about several matters, including how a “change of control” and calculation of monetary thresholds are intended to operate in a private equity context. Future government Determinations may clarify these issues. We are working with industry to make submissions to the government to clarify these issues in a manner that does not “chill” investment.
The government has also published draft notification forms under the draft Determination which require merger parties to specify whether their Sale and Purchase Agreement (SPA) contains any goodwill protection provisions (including noncompetes and restraints of trade). The ACCC will now have the power to declare that the existing “goodwill exemption” to the cartel conduct provisions under the Competition and Consumer Act 2010 (Cth) (CCA) does not apply if it considers that a particular noncompete, restraint of trade or other goodwill protection provision was not necessary for the protection of the purchaser in respect of the goodwill of the target business.
Foreign Investment Framework–Updates for Foreign Private Equity Funds and Foreign Investors
It is currently unclear how the new merger regime (and the ACCC) will interact with the foreign investment framework (and Foreign Investment Review Board (FIRB) processes), including the interaction between the FIRB and ACCC waiver regimes–detailed guidance is yet to be released.
The final stage of Treasury’s new Foreign Investment Portal (the Portal) is expected to launch by the end of May 2025, after which the entire FIRB application process (including communications with Treasury) will be facilitated electronically through the Portal.
Treasury recently released updated the Guidance Note 12–Tax Conditions, which interestingly removed the “standard tax conditions” but included more examples of tax conditions that may be imposed by the Australian Taxation Office (ATO) and Treasury on a case-by-case basis. In addition, it includes an updated tax checklist which the ATO now expects to be answered at the same time as lodging the FIRB application (rather than the current practice of seeking to defer this to after lodgement). Treasury has also updated Guidance Note 10–Fees to introduce a refund/credit scheme for filing fees in an unsuccessful competitive bid.
Next Steps
We will continue to update you on further developments in relation to the new merger control and foreign investment regime, including release of the subordinated merger legislation, which will, amongst other things, determine the final monetary thresholds by which merger notification will be required.
UPCOMING MANDATORY MERGER NOTIFICATION LAWS
In Australia, the merger control regime is underpinned by section 50 of the CCA, which prohibits mergers or acquisitions that would substantially lessen competition (SLC Rule) in any market in Australia.
While at present it is not compulsory for acquisitions to be notified to the ACCC, the Australian Government has passed the Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 (Cth) (the Act) such that as of 1 January 2026, a new mandatory and suspensory merger control regime will be introduced.
Under the new regime:
Any acquisitions of shares, assets, units and other defined interests involving a “change of control” that meet certain monetary thresholds (outlined further below) will be required to be notified to the ACCC and approved (i.e. determined that they do not breach the SLC Rule) prior to completing.
The SLC Rule has been broadened to encompass scenarios where a merger or acquisition results in the “creation, strengthening, or entrenchment of a substantial degree of market power”, not just a lessening.
Businesses can use the Clearance Procedure voluntarily from 1 July 2025, and it will be mandatory from 1 January 2026.
Thresholds–When Notification is Required
Set out on the next page is a flowchart which illustrates which transactions must be notified to the ACCC under the new regime:
Source: James Gray, K&L Gates LLP
As set out above, whether a transaction must be notified to the ACCC essentially depends on whether it results in a “change of control”, and if so, whether it meets certain monetary thresholds. Set out below is some additional detail on the change of control requirements and the monetary thresholds, noting that there remains uncertainty about how these are intended to operate in a private equity scenario.
Future government Determinations may clarify these issues. We are working with industry to make submissions to the government to clarify this issue in a manner that does not “chill” investment.
Control Threshold
A “change of control” is enlivened in respect of acquisitions of full or partial interests in shares, unit trusts and managed investment schemes. Acquisitions that do not result in a change in control are not required to be notified.
“Control” will be defined having regard to section 50AA of the Corporations Act 2001 (Cth) (Corporations Act)–i.e. as being the capacity to determine the outcome of decisions about an entity’s financial and operating policies.
We note that there is a degree of certainty regarding “control” issues. While the Act provides a “safe harbour” from the notification requirements for acquisitions of interests of less than 20%, the government has also foreshadowed that it intends to use its designation powers to require transaction parties to notify the ACCC of acquisitions of less than 20% of the voting rights in private/unlisted companies, where one of the parties to the transaction has an Australian turnover of more than AU$200 million.
This issue was not addressed in the Consultation Draft of the Determination published by the government on 28 March 2025, which otherwise provided considerable detail about the Mandatory Regime, including the information and documentary requirements that will be required to be provided to the ACCC. For more detail about the Determination, click here. Future government Determinations may clarify this issue.
Acquirer Turnover Thresholds
More generally, there is uncertainty as to how the acquirer “turnover thresholds” will be assessed for the economy-wide, large acquirer and serial acquirer thresholds for private equity investments, particularly in relation to:
Taking into account the turnover of “connected entities” (being associated entities for the purposes of section 50AAA of the Corporations Act and entities controlled by a principal party for the purposes of section 50AA of the Corporations Act) to calculate acquirer turnover in a private equity fund context given these Corporations Act concepts do not necessarily fit neatly with private equity fund structures, which may also include cross-shareholdings and cross-directorships.
The creation of a “new” fund for the purposes of industry or deal-specific investments.
Certain changes to the limited partners of a private equity fund (including secondaries) after a primary portfolio acquisition.
Where the fund is seeking to acquire interests/minority interests in entities.
Again, future government Determinations may clarify this issue (e.g. to have regard to the turnover of the specific portfolio company or specific fund only).
For exits which meet the notification thresholds, private equity funds and investors should anticipate longer approval timelines and increased regulatory oversight and cost, potentially influencing deal structuring and exit strategies.
Private equity funds and their portfolio companies must also consider the cumulative competitive impact of their acquisitions in the immediately preceding three-year period, as the ACCC can now assess these transactions together, even if they were not individually reported. This will be particularly relevant to private equity funds and their portfolio companies engaged in “bolt-on” and “roll-up” acquisitions to existing portfolio companies to enhance value. To stay compliant, portfolio entities should track target sales generated at the time of acquisition and in the following years to determine if future deals fall within the relevant monetary thresholds and therefore require notification.
Process Changes–Clearance Timelines and Notification Fees
The new merger regime imposes statutory timelines for the ACCC’s consideration of transactions. We will provide further detail on these timelines in a forthcoming Insight on the ACCC’s draft Merger Process Guidelines.
Treasury has also indicated that it expects notification fees to be around AU$50,000 to AU$100,000 for most notifiable transactions. However, an exemption from fees will be available for some small businesses so that the fees are not a disproportionate burden.
These ACCC fees are in addition to any FIRB notification fees that may apply to foreign private equity funds and investors.
Transitional Arrangements
To assist businesses during this transition, the ACCC has released guidance detailing how to navigate the period leading up to the mandatory implementation. Key points include:
Current informal review and merger authorisation processes: Businesses can continue to use the existing voluntary notification regime throughout 2025. Early engagement with the ACCC is advised to ensure sufficient time for assessment before the new regime takes effect.
Voluntary Notification (1 July 2025–31 December 2025): From 1 July 2025, businesses have the option to voluntarily notify the ACCC under the new regime. This provides greater certainty regarding timeframes and ensures that transactions are aligned with the forthcoming mandatory requirements.
Noncompetes, Restraints and Goodwill Protection
Under current laws, noncompetes and restraints of trade included in an SPA are generally exempt from the per se cartel prohibitions to the extent its purpose is solely to protect the goodwill acquired by the purchaser (Goodwill Exemption).
The government has published a draft Determination which provides detail about the forthcoming mandatory merger regime. The draft Determination includes draft notification forms which merger parties will be required to adopt when notifying the ACCC. Notably, merger parties will be required to specify whether their SPA contains any goodwill protection provisions and to specify why they are necessary for the protection of the purchaser in respect of the goodwill of the business.
The ACCC will have the power to declare that the Goodwill Exemption does not apply to any goodwill protection provisions which it considers are “not necessary” for the protection of the purchaser in respect of the goodwill of the target business. A goodwill protection provision (e.g. a noncompete clause) is likely to be deemed as such if the ACCC considers that the duration or geographic scope of the provision is unnecessarily broad. Merger parties should therefore carefully consider the scope of any goodwill protection provisions that they propose to include in any SPA–and ensure that they do not go beyond what is necessary for the sole purpose of protecting the goodwill of the business.
Unnecessarily broad goodwill protection provisions which fall outside the scope of the Goodwill Exemption will expose merger parties to potential liability for engaging in cartel conduct–which is both a criminal and civil offence under the CCA. Merger parties should be aware that even if the ACCC does not object to the goodwill protection provision upon being notified of the transaction, this does not preclude the ACCC from commencing action under the anti-competitive conduct provisions of the CCA in relation to this provision at a later stage.
Interaction with FIRB Regime
FIRB and the Treasury have traditionally consulted with the ACCC about transactions notified to FIRB because competition is a factor relevant to the national interest test in Australia’s foreign investment framework under the Foreign Acquisitions and Takeovers Act 1975 (Cth) and related Foreign Investment Policy and guidance notes.
It is currently unclear how the new merger regime and the ACCC will interact with the foreign investment framework and FIRB processes, including:
How the FIRB waiver regime will operate with the ACCC waiver regime.
How existing FIRB waivers granted by FIRB (after consulting with the ACCC) will operate under the new merger regime.
Whether Treasury may refer to a foreign acquisition to the ACCC for review even if that acquisition does not meet the merger thresholds.
The ACCC has noted in the ACCC’s draft Merger Process Guidelines that it is currently working with the Treasury on the interaction between the foreign investment framework and ACCC’s merger regime and that they will provide further guidance on how the two regimes operate together in due course.
It is expected that an applicant will be able to decide whether to submit a FIRB or an ACCC application first (i.e. there will not be a legal requirement to notify simultaneously, though it may still make sense to do so).
FOREIGN INVESTMENT CHANGES
Recap on Australia’s Foreign Investment Framework and FIRB
Background
Under Australia’s foreign investment framework, foreign persons may be required or encouraged to apply for foreign investment approval prior to taking certain actions. The approval is provided by the Australian Treasurer and confirms that the Commonwealth of Australia does not object to a particular action. It is commonly referred to as “FIRB Approval”, as the Treasurer receives advice from FIRB when deciding whether to approve an action.
Broadly, the framework is comprised of the Foreign Acquisitions and Takeovers Act 1975 (Cth) and the Foreign Acquisitions and Takeovers Regulations 2015 (Cth). Additionally, Australia’s Foreign Investment Policy and guidance notes provide further commentary and guidance.
Get Legal Advice Early
Australia’s foreign investment framework is complex, factually specific and continually changes. For foreign private equity investors (including sponsors, funds and their portfolio companies), Australia’s foreign investment framework and rules present a threshold issue that needs to be considered across all stages of the private equity investment life cycle against Australia’s foreign investment policy settings. Foreign private equity investors should seek legal advice for each and every investment into Australia to avoid breaching the foreign investment rules.
Other FIRB Updates for Foreign Private Equity Funds and Foreign Investors–Timelines, Lodgement, Tax Conditions and Fees
FIRB has made welcome headway in shortening its response times for straightforward decisions over the last year. Treasury’s new Portal is now live for compliance reporting. The final stage of the Portal is expected to launch by the end of May 2025, after which the entire FIRB application process (including communications with Treasury) will be facilitated electronically through the Portal.
On 14 March 2025, Treasury released updated Guidance Note 12–Tax Conditions. These changes reflect the tax risks and tax conditions that the ATO has been focused on and has imposed when reviewing recent foreign investment applications. Of note:
Interestingly, the guidance note no longer sets out “standard tax conditions” but does include more examples of tax conditions that may be imposed by the ATO and Treasury on a case-by-case basis.
Also included is an updated tax checklist which applicants are usually requested to answer post-lodgement of a FIRB application. However, the ATO now expects that information to be included in the FIRB application itself (rather than submitted during the FIRB review process or, sometimes, within three months of completion if relevant tax information is not available). If that tax information is not included in the initial application, the applicant must disclose why and when the information will be submitted. As noted above, these recent updates to FIRB’s tax guidance and the new Portal are likely to require front-loading of the provision of tax information by applicants.
Treasury has also updated Guidance Note 10–Feesto introduce a refund/credit scheme for filing fees in an unsuccessful competitive bid. This is a positive development; however, care needs to be taken to ensure that relevant eligibility criteria are met by unsuccessful bidders and credits or refunds can be applied in practice. Unsuccessful bidders can elect to take a refund equal to the lesser of 75% of the fee paid or the amount of the fee minus the minimum fee amount, currently AU$4,300 (which must be requested within six months of the unsuccessful bid) or a 100% credit for a subsequent FIRB application made within 24 months of the failed bid. Decisions regarding fee refunds or credits will still be made on a case-by-case basis following application and justification of the refund/credit request by applicants. It will be interesting to see if the new merger regime takes a similar approach to fees for unsuccessful competitive bids.
Overall, these changes are welcome and should assist to further support a shortening of average FIRB approval times but will require more upfront planning and disclosure by foreign applicants.
The BR International Trade Report: May 2025
Recent Developments
Various trade deals in the air.
U.S.-China trade deal: Washington and Beijing take steps to ease trade war. On May 12, the United States and China announced a deal to deescalate the trade tensions between the two countries. The centerpiece of the deal is a 90-day pause to the 100+ percent tariffs each country had imposed on the other. As of May 14, the United States lowered its general tariff on Chinese goods to 30 percent, while China lowered its tariffs on American goods to 10 percent. During the 90-day pause, the countries will endeavor to negotiate a more lasting resolution to ongoing trade tensions.
Trump administration announces UK trade deal. On May 8, President Trump announced his administration’s first major trade deal since his “Liberation Day” unveiling of broad reciprocal tariffs on April 2. Leaders in Washington and London agreed to terms that would (i) establish a “new trading union” for aluminum and steel products, (ii) lower the tariff on UK-origin automobiles to 10 percent for the first 100,000 vehicles imported into the United States each year, and (iii) streamline customs procedures for products exported from the United States. Notably, under the terms of the deal, the United States’ 10 percent base reciprocal tariff on UK-origin goods remains in effect. Shortly after the agreement was announced, International Consolidated Airlines, the owner of British Airways, purchased $13 billion of Boeing planes.
White House announces trade deals with Saudi Arabia and Qatar. Over May 13-14, during President Trump’s visit to the Middle East, the White House announced a $600 billion investment commitment from Saudi Arabia and a $142 billion U.S.-Saudi arms deal, as well as “an economic exchange worth at least $1.2 trillion” with Qatar.
United States and Ukraine sign long-awaited critical minerals deal. On April 30, the United States and Ukraine signed a natural resources deal which establishes the U.S.-Ukraine Reconstruction Investment Fund (the “Investment Fund”). The Investment Fund grants the United States certain priority access to Ukrainian critical minerals, oil, and natural gas in exchange for military assistance. Unlike previous iterations of the deal, the April 30 agreement did not require Ukraine to reimburse the United States for past military aid. Treasury Secretary Scott Bessent emphasized that the deal embodies America’s efforts to encourage peace between Russia and Ukraine, stating “[t]his agreement signals clearly to Russia that the Trump Administration is committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long term.”
United Kingdom and India agree to trade deal. On May 6, after more than three years of negotiations, the United Kingdom and India announced a free trade deal, described by the UK government as “the biggest and most economically significant bilateral trade deal the UK has done since leaving the EU.” Meanwhile, the United States is seeking to enter into a significant trade agreement with India. In late April, Vice President JD Vance and Indian Prime Minister Narendra Modi met in India to “finalize[ ] the terms of reference for . . . trade negotiation[s].”
Semiconductor export controls. On May 13, Commerce announced a range of long-awaited actions regarding export controls (see our alert) applicable to advanced integrated circuits and computing items, including:
rescission of the Biden Administration’s “AI Diffusion Rule,” which was scheduled to significantly broaden preexisting controls over such items effective May 15;
informing the public that export licensing requirements may apply (a) to the export, re-export, and transfer of such items (such as to cloud providers) for use in training large AI models for persons in China and certain other restricted countries, where there is knowledge that such models are for use in WMD or military-intelligence applications, or (b) U.S. person “support” for such activity;
issuance of guidance regarding red flags that may present a risk of diversion of controlled items to prohibited end-users or end-uses; and
imposition of export licensing requirements applicable to most transactions worldwide involving certain Huawei “Ascend” chips, on the ground that such chips were produced in violation of U.S. export controls.
Section 232 investigations update.
Critical Minerals: On April 15, President Trump ordered the initiation of a Section 232 investigation into imports of processed critical minerals, which the U.S. Department of Commerce (“Commerce”) launched on April 22. Subsequently, he issued an April 24 executive order to spur the exploration and extraction of critical mineral deposits located on the seabed.
Trucks: On April 22, Commerce launched a Section 232 investigation into imports of certain medium- and heavy- duty trucks, their parts, and their derivatives. The probe aims to assess whether such imports compromise the country’s ability to meet domestic demand and pose risks to national security.
Aircraft, jet engines, and related parts: On May 1, Commerce Secretary Howard Lutnick initiated a national security investigation into imports of aircraft, jet engines, and related parts, which could lead to additional tariffs, among other measures. Among other factors, Commerce will investigate the concentration of U.S. imports of such items from a small number of suppliers, along with what Commerce described as “foreign government subsidies and predatory trade practices.”
President Trump orders rescission of Syria sanctions. During a speech in Saudi Arabia, the president announced his intent to remove all U.S. sanctions on Syria—in place for decades—explaining that his decision followed discussions with Saudi Crown Prince Mohammed bin Salman and Turkish President Recep Tayyip Erdoğan and aims to give Syria “a chance at greatness.” The next day, the president met with Syrian President Ahmad al-Sharaa, formerly associated with al-Qaeda, who led the rebel group that toppled the Assad regime in December 2024. This marked the first meeting between an American president and a Syrian leader since 2000.
U.S. Department of the Treasury (“Treasury”) announces intent to launch a “fast track” process for CFIUS review of foreign investments. Treasury’s May 8 announcement, issued under the auspices of President Trump’s February “America First Investment Policy” memorandum (see our prior alert), sets the stage for eventual implementation of streamlined review for preferred investors by the Committee on Foreign Investment in the United States (“CFIUS”). Treasury noted that it will design a pilot program featuring a “Known Investor Portal” through which CFIUS can collect information from foreign investors in advance of a CFIUS filing.
U.S. Trade Representative issues final rule on Chinese ships. On April 17, the Office of the United States Trade Representative (“USTR”) issued a final rule concerning the imposition of port fees on Chinese vessel operators, owners, and Chinese-built vessels. The rule seeks to implement steep tonnage-based port fees for both Chinese-built ships and Chinese-owned ships, with the intent of resurrecting the U.S. commercial shipbuilding industry. Following a 180-day implementation period, annually increasing tonnage-based fees will be levied at U.S. ports on Chinese-owned and operated ships, while Chinese-built ships face increasing fees based on net tonnage or containers. In addition, fees of $150 per car will be levied on all foreign-built car carriers, not just those with ties to China. After three years, incrementally increasing restrictions will be placed on the transportation of liquified natural gas (“LNG”) via foreign-built vessels. Check out our coverage of the final rule here.
Amidst U.S. trade tensions, incumbent governments retain power in Canadian and Australian elections.
Down in the polls by double digits only a few months ago, Canada’s Liberals surged in response to trade tensions with the United States and the resignation of longtime Prime Minister Justin Trudeau, who was replaced as party leader by Mark Carney. Conservative leader Pierre Poilievre, once considered the strongest contender to become prime minister, lost his parliamentary seat in the elections. The new government will look to reshape relations with the United States, which Prime Minister Carney initiated with a White House visit on May 6.
A similar story played out in Australia, where incumbent Labour Party Prime Minister Anthony Albanese fended off a challenge by Peter Dutton’s Liberal-National coalition. Similar to Canada, U.S. trade tensions loomed large in the election.
European Union announces retaliatory tariff plan against the United States. The retaliatory measures would target a list of almost 5,000 goods which total approximately $107 billion in European imports. Reports suggest that U.S.-origin aircraft and automobiles would be hit hardest by the tariff package.
UK Government takes control of last remaining “virgin steel” plant in country from Chinese company. Following the announcement by British Steel’s Chinese parent company, Jingye, that it would stop purchasing materials to keep the blast furnace running at the Scunthorpe plant, the UK government took action to prevent the closure of the plant. Although neither the plant nor British Steel have been nationalized for the time being, emergency legislation passed by the UK Parliament allows Business Secretary Jonathan Reynolds the ability to direct the British Steel board and staff, allowing for the purchase of necessary materials.
FTC Defers Some Click-to-Cancel Rule Enforcement to July 14, 2025
Companies with recurring payment programs with negative option terms now have until July 14, 2025, to bring their disclosure, consent, and cancellation practices into full compliance.
On May 9, 2025, the FTC issued a statement deferring full enforcement of its Negative Option Rule by 60 days, pushing back the original compliance deadline of May 14, 2025 to July 14, 2025.
This delayed enforcement applies to operational matters around the Rule’s requirements, such as making cancelation for consumers as easy as the original sign up. It does not affect the Rule’s prohibition on material misrepresentations, which went into force in January 2025.
The FTC may continue to review the Rule’s requirements and impact on businesses, but the Rule remains legally required at this time. Court challenges to the Rule by a variety of industry groups remain active, but yet unsettled.
For businesses offering negative options, whether in the form of subscriptions that auto-renew, free trials that automatically convert to a paid offering, etc., the Rule’s requirements continue to apply. See our prior alert summarizing key aspects of the Rule.
DOJ Announces Key Corporate Enforcement Changes & White-Collar Priorities
DOJ recently announced white-collar crime enforcement priorities and significant changes to its corporate enforcement policies (here and here). “[O]verbroad and unchecked corporate and white-collar enforcement burdens U.S. businesses and harms U.S. interests,” and “[n]ot all corporate misconduct warrants federal criminal prosecution,” according to the memo. New changes to these DOJ policies are intended to help companies navigate what to expect when making a disclosure and clarify the additional benefits that are available to companies that self-disclose and cooperate.
Priority Enforcement Areas
DOJ’s Criminal Division will prioritize investigating and prosecuting white-collar crimes in certain identified high-impact areas, as summarized below:
Health care and federal program and procurement fraud;
Trade and customs fraud, including tariff evasion;
Fraud perpetrated through variable interest entities, including securities fraud, and other market manipulation schemes;
Market manipulation including, Ponzi schemes, investment fraud, elder and servicemember fraud, and health and safety consumer fraud;
National security threats to the U.S. financial system by financial institutions and their insiders that commit sanctions violations;
Material support by corporations to foreign terrorist organizations, including recently designated cartels;
Complex money laundering, including Chinese Money Laundering Organizations, and other organizations involved in laundering funds used in the manufacturing of illegal drugs;
Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act violations, including counterfeit fentanyl pills and unlawful distribution of opioids by medical professionals and companies;
Bribery and associated money laundering that impact U.S. national interests, undermine U.S. national security, harm the competitiveness of U.S. businesses, and enrich foreign corrupt officials; and
Crimes involving digital assets that victimize investors and consumers; that use digital assets in furtherance of other criminal conduct; and willful violations that facilitate significant criminal activity.
DOJ has also called for an increased investigative pace and directed prosecutors to “move expeditiously to investigate cases and make charging decisions” quickly to ensure “that [investigations] do not linger and are swiftly concluded.”
Corporate Enforcement Policy Changes
New changes to the Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”) include the following:
For companies that satisfy all required elements from voluntary self-disclosure, to full cooperation, to timely and appropriate remediation, as well as have no aggravating circumstances, the CEP will make clear there “is a clear path to declination.” This is a marked contrast to prior guidance that entitled companies to a “presumption” of a declination.
Companies that are willing to satisfy the core criteria, but have aggravating circumstances that raise concerns for the company to voluntarily self-disclose, may still qualify for declination under the revised CEP. In these cases, the DOJ will consider “the severity of those aggravating circumstances and the company’s cooperation and remediation,” offering a potential outcome to avoid prosecution.
The revised CEP also clarifies that companies may still qualify for meaningful benefits when self-disclosing in good faith – such as a non-prosecution agreement, a 75 percent reduction in criminal fines, and no requirement to appoint a monitor – even if the disclosure is not considered timely or comes after the DOJ, without the company’s awareness, has already discovered the misconduct.
DOJ also announced revisions to the Criminal Division’s standards and policy for the selection of monitors in matters handled by the Criminal Division.
Monitorships will be limited to those cases where deemed “necessary,” including “when a company cannot be expected to implement an effective compliance program or prevent recurrence of the underlying misconduct without such heavy-handed intervention.” Specifically, the monitor selection standards will be revised to clarify “the factors that prosecutors must consider when determining whether a monitor is appropriate and how those factors should be applied,” as well as require that monitorships be “narrowly tailor[ed]…to address the risk of recurrence of the underlying criminal conduct and to reduce unnecessary costs.” Such factors prosecutors may consider include: (1) “the nature and seriousness of the conduct” and the risk of recurrence; (2) other available regulatory oversight; (3) the effectiveness of the company’s compliance program at resolution; and (4) the maturity of the company’s internal controls, including the company’s ability to test its compliance program as well as make improvements.
DOJ’s corporate whistleblower program will also undergo an evaluation to identify “additional areas of focus” that align with the Administration’s key initiatives. “[P]rocurement and federal program fraud; trade, tariff, and customs fraud; violations of federal immigration law; and violations involving sanctions, material support of foreign terrorist organizations, or those that facilitate cartels and TCOs, including money laundering, narcotics, and Controlled Substances Act violations” have all been included as areas of interest.
Takeaways
Voluntary Self-Disclosure now means “a clear path to declination” rather than a “presumption” of a declination.
Look for an uptick in False Claims Act investigations in the international trade area including, customs fraud and tariff evasion.
DOJ is requiring for prosecutors to “move expeditiously to investigate cases,” and will be actively monitoring investigation timelines and progress to ensure prompt resolution. This means that stakeholders and outside counsel will need to conduct internal investigations and make decisions quicker.
Notwithstanding the 180-day FCPA pause, bribery that enriches foreign officials and undermines U.S. business remains a priority.
Monitorships appear to now be the exception, not the rule for corporate resolutions.
Deferred Prosecution Agreements may be back given that DOJ is making clear “[n]ot all corporate misconduct warrants federal criminal prosecution.” Rather, DOJ is directing Criminal Division prosecutors to weigh “additional factors,” such as whether a company self-disclosed and fully cooperated, as well as its remediation efforts, when assessing whether to prosecute.
Companies will want to stay ahead of these developments and revised corporate enforcement policies. As we have reported, well-designed compliance programs help to mitigate not only bribery and corruption risks, but also money laundering, sanctions issues, human rights violations, and financial fraud risks. Effective and adequately resourced compliance programs also help to foster positive speak-up cultures, ensuring that employees feel comfortable to report suspected misconduct via available internal channels and reporting mechanisms. Maintaining robust internal controls make companies better equipped and prepared to flag potential misconduct early as well as navigate difficult considerations around self-disclosure. Companies should continue to evaluate their compliance programs, including the effectiveness and efficiency of their internal reporting mechanisms and internal investigations processes.
Focus, Fairness and Efficiency: DOJ Reveals Administration’s Plans for Enforcement of Corporate and White-Collar Crime
Key Takeaways
DOJ Criminal Division will prioritize enforcement in key areas, including health care fraud, trade and customs violations and national security-related financial crimes.
Companies that voluntarily self-disclose, cooperate and remediate may qualify for declinations, reduced penalties and shortened compliance obligations even where aggravating factors are present.
Corporate compliance agreements will generally be capped at three years, with early termination available based on remediation, risk reduction and program maturity.
Independent compliance monitors will be imposed only when necessary and must be narrowly tailored to limit burden and business disruption.
On May 12, 2025, the Head of the Department of Justice’s (DOJ) Criminal Division, Matthew R. Galeotti, issued a memorandum detailing the Division’s enforcement priorities and policies for prosecuting corporate and white-collar crimes under the Trump administration.
The memorandum describes the need for the Division’s policies to “strike an appropriate balance” between investigating and prosecuting criminal wrongdoing “while minimizing unnecessary burdens on American enterprise.” In accordance with this position, the memorandum describes areas that the Division will be particularly focused on investigating and prosecuting, while also emphasizing the Division’s willingness to reduce criminal and civil sanctions when corporations self-disclose and cooperate with the government.
Overall, the memorandum describes enforcement priorities and associated policies that align with the Trump administration’s focus on rooting out government waste and abuse, toughening U.S. policy on foreign trade and combatting national security concerns such as drug trafficking and foreign crime organizations, citing to several executive orders on these topics.
The Criminal Division’s “Areas of Focus” include:
Federal program fraud, waste and abuse—specifically health care fraud and procurement fraud;
Trade and customs fraud, including tariff evasion;
Fraud perpetrated through variable interest entities (VIEs), including schemes targeting elders, “ramp and dumps,” and other forms of market manipulation;
Fraud that victimizes U.S. investors, individuals and markets, such as Ponzi schemes, schemes targeting elders and servicemembers and fraud that threatens consumer health and safety;
Financial institutions that commit sanctions violations or enable transactions by Transnational Criminal Organizations (TCOs), drug cartels, hostile nation-states and/or foreign terrorist organizations;
Corporations that provide “material support” to foreign terrorist organizations, cartels and TCOs;
Complex money laundering schemes—specifically referencing “Chinese Money Laundering Organizations” and other organizations involved in laundering money used in the manufacturing of illegal drugs;
Violations of the Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act, including the unlawful manufacture and distribution of products used to create counterfeit pills containing fentanyl and the unlawful distribution of opioids by medical professionals and companies;
Bribery that impacts U.S. national interests, undermines U.S. national security and harms the competitiveness of the U.S.; and
Crimes involving the use of digital assets—with cases impacting victims, involving cartels, TCOs, or terrorist groups or facilitating drug money laundering or sanctions evasion receiving the highest priority.
After outlining the Criminal Division’s investigation and prosecution priorities, the memorandum indicates that the Department will take a more relaxed approach to misconduct committed by corporations that are willing to report such conduct, cooperate with the government and take actions to remediate the misconduct. In fact, these are factors that Criminal Division prosecutors must now consider when determining whether to bring criminal charges against corporations.
The memorandum further states that the Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy will be revised to clarify additional benefits that are available to companies that self-disclose and cooperate with the government and will provide a “more easily understandable” path for declination and fine reductions. As part of this effort, the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section have been instructed to review all existing corporate compliance agreements to determine if they should be terminated early. Facts that these Sections may consider when determining whether early termination is warranted include the duration of the post-resolution period, a substantial reduction in the company’s risk profile, the extent of remediation and maturity of the compliance program and whether the company self-reported the misconduct.
Additionally, Division attorneys must consider several factors when imposing terms for corporate compliance agreements, including the severity of the misconduct, the company’s degree of cooperation and remediation and the effectiveness of the company’s compliance program at the time of resolution. The memorandum provides that the terms of such agreements should not exceed three years “except in exceedingly rare cases,” and Division attorneys should assess these agreements regularly to determine if they should be terminated early.
Lastly, the memorandum provides policy changes with respect to the use of independent compliance monitors. Namely, the Division will only impose such monitoring when necessary, for example, when a company cannot be expected to implement an effective compliance program or prevent recurrence of the underlying misconduct, and the monitoring must be narrowly tailored to minimize expense, burden and interference with business.
Mr. Galeotti discussed these policy changes while speaking at the Securities Industry and Financial Markets Association’s Anti-Money Laundering and Financial Crimes Conference on May 13, 2025, stating that companies will now have a “clear path to declination” through self-disclosure, full cooperation with the government and timely remediation. Galeotti stated that even companies with aggravating circumstances may receive declination if the company’s cooperation and remediation outweigh these circumstances. Furthermore, Galeotti indicated that even companies that self-disclose after the government has become aware of their misconduct can still qualify for shorter-term compliance agreements, fine reduction and lessened monitoring.
Taken together, this memorandum and other guidance issued by DOJ under the direction of U.S. Attorney General Pam Bondi, indicate that the Department intends to treat corporate misconduct outside certain areas of focus with a lighter hand, incentivizing corporations to be transparent with the government and, as stated in the Division’s memorandum, “learn from their mistakes.”
FTC Issues FAQs on ‘Junk Fees’ Rule
The Federal Trade Commission’s Rule on Unfair or Deceptive Fees, sometimes called the “Junk Fees Rule,” took effect on May 12, 2025. In advance of that effective date, the FTC published Frequently Asked Questions (FAQs) to provide guidance to consumers and businesses regarding the Rule.
In a press release announcing the FAQs, the FTC reiterated that the Rule “prohibits bait-and-switch pricing and other tactics used to hide total prices and mislead people about fees in the live-event ticketing and short-term lodging industries,” and also said that the Rule “furthers President Trump’s Executive Order on Combating Unfair Practices in the Live Entertainment Market by ensuring price transparency at all stages of the live-event ticket-purchase process, including the secondary ticketing market.”
The reference to Trump’s executive order indicates that while the Biden administration started the war on so-called junk fees, the Trump administration will continue it, though potentially with a more restrained strategy.
The FAQs
The FAQs represent the FTC “staff’s views” on the Rule and its requirements. While those views are not binding on the Commission, every business subject to the Rule—or to any unfair or deceptive acts or practices (UDAP) standard—should review the FAQs, which provide insight into how the FTC and other consumer protection agencies are may view fees and fee disclosures. This GT Alert summarizes several of the key points FTC staff made in the FAQs.
What Businesses Does the Rule Cover?
The FAQs explain that businesses selling live-event tickets and short-term lodging are covered by the Rule, and that the Rule covers both individual (B2C) and business (B2B) transactions.
What Are the Rule’s Basic Requirements?
The FAQs explain that the Rule requires businesses to disclose the “total price,” which includes “all charges or fees the business knows about and can calculate upfront, including charges or fees for mandatory goods or services people have to buy as part of the same transaction,” but not taxes or other government charges, shipping charges, or charges for optional goods or services that may be purchased as part of the same transaction.
The FAQs explain that the total-price disclosure must be upfront and more prominently displayed than other price information (except the final amount of payment, as described below) and that excluded charges must be disclosed before the business asks for payment.
The FAQs explain that businesses “must tell the truth about information it’s required to disclose, like how much it’s charging and why” and avoid vague phrases like “convenience fees,” “service fees,” or “processing fees.”
Which Mandatory Fees or Charges Must Be Included in a Business’s Displayed Total Price?
The FAQs explain that businesses must include in the total price “all fees or charges” (other than government charges and shipping charges) that:
people are required to pay, “no matter what”;
people cannot reasonably avoid (the FAQs provide as an example credit card processing charges where there is no other viable payment option);
people are charged for ancillary goods or services that must be purchased “to make the underlying good or service fit for its intended purpose, which reasonable consumers would expect to be part of the purchase”; or
people cannot “effectively agree to because the business employs practices such as default billing, pre-checked boxes, or opt-out provisions.”
Can a Business Itemize Mandatory Fees or Charges?
The FAQs explain that businesses can itemize mandatory fees or charges so long as the itemization does “not overshadow the total price,” is truthful, and does not mispresent fees.
Which Fees or Charges Can Businesses Exclude from the Total Price?
The FAQs explain that businesses may only exclude “government charges, shipping charges, and fees or charges for optional ancillary goods or services that people choose to add to the transaction.” But the FAQs also explain that any excluded fees must be disclosed in the final payment amount that must be presented before the consumer is asked to pay, along with “the nature, purpose and amount of the [excluded] fee or charge” and “the good or service for which the [excluded] fee or charge is imposed.” When Must a Business Disclose the Final Amount of Payment, Including Fees or Charges It Excluded from the Total Price?
The FAQs explain that businesses must clearly, conspicuously, and prominently disclose the final amount of payment—that is, the total price plus any charges excluded from the total price—“before asking people to pay.” The final amount of payment must be disclosed “as prominently as, or more prominently than,” the total price.
Can Businesses Charge Credit Card Surcharges and Other Payment Processing Fees and, if So, Can They Exclude Such Fees from the Total Price?
The FAQs explain that businesses may “charge or pass through credit card or other payment processing fees if otherwise permitted by law,” but that, if a business that “requires people to pay with a credit card, the credit card fee is mandatory and must be included in the total price.”
What Happens if a Business Violates the Rule?
The FAQs explain that businesses that violate the Rule “could be ordered to bring their practices into compliance, refunds money back to consumers, and pay civil penalties.”
Takeaways
State and federal consumer protection agencies remain focused on so-called “junk fees,” with new investigations opening at a regular clip. Given that focus, businesses should watch for “junk-fee” related developments at both the state and federal levels and fine-tune their compliance programs in light of those developments.
We have provided ongoing analysis and commentary regarding junk-fee-related developments, including the developments addressed in our prior client alerts and blog posts:
FTC Alleges Fintech Cleo AI Deceived Consumers (March 31, 2025)
FTC Alleges Fintech Dave, Inc. Deceived Consumers (Nov. 15, 2024)
FTC Targets Adobe for Hidden Fees and Deceptive Subscriptions (July 9, 2024)
CFPB Launches Public Inquiry into Rising Mortgage Closing Costs and ‘Junk Fees’ (June 4, 2024)
FTC Takes Action Against Doxo, Citing Junk Fees (June 3, 2024)
California AG Publishes FAQs on California’s ‘Junk Fee’ Law (May 30, 2024)
CFPB Releases Report Highlighting Junk Fees on Mortgage Servicing (March 23, 2024)
CFPB Unveils Final Rule Banning ‘Excessive’ Credit Card Late Fees (Mar. 13, 2024)
CFPB Issues Proposed Rule to Stop ‘Junk Fees’ on Bank Accounts (Feb. 1. 2024)
California Bans Hidden Fees, Effective July 1, 2024 (Oct. 17, 2023)
FTC Proposed Rule Targeting ‘Junk Fees’ (Oct. 16, 2023)
CFPB Issues Advisory Opinion on ‘Illegal Junk Fees’ By Large Financial Firms (Oct. 12, 2023)