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.
For several years, the Antitrust Division’s investigations have been increasingly global in scope. Acting Assistant Attorney General Andrew Finch made clear that trend will continue in remarks at a conference on International Antitrust Law and Policy held in New York earlier this month.
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.
On August 29, 2017, the D.C. Circuit affirmed the district court’s decision dismissing a suit filed by 2012 third-party presidential candidates Gary Johnson and Jill Stein, their running mates, their campaigns, and the parties they represented (together, “Plaintiffs”) against the Commission on Presidential Debates. Plaintiffs alleged that Johnson and Stein were improperly excluded from nationally televised general-election presidential debates in violation of the Sherman Act.
The Department of Justice Antitrust Division recently announced that California-based Custom Wristbands Inc. (d/b/a Kulayful Silicone Bracelets, Kulayful.com, Speedywristbands.com, Promotionalbands.com, Wristbandcreations.com, and 1inchbracelets.com) (“Custom Wristbands”) and its top executive Christopher Angeles agreed to plead guilty for conspiring to fix prices for wristbands and other customized novelty products sold online.
Last week Markus Meier, the Acting Director of the Bureau of Competition at the Federal Trade Commission, gave testimony to the House Judiciary Committee concerning “Antitrust Concerns and the FDA Approval Process.”
On July 28, 2017, a group of plaintiffs filed a putative class action in the Northern District of California against BMW, Volkswagen, Audi, Porsche, Daimler, and Mercedes-Benz, as well as auto-parts manufacturer Robert Bosch. The suit alleges that, extending as far back as 1996, these five German car manufacturers colluded to suppress competition by agreeing to limit technological advancement, selecting favored suppliers, and exchanging confidential business information. The class-action suit follows recent publications reporting that European Union antitrust officials and the German Cartel Office are investigating allegations of a cartel among these manufacturers.
In a split decision, on April 28, 2017, the Court of Appeals for the District of Columbia Circuit affirmed the district court’s decision to issue a permanent injunction blocking the merger of Anthem, Inc. and Cigna Corp., two of the nation’s largest health insurance providers. As we’ve previously written, in July 2016, the Department of Justice and attorneys general from multiple states sued to halt the merger pursuant to Section 7 of the Clayton Act, alleging that it would substantially lessen competition in the market for employers purchasing insurance for more than 5,000 employees ( “national accounts”) in multiple states and employers purchasing insurance for more than 50 employees (“large group employers”) in Richmond, Virginia. After a six-week bench trial, the district court enjoined the merger on the basis of its likely substantial anticompetitive effects in both markets.
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.
The Antitrust Division recently issued its 2017 annual spring update.
The update emphasizes the Division’s recent litigation victories, particularly in the merger context. In his introductory remarks, Assistant Attorney General Brett Snyder noted the Division’s litigation docket is more active—on both the civil and criminal sides—than it has been in recent years.
For the third straight legislative session, the House Judiciary Committee has voted in favor of a bill—the Standard Merger and Acquisition Reviews Through Equal Rules (“SMARTER”) Act—that would amend the Clayton Act and Federal Trade Commission Act to align the standards and processes for the Federal Trade Commission’s (FTC) and Department of Justice’s (DOJ) review of proposed mergers and acquisitions. The SMARTER Act aims to eliminate the current differences in merger review that companies may face depending on whether the proposed merger is reviewed by the DOJ or the FTC.
As our loyal readers know, on May 23, 2016, the Second Circuit issued a decision in the In re: LIBOR-Based Financial Instruments Antitrust Litigation vacating the District Court’s prior decision dismissing one case in this consolidated action. Our analysis of that decision is available here. Notably, however, the Second Circuit declined to rule on whether the plaintiffs (the “Plaintiffs”) are “efficient enforcers” of the antitrust laws and remanded that question for the District Court’s consideration.
On June 21, 2016, the United Kingdom Competition Appeal Tribunal (the “Tribunal”) published notice of an application to commence collective proceedings under Section 47B of the UK’s competition act. If this action continues, it will be the first opt-out collective (class action) competition claims to be heard by the Competition Appeal Tribunal.
The Antitrust Division recently issued its 2016 annual spring update. Taking advantage of modern technology, Bill Baer—now the Acting Associate Attorney General serving in the DOJ’s third-highest ranking position—prepared video remarks for your viewing pleasure. (Still, most of the Division’s updates were included in written commentary.) Renata B. Hesse now serves as the Principal Deputy Assistant Attorney General responsible for overseeing the Antitrust Division.
On May 23, 2016, the Second Circuit issued a long-awaited decision in the In re: LIBOR‐Based Financial Instruments Antitrust Litigation, vacating the District Court’s (Buchwald, J.) prior decision dismissing one case in this consolidated action.
Courts continue to evaluate the degree to which “reverse payments” are permitted post-Actavis. In the latest of these decisions, issued on February 22, 2016, the First Circuit held that non-cash payments may run afoul of the antitrust laws.
We’ve previously written about how the Yates Memo announced an increased focus on individual accountability, and that the DOJ’s broader focus on individual accountability would likely encourage the Antitrust Division to increase its efforts to prosecute individuals for antitrust violations.
Just over two months ago, the United States Department of Justice made waves when a memorandum from Deputy Attorney General Sally Quillian Yates (the “Yates Memo”) announced an increased focus on individual accountability to combat corporate misconduct. The Yates Memo explains DOJ’s view that individual accountability is important because it deters future illegal activity, incentivizes changes in corporate behavior, ensures the proper parties are held responsible for their actions, and promotes the public’s confidence in the justice system.
We recently wrote about the Second Circuit’s June 30, 2015 decision affirming Judge Denise Cote’s decision that Apple conspired with five publishing companies to raise the price of e-books. As we explained in that post, Judge Dennis Jacobs—who dissented from the opinion—wrote that he would reverse the District Court’s decision because, inter alia, its rule-of-reason analysis failed to consider Apple as a horizontal competitor of Amazon and because Apple’s conduct was “unambiguously and overwhelmingly pro-competitive” in reducing Amazon’s monopoly power in the e-book market.
On July 16, the European Court of Justice issued a decision stating that standard essential patent (“SEP”) owners that seek injunctions against companies willing to license intellectual property on fair and reasonable terms may be illegally abusing their dominance. The dispute between Huawei Technologies Co. Ltd. (“Huawei”) and ZTE Corp. (“ZTE”) arises from Huawei’s patent on Long Term Evolution (“LTE”), a technology that is used in mobile phones and was developed by the European Telecommunications Standards Institute (“ETSI”).
On April 13, 2015 the Second Circuit (Hon. Walker, Raggi, Droney) heard oral argument in People of the State of New York v. Actavis PLC.
On March 29, 2015, StubHub, Inc. brought an antitrust action against the Golden State Warriors LLC (the “Warriors”) and Ticketmaster, L.L.C. (“Ticketmaster”), alleging that they monopolized the ticket resale market by forcing Warriors fans to use only secondary ticket exchange services provided by the Warriors, and excluding competing secondary ticket exchange services. The action is pending before the Honorable Vince Chhabria in the Northern District of California.
On December 1, 2014, we wrote about the Seventh Circuit’s decision in Motorola Mobility LLC v. AU Optronics Corp., which affirmed dismissal of the vast majority of Motorola’s claims regarding LCD panels.
On December 5, 2014, the Official Journal of the European Union published the European Commission’s new directive on antitrust damages in civil actions (the “Directive”). The Directive went into effect on December 26, 2014.
We’ve previously written about the components of effective antitrust compliance programs and the potential benefits corporations may achieve by adopting them. In drafting compliance programs, however, corporations should be aware that the attorney-client privilege may not protect a compliance policy from disclosure in litigation.
The long trial in United States v. American Express has come to an end: on September 18, 2014, the parties exchanged post-trial briefing and on October 9, 2014, the court held oral argument. News reports suggest that the Court (Judge Garaufis in the Eastern District of New York) was looking for ways to avoid court intervention (including urging the parties to settle) and suggest that, if it did find an antitrust violation, the Court would consider holding additional proceedings to determine the appropriate remedies.
We have written extensively about the scope of the Foreign Trade Antitrust Improvement Acts and the extraterritorial reach of U.S. antitrust laws. Now, the scope of the U.S. antitrust laws has arisen in a different context: the Foreign Sovereign Immunities Act (“FSIA”).
Our regular readers know that we have been carefully following the developments in Motorola Mobility LLC v. AU Optronics Corp., currently pending in the Seventh Circuit. The case addresses the reach of the Foreign Trade Antitrust Improvements Act (“FTAIA”), and will join recent decisions issued by the Second Circuit and Ninth Circuit earlier this year.
On September 29, 2014, we asked: "Does a Compliance Program Matter to U.S. Antitrust Enforcers?" After concluding that compliance programs still provide tangible benefits, we offered five factors that companies should consider as they develop their own programs.
We’ve previously written about Motorola Mobility v. AU Optronics, currently pending in the Seventh Circuit. As many of you know, the Seventh Circuit vacated its March 2014 decision that the higher prices for mobile phones Motorola sold in the United States did not “give rise” to antitrust claims and that Motorola could not show a “direct” effect on U.S. commerce sufficient to satisfy the Foreign Trade Antitrust Improvements Act (“FTAIA”). Briefing is currently underway, and the case is scheduled for oral argument on Thursday, November 13.
Many of you will recall that on March 27, 2014, the Seventh Circuit issued a long-awaited decision concerning the scope of the Foreign Trade Antitrust Improvements Act (“FTAIA”) in Motorola Mobility v. AU Optronics. The Seventh Circuit held that the higher prices for mobile phones Motorola sold in the United States did not “give rise to” its foreign subsidiaries’ antitrust claims, and that Motorola could not show a “direct” effect on U.S. commerce sufficient to satisfy the FTAIA. Just days after this opinion, Motorola asked for a rehearing. After multiple letters back and forth between the Court, the parties, and the Solicitor General’s Office, on July 1, 2014 the Seventh Circuit vacated its prior opinion. Additional briefing is now underway, and is expected to be completed in October.
As we noted earlier this month, one factor that may contribute to the increase in criminal antitrust fines over the past ten years is the Antitrust Division’s focus on anticompetitive conduct that is international in scope. Indeed, the Antitrust Division’s chart listing Sherman Act violations yielding a corporate fine of $10 million or more shows that nearly all of the investigations resulting in fines greater than $10 million are international.
Earlier this month, Israel's Antitrust Authority ("IAA") published a draft policy paper regarding public disclosures that may harm competition. The IAA cited studies that unilateral public disclosures may facilitate coordination between competitors, potentially resulting in "a forbidden restrictive arrangement."
Last week we posted a discussion concerning effective antitrust corporate compliance programs, and provided some factors that in-house counsel should consider in developing compliance programs governing employees’ communications with competitors and dealings with customers and suppliers. Today we continue that discussion by addressing the relevant factors in compliance programs concerning monopolization and dominance and price discrimination.
In June 2014, the DOJ announced that it planned to review the consent decrees with music licensing firms ASCAP and BMI. These consent decrees were initially entered in 1941; the ASCAP consent decree was last amended in 2001 and the BMI consent decree was last amended in 1994. The DOJ asked for comments concerning whether the consent decrees "need to be modified to account for changes in how music is delivered to and experienced by listeners." On August 6, ASCAP and BMI filed public comments regarding the consent decree review.
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.
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?
Last month, we were excited to publish our article, The Use of Expert Witnesses for Penalty Determinations in Criminal Antitrust Cases: A Study of United States v. AU Optronics, in Antitrust Magazine. The article examines the use of expert testimony during the trial in AU Optronics, No. 09-cr-110 (N.D. Cal), and discusses several strategic issues for practitioners to consider in responding to expert testimony in criminal cartel cases.
As luck would have it, just days after our article was published, the Ninth Circuit issued its long-awaited AU Optronics decision addressing the requirements of the Foreign Trade Antitrust Improvements Act (“FTAIA”).
On August 1, 2014, Judge Cote preliminarily approved a $450 million settlement in the Apple e-books litigation. As many of you will recall, a June 2013 trial resulted in a finding that the various plaintiffs (including numerous states, the United States, and a class action) succeeded in proving that Apple had conspired with five book publishers to raise e-book prices.
