March 12, 2014

DOJ’s Justification Of American Airlines-US Airways Settlement Identifies Competitive Benefits But Leaves Some Questions Unanswered

By Ankur Kapoor

The Antitrust Division of the U.S. Department of Justice (the “DOJ”) is highlighting the competitive benefits to the settlement of its challenge of the American Airlines-US Airways merger in the DOJ’s Response to Public Comments on the Proposed Final Judgment filed on Monday in the United States District Court for the District of Columbia.

The DOJ’s Response heralds the Proposed Final Judgment as “a major victory for American consumers” because “[i]t will enable Low Cost Carriers (‘LCCs’)” such as JetBlue, Southwest, and Virgin America “to fly millions of new passengers per year to destinations throughout the country” and because, by requiring divestiture of 104 slots at Ronald Reagan Washington National Airport to these three LCCs, it “fully addresses the harm that would have resulted from New American’s control of nearly 70% of the limited takeoff and landing slots” at Reagan National. 

The DOJ’s Response also highlights that the proposed judgment requires divestiture of 34 slots to Southwest and Virgin America at New York LaGuardia International Airport and divestiture of fewer, other rights and interests at five other airports.  To support its claim of victory, the DOJ points to its conditioning the United-Continental merger in 2010 on the divestiture of 36 slots to Southwest at Newark Liberty International Airport and the fact that, since then, prices for certain nonstop routes from Newark have decreased substantially. click here for more »

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Categories: Antitrust Enforcement, Antitrust Litigation

    March 11, 2014

    Apple Doubles Down On Its Bet Against E-Books Judge

    By Allison F. Sheedy

    Apple has upped the ante in the e-books case with two court filings in recent weeks that seek to prevent Judge Denise Cote of the U.S. District Court for the Southern District of New York from presiding over the upcoming jury trial on damages.

    While the two-pronged attack – which argues not only lack of jurisdiction but also bias by the judge – is fairly aggressive, it is hardly surprising.  Although motions for recusal based on a judge’s lack of impartiality are rarely made – and even more rarely granted – Apple’s litigation tactics over the past few months have telegraphed that it was likely to seek the removal of Judge Cote from the case.

    The e-books case encompasses several actions brought by the U.S. Department of Justice (“DOJ”), Attorneys General of various states and class action plaintiffs, which alleged that Apple’s contractual agreements with book publishers violated state and federal antitrust laws.  After the publishers settled the case, Judge Cote found in a bench trial that the DOJ and the states had proved that Apple violated Section 1 of the Sherman Act and related state antitrust laws by conspiring with the publishers to raise e-book prices.  The trial focused solely on liability, and the only relief sought was an injunction.

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    Categories: Antitrust Enforcement, Antitrust Litigation

      February 13, 2014

      Apple Gets Half A Loaf Of Bread In “Losing” Appellate Challenge Of Antitrust Monitor

      By Allison F. Sheedy

      Although the U.S. Court of Appeals for the Second Circuit has denied Apple’s motion to suspend a court-appointed antitrust compliance monitor, Apple actually achieved part of its goal of reining in the monitor.

      Apple had asked the appellate court to stay the monitor, Michael R. Bromwich, from doing any more work pending Apple’s appeal of that appointment in United States v. Apple, Inc.  While the court denied Apple’s motion on Monday, it gave Apple some of what it asked for by writing a one-page order that should effectively put some limits on how far the monitor can reach in demanding documents and interviews with Apple employees.

      Significantly, the appellate court premised its denial of the motion to stay the monitor on a narrow reading of Judge Denise Cote’s order appointing the monitor.

      The Second Circuit’s order explained that the monitor’s job was to ensure that Apple is putting antitrust compliance policies in place.  The Second Circuit noted that the district court’s order of appointment “should be interpreted narrowly,” and highlighted that at oral argument the government “conceded” that the monitor was not allowed “to investigate whether [Apple’s] personnel were in fact complying with the antitrust or other laws.”  click here for more »

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      Categories: Antitrust Enforcement, Antitrust Litigation

        February 12, 2014

        FTC Performs Balancing Act In Evaluating Health Care Provider Combinations

        By Axel Bernabe

        The FTC’s recent victory in unwinding the St. Luke’s Health System and Saltzer Medical Group merger in Idaho provides a cautionary note to hospitals and other health care providers contemplating mergers.

        Mergers that threaten to give an entity market power to demand higher rates for health services to insurers are likely to be challenged.  In the St. Luke’s case, the FTC convinced the U.S. District Court for Idaho that St. Luke’s acquisition of Saltzer Medical Group violated Section 7 of the Clayton Act.  The court ordered “St. Luke’s to fully divest itself of Saltzer’s physicians and assets and take any further action needed to unwind the Acquisition.”

        The FTC argued that St. Luke’s acquisition of Saltzer, the region’s largest independent, multi-specialty physician group, would have given the combined entity “far too great a market power when negotiating with insurance companies.”  There was little ambiguity in the FTC’s position, and the victory is a clear warning sign to competitors contemplating joint ventures.  click here for more »

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        Categories: Antitrust Enforcement, Antitrust Litigation

          February 10, 2014

          Umbrella Liability For Price Fixing: Does The Forecast Call For More Damages In The EU And U.S.?

          A View from Constantine Cannon’s London Office

          By Irene Fraile and Ankur Kapoor

          The European Union may be on the verge of embracing “umbrella liability”—a theory of liability that would significantly increase the exposure of members of anticompetitive cartels.

          The European Court of Justice is being urged by one of its advocates general to hold that, under EU law, victims of cartels can seek damages from cartel members for higher prices paid to non-cartel members that were able to raise their prices under the pricing “umbrella” created by the cartel. If the Court of Justice endorses such umbrella liability, antitrust liability in the EU could diverge from the approach evolving in U.S. courts which have been reluctant to embrace umbrella liability. click here for more »

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

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