ASSISTANT AG BAER'S REMARKS ON "NO POACH' HIRING SETTLEMENT

FROM:  U.S. JUSTICE DEPARTMENT

REMARKS AS PREPARED FOR DELIVERY BY ASSISTANT ATTORNEY
GENERAL BILL BAER AT THE CONFERENCE CALL REGARDING THE JUSTICE DEPARTMENT’S SETTLEMENT WITH EBAY INC. TO END ANTICOMPETITIVE
“NO POACH” HIRING AGREEMENTS

WASHINGTON, D.C.

Good afternoon, and thank you for joining us on this call to talk about the Justice Department’s settlement of our lawsuit against eBay, a settlement that prohibits eBay from entering into anticompetitive agreements with other companies to restrain employee recruitment and hiring.

This is one further step towards closing an unfortunate chapter for Silicon Valley and other companies who unlawfully agreed to deny their employees the opportunity to receive competing job offers.  These so-called “do not poach” or anti-solicitation agreements are per se unlawful, and the Antitrust Division takes them very seriously. As a result of investigations into recruiting-related antitrust misconduct, a number of companies – Adobe, Apple, Google, Pixar, Intuit and Lucasfilm are under a court-ordered injunction to stop these illegal practices.  As a result of our action today, eBay also will be under a court-ordered injunction–after the closing of the public comment period and entry of the final judgment by the court.

What did eBay do?  In our lawsuit we alleged that executives at the highest level of eBay and Intuit, including eBay’s former CEO Meg Whitman and Intuit’s founder and executive committee chair Scott Cook, entered into an agreement that prevented the companies from recruiting employees from each other and, for a time, prevented eBay from hiring any Intuit employees.

The behavior was blatant and egregious.  And the agreements were fully documented in company electronic communications.  In one email, eBay’s senior vice president of HR wrote Meg Whitman complaining that while eBay was adhering to its agreement not to hire Intuit employees, “it is hard to do this when Intuit recruits our folks.”  Turns out that Intuit had sent a recruiting flyer to an eBay employee.  Whitman forwarded that email to Scott Cook asking him to “remind your folks not to send this stuff to eBay people.”  Cook quickly responded with “…Meg my apologies.  I’ll find out how this slip up occurred again….”

The state of California filed a related case based on the same factual allegations.  Both of those lawsuits are being settled today.  Our settlement prevents eBay from doing this again. The settlement announced today by Attorney General Harris provides restitution for the harm to individuals and the state’s economy.

We filed our first “no poach” lawsuit back in September 2010 in which we charged six high-tech firms–Adobe, Apple, Google, Intel, Intuit and Pixar–for entering into anticompetitive agreements.  We filed another lawsuit against Lucasfilm in December of that same year.  We reached settlements with all of those companies at the same time we filed our lawsuits.

Those settlements required an immediate halt to the illegal conduct and instituted strong and broad prohibitions against any recurrence.  And today’s settlement with eBay does the same and resolves the concerns that caused us to file suit against them in November 2012.

As you know, our judicial system also offers those who have been harmed the right to seek monetary damages for any antitrust harm.  Here, not long after we filed our first two lawsuits in 2010, private class action lawsuits against these same defendants were filed.  Certain companies settled last year.  And there are published reports that the remaining private lawsuits, covering the more than 60,000 employees who were harmed by these anticompetitive agreements, are settling as well.

These follow-on lawsuits are examples of the important roles that the federal, state and private enforcers together play in protecting U.S. consumers.

These actions by the Antitrust Division remind us all that the antitrust laws guarantee the benefits of competition to all consumers, including working men and women.   The agreements we challenged here not only harmed the overall competitive process but, importantly, harmed specialized and much sought after technology employees who were prevented from getting better jobs and higher salaries.  Stifling opportunities for these talented and highly-skilled individuals was bad for them and bad for innovation in high-tech industries.

Today’s proposed settlement prohibits eBay from entering into or maintaining anticompetitive agreements relating to employee hiring and retention for five years.

The settlement provides broad relief that also prohibits eBay from entering into an anticompetitive agreement–in basically any way, shape or form–that prevents a person from soliciting, cold calling, recruiting, hiring or otherwise competing for employees.

And to conclude, our enforcement actions should make it abundantly clear that the antitrust laws apply to every industry, including companies that innovate and companies in the high-tech industry.  These companies and the executives who run them are not above the law.  And our lawsuits against eBay and others prove that point.

And with that, I’d be happy to answer any questions you might have.

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AUSTRALIAN FIRM RECEIVES PERMANENT INJUNCTION RESULTING FROM FAILING TO REGISTER WITH CFTC

FROM:  COMMODITY FUTURES TRADING COMMISSION 

April 25, 2014

CFTC Obtains a Permanent Injunction against Australian Firm Halifax Investment Services, Ltd., Charged with Acting as an Unregistered Retail Foreign Exchange Dealer

Action is a result of CFTC’s 2012 sweep against foreign currency firms for failure to register under the 2008 Farm Bill, the Dodd-Frank Act, and CFTC regulations

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge James B. Zagel of the U.S. District Court for the Northern District of Illinois issued a Consent Order of Permanent Injunction that bars Australian firm Halifax Investment Services, Ltd. from soliciting orders to trade foreign currency (forex) from United States residents who do not qualify as eligible contract participants (ECPs) and from offering to be the counterparty to United States residents’ forex transactions without registering with the CFTC.

The Order requires Halifax to publish a notice on its website stating that Halifax does not provide services for United States residents. The Order settles CFTC charges that Halifax unlawfully solicited members of the public to engage in forex transactions and operated as a Retail Foreign Exchange Dealer (RFED) without being registered with the CFTC (see CFTC Press Release 6508-13, February 5, 2013).

Specifically, the Order states that between October 18, 2010 and February 5, 2013, Halifax maintained a website that permitted United States residents who were not eligible contract participants to potentially apply to open leveraged forex trading accounts by submitting information online to Halifax’s website.

In the forex market, entities known as RFEDs or Futures Commission Merchants (FCMs) may buy forex contracts from, or sell forex contracts to, individual investors. Under the Commodity Exchange Act and CFTC regulations, an entity acting as an RFED or FCM must register with the CFTC and abide by rules and regulations designed for investor protection, including those relating to minimum capital requirements, recordkeeping, and compliance. Further, with a few exceptions, such an entity also must be registered with the CFTC if it solicits or accepts orders from U.S. investors in connection with forex transactions conducted at an RFED or FCM.

BAZAARVOICE AGREES TO REMEDY TO ADDRESS ILLEGAL ACQUISITION

FROM:  U.S. JUSTICE DEPARTMENT

JUSTICE DEPARTMENT AND BAZAARVOICE INC. AGREE ON REMEDY
TO ADDRESS BAZAARVOICE’S ILLEGAL ACQUISITION OF POWERREVIEWS

Remedy Will Fully Restore Competition Eliminated in the Provision of Online Product Ratings and Reviews Platforms

WASHINGTON — The Department of Justice and Bazaarvoice Inc. have agreed on a remedy that will address Bazaarvoice’s illegal acquisition of PowerReviews Inc. by requiring Bazaarvoice to divest the assets it acquired from PowerReviews and adhere to other requirements to fully restore competition in the provision of online product ratings and reviews platforms.

On Jan. 8, 2014, the U.S. District Court for the Northern District of California in San Francisco ruled that Bazaarvoice violated Section 7 of the Clayton Act when it acquired PowerReviews, its only serious competitor.  Today’s proposed remedy, if approved by the court, will resolve the department’s competitive concerns associated with Bazaarvoice’s acquisition of PowerReviews.

“As a result of today’s agreement, Bazaarvoice will remedy the harm caused by its unlawful acquisition of PowerReviews,” said Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division.  “In addition, Bazaarvoice has agreed to meaningful additional measures that will allow a divestiture buyer to quickly achieve the competitive position that PowerReviews would have occupied today, absent the unlawful transaction.”

The proposed remedy requires Bazaarvoice to sell all of the PowerReviews assets to a divestiture buyer and contains other provisions to compensate for the deterioration of PowerReviews’ competitive position that occurred as a result of the transaction.  Under the terms of the agreement, Bazaarvoice is required to provide syndication services to the divestiture buyer for four years, allowing the divestiture buyer to build its customer base and develop its own syndication network.  Bazaarvoice is required to waive breach of contract claims against its customers, allowing them to switch to the divestiture buyer without penalty.  Bazaarvoice is also required to waive trade-secret restrictions for any of its employees who are hired by the divestiture buyer, enabling the buyer to leverage Bazaarvoice’s post-merger research and development efforts. 

Additionally, the agreement provides for the appointment of a trustee to oversee the divestiture process and to monitor Bazaarvoice’s compliance with its other obligations under the proposed remedy. 

On Jan. 10, 2013, the department filed a civil antitrust lawsuit in the U.S. District Court for the Northern District of California in San Francisco against Bazaarvoice.  The department alleged that Bazaarvoice’s June 2012 acquisition of PowerReviews eliminated the company’s only significant rival, in violation of the antitrust laws. The department’s trial against Bazaarvoice, conducted by Judge William H. Orrick III, began on Sept. 23, 2013.  The trial lasted three weeks, with closing arguments taking place on Oct. 15, 2013.  On Jan. 8, 2014, the court found that Bazaarvoice violated Section 7 of the Clayton Act by acquiring its primary rival, PowerReviews.

The proposed remedy, along with the department’s competitive impact statement, will be published in the Federal Register, consistent with the requirements of the Antitrust Procedures and Penalties Act.  Any person may submit written comments concerning the proposed remedy within 60-days of its publication to James J. Tierney, Chief, Networks & Technology Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., 7th Floor, Washington, D.C. 20530.  These comments will be published either in the Federal Register or, with the permission of the court, will be posted electronically on the department’s website.  At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.