May 26, 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.

Charter Said to Be Near Deal to Buy Time Warner Cable.  Following on the heels of Comcast’s failed bid to buy Time Warner Cable, Charter Communications has struck a deal to buy Time Warner, an acquisition that would create a powerhouse in the consolidating American cable and broadband industry.  Reportedly, Charter plans to announce today a $55 billion deal for its larger rival and an approximately $10 billion takeover of a smaller competitor, Bright House Networks.  Charter is still likely to face close scrutiny from the U.S. Department of Justice and the Federal Communications Commission, though some analysts have expressed the view that this deal is unlikely to face the same level of opposition as the Comcast bid for Time Warner.

Guilty Pleas and Heavy Fines Seem to Be Cost of Business for Wall St.   Even as five big banks plead guilty to felonies and paying out billions of dollars, the question remains whether top executives will shrug off the penalties as just a cost of doing business.  The U.S. Department of Justice hailed the guilty pleas by JPMorgan Chase, Citigroup, Barclays, UBS and the Royal Bank of Scotland to foreign exchange and Libor manipulation charges as a victory for discouraging corporate misconduct.  Attorney General Loretta E. Lynch said that the penalty of more than $5 billion that the banks agreed to pay, including $2.5 billion in criminal fines, “should deter competitors in the future from chasing profits without regard to fairness, to the law, or to the public welfare.”  However, whether traders will be dissuaded from seeking out ways to gain any edge possible in financial dealings is an open question.

As antitrust case looms, ‘Peak Google’ debated.  As Google faces an investigation by European antitrust regulators, some analysts are questioning whether the California tech giant’s dominance has already peaked.  While Google remains one of the world’s biggest companies with overwhelming dominance in Internet searches, its prospects are less rosy in a tech landscape rapidly shifting to mobile devices and social media, according to some industry analysts.

Reynolds Said Set to Win Antitrust Clearance for Lorillard.  Reynolds American is reportedly on the verge of winning U.S. antitrust approval for its $25 billion purchase of its competitor Lorillard.  Reynolds, the maker of Camel and Pall Mall cigarettes, is seeking approval from the Federal Trade Commission to buy its tobacco rival.  To ensure the industry remains competitive, the company has offered to sell its Blu e-cigarettes and menthol brands, including Kool, to Imperial Tobacco Group.

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Categories: Antitrust Enforcement, Antitrust Litigation

    May 18, 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.

    5 Big Banks Expected to Plead Guilty to Felony Charges, but Punishments May Be Tempered.  The U.S. Department of Justice is preparing to announce that Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies, according to sources.  Reportedly, the Justice Department is also preparing to resolve accusations of foreign currency misconduct at UBS.

    Sports broadcast antitrust case may proceed as class action.  A federal judge ruled that television viewers may pursue a class-action lawsuit accusing Major League Baseball, the National Hockey League, Comcast Corp, DirecTV and other broadcasters of illegally restraining their ability to watch their favorite sports teams play.  U.S. District Judge Shira Scheindlin in Manhattan said the viewers suffered from “a dearth of choice in the market for baseball and hockey broadcasting,” and that it made sense for them to pursue their claims as a group.  The court also found, however, that damages could not be pursued on a classwide basis.

    Sysco may face about $1 billion in costs if US Foods merger dies.  Sysco Corp. will be left with a bill of around $1 billion if the Federal Trade Commission kills its $3.5 billion merger with US Foods, regulatory filings show, underscoring the perils of doing deals that have a good chance of being blocked by antitrust regulators.  According to a Reuters analysis of Sysco’s filings, the mammoth U.S. food distributor has spent more than $400 million so far on a combination of integration planning, financing charges and on defending the transaction in court.

    EU Regulators to Decide on GE, Alstom Deal by August 21.  European Union antitrust regulators have resumed their investigation into General Electric’s 12.4-billion-euro bid for Alstom’s energy unit after receiving requested data from the U.S. conglomerate.  According to the European Commission, it will decide by Aug. 21, 2015, whether to clear the deal, General Electric’s biggest acquisition.

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    Categories: Antitrust Enforcement, Antitrust Litigation, International Competition Issues

      May 11, 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.

      E.U. Commission Opens Antitrust Inquiry Into E-Commerce Sector.  European antitrust officials have opened an investigation into whether large technology companies are impeding competition in online shopping, the latest in a string of inquiries in Europe focused on the web’s biggest players.  According to Margrethe Vestager, Europe’s antitrust chief, the review will focus on how electronics, clothing, shoes and online content are bought and sold online, and whether e-commerce companies have created artificial barriers that prevent Europeans from buying goods across national borders.

      Top California court revives Cipro antitrust case.  The California Supreme Court has revived an antitrust class action accusing a drugmaker of paying to keep a generic version of Bayer AG’s antibiotic Cipro off the market.  The unanimous opinion marks the first time an appellate court has tackled so-called “pay for delay” deals since a landmark 2013 decision by the U.S. Supreme Court held that such deals may be illegal.  The plaintiffs in the antitrust class action – a group of non-profits and individuals in California who bought Cipro – claim that Bayer (which settled the claims in 2013) violated California antitrust law by paying Barr Pharmaceuticals, (since bought by Teva Pharmaceutical Industries) $398 million to refrain from marketing a generic version of Cipro until Bayer’s patent on the drug expired.

      Sysco Urges Judge to Save US Foods Deal in Antitrust Duel.  Sysco Corp.’s takeover of US Foods Inc. would create an industry “behemoth” in food distribution, eliminating intense head-to-head competition between the companies, a U.S. lawyer argued at the start of a courtroom battle over the merger.  The FTC is asking a federal judge to block the $3.5 billion deal, arguing the merger would give Sysco a dominant share in an industry where it’s the biggest player, and lead to higher prices for restaurants, hotels, school cafeterias and other customers.

      SandRidge is target of antitrust grand jury probe: filing.    SandRidge Energy is the target of a federal grand jury investigation into violations of antitrust law related to the leasing of oil and gas properties, according to a regulatory filing by the company.  The Oklahoma-based company said in an SEC filing that the transactions subject to the government’s inquiry date from 2012 and prior years.

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      Categories: Antitrust Litigation, Uncategorized

        May 4, 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 told it cannot enforce anti-steering rules against merchants.  Merchants unhappy with the fees American Express charges them may steer customers toward less expensive cards without fearing retaliation from the credit card company, Judge Nicholas Garaufis ruled in federal court in Brooklyn.  The court issued a written ruling enjoining American Express from blocking restaurants, stores and other merchants from offering discounts for using lower-fee cards.  Judge Garaufis ruled in February that American Express’ rules for merchants against such activity, known as steering, “imposed actual, concrete harms on competition in the credit and charge card network services market.”  Constantine Cannon represented various merchants in commenting on the remedy adopted by the court.

        Applied Materials and Tokyo Electron Call Off $10 Billion Merger.  Two of the world’s largest manufacturers of the machinery used to produce semiconductors, Applied Materials of the United States and Tokyo Electron of Japan, dropped a $10 billion deal to merge after the U.S. Department of Justice said that combining their businesses would restrict competition.  The companies failed to come up with a plan that could allay the federal regulators’ antitrust concerns about combining two of the three largest players in a sector crucial to the production of modern electronic devices, from smartphones to televisions.

        U.S. Supreme Court weighs accepting ProMedica antitrust case.  The U.S. Supreme Court is considering hearing a Federal Trade Commission case on whether Ohio-based health system ProMedica violated antitrust laws when it acquired financially struggling St. Luke’s Hospital in Maumee, Ohio.  Some legal experts say it’s unlikely the high court will agree to hear ProMedica’s appeal of a lower court ruling ordering it to divest the hospital.   Constantine Cannon partner Matthew Cantor commented that he does not “see novel legal issues that the court is going to want to consider.”  The widely watched appeal comes as hospitals considering consolidation fret about antitrust regulators’ increasingly aggressive approach.

        S.Korea antitrust body investigating Oracle for software bundling.  South Korea’s antitrust body is investigating U.S. database services provider Oracle for bundling its new software offerings into maintenance services contracts with customers.  Hwang Won-chul, a director of the Korea Fair Trade Commission, indicated that the antitrust regulator is investigating Oracle because its software bundling is seen  as limiting competition.

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        Categories: Antitrust Enforcement, Antitrust Litigation, International Competition Issues

          April 27, 2015

          Antitrust Week in Review

          Comcast drops Time Warner Cable bid after antitrust pressure.  Comcast has abandoned its $45 billion offer for Time Warner Cable after U.S. regulators raised concerns that the deal would give Comcast an unfair advantage in the cable TV and Internet-based services market.  The proposed deal had been attacked by politicians, media company executives and consumer and industry groups, who worried it would create a monolith with too much control over what Americans do online and watch on TV.

          In Accusing Russian Energy Giant Gazprom, E.U. Begins a Test of Wills.  European Union antitrust regulators have charged the Russian energy giant Gazprom with abusing its dominance in natural gas markets, a move amounting to a direct challenge to authorities in Moscow.  While the EU’s antitrust chief, Margrethe Vestager, described the matter in terms of business markets, Gazprom suggested that it was not subject to the EU’s antitrust jurisdiction because it is a state-controlled company.

          EU antitrust case against Google based on 19 complainants-sources.   The European Union’s decision last week to bring antitrust charges against Google stems from official complaints by 19 companies in Europe and the United States, including Microsoft and a number of small firms, according to sources.  The list of complainants, which includes companies not directly involved in the charges around Google’s shopping service, would make it easier for the EU to expand the case beyond its preliminary focus on price-comparison shopping sites.  Being official parties to the case will enable the companies to get a copy of the detailed EU charge sheet and to argue their case at a hearing of competition experts should Google ask for one.

          Oil exec Aubrey McClendon faces U.S. antitrust probe: filing.  Aubrey McClendon, the former CEO of Chesapeake Energy Corporation, is under investigation by the U.S. Department of Justice for potential antitrust violations related to leasing oil and gas properties, according to a regulatory filing by American Energy Capital Partners-Energy Recovery Program LP, a new business venture he helps run.  Chesapeake has previously revealed it was cooperating with a government probe into possible antitrust violations.  The investigation has looked at whether buyers of oil and gas properties colluded to avoid bidding up land prices.

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          Categories: Antitrust Litigation

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