British antitrust authorities may be telling CAMRA (the Campaign for Real Ale) that it’s closing time for its complaint charging beer prices have increased due to lack of pub competition, but the consumer group isn’t going home quietly.

CAMRA is asking Lord Mandelson, Britain’s Secretary of State for Business, to refer its complaint to the Competition Commission, following the October 22, 2009, announcement by Britain’s Office of Fair Trading (OFT) finding no significant harm to consumers despite slightly higher beer prices.

The consumer group is arguing that British consumers are being harmed by purchasing requirements that are imposed on so-called tied pubs, which are pubs operated by tenants who lease the premises, which are typically owned by a large pub management company or brewer.  The challenged purchasing requirements obligate the pub to buy most or all of its beer from the landlord or a supplier designated by the landlord.

CAMRA filed a complaint with the OFT in July 2009, charging that the pubs’ landlords use the exclusive purchase requirements to force the pubs to buy beer at higher prices than they would pay if they were free to choose their suppliers and buy directly from these suppliers. click here for more »

The European Commission’s smooth approval of Merck & Co.’s $41 billion acquisition of rival Schering-Plough Corp. could be a textbook example of how parties to a merger or acquisition can get speedy clearance by anticipating – and remedying – antirust enforcers’ likely objections at the start. 

One might have expected the union of these two heavyweights – which, if completed, will create the world’s second largest pharmaceutical company – to run into some problems with European Union antitrust authorities.  Yet, on Friday, the Commission announced that it had cleared the merger, just one month after it was formally notified of it. click here for more »

Several advertising powerhouses are showing some respect for the Microsoft-Yahoo! search engine deal, which would advance Microsoft’s Bing in its challenge to Google.

As discussed in an earlier post, Yahoo! and Microsoft’s proposed partnership, which provides for Yahoo! to exit the search business and rely exclusively on Microsoft’s search engine Bing, is unlikely to be aided by traditional merger defenses in the wake of the Department of Justice’s antitrust review.  However, on October 19, 2009, the American Association of Advertising Agencies wrote a letter to the DOJ endorsing the partnership.

 The letter – also signed by leading advertising agencies Publicis Groupe, WPP, Interpublic Group, and Omnicom – states that a “healthy, competitive market for search and search advertising is crucial to the Internet’s future,” and that “Yahoo! and Microsoft’s proposal to combine their technologies and search platforms is good for advertisers, marketing services agencies, website publishers and consumers.”  The letter opines that the partnership “enhances competition,” and urges the DOJ to conclude its review quickly so that the partnership can take effect as soon as possible.

What do Sarah Palin and Stephen King have in common?

The answer is not a punchline to a bad joke, it’s that both have books that are selling at 1950s prices, which a group of booksellers view as predatory and worthy of investigation by the U.S. Department of Justice.

The American Booksellers Association (ABA), a 109-year-old trade organization representing the nation’s locally owned independent booksellers, wrote a letter last week to the DOJ urging it to investigate the price war between Amazon.com, Walmart.com and Target.com, and requesting a meeting with officials as soon as possible.  As was widely reported, the three online retail giants began selling new hardcover bestsellers, including books from Stephen King, Sarah Palin, Barbara Kingsolver, John Grisham, and James Patterson, for between $8.98 and $9.00.

The booksellers allege that the retailers are selling the books at predatory prices – below cost – as loss leaders to attract shoppers who then purchase more costly items. click here for more »

While it might be unlikely that President Obama and Republican Senator Orrin Hatch of Utah will be getting together for some Bud Lights and Doritos at a Super Bowl party, they may still become football friends over the antitrust issues raised by the Bowl Championship Series.

Senator Hatch sent President Obama a 10-page letter on Wednesday asking him to investigate the BCS for possible antitrust violations in the way college football picks its national champion.

The issue is personal for Senator Hatch’s constituents.  Although Utah was the only undefeated team in the Football Bowl Subdivision last year, they did not get a chance to play for the national title.

President Obama has already picked his team in the College Football Playoff Debate.  On 60 Minutes last year, in his first interview as President-Elect, Obama expressed support for a college football playoff system instead of the present bowl system based on rankings.

Senator Hatch contends that the BCS results and placement in college bowl games at the end of the season is rigged in favor of “privileged” conferences, to the exclusion of smaller ones that include universities in his home state of Utah.  “After a careful examination of both the written and oral testimonies presented” to his committee, Senator Hatch wrote to President Obama, “I believe a strong case can be made that the BCS is in violation of the Sherman Antitrust Act.  Therefore, I respectfully request that the Department of Justice’s Antitrust Division look into this matter.”  click here for more »

Antitrust plaintiffs are continuing to find their antitrust flights are being grounded by federal courts’ application of the Supreme Court’s Twombly case. 

 In Tam Travel, Inc., et al. v. Delta Airlines, Inc., et al. (In re Travel Agent Commission Antitrust Litigation), No. 07-4464 (6th Cir. Oct. 2, 2009), the Sixth Circuit affirmed dismissal, by the Northern District of Ohio, of a complaint alleging that multiple airlines conspired to fix the commissions they paid the plaintiff travel agencies.

 Citing specific commission amounts, the plaintiffs had alleged that the defendants conspired lock-step to reduce, cap, and eventually eliminate the payments of so-called “base commissions” (a percentage of the ticket price).  According to the complaint, when one airline cut its commission to a certain amount, the other airlines soon followed, matching dollar-for-dollar.  This occurred five times between 1995 and 2002.  The complaint also specified the times and places of numerous meetings attended by the defendants, during which the defendants allegedly had the opportunity to conspire. click here for more »

Congressional Democrats took another step today towards stripping the health insurance industry of the antitrust exemption it has enjoyed for more than six decades.

The House Judiciary Committee voted 20 to 9 to repeal the antitrust exemption health insurers have under the 1945 McCarran-Ferguson Act.  Democrats on the committee are seeking to include the repeal in the House health care reform bill that is now being put together.

Meanwhile, Senate Majority Leader Harry Reid announced plans today to include the partial McCarran-Ferguson repeal in the Senate version of the health care reform bill.  Democrats on the Senate Judiciary Committee conducted a hearing last week that was largely critical of the health insurers’ antitrust exemption. 

Democratic lawmakers have increased their scrutiny of the antitrust exemption following the health insurance industry’s criticism of health care reform efforts.

 If Congressional Democrats follow through with this effort, it is likely that the partial McCarran-Ferguson repeal will be included in the final health care package.

Democrats on the Senate Judiciary Committee are going after health and medical malpractice insurers after a leading industry group turned against the Senate Finance Committee’s version of health care reform… and the DOJ may not be far behind. 

Last Tuesday, America’s Health Insurance Plans (“AHIP”), a trade group for health insurers, released a PriceWaterhouseCoopers report indicating that the Senate Finance Committee bill would raise insurance premiums.  Shortly after release of the report, however, PWC blunted the impact of its own report by issuing a statement that it had only been asked to focus on certain sections of bill – and none of the cost-saving measures.

On Wednesday, Chairman Pat Leahy (D.-Vt.) of the Senate Judiciary Committee chaired a hearing on his legislation to repeal the McCarran-Ferguson Act’s exemption from the federal antitrust laws for health and medical malpractice insurers.  The hearing was scheduled prior to AHIP’s announcement, but the announcement clearly heightened the stakes at the hearing.  click here for more »

A customer-allocation conspiracy has been put on ice by the U.S. Department of Justice in a plea deal reached in Cincinnati federal district court.

Arctic Glacier International, Inc., a packaged-ice company located in St. Paul, has agreed to plead guilty to violating the Sherman Act and to pay a $9 million fine for allocating customers in the Detroit area.  Three former executives from the company have also pled guilty to charges related to the conspiracy, and Arctic Glacier has agreed to cooperate in the ongoing investigation.

This deal, along with the massive fine, underscores the perils and increasingly large penalties associated with antitrust violations.   It also highlights the importance of seeking sound legal advice when undertaking joint business actions involving other companies.  Maximum penalties for violations of the Sherman Antitrust Act can carry penalties of up to 10 years in jail, $1 million fines for individuals, and $100 million fines for corporations.

This investigation by the DOJ and the FBI has also frozen another company in its tracks for alleged participation in similar activities.  Home City Ice Company pleaded guilty on June 17, 2008, to conspiring to allocate customers.

A group of California pharmacies seeking to block Pfizer’s proposed buyout of Wyeth has already filled the prescription for an amended complaint in response to last week’s dismissal of their suit alleging the deal would be unhealthy for competition and jobs.

U.S. District Judge Maxine Chesney in San Francisco had given the pharmacies until Nov. 6 to cure their complaint, which she dismissed for failing to show in which product markets the acquisition would eliminate competition.  The deal has already received FTC approval.

One representative of the California Pharmacists Association claimed the acquisition would “create the largest pharmaceutical company in the world,” thus giving it power to raise drug prices.  A Pfizer representative countered that the suit was “without merit.” click here for more »