Category: Unilateral Conduct
Public discourse about antitrust law has been expanded to include a wider range of ideas about the purpose of antitrust law. “New Brandeisians” believe that the consumer welfare standard, which prioritizes end-user prices over most other considerations, does not account for all the harms caused by a lack of competitive markets. They contend that this standard is particularly ill-suited for policing the large technology companies that dominate their markets. As previously discussed here and here and here, certain American regulators, legislators, and presidential candidates appear to be listening.
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.
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.
In the latest development in Woodman’s Food Market v. Clorox—the saga between Clorox and Woodman’s that last year generated a landmark Robinson-Patman Act (RP Act) decision by the Seventh Circuit—Clorox is asking the district court to dismiss Woodman’s remaining Sherman Act claims. If granted, the motion would bring an end to this suit.
We have not previously reported on an antitrust litigation that is enveloping the mixed martial arts (“MMA”) world. Six current and former MMA fighters have filed a class action lawsuit against the company that owns the UFC, Zuffa, LLC, for violations of the Sherman Act. A review of the docket indicates that the UFC will have to go a few more rounds before it has another opportunity for a knockout.
Judge Merrick Garland, if he is confirmed, may become one of the Supreme Court’s foremost authorities in antitrust law. He taught antitrust law at Harvard, and he has published on the subject, so it’s fair to expect him to seek a role in shaping antitrust jurisprudence and perhaps voting to hear more antitrust cases than currently end up on the Court’s docket.
Bad Basketball at High Prices? Timberwolves Season Ticket Holders Seek to Enjoin the Team’s “Draconian” Resale Policies
Minnesota Timberwolves season ticket holders unhappy with the team’s 20-45 record and hoping to resell their tickets have filed a putative class-action lawsuit over the team’s “draconian” ticketing policy.
New York District Court Allows Monopolization Claims Alleging Manipulation of Electricity Prices to Proceed Against Barclays
Last week, Judge Victor Marrero of the U.S. District Court for the Southern District of New York partially granted Barclays PLC’s motion to dismiss antitrust and unfair enrichment claims brought against it by Merced Irrigation District.
Generic drug manufacturers have come under scrutiny from state and federal regulators for recent generic drug price hikes. These investigations have expanded to include Turing Pharmaceuticals and its former CEO, Martin Shkreli.
New York Attorney General Eric Schneiderman is reportedly investigating the National Football League for antitrust violations in connection with its imposition of “price floors” on tickets for resale. In a 40-page report released last week, the NYAG’s office outlined numerous concerns about the market for event tickets. Among those concerns is the practice, by some NFL teams and the New York Yankees, of imposing minimum pricing requirements (typically prohibiting sale for less than face value) on their “official” online resale platforms. According to the NYAG, such “price floors” make it “easy for buyers to be fooled into believing what they are paying is the market price for a ticket, when in fact the buyer is paying a price artificially inflated by a price floor.”
On December 14, 2015 Judge Yvonne Gonzalez Rogers heard oral argument on a motion to dismiss filed by Apple in an antitrust action brought against the company in connection with its 2007 deal to sell iPhones exclusively to AT&T Mobility. The next day, Judge Rogers denied Apple’s motion. The lawsuit, one of several arising from the Apple-AT&T agreement, raises interesting questions about how to define a relevant product market using an “aftermarket” theory.
We reported earlier today that the jury began deliberations this past Monday in the antitrust class action lawsuit against Cox Communications brought by its premium services subscribers. The jury returned its verdict today in favor of the plaintiffs and found that Cox had violated the Sherman Act by illegally tying its premium cable services to rentals of its set-top boxes. The jury awarded the plaintiffs $6.31 million in damages, which will be trebled to $19 million. The jury awarded damages based on one aspect of the plaintiffs’ claims for fees from set-top box rentals but declined to award damages based on the plaintiffs’ DVR fees. Thus, the damages award came back much lower than the $49 million figure the plaintiffs were seeking.
After a near two-week trial in the consumer class action lawsuit against Cox Communications, the jury began deliberations this past Monday to decide whether Cox’s alleged practice of tying premium cable services to rentals of its cable boxes violated the Sherman Act by harming competition in the set-top box market.
Ties that Bind: Trial Date Nears for Cox Communications on the Legality of Linking Access to Premium Cable Services and Proprietary Set-Top Boxes
Trial is set for October 13th on an antitrust class action lawsuit alleging that Cox Communications used its monopoly power over premium cable services in Oklahoma City to force consumers to rent its set-top box. The trial will be conducted before Judge Robin J. Cauthron of the Western District of Oklahoma. The plaintiff, Richard Healy, is seeking nearly $49 million in damages on behalf of Oklahoma City cable subscribers who paid Cox to rent a set-top box from February 1, 2005 through January 9, 2014.
We have been following developments in People of the State of New York v. Actavis, the New York Attorney General’s “product hopping” suit against Actavis and its subsidiary, Forest Laboratories LLC (together, “Actavis”). Now, an FTC Commissioner and a D.C. Circuit Judge have weighed in as well—and they are criticizing a key portion of the Second Circuit’s ruling.
We have previously posted about the New York Attorney General’s “product hopping” suit against Actavis and its subsidiary, Forest Laboratories LLC (together, “Actavis”), including our analysis of the District Court’s opinion enjoining Actavis from discontinuing sales of the Alzheimer’s drug Namenda IR, and of the Second Circuit’s decision affirming the district court’s ruling. The Second Circuit panel that heard the appeal has now denied rehearing, and the active members of the Second Circuit have also denied rehearing en banc.
AlarMax Distributors Inc. may pursue price discrimination claims under the Robinson-Patman Act (RPA) against Honeywell International Inc., a federal judge in Pennsylvania ruled last week. Fire and security product distributor AlarMax alleges that Honeywell violated a decade-old settlement and supply agreement by engaging in unlawful pricing activity.
We’ve previously covered the New York State Attorney General’s (“NYS AG”) lawsuit against Actavis PLC and Forest Laboratories seeking to prevent them from discontinuing sales of the Forest drug Namenda IR, which is used to treat Alzheimer’s disease. New York has alleged that Actavis and Forest are engaging in “product hopping”—attempting to force prescribers and patients to switch to a new extended-release version of Namenda (Namenda XR) before a generic version can be launched.
Supreme Court Finds that Regulatory Boards Composed of “Active Market Participants” are Subject to Antitrust Laws if Not Actively Supervised by the State
Yesterday, the Supreme Court issued its ruling in North Carolina State Board of Dental Examiners v. FTC, finding that North Carolina’s state board of dental examiners was subject to antitrust scrutiny under the Sherman Act and Federal Trade Commission Act. In reaching that decision, the court found that a state agency composed of “active market participants”—here, a board responsible for supervising the practice of dentistry composed primarily of practicing dentists—was not immune to federal antitrust laws as a sovereign actor unless the state “actively supervised” that agency. The Court left open, however, just what sort of active supervision might be required.
District Court Allows Monopolization Claims to Move Forward on Allegations of Direct Evidence of Monopoly Power
Traditionally, plaintiffs asserting claims under Sections 1 and 2 of the Sherman Act allege the existence of one or more product markets relevant to the defendants’ anticompetitive conduct and the defendants’ shares of those markets in order to state a plausible claim of defendants’ market power and/or monopoly power in a product market. But plaintiffs can also convince courts they can proceed to trial by alleging “direct evidence” of defendants’ market power.
Court Allows “Product Hopping” Claims to Proceed in Suboxone Litigation Based on Allegations of Removal of Prior Formulation and Disparagement of Generic Competition
We’ve previously discussed antitrust claims related to “product hopping”—allegations that pharmaceutical manufacturers have reformulated or otherwise altered their products to prevent automatic generic substitution. Earlier this week, the district court for the Eastern District of Pennsylvania in In re Suboxone Antitrust Litigation denied a motion to dismiss similar allegations regarding the drug Suboxone, which is used to treat opioid dependence.
The current debate over whether Amazon holds the power of a monopolist or a monopsonist is likely to be narrowed to one question in a court room: What is the relevant product market that Amazon is allegedly dominating? Since our last post on the Amazon and Hachette dispute, there has been increased discussion in the general press, culminating with 2008 Nobel Prize winner for economics Paul Krugman telling readers of the New York Times that Amazon is a monopsonist.
The Swiss competition law is governed by the Federal Law of October 6, 1995, on Cartels and Other Restraints of Competition (the Cartel Act). The regulatory framework is accompanied by numerous federal ordinances and communications of the Federal Competition Commission. On February 22, 2012, the Swiss Federal Council submitted to Parliament its draft for a number of amendments of the Cartel Act for approval. On September 17, 2014, the Parliament rejected in its entirety the proposed revision of the Cartel Act.
In the seminal decision, Aspen Skiing Co. v. Aspen Highlands Skiing Corp 472 U.S. 585, 611 (1985), the U.S. Supreme Court affirmed a jury verdict for a plaintiff on a Section 2 claim and set forth the standard for unilateral refusal-to-deal claims. More recent U.S. Supreme Court and Second Circuit cases suggest that Aspen Skiing may reflect the “outer boundary” of liability under Section 2. What are the markers of that boundary?
Earlier this week, India’s competition regulator─the Competition Commission of India (“CCI”)─raided two offices of JCB India Limited (“JCB”), a UK-based manufacturer of construction equipment. This raid marks the first time that CCI has exercised its search-and-seizure power under the Competition Act, 2002.
Amazon and the publisher Hachette are engaged in a fierce dispute over the pricing of e-books sold by Amazon. At issue is how the profits from the sale of e-books should be divided between Amazon and the publisher and who should bear the impact of Amazon’s discounting of e-books.
We are pleased to announce the launch of Antitrust Update, Patterson Belknap’s new resource for the latest news and happenings in the antitrust and competition law arena.