August 31, 2011

District Court Denies Snap Judgment In Fasteners Class Action

The U.S. District Court for the Eastern District of Pennsylvania has denied a motion in the In re Fasteners Antitrust Litigation class action to dismiss antitrust claims alleging that YKK and other fastener manufacturers engaged in price fixing.

Defendants sought dismissal of the claims on grounds of statute of limitations and lack of evidence.

The class action was filed in May 2010, by apparel manufacturers who alleged that YKK, Scovill Fasteners, Coats, and the Prym Group conspired to fix prices and allocate customers in the market for fasteners, a category which includes zippers, buttons, snaps, and hooks. From the early 1990’s through 2007, defendants allegedly participated in meetings to discuss prices, divide markets, and share business information.

U.S. apparel manufacturers began alleging illegal activity by the fastener manufacturers after a 2007 announcement by the European Commission fining the defendants for cartelizing the European and worldwide markets.  This finding caused over 35 suits to be filed in U.S. District Courts between 2007 and 2010.  The individual suits were consolidated into the class action.

Plaintiffs allege that the defendants concealed their conspiracy and due diligence would not have led class members to its discovery.  The class contends that there should be an equitable tolling of the statute of limitations until 2007, when they were made aware of the cartel by the European Commission’s announcement.

While the District Court did not grant the motion to dismiss based on the statute of limitations, the claims could still fail on that ground if a determination on the merits results in a denial of equitable tolling.  The District Court also found that the class sufficiently pled the existence of a conspiracy and antitrust injury.

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Categories: Antitrust and Price Fixing, Antitrust Litigation

    August 26, 2011

    Big Banks Accused Of Excluding Competition In Setting European Payments Standards

    Banks in the European Payments Council (EPC) are being probed by the antitrust department of the European Commission (EC) as a result of Payment Network AG’s complaint that it was locked out of the process to set the standard for streamlining payments systems in Europe.

    EPC members include banks such as Lloyds TSB, Citibank, Barclays, UBS, HSBC Holdings Plc and Deutsche Bank AG.

    The EPC is the “decision-making and coordination body of the European banking industry in relation to payments” that was formed to implement a Single Euro Payments Area (SEPA).  SEPA is a “European Union integration initiative in the area of payments” involving standards and practices aimed at a Single Market for payments in Europe. 

    According to the EPC, the group must answer an EC request for information about the “cooperation of banks and payment institutions for designing rules and standards for e-payment services.”  The investigation was sparked after Payment Network AG accused the EPC of excluding it from the standard-setting process altogether, after several requests last year from Payment Network to become involved in the creation of a draft standard and logo were ignored by the EPC.

    If Payment Network is excluded from the proposed SEPA standards, it would be unable to display the proposed SEPA logo used by rivals, which could be a big competitive disadvantage if consumers believed its network was not secure.

    The EPC claims it is receiving “diverging messages” from regulators who are asking for accelerated adoption of common standards to ease payments made in Euros, but at the same time scrutinizing the decisions made by the group in the name of competition.

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    Categories: Antitrust Enforcement, International Competition Issues

      August 24, 2011

      IBM Not Out Of The Regulatory Woods Despite Withdrawal Of Emulator Complaints

      Although three rivals of IBM have dropped their complaints that IBM illegally tied its mainframe hardware to its operating system, the computer giant is not out of regulatory woods yet.

      Both the U.S. Department of Justice (DOJ) and the European Commission maintain ongoing antitrust investigations – sparked by the complaints – into a possible monopoly IBM holds in the mainframe computer market.

      In a filing with the U.S. Securities and Exchange Commission (SEC), IBM stated that two providers of IBM compatible emulator software, Neon Enterprise Software LLC and T3 Technologies Inc., have withdrawn their complaints filed with the European Commission.

      Turbo Hercules SAS, a company providing similar products, has also dropped all complaints against IBM.  IBM has stated that the settlements did not involve any monetary compensation.

      In addition to dropping their European Commission complaints, Neon and T3 are also dropping their antitrust lawsuits filed against IBM in the U.S.

      The three companies that had lodged complaints against IBM were providers of emulator software used on mainframe computers.  This technology allows mainframe operating systems and applications to run Windows, Linux, Mac OS, or Solaris as the host environment, thereby bypassing the need for IBM’s proprietary mainframe software. 

      The withdrawal of the complaints has not ended the regulatory scrutiny, however.  Neither the DOJ nor the European Commission has concluded its antitrust investigation of IBM.

      These investigations came as the result of numerous complaints filed by mainframe emulator software producers.  While the complaints have been withdrawn, the DOJ has requested the documents pursuant to the settled cases.

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      Categories: Antitrust Enforcement, Antitrust Law and Monopolies, Antitrust Litigation, International Competition Issues

        August 22, 2011

        Viacom And Cablevision Agree To Streaming Settlement

        Viacom and Cablevision have settled their dispute over streaming media content.

        Viacom, which offers MTV, VH1, CMT, Nickelodeon, BET, Comedy Central, and Spike TV, accused Cablevision of using its new iPad app to illegally stream such popular media content.  In a jointly issued statement, the companies announced they “were able to resolve the iPad matter and an unrelated business matter to their mutual satisfaction.”

        The lawsuit, filed in June 2011 in the U.S. District Court for the Southern District of New York, alleged that Cablevision breached licensing and distribution agreements, infringed Viacom’s intellectual property rights, and engaged in unfair competition.    

        According to Viacom’s complaint, on April 2, 2011, Cablevision launched an iPad app that allowed Cablevision to “stream linear feeds of Viacom’s copyrighted entertainment programming through a cable modem to iPad tablets in violation of Viacom’s … rights.”  Viacom sought damages as well as injunctive relief to remedy the allegedly significant and irreparable harm suffered as a result of the unauthorized streaming. 

        Although the details of the settlement were not immediately available, Viacom content will continue to be offered on Cablevision’s Optimum Apps for the iPad and similar devices. 

        A similar lawsuit brought by Viacom against Time Warner Cable remains pending in the U.S. District Court for the Southern District of New York. 

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        Categories: Antitrust and Intellectual Property Law, Antitrust Litigation

          August 19, 2011

          Second Circuit Gives Attorney One More Try In Bond Market Antitrust Suit Against Citigroup

          The U.S. Court of Appeals for the Second Circuit has given a sliver of hope to an attorney seeking to resurrect her claims that Citigroup abused its market power to block her innovative method of structuring bonds for municipalities seeking to finance the construction and renovation of airport terminals.

          Though it affirmed the district court’s dismissal of the complaint in Williams v. Citigroup Inc. et al., for failing to meet the pleading standard set by the Supreme Court in Bell Atlantic Corp. v. Twombly, the Second Circuit sent the case back to the lower court, ruling that the lower court should at least consider the request of attorney Linda Grant Williams to amend her complaint against Citigroup.

          Citing the liberal amendment policy under the Federal Rules of Civil Procedure, the Second Circuit said that, on remand, the district court “should address whether the proposed amendments would be futile.”

          In her complaint, Williams alleges that Citigroup illegally blocked a financing method she developed for airline special facility bonds (“ASF bonds”) in violation of federal and New York State antitrust laws.

          Specifically, Williams alleged that Citigroup, which controls 73 percent of the market for underwriting ASF bonds, abused its dominant market position and conspired with other banks and municipal governments to block use of her new “patent pending” way of structuring these bonds, which finance the construction and renovation of airport terminals.

          Williams also alleged that Citigroup pressured two law firms that employed her to terminate her in order to prevent her from marketing her new financing method.

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          Categories: Antitrust Litigation

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