Category: Collaboration & Joint Conduct
Yesterday, the FTC announced that it reached a settlement in its pay-for-delay lawsuit, FTC v. Cephalon Inc. in the U.S. District Court for the Eastern District of Pennsylvania, with Teva Pharmaceuticals Industries, Ltd., which acquired Cephalon in 2012. This case is the first FTC case to be resolved since the Supreme Court’s 2013 decision in FTC v. Actavis, in which the Court announced that reverse-payment patent settlements could be subject to antitrust challenges.
Last Thursday, American Express appealed the District Court for the Eastern District of New York’s February ruling that its anti-steering rules violated Section 1 of the Sherman Act. The court entered a permanent injunction in April requiring American Express to change its anti-steering rules and allow merchants to steer customers to use other credit cards or other forms of payment.
Following Actavis, California Supreme Court Crafts “Structured Rule of Reason” Test for Evaluating Pay-for-Delay Settlements
Last Thursday the Supreme Court of California decided In re Cipro Cases I & II, No. S198616 (Cal. May 7, 2015), holding that reverse payment, or “pay-for-delay,” settlements can be challenged as unreasonable restraints on trade. In so doing, it followed the U.S. Supreme Court’s 2013 decision in Federal Trade Commission v. Actavis, Inc., 133 S.Ct. 2223 (2013).
In what it is calling the Antitrust Division’s “first criminal prosecution against a conspiracy specifically targeting e-commerce,” the Department of Justice has announced that an individual has agreed to plead guilty to charges that he conspired to fix the prices of wall posters sold online through Amazon Marketplace. The matter is United States v. Topkins, No. 15 Cr. 201 (N.D. Cal.).
Allegations of conspiracy to restrain trade and exclusive dealing may read like textbook antitrust claims, but if the allegations are made by a plaintiff who is not an “efficient enforcer” of the antitrust laws, the complaint is vulnerable to a motion to dismiss.
Russia has amended its criminal code on cartels, signaling a major change in antitrust law enforcement. On March 8, 2015, President Vladimir Putin signed a Federal Law “introducing changes to Article 178 of the Criminal Code of the Russian Federation.”
On March 26, 2015, U.S. District Judge Katherine Forrest of the Southern District of New York, in a very colorful decision that metaphorically describes the plaintiffs as cats trying to locate a “rat” in the world of aluminum warehousing, denied defendants’ motion to dismiss in In re: Aluminum Warehousing Antitrust Litig.
On March 17, 2015, a Ninth Circuit panel consisting of Chief Judge Sidley R. Thomas, Circuit Judge Jay S. Bybee and Senior U.S. District Judge Gordon J. Quist, of the Western District of Michigan heard oral argument in O’Bannon v. NCAA.
Last Friday, the Ninth Circuit affirmed the dismissal of a multidistrict class action brought by Netflix subscribers who claimed the company conspired with Walmart to dominate the online DVD sales and rental markets. In 2005, Netflix and Walmart entered into a promotion arrangement whereby Walmart agreed to transfer its DVD-rental subscribers to Netflix in exchange for 10% of the revenue and a $36 payment for each subscriber Netflix gained through referral. Netflix also agreed to promote Walmart’s DVD sales in exchange for the referrals.
DOJ and FTC Announce Proactive Approach to Monitoring Post-Affordable Care Act Antitrust Compliance at Joint Workshop
On February 24 and 25, the DOJ and FTC held their second joint workshop to examine the state of health care competition in the United States. The workshop explored five main themes: (1) early observations regarding accountable care organizations; (2) alternatives to traditional fee-for-service payment models; (3) trends in provider consolidation; (4) trends in provider network and benefit design strategies; and (5) early observations regarding health insurance exchanges.
Court Rules Against American Express Based on Both Direct and Indirect Evidence of Harm to Competition
On February 19, 2015, the District Court for the Eastern District of New York issued its ruling on liability in United States v. American Express. Following a seven-week trial, the Court found that American Express violated Section 1 of the Sherman Act by imposing certain restrictions on merchants that prevent the merchants from offering their customers incentives to use competing credit cards with lower retail charges.
A federal judge in New York on Wednesday allowed a consolidated class action by U.S.-based investors concerning the rigging of the foreign exchange (FX) market to move forward. In denying a motion to dismiss, U.S. District Judge Lorna G. Schofield ruled that the allegations in the complaint were sufficient to warrant discovery and, possibly, trial.
The U.S. Court of Appeals for the Fifth Circuit last week reversed a jury verdict and rendered judgment for American Quarter Horse Association (AQHA) in a much-contested antitrust case about AQHA's ban of cloned horses. The Fifth Circuit left open the possibility that a single entity like AQHA could conspire with its own members or sub-parts. The takeaway? Without transparency in decision-making procedures, organizations can find themselves vulnerable in antitrust litigation.
On January 21, 2015, the Supreme Court of the United States issued a highly anticipated decision in a LIBOR-based antitrust class action suit allowing a plaintiff to immediately take a direct appeal from an order dismissing that plaintiff’s complaint in its entirety even when that case has been consolidated by the Judicial Panel on Multidistrict Litigation and other cases remain pending in the consolidated action.
On December 1, 2014, we wrote about the Seventh Circuit’s decision in Motorola Mobility LLC v. AU Optronics Corp., which affirmed dismissal of the vast majority of Motorola’s claims regarding LCD panels.
On December 19, trade officials from the United States and China wrapped up a three-day trade conference in Chicago. As attendee and U.S. Trade Representative Michael Froman stated, the 25th annual Joint Commission on Commerce and Trade (“JCCT”) produced “concrete results.”
On October 9, 2014, the Hong Kong Competition Commission and Communications Authority published draft guidelines under the Hong Kong Competition Ordinance. The guidelines will not be the law; instead, they represent the Commission’s interpretation of the Ordinance and its policies on how the Ordinance will be enforced. The guidelines will, nevertheless, certainly be influential as the Competition Ordinance takes effect and the Commission tests the enforcement waters.
On Monday, the United States Court of Appeals for the Second Circuit heard oral argument in Apple’s appeal in the e-book price-fixing lawsuit brought by the Department of Justice. This appeal follows an adverse decision from June 2013, in which the district court determined that Apple had conspired with five book publishers to raise prices on e-books in violation of the antitrust laws.
In July of this year, the European Commission imposed fines on French pharmaceutical company Servier and five generic drug makers, including Lupin Ltd., totaling €427.7 million. The fines were the result of a five-year investigation into alleged anticompetitive agreements that prevented generic versions of perindopril, Servier’s best-selling blood pressure medication, from entering the market.
After six weeks of trial and two days of deliberation, the jury has returned its verdict in favor of the defendants in In re: Nexium. This trial began as a challenge to the allegedly anticompetitive effects of the settlements of prior patent infringement litigations between AstraZeneca and Teva and between AstraZeneca and Ranbaxy concerning AstraZeneca’s Nexium.
On November 21, 2014, professors of antitrust law from 15 universities filed an amicus brief in support of the NCAA’s appeal in O’Bannon v. NCAA. Citing their interest in the “proper development of antitrust jurisprudence,” the professors argue that the district court misapplied the rule of reason analysis under the Sherman Act, and that allowing the trial court’s decision to stand could undermine amateurism in college sports and have a broader impact on antitrust law in general.
Seventh Circuit Affirms Dismissal of 99% of Motorola’s Claims in LCD Case Based on Motorola’s Lack of Standing
On the day before Thanksgiving—less than two weeks after oral argument—the Seventh Circuit issued its ruling on Motorola’s interlocutory appeal in Motorola Mobility LLC v. AU Optronics Corp., affirming dismissal of the vast majority of Motorola’s claims regarding LCD panels.
On November 14, 2014, the National Collegiate Athletic Association (“NCAA”) filed a brief in the Ninth Circuit challenging a district court’s injunction on the enforcement of NCAA rules barring college athlete compensation as violating the federal antitrust laws. This blog previously covered O’Bannon v. NCAA.
Today, the Nexium district court will hear arguments on the Ranbaxy defendants’ motion for a mistrial. As we have previously reported, In re: Nexium is the first pay-for-delay case to go to trial since the Supreme Court’s Federal Trade Commission v. Actavis decision.
What’s Next for In re: Nexium: Defendants’ Motions for Directed Verdicts Likely to Turn on Sufficiency of Expert Testimony
As we previously reported, the In re: Nexium trial is the first pay-for-delay trial in the wake of the Supreme Court’s Federal Trade Commission v. Actavis decision. But if the Nexium defendants have it their way, plaintiffs’ case will be decided by the court as a matter of law instead of by the jury.
The plaintiffs’ antitrust claims in the New Jersey municipal tax lien auction bid-rigging class action may proceed, the federal judge presiding over the litigation has ruled.
Italian Competition Authority Issues Guidelines, Will Consider the Existence of a Compliance Program When Imposing Fines
The Italian Competition Authority has released new guidelines setting forth the criteria it uses to impose fines for violations of Italy’s antitrust laws. Notably, the guidelines list the adoption and enforcement of a compliance program as a potential mitigating factor that can reduce the base fine amount.
Developments in the Capacitor Cartel Litigation: Class Counsel Appointed and the Antitrust Division Intervenes
In July, we wrote about two putative class action lawsuits alleging that Panasonic, Samsung, and other electronics manufacturers had formed a cartel to boost prices of certain electronic capacitors. Since then, the cases have been consolidated, interim lead co-counsel have been appointed, the Antitrust Division has confirmed its own investigation, and the court has set a preliminary case schedule.
How does a court explain the complicated area of law at the intersection of patent settlements and antitrust law to a group of lay-jurors in the wake of Actavis? The district court’s approach to preliminary jury instructions in the on-going Nexium “reverse payment” trial provides one solution. The instructions also raise questions concerning the significance of direct evidence of market power that we previously discussed in connection with the Amex and Cephalon cases.
The Canada Supreme Court ruled earlier this month that civil antitrust plaintiffs may receive wire-tap evidence obtained in the criminal investigation into an alleged price-fixing scheme by several large gas companies. During the criminal investigation, the Competition Bureau of Canada intercepted and recorded more than 220,000 private communications which it used to bring antitrust proceedings against 54 persons.
On October 23, 2014, the Second Circuit agreed to hold an appeal in abeyance until the U.S. Supreme Court rules on an issue of appellate procedure in Gelboim v. Bank of America Corp. (formerly known as In re LIBOR-Based Financial Instruments Antitrust Litigation).
The long trial in United States v. American Express has come to an end: on September 18, 2014, the parties exchanged post-trial briefing and on October 9, 2014, the court held oral argument. News reports suggest that the Court (Judge Garaufis in the Eastern District of New York) was looking for ways to avoid court intervention (including urging the parties to settle) and suggest that, if it did find an antitrust violation, the Court would consider holding additional proceedings to determine the appropriate remedies.
Our regular readers know that we have been carefully following the developments in Motorola Mobility LLC v. AU Optronics Corp., currently pending in the Seventh Circuit. The case addresses the reach of the Foreign Trade Antitrust Improvements Act (“FTAIA”), and will join recent decisions issued by the Second Circuit and Ninth Circuit earlier this year.
We have written extensively about the scope of the Foreign Trade Antitrust Improvement Acts and the extraterritorial reach of U.S. antitrust laws. Now, the scope of the U.S. antitrust laws has arisen in a different context: the Foreign Sovereign Immunities Act (“FSIA”).
On September 29, 2014, we asked: "Does a Compliance Program Matter to U.S. Antitrust Enforcers?" After concluding that compliance programs still provide tangible benefits, we offered five factors that companies should consider as they develop their own programs.
There is a wide range of remedies under Swiss competition law for business litigants. Inventive remedies include compelled access to what American antitrust lawyers would call an "essential facility." But recent proposed legislation that would have provided consumers with standing to enforce Switzerland’s competition laws has been rejected, and private enforcement remains in the hands of corporate litigants.
In Motorola Mobility LLC v. AU Optronics Corp. et al., the Seventh Circuit is currently considering the reach of the Sherman Act beyond United States borders and will join the Second and Ninth Circuits in interpreting some key provisions of the Foreign Trade Antitrust Improvements Act (“FTAIA”). In that case, which will be heard by the Seventh Circuit on a motion for rehearing, the parties have advanced vastly different interpretations of the FTAIA and the extent to which defendants’ conduct abroad has impacted the United States market, if at all.
Development of a well-designed corporate compliance program, to guard against anti-competitive actions, has long been considered a worthwhile endeavor for any corporation. In issuing a revised Bulletin on Corporate Compliance Programs, the Canadian Competition Bureau (“the Bureau”) has sent a strong message about the importance of such programs for both businesses and consumers, and has offered guidance on how companies can create an effective compliance program. A draft of this Bulletin was issued on September 18, 2014, and is available for public comment until November 17, 2014.
The Canadian Competition Bureau intends to take a tough approach to so-called “pay-to-delay” settlements, potentially anti-competitive agreements in which generic drug manufacturers agree to delay the launch of a low-cost generic medicine in exchange for settlement of patent litigation with their brand-name drug competitor. Canadian Competition Bureau commissioner John Pecman delivered this message in his white paper, “Patent Litigation Settlement Agreements: A Canadian Perspective,” which he presented at a George Mason University pharmaceutical industry conference on September 23rd.
“Free Sherlock” Litigation Raises Specter of Antitrust Liability for Distributors Cooperating With Intellectual Property Owners
Leslie Klinger, noted Sherlock Holmes scholar and lawyer, has waged a nearly all-out legal offensive against the Estate of Arthur Conan Doyle over the Estate’s assertion of a copyright in connection with certain works featuring the iconic Sherlock Holmes. The lawsuit has been a media darling─reports have appeared in outlets such as Businessweek, The Hollywood Reporter, Reuters, and The New York Times─with the press often emphasizing the David-and-Goliath-like aspects of the litigation. A website entitled Free Sherlock has chronicled the ups and downs of the lawsuit (mostly ups for Klinger), and the litigation also inspired its own Twitter hashtag: #freesherlock. Judge Posner of the Seventh Circuit has stirred the copyright pot with an antitrust analysis that could ensnare distributors that refuse to distribute products that allegedly infringe the rights of an intellectual property owner.
China’s antitrust regulators have been on a tear lately. Last year the State Administration for Industry and Commerce (“SAIC”) began its investigation of Qualcomm for allegedly violating China’s 2008 Anti-Monopoly Law. SAIC recently released a statement indicating that this investigation is coming to an end, but Qualcomm may be facing a fine of over $1 billion. Then, in July of this year, SAIC raided offices of Microsoft and its partner Accenture PLC throughout China in connection with an investigation into Microsoft’s alleged anti-competitive bundling of software. And during the last month alone, the National Development and Reform Commission (“NDRC”) accused Chrysler, Mercedes Benz, Volkswagen, and a dozen Japanese auto parts makers of various violations of the Anti-Monopoly law in connection with their pricing of auto parts.
We’ve previously written about Motorola Mobility v. AU Optronics, currently pending in the Seventh Circuit. As many of you know, the Seventh Circuit vacated its March 2014 decision that the higher prices for mobile phones Motorola sold in the United States did not “give rise” to antitrust claims and that Motorola could not show a “direct” effect on U.S. commerce sufficient to satisfy the Foreign Trade Antitrust Improvements Act (“FTAIA”). Briefing is currently underway, and the case is scheduled for oral argument on Thursday, November 13.
As we noted last month, the DOJ invited public comment last June on whether to modify its consent decrees with the music licensing firms ASCAP and BMI to respond to changes in the digital music business. The DOJ review comes on the heels of decisions issued last year in the Southern District of New York, by Judges Cote and Stanton, holding that the consent decrees did not permit music publishers to partially withhold digital performance rights – which the publishers sold separately, at a premium, to the streaming music service Pandora. The challenge now will likely be convincing the DOJ (and, if necessary, the district court) – that the decrees have already achieved their purposes – or are no longer suited to do so – despite recent finding of coordinated, anticompetitive conduct by some of the key players in the dispute.
The Federal Trade Commission has reached a proposed consent agreement with two major propane distributors, Ferrellgas, L.P. (d/b/a Blue Rhino) and AmeriGas Partners, L.P., that would settle an FTC price-fixing investigation into the two companies. The proposed deal was announced by the FTC in an order withdrawing the matter from adjudication so that the proposed agreement could be reviewed.
Many of you will recall that on March 27, 2014, the Seventh Circuit issued a long-awaited decision concerning the scope of the Foreign Trade Antitrust Improvements Act (“FTAIA”) in Motorola Mobility v. AU Optronics. The Seventh Circuit held that the higher prices for mobile phones Motorola sold in the United States did not “give rise to” its foreign subsidiaries’ antitrust claims, and that Motorola could not show a “direct” effect on U.S. commerce sufficient to satisfy the FTAIA. Just days after this opinion, Motorola asked for a rehearing. After multiple letters back and forth between the Court, the parties, and the Solicitor General’s Office, on July 1, 2014 the Seventh Circuit vacated its prior opinion. Additional briefing is now underway, and is expected to be completed in October.
Historically, Hong Kong has lacked a legal framework for regulating mergers or otherwise deterring conduct that is harmful to competition. The country’s traditional laissez‑faire landscape was substantially altered in June 2012, when Hong Kong’s Legislative Council passed a sweeping new Competition Ordinance (“Ordinance”) to prohibit anti‑competitive conduct and business combinations. The Ordinance also called for the establishment of a Competition Commission (“Commission”) and Competition Tribunal. The Ordinance is slated to take effect in 2015.
Perhaps best known worldwide for its Trappist breweries, Belgium is increasingly hospitable to business regulation. It is among the many countries that have recently introduced new laws and created new agencies to regulate business practices that have undermined economic competition. In April 2013, Belgium revised its Code of Economic Law (“Code”) to implement a simplified competition enforcement regime.
Earlier this month, Israel's Antitrust Authority ("IAA") published a draft policy paper regarding public disclosures that may harm competition. The IAA cited studies that unilateral public disclosures may facilitate coordination between competitors, potentially resulting in "a forbidden restrictive arrangement."
Last week we posted a discussion concerning effective antitrust corporate compliance programs, and provided some factors that in-house counsel should consider in developing compliance programs governing employees’ communications with competitors and dealings with customers and suppliers. Today we continue that discussion by addressing the relevant factors in compliance programs concerning monopolization and dominance and price discrimination.
- Page 2 of 3