David Kleban, Associate

With the Democratic primary process in full swing, we thought it fitting to take a look at where the candidates stand with respect to antitrust issues.  As it turns out, this is a fairly active election cycle for antitrust, with most Democratic candidates invoking antitrust laws (and proposed laws) in connection with their visions for the future.  The increased focus on antitrust has not been lost on other observers.

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.

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.

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.

In the past month, the DOJ and several state governments scored two trial wins in their challenges to mergers among some of the country’s largest health insurers.  First, Judge Bates of the District of Columbia blocked the combination of Aetna and Humana, finding that the “proffered efficiencies do not offset the anticompetitive effects of the merger.”  Weeks later, Judge Jackson of the same district scuttled a deal between Anthem and Cigna, which she found “likely to lessen competition substantially” in the relevant market. 

It has been over three years since the Supreme Court’s Actavis decision.  Since then, numerous putative class actions alleging harm to competition as a result of “reverse-payment” settlements have flooded the courts.  The complexity of these cases, along with the vague guidance provided by the Supreme Court, has given rise to intricate questions about how courts should apply Actavis and scrutinize settlements of Hatch-Waxman litigation.

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.”

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.”

Portions of a reverse payment suit against Endo Pharmaceuticals and others were recently dismissed by Judge William H. Orrick of the Northern District of California.  The case  was brought by plaintiffs who allege that a settlement agreement resolving a patent dispute over the drug Lidoderm illegally delayed the release of a generic version.

As we previously reported, the FTC sought a preliminary injunction to block a merger between Sysco and U.S. Foods pending the outcome of its administrative trial challenging the deal.  Yesterday, Judge Amit Mehta of the federal district court for the District of Columbia granted the agency’s request, finding that “there is a reasonable probability that the proposed merger will substantially impair competition in the national customer and local broadline markets and that the equities weigh in favor of injunctive relief.”

Following the S.D.N.Y.’s award to the New York State Attorney General of an injunction requiring Actavis to continue distributing the immediate-release tablet version of its dementia drug, Namenda, the Second Circuit Court of Appeals has denied Actavis’ request for a stay of the injunction pending appeal.