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Focus on Regulation

Hogan Lovells Obtains Major TCPA Consent Revocation Victory

On June 22, 2017, in Reyes v. Lincoln Automotive Financial Services, the U.S. Court of Appeals for the Second Circuit agreed with Hogan Lovells attorneys representing the defendant and held that the Telephone Consumer Protection Act (“TCPA”) does not permit a consumer to revoke her consent to be called when that consent forms part of a bilateral contract.  The Second Circuit’s precedent-setting decision, if adopted by other courts, may have far-reaching implications for how companies draft their contracts and service agreements and structure their TCPA compliance approaches.

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Lost in the woods? Special treatment for the press, cooperative and savings bank associations and the timber industry in German Competition Act reform

Current legislative changes in the German Competition Act and the Federal Forest Act bring a set of new antitrust exemptions. We briefly present them in our blog:

1. Cooperation between press companies

Press companies can from now on cooperate more easily. Newspaper and magazine publishers (but not mere press distributors) are exempt from the German cartel prohibition in cases of economic, non-editorial cooperation if the cooperation allows them to strengthen their economic basis for intermedial competition. Effects cushioning competition on the press markets (intramedial) are thus tolerated to strengthen the press’s position in competition with other media (intermedial). As long as the cooperation does not affect editorial content, the privilege goes far; it includes, for instance, purchasing cooperation (e.g. for non-editorial services), production cooperation (e.g. for printing) and distribution cooperation (e.g. for subscriber acquisition, delivery or even coordination of resale prices). If the parties to cooperation can demonstrate a substantial legal and economic interest they are even – beyond the normal rules in competition law – entitled to a formal decision from the competition authority establishing a lack of need to intervene. European law remains however unaffected of all this. The privilege does therefore not apply if the cooperation has cross-border effects. This can be the case for cooperation on a federal level already, which is why the privilege may rather be a suitable basis for regional cooperation. Likewise, the prohibition of abuse of market power remains applicable. Continue Reading

Continuous Manufacturing of Pharmaceuticals: FDA Wants to Hear from Industry

Continuous manufacturing has often been highlighted by FDA as an exciting technology in the area of pharmaceutical manufacturing, but one that the Agency is still wrapping its head around. Accordingly, on June 22, 2017, FDA announced the availability of a public docket (FDA-2017-N-2697) to collect comments and recommendations on the issue of continuous manufacturing. FDA is seeking public comments on an array of areas, including control strategy, facility, and process validation considerations for continuous manufacturing of solid oral dosage forms, which were areas of focus previously raised with the Agency as part of an industry-coordinated best practices document submitted by the Engineering Research Center (ERC) for Structured Organic Particulate Systems (CSOPS). FDA is also seeking comments on other previously published continuous manufacturing documents, including Regulatory and Quality Considerations for Continuous Manufacturing: May 20-21, 2014, Continuous Manufacturing Symposium.

This is an opportunity for companies to weigh in on the policy, science, technology, and practices that FDA is considering with regard to continuous manufacturing. It is also an opportunity for industry to educate the Agency on some of the practical realities companies are facing when it comes to continuous manufacturing.

Hogan Lovells is happy to answer any questions you may have regarding FDA’s call for comments and to assist with the development of such comments. Comments are due to FDA by September 21, 2017.

Closing the so called “Sausage gap” – Cartel fine procedures after the 9th amendment of the German Act against Restraints of Competition (GWB)

With the amendments to the cartel fine procedure introduced by the 9th amendment of the GWB the legislator intends a harmonization with EU-law and significantly extends the liability for cartel fines.

With the 9th amendment of the GWB, the legislator again attends to the closing of the so called “sausage gap”. This sanctioning gap in the German competition law derives its name from the sausage manufacturer Tönnies who was able to evade a three-digit million fine imposed by the Federal Cartel Office (FCO) by a clever corporate restructuring of his sausage empire. The essential assets of the legal entities responsible under antitrust law were transferred to other group companies and the legal entities ceased to exist. Continue Reading

Digital is trump! – Market definition and new dominance criteria for digital markets

New German competition law: Germany takes a pioneering role in adapting its competition law to the digital economy (Part 2)

On 9 June 2017, the 9th amendment of the German Act Against Restraints of Competition (ARC) entered into effect introducing important amendments for companies to German competition law (please see the highlights of the 9th amendment of the ARC here). The reform deals with two main issues: the implementation of the European Cartel Damages Actions Directive (for a comprehensive coverage of the various new regulations, please see here) and the adaption of German competition law to the challenges of the digital economy.

The new provisions amongst others deal with merger control (see our previous blog post), the handling of “free” services, e.g. social media, and companies with the assessment of market power, in particular in the digital industry. This reform is likely to shape the competition law practice in Germany and Europe over the next years. Continue Reading

Mind the gap – New Size-of-Transaction Test in German merger control

New German competition law: Germany takes a pioneering role in adapting its competition law to the digital economy (Part 1)

On 9 June 2017, the 9th amendment of the German Act Against Restraints of Competition (ARC) entered into effect introducing important amendments for companies to German competition law (please see the highlights of the 9th amendment of the ARC here). The reform deals with two main issues: the implementation of the European Cartel Damages Actions Directive (for a comprehensive coverage of the various new regulations, please see here) and the adaption of German competition law to the challenges of the digital economy.

The new provisions amongst others deal with merger control, the handling of “free” services, e.g. social media, and with the assessment of market power, in particular in the digital industry. This reform is likely to shape competition law practice in Germany and Europe over the next years. Many questions remain open, especially in the practical handling of the newly introduced size-of-transaction test in German merger control. This will lead to an increased need for coordination between companies and the Federal Cartel Office (FCO). Continue Reading

U.S. Department of Education Delays Borrower Defense to Repayment Regulations, Announces New Negotiated Rulemaking Committees

On June 14, the U.S. Department of Education (“ED”) announced its plan to convene negotiated rulemaking committees to consider revisions to two major sets of regulations that were developed by the Obama Administration.  ED also announced that it would delay indefinitely the implementation of one of those sets of regulations—which was scheduled to take effect on July 1, 2017—in light of pending litigation. These developments warrant attention as the implicated regulations impose substantial obligations on institutions in all sectors.
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FDA Requires Reprocessing Validation Data for Certain Reusable Devices

On June 9, 2017, the U.S. Food and Drug Administration (“FDA”) published a Federal Register Notice announcing that new 510(k) notices for a number of reusable medical devices will now require the support of validated instructions for use and reprocessing instructions addressing  cleaning, disinfection, and sterilization.  Although the Notice was required by Section 3059 of the 21st Century Cures Act, it is consistent with FDA’s recent focus on reprocessing activities in response to public health concerns raised by inadequate reprocessing of reusable medical devices.

The Notice identifies a  list of devices for which validated reprocessing will now be required for 510(k) notices submitted after August 8, 2017, noting that the listed devices and their accessories have specific design features such as crevices, irregular surfaces, dead-end chambers, sleeves, and other features that make them more challenging to adequately reprocess between uses.   The list of devices includes:

  • Bronchoscopes (flexible or rigid) and accessories;
  • Ear, Nose, and Throat (ENT) endoscopes and accessories;
  • Gastroenterology and Urology Endoscopes that have elevator channels (not including accessories) [e.g., duodenoscopes used for endoscopic retrograde cholangiopancreatography (ERCP)];
  • Automated Reprocessors for Reusable Devices;
  • Other Flexible Gastroenterology and Urology Endoscopes (not including accessories);
  • Neurological endoscopes (not including accessories);
  • Water-based heater-cooler systems for use in operating rooms;
  • System, Surgical, Computer Controlled Instrument;
  • Arthroscopes and accessories;
  • Laparoscopic instruments and accessories; and
  • Electrosurgical instruments and accessories.

510(k) notices for the above-listed medical devices will not be substantially equivalent if the validated instructions for use and reprocessing validation data (e.g., data regarding cleaning, disinfection, and sterilization) are not provided or are inadequate.  Device sponsors should consult FDA’s 2015 guidance, Reprocessing Medical Devices in Health Care Settings:  Validation Methods and Labeling, for information on the reprocessing validation methods necessary to support a finding of substantial equivalence for these devices going forward.

The return of the kin liability (Sippenhaft) – Liability of parent companies after the 9th amendment of the German Act against Restraints of Competition (GWB)

The Middle Ages are regarded as the golden age of the kin liability (Sippenhaft) in Germany.  According to the principle of kin liability, family members had to stand up for the actions of their relatives, regardless of whether they were involved or not.  Thus, kin liability was a form of collective liability.  A family member was liable even if it had done nothing wrong.  This principle was so far unknown to the German law of regulatory offences and law of torts.  In these areas of law it was undoubtedly the principle of separation of legal entities (Trennungsprinzip) that ruled.  Pursuant to such principle, a legal entity is only liable for such antitrust violations that have been committed by its organs or employees in an attributable manner.  Not for more.  The 9th GWB-amendment now applies the ax to this basic principle.  Is there a relapse into dark medieval times?  This blog post is devoted to the question what the new German law has to say on the issue of corporate collective liability in the field of competition law. Continue Reading

No limits..? The limitation rules for cartel (damages) claims after the 9th reform of the German Competition Act (ARC)

At first glance, not a stone seems to be left standing. The new sec. 33h ARC hardly bears any resemblance with the old sec. 33 para. 5 ARC, the to date only special limitation rule applicable to cartel damages claims in the ARC. What appears tremendous – the new sec. 33h ARC comprises eight paragraphs in total – proves also on closer consideration quite far-reaching – even though perhaps not quite as far-reaching as the multiplication of the number of paragraphs by eight may suggest. The extension of the provision text is to a large extent due to the fact that a comprehensive special limitation regime for cartel (damages) claims has been introduced into the ARC which, while primarily meant to transpose the special requirements stemming from the cartel damages directive 2014/104/EU into national law, largely reconstructs the general limitation rules as contained in the German Civil Code previously applicable to cartel (damages) claims. In that regard, the German legislator aimed at attaining consistency with the general limitation rules, and quite successfully at that. As a result, the differences are in many ways hidden in the details – which by no means is to say that they weren’t fundamental. Apart from that, the newly introduced sec. 33h ARC brings some real novelties. One thing, however, is common to (almost) all changes: they strengthen private enforcement by cartel victims. Continue Reading