Update: NCAA Loses in Suit Challenging Student-Athlete Compensation and Benefit Limits, Prepares for Appeal
Last year we wrote about the summary judgment decision in an MDL class action then pending in the U.S. District Court for the Central District of California, In re NCAA Athletic Grant-In-Aid Cap Antitrust Litigation. The suit against the National Collegiate Athletic Association and eleven member athletic conferences is a challenge by the plaintiffs (men’s football, men’s basketball, and women’s basketball student-athletes) to the NCAA’s student athlete compensation-cap rules as a violation of Section One of the Sherman Antitrust Act. In that decision, the court rejected several of the NCAA’s defenses and permitted the case to proceed to a bench trial, which was held last September. On March 8, the court issued its decision, siding against the defendants and holding that the challenged rules were unlawful.
As we discussed in a previous post, a new school of thought about antitrust law (or, rather, a new application of old antitrust principles) has received increasing attention in recent months. The so-called “New Brandeis” approach seeks to shift the focus of antitrust law from consumer welfare alone to include the competitive structure of markets. Recent attention to these arguments is often traced to the publication of Lina Khan’s Yale Law Journal article "Amazon's Antitrust Paradox." (Khan, who previously served as an advisor to FTC Commissioner Rohit Chopra, was just hired as counsel for the House Judiciary Committee’s Subcommittee on Antitrust, Commercial and Administrative Law.) Indeed, as we discussed last week, the Senate Judiciary Committee held hearings focusing on potential changes to the consumer welfare standard currently used by federal courts in evaluating antitrust claims.
The purpose and goals of United States antitrust policy have not remained static over time. Since 1979, the Supreme Court has focused on a “consumer welfare” theory of antitrust law. See Reiter v. Sonotone Corp., 442 U.S. 330, 343 (1979) (The floor debates “suggest that Congress designed the Sherman Act as a ‘consumer welfare prescription.’” (citation omitted)). Under the consumer welfare standard, an act is deemed anticompetitive “only when it harms both allocative efficiency and raises the prices of goods above competitive levels or diminishes their quality,” Rebel Oil Co. v. Atlantic Richfield Co., 51 F.3d 1421, 1433 (9th Cir. 1995); whether an action or policy is found to be anticompetitive depends ultimately on whether consumers pay higher prices. The consumer welfare theory has the advantage of focusing on the impact to consumers through the application of economic theory, but doesn’t always have much to say about firms that occupy a dominant position in an industry while continuing to provide services to consumers cheaply (or without any fee at all)—a hallmark of many modern tech companies.
Though the merger of CVS and Aetna received conditional approval from the DOJ’s Antitrust Division back in October, the road to final approval has been rocky as the court’s exasperation with the parties appears to grow. Last week, Judge Richard J. Leon of the District Court for the District of Columbia ordered the Antitrust Division to respond to public comment on the merger by February 15, 2019—notwithstanding the fact that appropriations to the Antitrust Division lapsed on January 4, leaving the Division without funding.
On January 7, 2019, in Green Sols. Recycling, LLC v. Reno Disposal Co., No. 3:16-cv-00334-MMD-CBC, 2019 BL 4611 (D. Nev. Jan. 07, 2019), the District Court for the District of Nevada granted summary judgment on plaintiff’s antitrust claim in favor of defendants Reno Disposal Company, Inc. (“Reno Disposal”), and Waste Management of Nevada, Inc. (“WMON”), on the basis of the doctrine of state-action immunity. The litigation arose out of the City of Reno’s entry into an exclusive franchise agreement with Reno Disposal, which provided Reno Disposal with the exclusive right to collect and dispose of waste and certain recyclable materials. The plaintiff challenged the City of Reno’s authority to grant a monopoly for the collection and disposal of garbage and recyclable materials as an unlawful restraint of trade in violation of Section 1 of the Sherman Act. The defendants argued that they were entitled to summary judgment under the doctrine of state-action immunity.
After two hearings over the last week, Judge Richard J. Leon of the District Court for the District of Columbia seems to have put the brakes on the well-publicized merger between health care giants CVS and Aetna. The merger obtained conditional approval from the DOJ’s Antitrust Division on October 10, 2018, and the parties seemed poised for court approval when they appeared before Judge Leon on November 29, 2018.
U.S. Supreme Court’s Decision in China Agritech May Limit The Availability of Class-Action Tolling For Litigants That File Suit Before Class Certification
On June 11, 2018, the U.S. Supreme Court issued its opinion in China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018). The China Agritech decision resolved a circuit split, finding that the statute of limitations for a follow-on class action is not tolled under American Pipe. Currently, a related circuit split exists on the question whether class action tolling is available for litigants that file opt-out lawsuits prior to a decision on class certification. Currently, the Second Circuit permits tolling in those circumstances, while the Sixth Circuit does not.
For the past several decades, antitrust law has been focused primarily on consumer harm—a given policy is unlikely to be considered anticompetitive if it results in lower prices for consumers. A student note in a January 2017 edition of the Yale Law Journal titled “Amazon’s Antitrust Paradox,” argues that this focus is too narrow, and that antitrust policy and regulators should be focused on broader measures of competition. Using Amazon as a case study, the author, Lina M. Khan, argues that Amazon should be subject to increasing antitrust scrutiny despite its substantial track record of providing low prices to consumers for a variety of products.
In re Asacol: First Circuit Sharply Limits Certification of Antitrust Classes Containing Uninjured Members
In a recent decision, the U.S. Court of Appeals for the First Circuit held that Rule 23’s “predominance” requirement barred certification of a class of all indirect purchasers of a prescription drug because the class included members who were uninjured by the alleged anti-competitive activity – they were “brand loyal” and would not have purchased a cheaper generic product even were it available. Asacol makes it more difficult to certify antitrust class actions in the First Circuit and its effects may extend further if the First Circuit’s reasoning is adopted by other circuits.
As DOJ Reconsiders Watershed Consent Decrees, Claims of Unlawful “Circuit Dealing” Proceed Against Landmark Theaters
Hollywood and the antitrust laws go way back. Indeed, antitrust suits have resulted not only some of the most significant cases in the evolution of American antitrust law, but many of the most consequential developments in the history of the movie industry. Chief among these is United States v. Paramount Pictures, Inc., 334 U.S. 131 (1948), which held unlawful the then-existing vertical integration of production studios, distributors, and exhibitors (i.e., theaters); it also held various prevailing practices—“block booking” (bundling movie licenses and strong-arming theaters into accepting all of a studio’s movies); “circuit dealing” (obtaining mass licenses for entire theater chains, instead of for individual theaters and films); overbroad “clearances” (selling exclusive exhibition licenses for certain geographical areas); and setting minimum movie-ticket prices—to be impermissibly anticompetitive. By effectively abolishing the so-called “studio system” and requiring the studios to divest themselves of their theater chains, the Paramount case and the resulting consent decrees fundamentally altered the relationships among producers, distributors, and exhibitors, and led to the industry structure that has survived to date.
As the Supreme Court prepares to hear Apple Inc. v. Pepper, a major case involving antitrust standing, interested parties across the political spectrum are weighing in with their ideas of how the case should be resolved. As we previously reported, the Supreme Court decided to review the Ninth Circuit’s decision that because Apple sold iPhone apps directly to consumers, consumers are direct purchasers that have standing to sue Apple for alleged monopolization of the market for iPhone apps. Apple contends that the app developers – not Apple – are the sellers of apps to consumers because the app developers set prices; Apple contends that it sells only distribution services, and sells those services to the app developers, not to consumers.
We wrote before about a decision by an Alabama federal district court to analyze claims in the Blue Cross Blue Shield multi-district litigation under a per se standard. The court found that a licensing rule allegedly requiring member plans to derive at least two-thirds of their revenue from Blue-branded plans was effectively an “output restriction” which, especially combined with the designation of exclusive service areas among the member plans, constituted a per se Sherman Act violation.
Disagreeing with D.C. Circuit Colleagues, Supreme Court Nominee Brett Kavanaugh Would Have Rejected Challenges to Major Mergers in Antitrust Enforcement Actions
On Monday, President Trump announced Brett Kavanaugh, a judge on the United States Court of Appeals for the District of Columbia, as his nominee to replace Supreme Court Justice Anthony Kennedy. Judge Kavanaugh’s most notable antitrust-related decisions in his 12 years on the federal bench include the dissents he issued in United States v. Anthem, Inc. and FTC v. Whole Foods Market, Inc. In both cases, Judge Kavanaugh disagreed with his colleagues’ decisions to block the contemplated mergers, suggesting an antitrust jurisprudence leery of excessive enforcement activity.
On March 26, 2018, the Supreme Court heard argument in China Agritech, Inc. v. Resh (No. 17-432), a case in which the justices will determine whether a plaintiff whose otherwise untimely claim has been tolled by the rules articulated in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974) and Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983) may bring a putative class action, or is limited to filing an individual claim. In American Pipe and Crown, Cork, the Supreme Court held that the filing of a class action complaint tolls the statute of limitations for persons that fall within the proposed class definition until the court denies the motion for class certification. In American Pipe, this rule rendered timely the claims of plaintiffs who sought to intervene in the pending action after the court denied class certification, 414 U.S. at 561, and in Crown, Cork, the Court held that tolling applied to plaintiffs who initiated individual actions after the district judge issued the decision denying class treatment, 462 U.S. at 354.
In late March, a district court in the Northern District of California partially granted and partially denied dueling summary judgment motions in an MDL class action—In re NCAA Athletic Grant-In-Aid Cap Antitrust Litigation—challenging the National Collegiate Basketball Association’s student athlete compensation-cap rules as a violation of Section One of the Sherman Antitrust Act. Defendants—the NCAA and eleven member athletic conferences—previously reached a $208 million settlement with the consolidated plaintiffs, which the court approved in December 2017. Claims for injunctive relief remain pending, however—and, as a result of the District Court’s ruling, will proceed to a bench trial currently scheduled for December 2018. (Defendants have asked to postpone the trial until mid-2019; the court will hear argument on that motion later this month.)
Alabama Federal Court Will Analyze Blue Cross Blue Shield Antitrust Claims Under Per Se Standard; Defers Decision on “Single Entity” Defense
A court’s decision regarding the proper standard of review in a Sherman Act Section 1 case—whether to analyze the defendant’s conduct as a per se antitrust violation or under the “rule of reason”—is highly significant. The rule of reason requires a plaintiff to show that the anticompetitive effects of the conduct are not outweighed by its procompetitive benefits—often, a factually intensive analysis. But under the per se standard a plaintiff (and the court) may dispense with this balancing test; it is necessary only to prove that the conduct actually happened.
On April 9, 2018, the producer of the Soul’d Out music festival in Portland, Oregon, sued the owners and producers of the Coachella music festival in California for what it alleges are anticompetitive contract terms that prevent performers from playing in its much smaller festival. As alleged in the compliant, to perform at the massive Coachella festival, performers must agree not to perform at any “Festival or Themed Event” in California, Nevada, Oregon, Washington or Arizona between December 15, 2017 and May 7, 2018—a contract term that the complaint refers to as the “Radius Clause.” Coachella is scheduled to take place this year in April 2018, so the clause restricts performers for roughly four months before and one month after the festival.
AAG Delrahim on the Intersection of Antitrust and Intellectual Property Law: Strong Patent Rights Spur – Not Suppress – Competition
On March 16, 2018, Assistant Attorney General for the Antitrust Division Makan Delrahim gave a speech at the University of Pennsylvania Law School titled “The ‘New Madison’ Approach to Antitrust and Intellectual Property Law.” The speech provided insight concerning his views on the role of antitrust law in the field of intellectual property, and the Antitrust Division’s priorities under his leadership. AAG Delrahim explained four basic premises that govern how he believes antitrust enforcement should impact intellectual property law; in short, his view is that patent rights are a boon to consumers and competition and antitrust law should not stand in the way of patent-holders exercising their rights.
On March 27, 2018, the Third Circuit affirmed dismissal of an antitrust suit against Uber Technologies, Inc. (“Uber”) by the Philadelphia Taxi Association and its members, individual taxicab companies (together, “Plaintiffs”). In essence, the Third Circuit held that, based on Plaintiffs’ allegations, federal antitrust laws do not reach Uber’s alleged violation of state and local taxicab regulations and that its entrance into the Philadelphia taxicab market created more competition, not less.
On February 28, 2018, the Puerto Rico Telephone Company, Inc. (PRTC) filed a petition for a writ of certiorari after its antitrust claims against San Juan Cable LLC (OneLink) were dismissed by the First Circuit Court of Appeals at the summary judgment phase. In its petition, PRTC asks the Supreme Court to delineate a clearer boundary between the right to petition the government (whether through lobbying, litigation, or participation in administrative proceedings) and the antitrust laws’ imposition of liability on activity that unfairly restricts competition. Specifically, when does petitioning activity that is usually protected from antitrust liability under the Noerr-Pennington doctrine cross the line into illegal antitrust behavior?
Economists are endemic to antitrust litigation. Their expertise is often necessary to explain why the conduct or merger at issue will have no impact (or a huge impact!) on competition in a market. Typically the opinions of economists are presented through the expert witnesses each party calls. Sometimes, though, economists who are not officially retained to opine on the issues will weigh in through the filing of an amicus brief, and sometimes such briefs can have a demonstrable impact.
2017 Statute of Limitations Roundup: Courts Disagree About Applicability of “Continuing Violation” Doctrine in Antitrust Actions
2017 saw three notable decisions concerning the applicability of the “continuing violation” doctrine in antitrust cases. We discuss below three cases that have taken different approaches in their treatment of this doctrine—and have reached different conclusions regarding its applicability.
Last month, we reported on a partial settlement in an antitrust case alleging that entities within the Duke and the University of North Carolina systems agreed not to hire each other’s medical personnel unless the lateral hire involved a promotion. The Court has now granted in part the plaintiff’s motion to certify a class.
Third Circuit Says “Umbrella Damages” Bar Does Not Preclude Antitrust Standing Where Product Is Partly Comprised of Materials Not Subject to the Alleged Conspiracy
In a case of first impression, the Third Circuit recently held in In re Processed Egg Products Antitrust Litigation, No. 16-3795, 2018 U.S. App. LEXIS 2698 (3d Cir. Jan. 22, 2018), that a direct purchaser of a product, comprised partly (but not all) of price-fixed materials, has antitrust standing to pursue a claim against the product’s seller where the seller is a participant in the alleged price-fixing conspiracy, even if the product also includes some material supplied by a third-party non-conspirator.
This blog has discussed some of the dynamics created by the Supreme Court’s Hanover Shoe and Illinois Brick decisions and state “repealer” laws that attempt to undo their effect. As it turns out, repealer states aren’t the only ones skeptical of these twin cases that in general prevent indirect purchasers from asserting antitrust damages claims and defendants from relying on a “pass-on” defense.
The Third Circuit recently denied a petition for rehearing en banc a panel’s earlier decision in the In re Flonase Antitrust Litigation. In that case, the panel decision addressed the degree to which class settlements can bind non-participating U.S. state class members. After vigorous briefing on the issue, the panel found that the state of Louisiana had not waived its sovereign immunity, and therefore could not be bound by a class settlement that enjoined class members from subsequently bringing separate suits. This is a case with potentially wide reaching implications, as it could impact the negotiation of settlements in class actions that include states as class members.
As the college basketball season heats up, bitter rivals Duke and the University of North Carolina stand accused of maintaining a cozier (and illegal) relationship off the court. UNC, the UNC School of Medicine, and the UNC Health Care System (together the “UNC Defendants”) recently entered into a settlement agreement with a class of individuals employed by the UNC Defendants or of Duke-affiliated defendants (“the Duke Defendants”) between 2012 and 2017 to resolve an action alleging that the Duke Defendants and UNC Defendants agreed not to hire each other’s medical personnel unless the lateral hire involved a promotion. The settlement enjoins the UNC Defendants from agreeing to refrain from soliciting, hiring, or otherwise “poaching” employees of any other company or organization.
On January 10, 2018, in In re Lantus Direct Purchaser Antitrust Litig., the District Court for the District of Massachusetts dismissed the antitrust case against Sanofi-Aventis U.S. LLC (“Sanofi”), the manufacturer of Lantus and Lantus SoloSTAR, which use the insulin product glargine to treat Type I and Type II diabetes. The plaintiffs in the multi-district litigation, a group of purchasers of the Lantus products, alleged that Sanofi unlawfully prolonged its monopoly for the glargine products after the expiration of the relevant patent in two ways. First, the plaintiffs alleged that Sanofi improperly listed six patents in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”). Second, the plaintiffs alleged that Sanofi pursued sham litigation against Eli Lilly in which Sanofi asserted claims of patent infringement without any reasonable basis. That litigation was settled by Sanofi and Lilly shortly before trial.
A federal judge has granted preliminary approval of Southwest Airlines Co.’s settlement with a class of plaintiffs alleging antitrust violations against Southwest, American Airlines, Inc., Delta Air Lines, Inc., and United Airlines, Inc.
On November 20, 2017, the Department of Justice (“DOJ”) filed suit in the District Court for the District of Columbia to block AT&T’s attempted acquisition of Time Warner Inc. AT&T (through its cellular network, its fiber-optic television distribution service U-Verse, and its ownership of DirecTv) is a video distributor, and Time Warner (through its ownership of cable networks like TNT, CNN, and HBO) is a video producer. Because the companies primarily operate in different parts of the supply chain of program content, they do not directly compete with one another. A combination of two such companies is known as a “vertical merger.” The DOJ’s decision to try and block AT&T’s bid surprised many observers because it is unusual for the government to object to a vertical merger; in fact, the last time the DOJ actually filed a lawsuit to block or dissolve a vertical merger was forty years ago.
As Germany Targets Facebook’s Data Collection, DOJ Antitrust Division Suggests Friendlier Approach to Data-Powered Digital Market Leaders
Information can be an invaluable asset. This is especially evident in the technology sector, where companies use increasingly sophisticated methods to collect, aggregate, and analyze data. Exclusive possession of data can, of course, confer significant competitive advantages—but may also prompt legal challenges from competitors or scrutiny from regulators. Authorities in France and Germany have investigations underway into whether the collection and use of consumer data by major online platforms including Facebook and Google are having anticompetitive effects. And on December 19, 2017, Germany’s competition authority—the Bundeskartellamt— informed Facebook that it “holds the view that Facebook is abusing [a dominant market position] by making the use of its social network conditional on its being allowed to limitlessly amass every kind of data generated by using third-party websites and merge it with the user’s Facebook account.”
Senate Passes the Criminal Antitrust Anti-Retaliation Act, and Takes Another Shot at Increased Protections for Whistleblowers
On November 15, 2017, the United States Senate passed the Criminal Antitrust Anti-Retaliation Act of 2017 (“CAARA”). This Act would amend the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (“ACPERA”), and would provide a civil remedy to persons fired or otherwise discriminated against for reporting potential criminal violations of the antitrust laws.
A federal judge in California has refused to allow indirect purchasers of semiconductor chips—i.e., cell phone consumers—to bring claims against Qualcomm under federal antitrust law.
Senators and court complain of ‘anti-competitive’ transfer of patent rights to American Indian tribe
We have previously discussed antitrust implications of pharmaceutical companies’ efforts to maximize patent protection for their drugs. Consumers and generic drug makers, for instance, have alleged antitrust violations based on “product hopping” and “pay-for-delay” settlements. Recently, a patent owner’s creative technique to avoid possible invalidation of its patent by the Patent and Trademark Office has drawn sharp criticism from lawmakers and one district court.
In July of 2013, Danny Meyer, the CEO of the Union Square Hospitality Group, tweeted that he was considering eliminating tipping at his restaurants and solicited the opinion of other restaurant owners. Meyer and others eventually followed through on this idea and eliminated tipping at some of their restaurants. Instead, they began charging service fees while also raising menu prices to account for the increase in wages needed to compensate previously tipped employees. A newly filed putative class-action complaint alleges that these no-tipping policies, rather than being undertaken for largely equitable reasons, are in fact a massive antitrust conspiracy among restauranteurs to raise consumer prices.
In a 2-1 decision issued on September 7, 2017, the Eleventh Circuit reversed a district court decision dismissing antirust claims brought by auto body shops against a group of car insurance companies in the In re Auto Body Shop Antitrust Litigation.
On August 29, 2017, the D.C. Circuit affirmed the district court’s decision dismissing a suit filed by 2012 third-party presidential candidates Gary Johnson and Jill Stein, their running mates, their campaigns, and the parties they represented (together, “Plaintiffs”) against the Commission on Presidential Debates. Plaintiffs alleged that Johnson and Stein were improperly excluded from nationally televised general-election presidential debates in violation of the Sherman Act.
The Department of Justice Antitrust Division recently announced that California-based Custom Wristbands Inc. (d/b/a Kulayful Silicone Bracelets, Kulayful.com, Speedywristbands.com, Promotionalbands.com, Wristbandcreations.com, and 1inchbracelets.com) (“Custom Wristbands”) and its top executive Christopher Angeles agreed to plead guilty for conspiring to fix prices for wristbands and other customized novelty products sold online.
The Third Circuit recently affirmed the grant of summary judgment to GlaxoSmithKline (“GSK”) in the nearly 10-year-old Wellbutrin XL Antitrust Litigation, which challenged the lawfulness of settlement agreements resolving patent disputes over Wellbutrin XL. In determining that GSK had not violated the Sherman Act, the court determined that GSK’s settlement of patent infringement lawsuits did not reflect that GSK had engaged in sham litigation, or that GSK made unlawful “reverse payments” to settle that litigation. To reach these conclusions, the court carefully picked apart years of evidence
Outlet malls are popular destinations for consumers seeking a bargain, even if not everyone agrees that the deals are as good as advertised. But although the prices may seem low, a common provision in lease agreements between the operators of outlet malls and retailers may have reduced competition and raised the prices consumers paid. This week, the operator of the most popular outlet mall in the New York City metropolitan area reached a settlement with the New York Attorney General that may lead to increased competition in the outlet mall space in New York and beyond.
As we noted last month, the FTC has recently been voicing concerns about potentially anticompetitive actions of state professional licensing boards. Our post also discussed the scope of such boards’ immunity from antitrust liability under the Supreme Court’s caselaw.
Last week Markus Meier, the Acting Director of the Bureau of Competition at the Federal Trade Commission, gave testimony to the House Judiciary Committee concerning “Antitrust Concerns and the FDA Approval Process.”
On July 28, 2017, a group of plaintiffs filed a putative class action in the Northern District of California against BMW, Volkswagen, Audi, Porsche, Daimler, and Mercedes-Benz, as well as auto-parts manufacturer Robert Bosch. The suit alleges that, extending as far back as 1996, these five German car manufacturers colluded to suppress competition by agreeing to limit technological advancement, selecting favored suppliers, and exchanging confidential business information. The class-action suit follows recent publications reporting that European Union antitrust officials and the German Cartel Office are investigating allegations of a cartel among these manufacturers.
Last week, Sabre filed its principal brief on appeal to the Second Circuit Court of Appeals, seeking to overturn the jury’s verdict of $15 million and find for Sabre or, in the alternative, grant a new trial in US Airways Inc. v. Sabre Holdings Corp. Its primary argument on appeal is that its case should have been governed by United States v. American Express Co., in which the Second Circuit reversed the district court’s finding of anticompetitive harm in a one-sided market because the proper analysis was whether there was anticompetitive harm in a two-sided market.
Eighth Circuit Applies Continuing Violation Doctrine to Extend Statute of Limitations for Sherman Act Claims
Recently in In re Pre-Filled Propane Tank Antitrust Litigation, an en banc panel of the Eighth Circuit clarified the application of the continuing violation exception to the statute of limitations for claims under the Sherman Act. The Court was closely divided, with a 5-to-4 split between the majority opinion and a sharply worded dissent. The majority held that, in an antitrust conspiracy suit, a continuing violation tolls the statute of limitations as long as there were unlawful acts (e.g., sales to the plaintiff) within the limitations period, even if the alleged conspiracy was hatched outside the four-year statute of limitations period. The dissent, however, argued that to avoid dismissal plaintiffs are required to show a live, ongoing conspiracy within the limitations period.
Last week, a Rhode Island Congressman published a letter he sent to the Chairman of the House Judiciary Committee requesting that the committee hold a hearing on the recently-announced Amazon-Whole Foods merger. This post explores when and why Congress holds hearings on particular mergers and what power Congress has to stop a merger.
Last month, the FTC staff sent a letter warning North Carolina’s General Assembly that a pending bill regarding the state’s real estate appraisal board could run afoul of competitive principles. The staff notes that it is prepared to investigate and recommend challenges to potentially anticompetitive actions by state appraisal boards. However, in light of Supreme Court precedent on state sovereign immunity, it is not certain that the FTC could successfully challenge state board actions with which it disagrees.
Last Monday, the court denied Qualcomm, Inc.’s motion to dismiss the Federal Trade Commission’s suit against it for allegedly using anticompetitive tactics to maintain a monopoly in baseband modem chips for cell phones. The FTC contends that Qualcomm is using its standard-essential patents (SEPs) to extract monopoly prices from cell phone and other cellular device manufacturers in violation of its commitment to license its patents on a “fair, reasonable, and non-discriminatory” (FRAND) basis.
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