January 21, 2015

Baseball Antitrust Exemption Extends 93-Year Winning Streak In Federal Courts

By Nneka Ukpai

Although federal courts may consider baseball’s antitrust exemption to make about as much sense as the infield fly rule, last week’s decision by the U.S. Court of Appeals for the Ninth Circuit in City of San Jose v. Commissioner of Baseball shows that courts still consider themselves bound to invoke that anachronistic exemption to call antitrust plaintiffs out.

According to a three-judge panel of the Ninth Circuit, the U.S. District Court for the Northern District of California correctly held that the baseball industry’s historic antitrust exemption required the court to dismiss antitrust claims against Major League Baseball (“MLB”).

In June 2013, the City of San Jose filed suit against MLB alleging a conspiracy to prohibit the Oakland Athletics’ relocation to downtown San Jose.  According to the lawsuit, the relocation of the Oakland A’s to San Jose was blocked solely because the territorial rights to San Jose and its suburbs belong to the San Francisco Giants.  The City of San Jose alleged that the exclusive territorial rights agreement among MLB teams was a “blatant market allocation scheme.”  In October 2013, District Judge Ronald Whyte dismissed these claims and barred the City of San Jose from refiling, holding that “MLB’s alleged interference with the A’s relocation to San Jose is exempt from antitrust regulation.”  Judge Whyte said he was bound by precedent, but agreed “with the other jurists that have found baseball’s antitrust exemption to be ‘unrealistic, inconsistent, or illogical’” and agreed that the “exemption is an ‘aberration’ that makes little sense given the heavily interstate nature of the ‘business of baseball’ today.”

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Categories: Antitrust Litigation

    January 7, 2015

    European Commission Announces Agreement To Cap Interchange Fees For Card-Based Payments

    A View from Constantine Cannon’s London Office

    By Yulia Tosheva and James Ashe-Taylor

    The European Commission has announced that the European Parliament and the European Council have reached a long-awaited political agreement on the Commission’s proposal for a Regulation on Interchange Fees for Card-based Payment Transactions.

    The Regulation will introduce maximum fees for four-party card schemes’ consumer debit and credit cards, prevent card schemes from forcing retailers to accept all types of cards regardless of their fees, and establish transparency rules for all transactions. The Commission has already ruled that interchange fees set by MasterCard are in violation of EU antitrust laws and, after a seven-year court battle, MasterCard lost its final appeal before the European Court of Justice in September 2014.

    Interchange fees represent about 70% of the approximately 13 billion euros a year retailers pay banks to handle payment card transactions. The Regulation is expected to have a profound impact on the card industry as a whole but its effect is likely to be particularly felt in markets such as Germany, where average credit card rates stand at 1.8%, and Poland, where average debit card charges are 1.6%.

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    Categories: Antitrust and Price Fixing, Antitrust Enforcement, Antitrust Legislation, Antitrust Litigation, International Competition Issues

      January 5, 2015

      Reasonableness Of Licensing Royalties Is On Trial As Courts And Standard-Setting Organizations Wrestle With Standard-Essential Patents

      By David Golden

      The ongoing battle over what constitutes a “reasonable” licensing royalty for standard-essential patents has now been joined by the U.S. Court of Appeals for the Federal Circuit with its decision in Ericsson, Inc. v. D-Link Systems, Inc., concerning the alleged infringement of patents essential to the ubiquitous Wi-Fi networking technology.

      This definitional battle is also being fought in standard-setting organizations, such as the Institute of Electrical and Electronics Engineers (“IEEE”), the promulgator of Wi-Fi standards, which recently adopted a resolution that defines the calculation of a “Reasonable Rate” for standard-essential patents.

      Many modern electronic devices, such as smartphones and tablets, incorporate voluntary industry-wide communication and networking standards, such as Wi-Fi, cellular data, and Bluetooth technologies. Generally, the members of organizations that create and maintain such standards compete in the markets for these products, and frequently own patents that are essential to the implementation of the standards. Thus, the member companies’ collective selection of technologies to include in the organization’s standard can prove advantageous in both product and technology licensing markets. It is not surprising then that the Supreme Court has described private industry standard-setting organizations as “rife with opportunities for anticompetitive activity.”

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      Categories: Antitrust and Intellectual Property Law

        December 17, 2014

        European Commission Seeks To Stamp Out Envelope Cartel With Fines Totaling 19.48 Million Euros

        A View from Constantine Cannon’s London Office

        By Ana Rojo Prada and Richard Pike

        The European Commission has announced that it has imposed fines totaling 19.48 million euros on five European envelope producers for coordinating prices and allocating customers through an anticompetitive cartel.

        The Commission imposed fines on the five companies – Bong (of Sweden), GPV and Hamelin (both of France), Mayer-Kuvert (of Germany) and Tompla (of Spain) – after they agreed to a settlement that required them to acknowledge their participation in the envelope cartel and their liability for violating European Union antitrust rules.

        The Commission found that from October 2003 to April 2008 the cartel allocated customers and coordinated prices for standard/catalogue and special printed envelopes.  The companies’ high-level executives met at multilateral and bilateral meetings at which they arranged for their companies to exchange commercially sensitive information and to coordinate prices that they offered to major European customers.

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        Categories: Antitrust Enforcement, International Competition Issues

          November 12, 2014

          Net Neutrality – What’s In A Name?

          By Robert Schwartz

          Although President Obama has endorsed a specific approach to “net neutrality” – the principle that Internet service providers should treat all data on the Internet equally – the debate over whether and how the Federal Communications Commission should enforce that principle is still raging, and may well be decided by whoever wins the battle over defining “Internet access.”

          In politics, a basic rule is never to let the opposition define you.  So it is in public policy and regulation as well.  The term “broadband,” for example, makes sense only when compared to the old dial-up world based on thin copper telephone wires, where speeds are measured in K’s, not M’s or G’s.  Compared to the bandwidth devoted to multichannel home video by cable, satellite (“DBS”) or telco distributors, the bandwidth that these distributors make available to the Internet is puny indeed – a mere handful of channels out of the hundreds that they control.  Internet access is like a key mountain pass – whoever controls this turf is likely to emerge victorious.

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          Categories: Antitrust Policy

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