Industry: Computer Programs

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. 

On August 8, 2014, Judge Koh denied a motion for preliminary approval of a proposed $324.5 million class action settlement with Adobe, Apple, Google, and Intel in the No-Poach litigation pending in the Northern District of California, finding that "the total settlement amount falls below the range of reasonableness" because "there is ample evidence of an overarching conspiracy" and "[c]lass members would receive an average of approximately $3,750 from the instant settlement if the Court were to grant all requested deductions and there were no further opt-outs." 

With DOJ’s Antitrust Division and the FTC ramping up antitrust enforcement, it is critical for companies to take a hard look at their compliance programs and update them on a regular basis to avoid potential antitrust violations and discover antitrust malfeasance early on so a company can have the option of self-reporting and applying for leniency under DOJ’s leniency program. The United States Sentencing Guidelines provide guidance to companies in the organization of their corporate antitrust compliance programs; Guidelines considerations include establishing standards and procedures to prevent and detect criminal conduct and monitoring, auditing and periodically evaluating compliance with the program, including providing anonymous or confidential means for reporting potential breaches.  In addition to these threshold requirements, it is important that any antitrust compliance program provide guidance in a number of areas that present potential pitfalls.  Today, we discuss guidance on communications with competitors and dealing with customers and suppliers. 

On June 27, the trial in O’Bannon v. NCAA concluded following 15 days of testimony. Plaintiffs in this case, former college athletes, including former UCLA basketball player Ed O’Bannon, originally filed in the Northern District of California in 2009.  They have challenged the NCAA’s longstanding ban on paying licensing fees to college athletes for the use of their names and images in commercial outlets like broadcasts, merchandise, and video games, asserting that this policy constitutes an anti-competitive restraint of trade devoid of any pro-competitive benefits.