The Antitrust Week In Review
Here are some of the developments in antitrust news this past week that we found interesting and are following.
Sony Pictures Acquires Alamo Drafthouse in Lifeline to Cinema Chain. Sony Pictures Entertainment is acquiring Alamo Drafthouse Cinema and will manage its 35 locations, a rare example of a traditional Hollywood studio’s owning a theater chain. The deal followed the Justice Department’s decision in 2020 to rescind the so-called Paramount consent decrees — movie distribution rules dating to 1949 that forced the largest Hollywood studios to sell off their theater holdings. Those rules were intended to prevent studios from controlling the film business, from creation to exhibition. In 2019, the Justice Department’s antitrust chief at the time, Makan Delrahim, said changes in the entertainment industry “made it unlikely that the remaining defendants can reinstate their cartel.”
DOJ ramps up scrutiny of health care investors. Citing the growing influence of private equity firms and other investors on the delivery of health care, the Department of Justice (“DOJ”) has turned its sights on health care investors, including through the widely used health care anti-fraud tool, the federal False Claims Act (“FCA”). In a February 2024 speech at the Federal Bar Association’s Qui Tam Conference, the acting head of DOJ’s Civil Division Brian M. Boynton identified “investors, such as private equity firms or venture capital firms” as a source of “influence [on] patient care” and warned that DOJ “will not hesitate to pursue them for their roles in defrauding the government.” Scrutiny from other arms of DOJ, including the Antitrust Division, is ratcheting up in parallel, and health care investors should understand the heightened compliance program expectations they are facing.
Sysco can’t scrap its Pilgrim’s Pride price-fixing settlements, US judge rules. In a setback for litigation finance company Burford Capital, a judge in Chicago ruled that national food distributor Sysco cannot back out of price-fixing settlements with meat industry giant Pilgrim’s Pride. U.S. District Judge Thomas Durkin said Sysco’s settlement with Pilgrim’s Pride was enforceable despite opposition from Burford, which had helped bankroll the litigation and argued that the deal was never finalized. The judge said emails between Sysco and Pilgrim’s confirmed the accord. The dispute between Sysco and Pilgrim’s Pride has been closely watched by the litigation funding industry, which provides financing to clients in exchange for a part of any settlement or other judgment.
Edited by Gary J. Malone