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

      February 10, 2015

      European Antitrust Watchdogs Warn Of Uncertain Future For Pay-For-Delay Settlements

      A View from Constantine Cannon’s London Office

      By Irene Fraile

      A recent lively discussion with European Commission competition officials indicates that antitrust enforcement is continuing to evolve to deal with the thorny issues raised by so-called “reverse-payment” or “pay-for-delay” patent litigation settlements designed to delay the sale of generic drugs.

      On January 29, 2015, Brussels Matters (which hosts informal discussions with senior EU officials) hosted the first pan-EU discussion with officials from the European Commission’s Directorate General for Competition (“DG COMP”) after the Commission’s Lundbeck decision, which imposed hefty fines for entering into pay-for-delay agreements that violated EU antitrust rules that prohibit anticompetitive agreements.

      In that June 19, 2013, decision, the Commission imposed a fine of 93.8 million euros on the Danish pharmaceutical company Lundbeck and fines totalling 52.2 million euros on several producers of generic medicines for delaying generic market entry of the drug Citalopram.  This was the first EU infringement decision concerning pay-for-delay agreements.

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      Categories: Antitrust and Intellectual Property Law, Antitrust Enforcement, Antitrust Policy

        February 9, 2015

        European Commission Fines London-Based Broker ICAP 14.9 Million Euros For Facilitating Yen Libor Cartels

        A View from Constantine Cannon’s London Office

        By Yulia Tosheva and James Ashe-Taylor

        The European Commission (“EC”) has fined London-based ICAP, the world’s largest broker of interest-rate swaps, for facilitating bank cartels in the market for Yen-denominated interest rate derivatives.

        The EC already imposed heavy fines of 669 million euros on UBS, the Royal Bank of Scotland, Deutsche Bank, Citigroup and the British broker, RP Martin, in December 2013, after they admitted their involvement in several cartels that manipulated the Yen Libor benchmark.  The cartels involved traders’ discussions on Japanese Yen Libor submissions and exchange of commercially sensitive information on trading positions and future Japanese Yen Libor submissions.  As part of the same investigation, the EC opened proceedings against ICAP, which refused to admit guilt and did not join the financial institutions in paying fines to settle the case.

        The EC’s investigation concluded that ICAP facilitated six out of the seven Japanese Yen cartels, in particular by disseminating misleading information about expected Japanese Yen Libor rates, serving as a communications channel between traders and using its contacts at various banks in an attempt to influence their Yen Libor submissions.

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        Categories: Antitrust Enforcement, International Competition Issues

          February 3, 2015

          Sysco May Be Selling “Fix-it-First” To Save Food Distributors’ Merger, But FTC May Not Be Buying

          By Allison F. Sheedy

          Sysco Corp. announced a divestiture plan this week that it claims should address concerns of the Federal Trade Commission (the “FTC”) about the food behemoth’s proposed acquisition of US Foods, which would combine the two largest food distributors in the United States.

          Sysco, the nation’s largest food distributor, said on Monday that it is prepared to sell 11 US Foods distribution centers in the West and Midwest to smaller competitor Performance Foods Group, should the FTC approve its pending deal, which would give Sysco more than 25% of the national market, before divestitures, in the business of buying food and other supplies and selling them to restaurants, hospitals and other institutions. The company has been in discussions with the FTC for over a year with no resolution in sight. What does this proposed divestiture mean for the deal?

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          Categories: Antitrust Enforcement, Antitrust Law and Monopolies

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