Antitrust Update Blog

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Antitrust Update Blog is a source of insights, information and analysis on criminal and civil antitrust and competition-related issues. Patterson Belknap’s antitrust lawyers represent clients in antitrust litigation and counseling matters, including those related to pricing, marketing, distribution, franchising, and joint ventures and other strategic alliances. We have significant experience with government civil and criminal/cartel investigations, providing the unique perspectives of former top U.S. Department of Justice Antitrust Division lawyers from both the civil and criminal sides.

Global Inquiries into Drug Price Increases

European competition authorities announced this week an investigation into Aspen Pharmacare’s recent price hikes of five cancer drugs. The European Commission said in a press release that it had “information indicating that Aspen has imposed very significant and unjustified price increases of up to several hundred percent.” The Commission is also looking into reports that the South African-based generic drug-maker withdrew or threatened to withdraw the drugs from countries that would not accept these price hikes. If the investigation demonstrates that Aspen abused its alleged dominant market position to increase prices, the Commission could order fines of up to 10 percent of the company’s yearly revenue.

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DOJ and FTC provide guidance on avoiding antitrust violations in Human Resources practices

The Department of Justice (DOJ) and the Federal Trade Commission (FTC) last week issued antitrust guidelines for human resources (HR) professionals.  The guidelines highlight the most common antitrust violations, based on a review of cases in which federal antitrust agencies have taken enforcement actions against employers.  There are three main takeaways from this guidance.  

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Hospitals Considering Merger Face Increased Uncertainty

PinnacleHealth System and Penn State Hershey Medical Center have abandoned their merger plans following a Third Circuit defeat last month.  The announcement underscores the uncertainty faced by hospitals considering consolidation as a way to keep costs down and promote a value-based system of payment.

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DOJ Sues to Halt Deere's Acquisition of Monsanto's Precision Planting

The Department of Justice ("DOJ") sued this week to stop Deere & Co.'s acquisition of Monsanto Co.'s Precision Planting, explaining that the deal would harm farmers.  The companies make high-speed precision planting systems, which allow farmers to plant uniformly spaced crops at double the speed of conventional planters.  The deal would give Deere at least 86 percent of the market for this planting technology, the DOJ said.

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Health Insurance Merger Challenges: Of Antitrust and the Affordable Care Act

The Department of Justice and attorneys general from multiple states last week sued to halt two health insurance mergers, each worth billions of dollars.  

The challenged deals are Anthem's planned merger with Cigna and Aetna's proposed acquisition of Humana.  The deals would whittle down the number of top competitors in the health insurance industry from five to just three: an Anthem-Cigna entity, an Aetna-Humana entity, and the current industry giant UnitedHealth Group.  Each would have revenue of more than $100 billion a year. 

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Tobacco Cases Expose Tension Between Antitrust and Public Health

A recent decision of the European Court of Justice (“ECJ”) regarding the sale of tobacco products highlights a long-standing tension between two sets of laws: antitrust/competition laws, which seek to keep products affordable and accessible to consumers, and consumer protection and public health laws, which can seek to steer consumers away from products that pose a risk to public health by making them less accessible.

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Hitachi Chemical to Plead Guilty to Price-Fixing

The Department of Justice ("DOJ") announced this week that Hitachi Chemical Co. will plead guilty to a criminal charge for conspiring with competitors to fix the prices of electrolytic capacitors sold in the United States and elsewhere. The Tokyo-based company will pay an undisclosed fine and has agreed to cooperate with the DOJ's investigation.

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Polar Air Cargo Settles Antitrust Claims for $100 Million

A settlement agreement last week in the long-running U.S. Cargo Antitrust Class Action brought the settlement fund in that case to over $1.1. billion. Polar Air Cargo, Polar Air Cargo Worldwide, and Atlas Air Worldwide Holdings agreed to pay $100 million in three installments. The settlement is the second-largest so far in this case, after Korean Air Lines's agreement in December 2013 to pay $115 million. It is subject to approval by the U.S. District Court for the Eastern District of New York, where the case is pending.

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FTC Moves to Halt Merger Between Staples and Office Depot

The Federal Trade Commission (FTC) last week challenged Staples' $6.3 billion bid for Office Depot, claiming that the proposed merger would significantly reduce competition nationwide in the market for office supplies to large companies.  Large companies rely on competition between the two suppliers to hold down the cost of items such as pens, pencils, notepads, sticky notes, file folders, paper clips, and paper used for printers and copy machines, the FTC said. 

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AlarMax’s Robinson-Patman Claims Against Honeywell Survive

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. 

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Antitrust Regulators Seek "Superhero" Cooperation

The head of the Department of Justice’s criminal antitrust unit called Monday for greater international cooperation in limiting the cost for companies to cooperate with investigators.  Deputy Assistant Attorney General Brent Snyder’s remarks come on the heels of Canadian Competition Commissioner John Pecman’s speech urging development of a “longer term strategic plan” for international antitrust cooperation.

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FTC Ordered to Reveal Names of Witnesses to Sysco, US Foods

A federal judge in Washington, DC ruled last week that the FTC must disclose the names of the individuals it relied on in its bid to block a proposed $3.5 billion merger between Sysco and US Foods. The FTC attached under seal 92 declarations and an exhibit list identifying the names and affiliations of the declarants to its motion for a preliminary injunction halting the merger. 

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March Madness for Foreign Companies: Supreme Court asked to resolve Circuit Split on Reach of FTAIA

The Supreme Court has been urged to resolve a circuit split concerning the reach of the Foreign Trade Antitrust Improvements Act (FTAIA) to foreign conduct that may affect U.S. commerce. Motorola this week filed a petition for certiorari in a Seventh Circuit case interpreting the FTAIA as barring Sherman Act claims arising out of the foreign conduct of an alleged liquid crystal display (LCD) panel cartel. 

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Sysco, US Foods Seek Disclosure of FTC Witness Identities

The Federal Trade Commission (FTC) went head-to-head last week with Sysco Corp. and US Foods Inc. over whether to make public the names of the declarants relied on by the FTC in its preliminary injunction to block Sysco and US Foods’ merger. Sysco and US Foods filed a motion in a Washington, D.C. federal district court on March 6 asking the judge to publicize the names, which the FTC quickly opposed. 

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Motion to Dismiss Denied in FX Rigging Case

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. 

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When Can an Organization Conspire with Itself?

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. 

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Four Takeaways from the Ongoing Air Cargo Price-Fixing Litigation

Nippon Cargo Airlines Co. Ltd last week agreed to pay $36.55 million to settle claims that it conspired with other airlines to fix rates for air cargo services in the early 2000s. Two dozen airlines have settled in the long-running multi-district litigation (MDL), bringing the settlement fund to more than $900 million. 

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