Interim measures may be requested in the context of public as well as private enforcement. Taking the EU as an example of the former, the Commission may impose interim measures on an undertaking, or an undertaking may seek to suspend operation of a Commission decision by applying to the (President of) the General Court. In most jurisdictions, interim measures may also be requested in the context of private disputes, whether in B-2-B or consumer litigation. Due to space constraints the emphasis here will be on public enforcement.
Use or non-use of interim measures may create error costs. Such measures are potent and should generally be granted only on an exceptional basis. Where they are imposed by or requested by a competition authority, an inappropriately low standard of proof could cause serious disruption of business operations based on a relatively cursory investigation. However, the arguments supporting an increased use of interim measures as a rapid response tool are strong.
The ECJ ruled in 1980 that the Commission had the implied power to adopt interim measures, and Regulation 1/2003 made that power explicit. Article 8 provides that in cases of ‘urgency’ due to the risk of ‘serious and irreparable damage to competition’, and on the basis of a prima facie finding of infringement, the Commission may order interim measures. The Commission’s assessment of ‘urgency’ must take into account the effects of the alleged conduct and of the interim measures on the undertakings concerned as well as third parties such as consumers. Interim measures can be adopted only where there is danger of harm to competition, not to particular competitors. The case law requires that such measures must comply with proportionality, the same standard that applies to remedies in Article 7 infringement cases. Before being subject to interim measures, the undertaking concerned must have an opportunity to contest the Commission’s objections in writing and in an oral hearing if it so requests.
Interim measures have become a ‘hot topic’ in the EU. Unlike some national authorities (notably the Autorité de la concurrence in France–where the legal standards are more permissive), the Commission had let its interim measures power ‘fade into oblivion’ since 2001, mainly due to: (i) the restrictive wording of Article 8 of Regulation 1/2003, (ii) the exacting standards of the EU Courts, (iii) the frequent use of the Article 9 commitment procedure, and possibly (iv) the risk of type I errors. However, the Commission in 2019 adopted interim measures under Regulation 1 for the first time, and this could conceivably lead to more frequent use of the instrument, in particular where there is a danger of market tipping.
Motivated by a desire for more discretion in adopting interim measures, the Commission—in a Declaration accompanying EU Directive 2019/1—states: ‘With a view to enabling competition authorities to deal more effectively with developments in fast-moving markets, the Commission commits that it will undertake an analysis of whether there are means to simplify the adoption of interim measures within the European Competition Network within two years from the date of transposition of this Directive [i.e. within two years of 4 February 2021]. The results of this will be presented to the European Parliament and the Council.’
The preliminary injunction requirements are established in 15 USC § 26 (private injunctions) and 15 USC § 25 (public injunctions). The former, § 26, is more restrictive in that it refers to ‘threatened loss or damage’ and imposes a causation requirement. The detailed application of the rules on injunctions varies from Circuit to Circuit. However, U.S. Courts generally consider: (i) the applicant’s likelihood of success on the merits; (ii) the likelihood that the applicant will suffer irreparable harm if an injunction is denied; (iii) the balancing of hardships or ‘equities’ resulting from the grant/denial of a request; and, where appropriate, (iv) the effect of the grant/denial on the public interest. Where the applicant is a private party, a Court may choose—based on principles of equity such as ‘unclean hands’—to reject the request for preliminary relief. Where the plaintiff is the Government, and where a reasonable likelihood of success on the merits is established, Courts assume that the risk of irreparable harm is likewise established. If granted, a preliminary injunction may be of indefinite duration and it is immediately appealable. While U.S. Courts do not typically speak of ‘proportionality’, there are functionally equivalent principles, and if a proposed remedy has no reasonable relationship with an alleged antitrust infringement, it will be denied.
The party opposing the motion for a preliminary injunction must be given a fair opportunity to be heard. However, exigent and specific facts can justify a temporary restraining order (TRO), a short-term and generally unappealable measure that a court may adopt in ex parte proceedings (Rule 65(b) FRCP). Such exigency may arise in particular where the DOJ or FTC seeks to stop a merger.
Challenging a merger under Section 7 of the Clayton Act is indeed the main (albeit not the only) scenario where the federal agencies may request a preliminary injunction or TRO. Where the DOJ handles the case, it will simultaneously seek from the Court both a permanent injunction and a preliminary injunction/TRO. When the Court balances the equities (criterion iii above), it will attach more weight to the Government’s interest than it will to the private interests of the parties to the proposed merger. Compared to the procedure governing DOJ actions, the procedure that applies to the FTC has special features. Section 13(b) of the FTC Act authorizes the FTC to file suit seeking a preliminary injunction/TRO when it has cause to believe that an entity ‘is violating, or is about to violate’ any provision of law enforced by the FTC. Unlike the DOJ, the FTC does not seek a permanent injunction from the District Court. Instead, if the Court grants the temporary relief, the FTC then files an administrative complaint and the merits are adjudicated in-house in an administrative procedure under Part 3 of the FTC’s Rules of Practice. The FTC thus becomes the first-instance decision maker. With regard to the FTC’s request for temporary relief, the Courts interpret the legislative intent of the FTC Act as supporting broad access to injunctive relief—a deviation from the more demanding traditional principles of equity. This idiosyncratic feature was criticized by the Antitrust Modernization Commission in 2007, as the DOJ does not benefit from quite the same generous treatment, leading to at least the perception of uneven enforcement.