States test the limits of antitrust power

A quarter century ago, the U.S. Department of Justice dropped efforts to break up Microsoft Corp. over allegations that it illegally monopolized the web browser market for Windows, only to have Massachusetts object to the terms of the deal.

The case played out for a few more years, but in the end the U.S. Court of Appeals for the D.C. Circuit affirmed the settlement reached between Microsoft and the federal government in a 2004 decision, rejecting any additional remedies by states that initially had balked at the consent decree.

More than two decades later, state attorneys general - including California Attorney General Rob Bonta - are battling to block two mergers: a combination of TV stations Nexstar Media Group Inc. and Tegna Inc. and forcing Beverly Hills concert promoter Live Nation Entertainment Inc. to divest its Ticketmaster subsidiary.

In another case, state attorneys general are trying to block the merger of Hewlett Packard Enterprise Co. and Juniper Networks Inc. U.S. District Judge P. Casey Pitts of San Jose has not ruled on the matter, which was originally an antitrust lawsuit filed by the U.S. Department of Justice before settling the case.

The resolution of these cases will test the ability of states to enforce their antitrust laws - and achieve meaningful remedies - even if the Trump administration reaches settlements that favor the companies.

The states have scored two wins thus far, persuading a Manhattan jury that Live Nation violated federal and state antitrust laws by maintaining an illegal monopoly on the large amphitheater and primary ticketing markets, resulting in higher fees for consumers.

Meanwhile, a Sacramento federal judge granted a preliminary injunction halting the TV station merger despite its backing by the Trump administration.

Live Nation - Looking ahead to appeal?

Attorneys for Live Nation and Nexstar are fighting back, seeking to overturn the jury's verdict or get a new trial in the ticket company case while asking a 9th U.S. Circuit Court of Appeals to reverse Eastern District of California Chief Judge Troy L. Nunley's injunction.

In the Live Nation case, attorneys with Latham & Watkins LLP and Cravath, Swaine & Moore LLP - representing the company - argued that the state attorneys general failed to prove their case.

"There is no direct evidence of monopoly power, not even an argument," the attorneys wrote in a motion seeking judgment as a matter of law. They also filed a separate motion seeking a new trial.

William A. Kovacic, a former FTC chair during the President George W. Bush administration who previously served as its general counsel and now is a professor at George Washington University Law School, said these sorts of post-trial motions "are really hard to win," as they essentially ask the judge to concede error.

But he added that even if U.S. District Judge Arun Subramanian rejects the Live Nation motions, the real goal is to tee the issues up for appeal. "That's where they're going here," Kovacic said.

"I think [the Live Nation lawyers] make some reasonable points about how the legal test is defined," he added. That might not be enough at the district court level, but "there's enough intrinsic interest in these cases that it's easy to imagine the Supreme Court deciding this is a case on which we want to weigh in."

"The court is going to have a myriad of options to choose from as to how they want to weigh in on competition law," Kovacic said.

The states have yet to present their proposed structural remedies.

Jeffrey L. Kessler, a partner with Winston Taylor LLP who is representing the states, countered in a brief last month that plaintiffs had presented "ample evidence" and expert testimony to support their argument that Live Nation maintains monopoly power over the large amphitheater and primary ticketing markets. U.S. et al. v. Live Nation Entertainment Inc. et al., 24-cv-03973 (S.D. N.Y., filed May 23, 2024).

Mark A. Lemley, a Stanford Law School professor and partner with Lex Lumina LLP, said that "as political pressure from the top has caused the [Justice Department's] Antitrust Division to back out of many meritorious cases, the states have stepped into the breach."

Nexstar's challenge

In the Nexstar-Tegna case, Morrison & Foerster LLP partner Deanne E. Maynard - representing Nexstar - wrote in an opening brief to the 9th Circuit that Nunley "lacks authority to issue injunctive relief broader than necessary to remedy the harms alleged by the specific plaintiffs before the court."

Further, she maintained that the state plaintiffs "lack standing to litigate this suit at all" because they cannot sue as sovereign enforcers but only as private parties.

Munger, Tolles & Olson LLP partner Benjamin J. Horwich, who represents plaintiff DirecTV LLC, wrote in an answering brief last month that the "most natural way to restore pre-merger competition is to unwind the merger and restore TEGNA to its pre-merger position."

"For that remedy to be available, though, TEGNA must be maintained whole and operationally separate in the meantime, to ensure that it can be fully reconstituted after trial," he added.

California Deputy Attorney General Emily C. Curran agreed that Nunley's injunction preserves an effective remedy if the states win.

"The District Court's injunction pausing the merger in its entirety -- thus allowing the merger to be reversed in its entirety should Plaintiffs ultimately prevail -- plainly achieves that end," she wrote. DirecTV LLC et al. v. Nexstar Media Group et al., 26-2490 (9th Circ., filed April 22, 2026).

Echoes of the past

But legal observers say antitrust cases are difficult to win for any plaintiff - federal, state, or otherwise.

Harry First, professor emeritus at New York University School of Law, said states have established that they have the authority to try to enforce antitrust laws, citing a 36-year-old U.S. Supreme Court decision allowing states and private plaintiffs to seek divestiture under the Clayton Act. California v. American Stores Co., 495 U.S. 271 (S. Ct., 1990).

The current dynamic, First said, echoes that period in the 1980s and early 1990s - when Republicans controlled the White House for 12 years straight and Democratic attorneys general sought to fill the breach.

Attorneys general have more antitrust expertise today as well as the ability to file multi-state actions so they can divide the work. But courts remain reluctant to block mergers or break up companies.

"It's got some similarities to the past but maybe some different twists," he said.