Industry: Transportation

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.

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.

Media outlets have reported that the U.S. Department of Justice raided the maritime industry’s “Box Club” meeting, which is more formally known as the meeting of the International Council of Containership Operators.  Box Club meetings include the CEOs of all major container lines, and even though the meeting locations are not publicly disclosed, the DOJ managed to serve subpoenas in mid-March at the San Francisco meeting, including top executives at A.P. Moller-Maersk, Evergreen, the Orient Overseas Container Line, and Hapag Lloyd.  Notably, the subpoena recipients are not U.S.-based companies—the DOJ may have used the Box Club meeting as an opportunity to exercise its subpoena power over foreign entities.

The European Commission on Tuesday announced its decision finding truck makers MAN, Volvo/Renault, Daimler, Iveco, and DAF liable for violating EU antitrust rules.  The companies acknowledged that for 14 years they colluded in setting truck prices, settling the case for a record total of €2.93 billion.  Competition commissioner Margrethe Vestager reported that the five-company cartel “account[s] for around 9 out of every 10 medium and heavy trucks produced in Europe.”  Vestager also said that the unprecedented fines send a “clear message to companies that cartels are not accepted.”

It is plausible that Uber’s CEO, Travis Kalanick, may have violated antitrust law by fixing prices charged to Uber passengers, a judge in the United States District Court for the Southern District of New York concluded last week in denying Kalanick’s motion to dismiss.  The lawsuit, Meyer v. Kalanick, is a putative class action initiated by Spencer Meyer, a resident of Connecticut, on behalf of people who, like him, have used Uber car services.  The complaint also names a subclass of people who have been charged according to Uber’s “surge pricing” model.

United Airlines has come under increased antitrust scrutiny during the latter half of 2015.  As we previously reported the U.S. Department of Justice (“DOJ”) is investigating an alleged passenger-capacity conspiracy between United and three other airlines, and the Department of Transportation is investigating whether United and others engaged in price gouging after a Spring 2015 Amtrak derailment.

Last month, the Associated Press was the first to report that the DOJ is investigating whether American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines have engaged in collusion.  Since that time, there has been much speculation in the press about the DOJ’s investigation.  But given that the investigation is not a public proceeding, what do we really know?

Bill Baer, the Assistant Attorney General in charge of the DOJ Antitrust Division, spoke about the DOJ’s antitrust enforcement priorities last Friday, February 6, at a speech in Miami. AAG Baer emphasized three priorities: exercising patience with market flux due to new disruptive new industry sectors, giving meaningful guidance to the business community, and crafting structural remedies as part of their merger enforcement efforts.  

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. 

Over the past ten years, criminal antitrust fines have increased dramatically:  they totaled only $107 million in fiscal year (“FY”) 2003, but increased to a high of $1.14 billion in FY-2012 and remained relatively steady at $1.02 billion in FY-2013.  As criminal fines increase, companies face increasing exposure for conduct that allegedly runs afoul of the U.S. antitrust laws. What is driving the marked increase in potential penalties?