March 2, 2015

The Antitrust Week In Review

Here are some of the developments in antitrust news this past week that we found interesting and are following.

U.S. Asks If Comcast, Time Warner Cable Restricted Video Deals.  Federal regulators vetting Comcast Corp.’s proposal to buy Time Warner Cable Inc. want to know if the cable giants tried to restrict Walt Disney Co. and other entertainment providers from offering programs to rival online video outlets.  Among other avenues of inquiry, the FCC has asked eight media companies, including CBS Corp. and Discovery Communications Inc., to describe any limits to online distribution imposed by the two largest U.S. cable providers.

F.C.C. Approves Net Neutrality Rules, Classifying Broadband Internet Service as a Utility.  The Federal Communications Commission voted to regulate broadband Internet service as a public utility, a milestone in regulating high-speed Internet service.  The new rules seek to ensure that no content is blocked and that the Internet is not divided into pay-to-play fast lanes for Internet and media companies that can afford it and slow lanes for everyone else.

FTC Puts Conditions on Novartis AG’s Proposed Acquisition of GlaxoSmithKline’s Oncology Drugs.  Global pharmaceutical company Novartis AG has agreed to a proposed FTC consent decree that will require it to divest all assets related to its BRAF and MEK inhibitor drugs, currently in development, to Boulder, Colorado-based Array BioPharma to settle charges that Novartis’s $16 billion acquisition of GlaxoSmithKline’s portfolio of cancer-treatment drugs would likely be anticompetitive.  The FTC investigation is notable for its substantial cooperation with antitrust enforcers in Australia, Canada, and the European Union.

Ninth Circuit Refuses to Rewind Netflix Win.  The U.S. Court of Appeals for the Ninth Circuit has agreed Netflix shouldn’t be on the hook for allegedly colluding with Wal-Mart Stores Inc. to divvy up the market for online DVD rentals.  The Ninth Circuit affirmed the dismissal of a lawsuit alleging that Netflix and Walmart ran afoul of antitrust laws in their 2005 deal that transferred customers of Walmart’s DVD-rental subscription service to Netflix in return for Netflix’s agreement to promote Walmart’s DVD sales business.

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Categories: Antitrust Litigation, Antitrust Policy

    February 27, 2015

    Federal Court Rings Down The Curtain On Baltimore-D.C. Rock Promoters’ Antitrust Case Against Live Nation

    By Allison F. Sheedy

    A long-running antitrust battle of the bands between a Baltimore-D.C. area regional concert promoter and venue operator and the concert colossus Live Nation got the hook in the U.S. District Court of the District of Maryland last week when Judge J. Frederick Motz ruled that the plaintiffs had not presented evidence that Live Nation had violated the antitrust laws.

    Although the court found that “Live Nation is undisputedly large, and utilizes its size and global reach to sign artists to exclusive contracts and steer them to perform in venues that it owns,” the court concluded that such conduct was not anticompetitive, and thus did not violate the antitrust laws.  The court’s conclusion was driven in main part by its view that the plaintiffs’ alleged antitrust markets did not harmonize with the evidence proffered on motions for summary judgment.

    The lawsuit started in 2009 when Plaintiffs It’s My Party, Inc. and It’s My Amphitheater, Inc. (the “Indie Rock Plaintiffs”), which operate D.C.’s famed 9:30 Club and the Merriweather Post Pavilion, accused Live Nation of monopolizing a nationwide market for concert promotion and illegally tying promotion services to the use of Live Nation concert venues.  The complaint alleged separate product markets for concert promotion and for the operation of concert venues.  Not incidentally, at that time, Live Nation’s acquisition by Ticket Master was being investigated by antitrust regulators.

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    Categories: Antitrust Litigation

      February 26, 2015

      Supremes Nix Antitrust Immunity For Unsupervised State Boards In Dental Case

      By Allison F. Sheedy

      The Supreme Court sided with the FTC yesterday in North Carolina State Board of Dental Examiners v. Federal Trade Commission, a much anticipated decision that sets limits on state-action immunity from federal antitrust laws.

      In a six-to-three decision authored by Justice Kennedy, the Court held that when a nonsovereign actor, such as a state regulatory board, is controlled by active market participants, state-action immunity will apply only where the challenged restraint is actively supervised by the State itself.

      Under the state-action doctrine—also known as Parker immunity (from the seminal 1943 state-action case, Parker v. Brown)—state and municipal authorities are immune from federal antitrust law when regulating conduct pursuant to a clearly expressed state policy.  Private actors may also be immune from antitrust liability when they act at the direction of a State, pursuant to a State’s clearly articulated, and affirmatively expressed, policy to displace competition with a regulatory regime.  Attempting to balance state sovereignty, principles of federalism and the federal commitment to robust competition, Parker immunity recognizes that the federal antitrust laws should not impose an impermissible burden on the States’ own powers to regulate.  This doctrine, however, is not unbounded.

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      Categories: Antitrust Litigation

        February 23, 2015

        The Antitrust Week In Review

        Here are some of the developments in antitrust news this past week that we found interesting and are following.

        American Express Violated Antitrust Laws, Judge Rules.  In a 150-page opinion, Judge Nicholas G. Garaufis of the U. S. District Court for the Eastern District of New York ruled that American Express’s practice of prohibiting any merchant that accepts its cards from encouraging customers to pay with lower-cost cards violates the U.S. antitrust laws.  Constantine Cannon partner Jeffrey I. Shinder, who represented three retailers — Ikea, Sears and Crate & Barrel — that testified against American express in the case, predicted that the decision would give merchants greater clout to negotiate more favorable agreements with American Express, including cheaper fees.

        Google wins US antitrust lawsuit.  Judge Beth Labson Freeman of the U.S. District Court of the Northern District of California dismissed an antitrust lawsuit that accused Google of forcing device manufacturers that use its Android operating system to include a bundle of the company’s apps and make its search engine the default option.  Although Judge Freeman found that “there are no facts alleged to indicate that defendant’s conduct has prevented consumers from freely choosing among search products or prevented competitors from innovating,” she also gave the plaintiffs a chance to correct this pleading deficiency by giving them three weeks to amend their antitrust complaint.

        In Russia, Yandex Files Antitrust Complaint Against Google Over Search On Android Devices.  Just as Google wins one antitrust battle in the U.S., a similar fight breaks out in Russia.  Internet search giant Yandex, which has been called the “Google of Russia,” has filed a request with Russia’s antimonopoly regulator to investigate whether Google has violated Russia’s antitrust laws.  Yandex is complaining about Google’s Android operating system and how Google bundles its search engine as the default on all Android devices.

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        Categories: Antitrust Enforcement, Antitrust Litigation

          February 20, 2015

          Sysco’s “Fix-it-First” Foray Fails To Forestall Food Fight With FTC

          By Allison F. Sheedy

          The U.S. Federal Trade Commission announced yesterday that it is challenging the merger of the nation’s two largest food distributors, US Foods, Inc. and Sysco Corporation.

          By a split vote, the FTC decided to file an administrative complaint and to authorize its staff  to go to federal court to seek a temporary restraining order and a preliminary injunction to prevent the parties from consummating the merger, pending the administrative proceeding.

          The two Republican appointees on the FTC voted against the action.  The decision of the three Democratic appointees to challenge the merger was hardly unexpected.  The two foodservice giants had been in discussions with the FTC for more than a year trying to convince the consumer protection watchdog that their proposed deal would not pose competitive problems.

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          Categories: Antitrust Enforcement, Antitrust Litigation

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