Corporate Counseling Committee July-August Antitrust ... · not because cash has a unique economic...

September 10, 2013

12:00pm to 1:00pm EDT

Moderator:

Dorothy Raymond,

Law Offices of Dorothy Gill Raymond

Panelists:

Tom Gilbertsen, Venable LLP

William Coston, Venable LLP

Melissa Landau Steinman, Venable LLP

Robert Davis, Venable LLP

Andrew Bigart, Venable LLP

David Conway, Venable LLP

Corporate Counseling CommitteeJuly-August Antitrust Update for

In-House Counsel

AgendaI. Private Litigation

II. Federal Trade Commission

a) Phoebe Putney Settlement with the FTC

b) Actavis Amicus

III. Department of Justice

a) American Airlines/U.S. Airways Merger

b) United States v. Apple – Remedies

IV. International

PRIVATE LITIGATION

Actavis Progeny

• In re Lipitor Antitrust Litigation (MDL 2332)(D.N.J. 9.5.13)• Reverse payment theory is independent of patent law, therefore Third

Circuit and not Federal Circuit law applies

• Direct purchasers have standing because injuries flow from challengedanticompetitive conduct (generic competition would have/could haveentered market sooner but-for defendants’ conduct)

• Fact issues include ability of generic competitors to design aroundpatents, prevail in infringement suit, and gain FDA approval for product

• Grants plaintiffs leave to amend with allegation that settlement of Accuprillitigation was Pfizer’s “payment” to delay generic Lipitor drug

• Nothing in Actavis requires challenged reverse payment to be in monetaryform.

4

Actavis Progeny

• Previously stayed matters now in discovery

• Post-Actavis settlements include: Cipro (Sup.Ct.S.D.) (Bayer agrees to $74MM to settle consumerclass)

5

In re Payment Card Interchange Fee and MerchantDiscount Antitrust Litig. (MDL 1720)

• $7.25B settlement set for 9.12 fairness hearing in E.D.N.Y.

• Court-appointed expert blesses settlement’s “economics”

• “substantial doubt” that plaintiffs can run table on dispositive issues

• Plaintiffs likely to prevail under “rule of reason” to establish defendants’power in two-sided market

• whether practices are anticompetitive presents “formidable hurdle”because challenged practices “lie historically at the core of the defendants’highly successful [network] business model” and “a court may be reluctantto declare that these practices have become antitrust violations by virtureof industry maturation.”

6

In re Payment Card Interchange Fee and MerchantDiscount Antitrust Litig. (MDL 1720)

• Objectors challenging adequacy of prospectiveand monetary relief, scope of release, certification

• Several opt-outs filed new complaints in SDNY

• Defendants assert prior settlement in Visa Check

• Aug. 14 letter seeks EDNY guidance aboutapplicability or prior release

• Longer road ahead for settlement

7

In re Processed Egg Products Antitrust Litig. (E.D. Pa.)

• Direct purchaser class challenges trade groups’ long-running agreement tolimit egg production

• Nation’s largest egg producer agrees to $28MM settlement with nine directpurchasers in the class

In re Hypodermic Products Antitrust Litig. (D.N.J.)

• Hospital and pharmacy class action accuses Becton Dickinson of stiflingcompetition in hypodermic syringes and catheter products

• BD annouced $22MM settlement with indirect purchaser class

• Follows $45MM settlement with direct purchasers announced last year

8

In re Fasteners Antitrust Litig. (E.D.Pa.)

• $17.5MM settlements in MDL alleging zipper and fastener mfb. price fixingconspiracy

• 1991-2007 class period

In re Air Cargo Shipping Serv. Antitrust Litig. (E.D.N.Y.) (Gleeson, J.)

• Approves 10 settlements = $112MM

• Dismisses some but not all freight forwarding defendants from suit alleginginternational price-fixing conspiracy

• Denies request for 33% contingent fee award because case involved“megafund,” where fee ranges of 6 to 10% are common.

9

Haley Paint Co. et al. v. du Pont de Nemours and Co.

• Nationwide class alleges 2002-2010 conspiracy to fix priceof paint component titanium dioxide

• $72MM settlement announced with du Pont

• Contested class was certified last year, and D.Md. deniedremaining defendants’ summary judgment motions on 8.14

• Settling parties sought preliminary approval w/o opt-outrights on grounds that earlier notice already provided same

• Recent order trims over 300 paint makers from class byenforcing arbitration clauses, class action and jury trialwaivers, and forum selection clauses

10

• In re TFT-LCD (Flat Panel) Antitrust Litig.(N.D.Cal.) (jury finds price-fixing conspiracy inglobal market for liquid crystal display panels butclears Toshiba of allegations that it participated;$7MM awarded to Best Buy)

• Abraham & Veneklasen J.V. v. AmericanQuarter Horse Assoc. (N.D.Tex.) (jury verdictfinds defendant violated Sections 1 and 2 by notadmitting cloned horses into its registry; awards nodamages)

11

Gulf States Reorganization Group, Inc. v. Nucor Corp.(11th Cir. July 15, 2013)

• Affirming summary judgment against claims that Nucor’spurchase of Gulf States Steel assets in Ch. 7 bankruptcyconstituted attempted monopolization in violation of §2

• Plaintiff’s relevant market for “black hot rolled coil steel”failed to account for ease with which producers of “oiled”and “pickled” steel could switch to defined product

• High cross-elasticity of supply arises where definedproduct is made in the course of manufacturing other, morerefined products

12

SSS Enterprises Inc. v. Nova Petroleum Realty LLC(4th Cir. July 19, 2013)

• Gas station operators accused wholesale distributors ofslew of anticompetitive acts

• Fourth Circuit affirms summary judgment

• Evidence failed to establish relevant markets, distributors’monopoly power, nor conduct in excluding competition

13

Dahl v. Bain Capital Partners LLC (D. Mass.)

• Complaint alleges that ten private equity firms conspired tohold down prices of target companies

• Order denies defendants’ summary judgment• prior order rejected summary judgment on overarching conspiracy

claims, finding sufficient evidence to support agreement betweendefendants to refrain from “jumping” each others’ announcedproprietary deals

• July 16 order denies summary judgment to eight companieschallenging evidence of their connection to the alleged conspiracy

• co-conspirator exception to hearsay rule brings in statements aboutagreements to “stand down” and abide by “club etiquette”

14

• In re Neurontin Antitrust Litig. (D.N.J. Aug. 8,2013) (denies cross motions for summaryjudgment due to genuine disputes about relevantmarket boundaries)

• In re Rail Freight Fuel Surcharge Antitrust Litig.(D.C. Cir. Aug. 9, 2013) (citing Behrends to vacateand remand certification of rail shipper classpursuing Section 1 price fix allegations)

15

• In re Apple iPhone Antitrust Litig. (N.D.Ca.)(dismissing monopolization claims of putativeclass challenging various aspects of app storesales, including Apple’s 30% cut of app sales;amended complaint filed last week)

• KM Enterprises, Inc. v. Global Traffic Tech., Inc.(7th Cir. Aug.2) (reading Clayton Act Section 12venue and service of process provisions must beready as a “package deal” that maintains thestatute’s venue limitations)

16

Gorlick Distribution Centers, LLC v Car Sound ExhaustSystem, Inc. (9th Cir. July 19, 2013)

• Rare Robinson-Patman case in 9th Cir. makes it moredifficult for buyers to prove R-P claims against competingbuyers receiving more favorable pricing/other terms

• Aff’d summary judgment on behalf of defendant distributor,even though defendant admitted it received preferentialpricing, free shipping, volume discounts, sales rebates

• Plaintiff sued under Section 2(f) of R-P Act, 13 USC § 13(f), and Section 2 of Sherman Act, 15 USC § 1, allegingagreement between Allied and manufacturer wasunreasonable restraint of trade.

17

Gorlick (cont’d)

• Issue: Whether plaintiff raised genuine issue of fact as towhether favored buyer had requisite knowledge that hewas receiving lower price under § 2(f)

• On appeal, plaintiff argued defendant/distributor Allied hadactual knowledge, knowledge based on trade experience or a“duty to inquire” whether it was receiving prohibited prices

• Court aff’d grant of summary judgment for defendant clarifiedlevel of knowledge required for liability:

• neither receipt of better-than-published prices nor tradeexperience will satisfy knowledge requirement;

• there is no duty to inquire by the buyer whether it is receiving abetter deal

• Also rejected Sherman Act § 1 claim because no antitrust injury

• Court focused on injury to competition, rather than competitorinjury

18

• Central to Gorlick is the Court’s finding that there is no duty to inquireby the buyer whether it is receiving a better deal

• Can be distinguished from 1966 Fred Meyer case, where retailerinduced preferential prices and insisted none of competitors beoffered same deal

» The FTC recently solicited comments on whether it should modifyits Guides for Advertising Allowances and Other MerchandisingPayments and Services (a/k/a the Fred Meyer Guides), lastpublished in 1990. Comment period closed March, 2013, but FTChas yet to issue any revisions or updates.

• Topics on which comment requested: (1) whether there is a continuing need forGuides; (2) whether there have been changes in the case law that should bereflected; (3) how, if at all, the Guides should be revised to account for newdevelopments in commercial practices; (4) costs and benefits to business; (5)costs and benefits to consumers

• Not clear when/if changes will be issued

• Little FTC R-P litigation—why update Guides now?• FTC has been reviewing/updating its guides as part of regular “housekeeping.”

• Provide guidance to courts in private litigation?.19

PART II.FEDERAL TRADE

COMMISSION

» Phoebe Putney settlement with the FTC

» FTC Amicus interpreting the Court’s decision inActavis filed in the Effexor XR Antitrust Litigation inthe District of NJ

21

Federal Trade Commission

Phoebe Putney Settlement w/FTC (August 22, 2013)

» Merger to monopoly in a hospital market in rural Georgia.

» Due to unusual circumstances of the Certificate of Need (CON) laws inGeorgia, Commission unable to require divestiture.

» Commission required order that fell short of a divestiture, but didn’t includeanything to control prices:

» Provisions relating to ability of hospital to oppose issuance of CONs for newhospitals in area

» Require hospital to notify FTC of any new acquisitions

» Very different from what Commission did under similar circumstances inthe Evanston case.

» FTC using behavioral remedies in merger cases?

» Disagreement in the Commission regarding the outcome?


In re Effexor XR Antitrust Litigation Amicus Brief (Aug. 14, 2013)

» FTC has asked U.S. District Court for the District of New Jersey to acceptan amicus brief that addresses the application of FTC v. Actavis to a patentsettlement containing a “no-authorized-generic” commitment.

» In Actavis, the Supreme Court held that “reverse-payment” patentsettlements are not immune from antitrust scrutiny and are to be evaluatedusing traditional antitrust factors.

» Actavis involved literal cash payment; FTC wants to extend Actavis to “no-authorized-generic deals”

» Effexor XR case involves challenge to patent settlement between Wyethand Teva Pharmaceuticals alleging agreement by Teva not to enter withgeneric until July 1, 2010, and agreement by Wyeth not to market anauthorized generic for a period of time.

» Defendants have argued:

» Antitrust analysis required by Actavis does not apply because agreement didnot involve a cash payment.

23


» In re Effexor XR Antitrust Litigation Amicus Brief (cont.)

» FTC Amicus Brief:

» Supreme Court’s Actavis opinion speaks in terms of “payments” and “money,”not because cash has a unique economic effect, but because Actavis involvedallegations of cash payments.

» No-authorized-generic commitments present same antitrust concern as thereverse payments considered in Actavis, and thus should be treated in thesame fashion.

» FTC relied on its 2011 Report – Authorized Generic Drugs: Short-Term Effectsand Long-Term Impact

» Accepting defendants’ claim of immunity whenever patentees use vehicles otherthan cash to share profits “elevates form over substance” and would allow drugcompanies to easily circumvent Actavis ruling.

» Ruling on FTC’s request to participate as amicus is expected by mid-September.

» FTC had previous motion for leave to file amicus brief denied (prior to Actavisdecision).

24

PART III.DEPARTMENT OF JUSTICE

American Airlines/U.S. Airways Merger

Details of American/U.S. Airways Merger – Industry Context

• Recent Airlines Mergers:• 2008 – Delta/Northwest Airlines• 2010 – Southwest/AirTran• 2012 – United/Continental

• Estimated Domestic Market Shares*:• Delta – 16.3%• United – 15.8%• Southwest – 15.2%• American – 12.8%• U.S. Airways – 8.3%• JetBlue – 5.1%• Others – 26.5%

*Information obtained from U.S. Department of Transportation: http://www.transtats.bts.gov/


Details of American/U.S. Airways Merger – Timeline

• November 2011: American Airlines enters bankruptcy.

• May 2012: U.S. Airways submits initial documents to DoJ relating to potentialmerger with American – more than 9 months before publicly announcing merger.

• February 2013: American/U.S. Airways merger publicly announced.

• July 12, 2013: U.S. Airways shareholders approve merger.

• August 5, 2013: European Commission approves merger on the condition thatthe carriers divest a pair of slots at London Heathrow to promote competition onflights to Philadelphia.

• August 13, 2013: DoJ and State AG’s file complaint challenging merger.

• November 25, 2013: Bench trial set to begin, if matter does not settle.

• December 13, 2013: Either party may terminate merger if all regulatory hurdlesare not cleared.

14

Months


Details of American/U.S. Airways Merger – Basic Details

• Merger would result in world’s biggest airline, with nearly 7,000 dailyflights and $40 billion in annual revenue.

• American will own 72%, U.S. Airways shareholders will own 28%.

• New airline will retain the American Airlines brand.

• New company will be based at American’s current headquartersin Forth Worth, Texas.

• U.S. Airways team will retain most management positions.


Details of American/U.S. Airways Merger – Obstacles to Merger

• American’s bankruptcy judge.• Proposed merger approved, but confirmation of reorganization

plan still pending in Southern District of New York.

• Federal and state antitrust regulators.• Challenge to block merger filed by Dept. of Justice and seven

state AGs in U.S. District Court for District of Columbia.

• Air transportation consumers.• Lawsuits to block merger filed on behalf of passengers and

travel agents in U.S. District Court for the Northern District ofCalifornia and the U.S. Bankruptcy Court for the SouthernDistrict of New York.


Department of Justice/State AG Challenge – Plaintiffs’ Complaint

• On August 13, 2013, the Department of Justice and seven State AGssued American and U.S. Airways in U.S. District Court for the District ofColumbia.

• Plaintiffs seek a permanent injunction blocking the merger on thegrounds that it would “likely substantially lessen competition, andtend to create a monopoly” in violation of Section 7 of the ClaytonAct, 15 U.S.C. § 18.

• State AG plaintiffs include Arizona, District of Columbia, Florida,Pennsylvania, and Texas – all of which are home to American orU.S. Airway hub airports.


Department of Justice/State AG Challenge – Relevant Markets

• Market #1: Domestic Scheduled Air Passenger Service Between City Pairs

• Line of Commerce/Product Market – Domestic Scheduled Air Passenger Service

• Air service allows quick and convenient travel between various U.S. cities.

• Due to time savings and convenience of air travel, few passengers would substituteother modes of transportation for scheduled air service in response to a small butsignificant industry-wide fair increase.

• Section of Country/Geographic Market – City pairs (i.e., flight’s departure & arrival cities)

• Passengers seek to depart from airports close to home and arrive at airports closeto intended destinations.

• Passengers usually book flights with origins and destinations predetermined.

• Airlines customarily set fares on a city pair basis.

• As a result, few passengers who wish to fly from one city to another would switch toflights between other cities in response to a small but significant industry-wide fairincrease.


Department of Justice/State AG Challenge – Relevant Markets

• Market #2: Takeoff/Landing Slots at Washington, D.C. Reagan National Airport (“DCA”)

• Relevant Geographic/Product Market – Takeoff/Landing Slots at DCA

• DCA is one of only four U.S. airports requiring takeoff and landing slots, which arevalued at over $2 million each and rarely change hands between airlines.

• No alternatives exist for airlines seeking to enter or expand service to DCA.

• Airlines have the option of servicing passengers through other D.C. airports, butinstead they pay significant sums for slots at DCA because passengers prefer theproximity to downtown. Airlines do not view Dulles or BWI as adequatesubstitutes.


Department of Justice/State AG Challenge – Anticompetitive Effects


• (1) Hefindahl-Hirschman Index (“HHI”): Plaintiffs use HHI to demonstrate that mergerwould result in greater market concentration in various city pairs, thereby reducingcompetition in those markets and increasing the likelihood that the remaining airlineswill coordinate to raise prices, reduce output, and diminish quality of service.

• According to Plaintiffs, in more than 1,000 city pair markets in which Americanand U.S. Airways compete head-to-head, the post-merger HHI would exceed2,500 points and the merger would increase HHI by more than 200 points.

• For example:• On the Charlotte-Dallas city pair, the post-merger HHI would increase by

4,648 points to 9,319 points (out of 10,000 points).• On the Milwaukee-Riverside city pair, the post-merger HHI would increase

by 2,966 points to 6,319 points.

American Airlines/U.S. Airways MergerDepartment of Justice/State AG Challenge – Anticompetitive Effects


• (2) Coordinated Effects: Plaintiffs argue that the structure of the airline industry is conduciveto coordinated behavior because it involves a few dominant players, small transactions, andreadily transparent pricing.

• Cross-Market Initiatives: Where one airline offers non-stop service between a citypair, the others will generally respect the pricing of the non-stop carrier and chargesimilar prices for connecting flights for fear of retribution in another market.

• U.S. Airways is unique amongst the legacy carriers because it offers “AdvantageFares” that undercut non-stop pricing.

• U.S. Airways’ hubs are smaller and generate less revenue than other legacyhubs, so it must increase passengers on its connecting flights.

• If U.S. Airways’ hubs are consolidated with American’s hubs, those fareswould become unprofitable.

• Capacity Discipline: Airline industry’s tendency to restrain growth and reduceestablished services after major mergers as a means of enabling fare increases.

• Ancillary Fees: Increased consolidation has aided in the implementation of airlineancillary fee increases for things like checked bags and flight changes.

• The airlines follow a “price leader” method, where one implements a change andthe others soon follow suit.




• (3) Unilateral Effects: Plaintiffs assert that the merger would eliminate head-to-headcompetition between American and U.S. Airways and create a strong incentive for themerged airline to reduce capacity and raise fares where they previously competed.

• American and U.S. Airways engage in head-to-head competition with non-stopservice on 17 domestic routes and on more than 1,000 routes where one or bothoffer connecting service.

• (4) American’s Emergence from Bankruptcy: Plaintiffs contend that before the mergerwas announced, a key component of American’s plan for exiting bankruptcy involved asubstantial expansion in both domestic and international flights, which would likely notoccur after the merger.



• Market #2: Takeoff/Landing Slots at DCA

• (1) Hefindahl-Hirschman Index: Plaintiffs use HHI to demonstrate that merger wouldresult in a highly concentrated market for takeoff and landing slots at DCA, with a post-merger HHI of 4,959 points and an HHI increase of 1,493 points.

• (2) Unilateral Effects: Plaintiffs argue that the merger would eliminate head-to-headcompetition between American and U.S. Airways at DCA and effectively foreclose entryor expansion by other airlines at that airport.

• The merged airline would control 69% of takeoff and landing slots at DCA, whichwould be almost six times more than its closest competitor.

• The merged airline would not be inclined to sell or lease slots to a competitorbecause those slots would almost certainly be used to compete against it.


Department of Justice/State AG Challenge – Significant Barriers to Entry

• Plaintiffs contend that no countervailing factors are likely to prevent the merger’santicompetitive effects:

• (1) New market entrants face significant barriers to success, including obtaining slots,combatting corporate discount and frequent flyer programs, establishing a brand, andrisking substantial investment.

• (2) Existing legacy carriers are not likely to expand in the event of anticompetitive priceincreases or capacity reductions by the merged airline.

• (3) Low-cost carriers like Southwest and Jet Blue have different networks and businessmodels that prevent them from offering service in many markets, and they are viewedless favorably by passengers.


• Department of Justice/State AG Challenge – Motion to Set Trial Date

• American and U.S. Airways filed a motion requesting that the Court set a10-day trial beginning on November 12, 2013.

• The Airlines argued that a 90-day schedule is appropriate becausecourts routinely try merger challenges promptly in order to lessen thesteep costs and burdens to the merging parties.

• Plaintiffs requested that the Court set a “trial ready” date of March 3, 2014,with trial at the Court’s convenience thereafter.

• Plaintiffs argued that any short term costs and uncertainties for themerging parties should be balanced against their current success, theneed for full exploration of the claims at issue, and the merger’spotential for long term harm to consumers.

• Order: Bench trial date set for November 25, 2013, at 9:00am beforeDistrict Judge Colleen Kollar-Kotelly; status conference set for October 1.


• Factors in Favor of Merger:

• November 2009 Year in Review Paper by Antitrust DivisionEconomists Ken Heyer, Carl Shapiro, and Jeffrey Wilder

• In analyzing the Delta/Northwest merger, Antitrust Division economists couldfind “no adverse competitive effects in markets where the two carriers’ facecompetition from another nonstop carrier or from a Low Cost Carrier” likeSouthwest.

• Where the two merging airlines had few non-stop overlap markets and thevolume of commerce on those markets was relatively small, the AntitrustDivision economists determined that “potential harm in these city-pairs waspredicted to be modest at most.”

• They concluded that “if only a fraction of the efficiencies claimed by theparties from combining their large, and largely complimentary, networkswere found likely to be generated by the merger, these would easilyexceed any potential for harm from the deal.”

Paper available at http://faculty.haas.berkeley.edu/shapiro/DOJATR2009.pdf


• Factors in Favor of Merger:

• Integrating complementary networks of American and U.S. Airwayswill allow competition against existing super-carriers – namely,Delta, United, and Southwest.

• American and U.S. Airways compete directly on only about a dozennon-stop routes.

• Merger already approved by European Commission andbankruptcy court.

• American and U.S. Airways occupy different hub airports:

U.S. Airways’ Hubs American’s Hubs

Charlotte Chicago (O’Hare)

Philadelphia Dallas/Fort Worth

Phoenix Los Angeles

Washington (Nat’l) Miami

New York (JFK)


• Other Factors Against Merger:

• Merger would reduce the number of major domestic airlines from fiveto four, and would leave only three remaining “legacy” airlines – Delta,United, and American.

• June 2013 GAO Report found that merger would eliminate an“effective competitor” (i.e., company with 5% of total air trafficbetween a pair of airports) in 1,665 routes – 530 routes more than theUnited/Continental merger.

• The new company would control 69% of flights into and out ofWashington National Airport, and 63% of non-stop outbound routes.

• Several American and U.S. Airways hubs are located proximally toone another and could be easily combined.

United States v. Apple – Remedies

Liability Background:

• Apple found to have facilitated horizontal conspiracy among fivepublishers.

• Stop Amazon discounting of e-books.

• Reduce spread between e-books and hardcover book prices.

• Use of parallel agency relationships where publishers ostensibly setprices.

• Use of MFN clauses to eliminate price competition with Amazonand forcing agency model on Amazon.

• Publishers settled and agreed to certain remedies.

• Apple went to bench trial.

• 160-page opinion issued on July 10.

• Apple will appeal.


Apple Remedy Issues

• Scope: e-books only or all Apple store content?

• DoJ: Broad scope

• Court: e-books only but on terms no worse than other content

• Conduct Covered

• DoJ: MFN, RPM, Commission, agency agreements,communications, disclosure of others’ terms.

• Court: Generally agreed. No MFN clauses, No RPM, No agencymodel for staggered periods.

• But court did not require Apple to have a “no commission” link.Ban on disclosing terms. Requirement to maintain log ofcommunications


Apple Remedy Issues

• Length

• DoJ: Ten years

• Court: 5 years for most behavioral restraints and obligations – withpossibility of extensions. Phase in of 2-4 years for publishers toreturn to agency model. Monitor of two years.

• Monitor

• DoJ: Internal and external compliance.

• Court: Agreed.

• Internal – Must not have been Apple employee at time ofjudgment.

• External – For two years. Court approved. Apple must petitioncourt to avoid monitor’s recommendations.

PART IV.INTERNATIONAL

International – European Commission

• Investigations

• The EC issued statement of objections to 13 investment banks, theInternational Swaps and Derivatives Association Inc., and Markit as part ofits investigation into allegations of a conspiracy to stop lucrative credit-default swap trading moving to exchanges. (7/1/13)

• The EC raided major telecommunications companies, including DeutscheTelekom AG, as part of an investigation into whether the targetedcompanies abused their dominant market position in the market for Internetconnectivity services. (7/11/13)

• The EC is investigating several German laws under the EU’s state aid rules,including a law that grants pharmaceutical companies in financial difficultyexemptions from offering rebates to German public sickness funds andprivate health insurers and a law that exempts large consumers of electricityfrom paying a surcharge used to support the funding of renewable energyproduction.

• The EC settled with Pearson PLC's Penguin as part of its investigation intoalleged price-fixing between publishing houses and Apple Inc. in the e-bookmarket. Pearson and the other publishers have agreed to move away fromusing agency contracts that use most-favored nation clauses. (7/25/13)


• Enforcement

• Commission v. Aalberts Industries (C-287/11): The European Court ofJustice denied the EC’s request to reinstate $129 million in fines imposedon Aalberts Industries NV for its alleged role in fixing prices in a copperfitting cartel. The Court upheld a lower court finding that the EC did notprovide sufficient evidence to fine Aalberts for its subsidiaries’ participationin meetings at which other companies agreed to restrict competition.(7/4/13)

• The EC fined several auto parts suppliers $182 million for participating incartels that involved bid rigging in the market for automotive wire harnessessold to car manufacturers. (7/10/13)

• Gosselin Group v. Commission (C-429/11) et al: The European Court ofJustice upheld $19.7 million in fines imposed by the EC against varioustransportation companies for fixing the prices of international movingservices in Belgium. (7/11/13)

• The Dow Chemical Co. et al. v. European Commission (C-499/11P): TheEuropean Court of Justice rejected Dow Chemical Co.’s appeal that the EChad treated the company unfairly and upheld a $84.4 million fine imposedon the company for participating in a conspiracy to fix prices on syntheticrubber used to make tires. (7/18/13)


• Regulatory Developments

• Following the European Court of Justice decision in Case C-226/11(Expedia), the EC is considering an update to its de minimis guidelines. Theguidelines provide an antitrust safe harbor for agreements betweencompetitors whose market shares are less than 10 percent ornoncompetitors whose market shares are below 15 percent. (7/11/13)

• Mergers

• The EC cleared Baxter’s proposed acquisition of Gambro, a Swedishdialysis equipment manufacturer, conditioned on Baxter's divestment of itscontinuous renal replacement therapy (CRRT) business. The EC wasconcerned the acquisition would reduce competition in the CRRT market.(7/22/13)

• The EC cleared the proposed merger between US Airways Group and AMRCorporation (American Airlines, Inc.) conditioned on the companies’ releaseof one daily slot pair at London Heathrow and other commitments related tothe London-Philadelphia route. (8/5/13)

• The EC cleared a joint venture between Spanish telecommunicationsoperator Telefónica and two Spanish banks aimed at creating a virtualadvertising community for merchants and consumers. (8/14/13)

International – EU Member Countries

• United Kingdom• The Office of Fair Trading published revised leniency guidelines that provide

a framework for leniency applications, including a policy of not requiring legalprofessional privilege waivers as a condition of leniency. (7/8/13)

• U.K. Competition Commission ordered Ryanair Holdings PLC to sell most ofits stake in Aer Lingus Group PLC. (8/28/13)

• Spain• The Comision Nacional de la Competencia (CNC) raided several oil product

companies regarding price fixing for auto fuel distribution (7/24/13)• The CNC raided the offices of several automotive companies as part of a

continuing investigation into allegations of price-fixing among auto makersand distributors. (7/26/13)

• Germany• Germany implemented substantive and procedural changes to its merger

rules to further harmonize the German system with the EU's regulations.(6/30/13)

• The Federal Cartel Office fined Moravia Steel Deutschland GmbH $13.1million for bid-rigging on steel rail sold to Deutsche Bahn AG (national railwayoperator). (7/11/13)

International – Asia

• South Korea

• The Fair Trade Commission fined Hyundai Motor Co. and six foreign-vehicleimporters and distributors $104.3 million for alleged price-fixing in the sale oftrucks, tractors and other commercial vehicles. (7/29/13)

• China

• The National Development and Reform Commission opened an investigationinto allegations of price-fixing in the baby formula market by Nestle SA,Abbott Laboratories, Mead Johnson Nutrition Co., Danone SA's Dumex, andRoyal FrieslandCampina NV. (7/2/13)

• The State Administration of Industry and Commerce announced it wasinvestigating allegations of abuse of dominance by Tetra Pak International SA(food packaging). (7/5/13)

• The State Administration for Industry and Commerce (responsible forinvestigating allegations of abuse of dominance and nonprice-relatedconduct) began publishing its decisions online. (8/1/13)

• The Ministry of Commerce approved MediaTek Inc.'s $3.9 billion merger withMStar Semiconductor Inc., but required the companies’ LCD TV chipmakingunits to remain separate for at least three years. (8/27/13)

International – Americas

• Canada

• The Supreme Court of Canada granted CCS Corp.'s (now Tervita Corp.)appeal of a Federal Court of Appeal order requiring the company to shedcertain assets as part of a Competition Bureau merger review. The case wasthe Bureau's first merger challenge in six years. (7/11/13)

• The Superior Court of Quebec fined Japan's JTEKT Corp. $4.8 million afterthe company pled guilty to rigging bids on bearings sold in Canada. (7/12/13)

• The Competition Tribunal rejected the Competition Bureau’s challenge tocertain surcharge and other rules imposed on merchants by Visa andMasterCard on grounds that the Bureau failed to show a resale as requiredunder Canada’s competition laws. (7/23/13)

• The Competition Bureau obtained a verdict in Québec Superior Court againstLes Petroles Global Inc. for the gasoline retailer’s participation in a gas price-fixing conspiracy. (8/12/13)

• Mexico

• The Comision Federal de Competencia fined Petroleos Mexicanos $50million for requiring gas retailers to utilize its unionized personnel whentransporting wholesale gasoline and diesel to gas stations. (7/26/13)

Presenter Information

• Tom Gilbertsen

Venable LLP

575 Seventh Street, N.W.

Washington, D.C. 20004

Phone: (202) 344-4598

[email protected]

• William D. Coston

Venable LLP



Phone: (202) 344-8051

[email protected]


• Robert P. Davis

Venable LLP



Phone: (202) 344-4514

[email protected]

• Melissa Landau Steinman

Venable LLP



Phone: (202) 344-4972

[email protected]


• Andrew Bigart

Venable LLP



Phone: (202) 344-4323

[email protected]

• David Conway

Venable LLP



Phone: (202) 344-4489

[email protected]

Corporate Counseling Committee July-August Antitrust ... · not because cash has a unique economic...

Documents

Transcript of Corporate Counseling Committee July-August Antitrust ... · not because cash has a unique economic...