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

      October 17, 2014

      Brussels Antitrust Seminar Demonstrates Shifting European Landscape For Competition Enforcement In Wake Of ECJ MasterCard Judgment

      A View from Constantine Cannon’s London Office

      By Irene Fraile and Richard Pike

      The recent judgment by the European Court of Justice (“ECJ”) in the MasterCard case is sparking a lively debate about how antitrust enforcement of payment system regimes should evolve in the European Union, as evidenced by an antitrust seminar co-sponsored by Constantine Cannon in Brussels on Monday.

      The ECJ’s MasterCard judgment was rendered on September 11, 2014, when it dismissed MasterCard’s final appeal against an antitrust infringement decision adopted by the European Commission in 2007 regarding MasterCard’s Multilateral Interchange Fees (“MIFs”) for cross-border payment card transactions. MIFs are the fees paid by merchants’ banks to card-issuing banks to cover the cost of processing card payments. The ECJ held that the level of those fees had “restrictive effects on competition.”

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      Categories: Antitrust Enforcement, Antitrust Litigation, International Competition Issues

        October 1, 2014

        Apple’s Appellate Challenge Of E-Books Monitor Moves To Procedural Battlefield

        By Allison F. Sheedy

        Apple’s battle in the U.S. Court of Appeals for the Second Circuit against a court-appointed external antitrust compliance monitor is winding its way through a procedural thicket as the Second Circuit prepares to consider the merits of Apple’s appeal.

        Apple is appealing an order by Judge Denise Cote of the U.S. District Court for the Southern District of New York refusing to disqualify the monitor the court appointed to oversee Apple’s antitrust compliance policies, after finding in a bench trial that U.S. Department of Justice and Attorneys General of various 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.

        Apple’s disputes with the monitor, Michael Bromwich, began almost as soon as he was appointed by the Judge Cote last fall. Apple complained from the start that he overstepped his mandated responsibilities, and charged exorbitant fees, with no oversight, which Apple is solely responsible for paying. Apple also argued that Bromwich lacked impartiality because of ex parte communications he engaged in with both Judge Cote and the government plaintiffs.

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        Categories: Antitrust Litigation

          September 25, 2014

          Antitrust Regulators Taking Aim At Drug Companies’ “Forced Switching”

          By Rosa M. Morales

          Signs continue to accumulate that antitrust regulators are on the lookout for innovative anticompetitive tactics by pharmaceutical companies seeking to delay entry of lower-priced generic drugs.

          This growing interest by federal and state regulators in policing the anticompetitive suppression of generic drugs was the subject of a recent post on this blog by Ankur Kapoor.  Among the antitrust enforcement actions analyzed was a reverse-payment case filed earlier this month by the New York State Attorney General against Actavis and its recently acquired, wholly-owned subsidiary Forest Laboratories.

          In recent comments, Eric Stock, chief of the Antitrust Bureau of the New York State Attorney General’s Office shed light on what antitrust enforcers may be looking at when he discussed “forced switching” – one of the anticompetitive tactics used by the pharmaceutical companies that is attracting the interest of antitrust enforcers.  “Forced switching” occurs when pharmaceutical companies “force” the use of new branded drugs by either pulling older branded versions from the market or reducing their supply.

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          Categories: Antitrust and Intellectual Property Law, Antitrust Litigation

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