June 6, 2014

District Court Rejects “Double Counting” Attack On Damages Theory In Meritor’s Exclusive Dealing Case

By Matthew L. Cantor and Allison F. Sheedy

Judge Sue L. Robinson of the U.S. District Court for the District of Delaware has denied a motion for summary judgment on damages in ZF Meritor LLC and Meritor Transmission Corporation v. Eaton Corporation, setting up the long-running antitrust case for a trial on damages that is slated to start on June 23, 2014.

Plaintiffs are now free to seek the full $800 million they claim as damages, which, after trebling, would total $2.4 billion.  Plaintiffs have already won a jury verdict on liability that found that Defendant Eaton Corporation, an electrical and hydraulic systems maker, violated Sections 1 and 2 of the Sherman Act by entering into unlawful exclusive dealing agreements.

The plaintiffs are Meritor Transmission Corp. and an extinct joint venture between Meritor and a German manufacturer, which sold manual transmission systems to truck manufacturers.  Plaintiffs claimed that Eaton excluded their joint venture from the market by entering into long-term arrangements with major American truck manufacturers.  Plaintiffs alleged that these long-term arrangements—which included loyalty “discounts” that plaintiffs claimed were pricing penalties—were actually unlawful exclusive dealing agreements.

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Categories: Antitrust Litigation

    May 22, 2014

    $20 Million Settlement Domino Falls In High-Tech Employee Antitrust Litigation, With More On The Brink

    By David Golden

    The U.S. District Court for the Northern District of California has granted the motion of plaintiffs in In Re: High-Tech Employee Antitrust Litigation for final approval of class action settlements with Pixar, Lucasfilm, and Intuit for $20 million.

    The court’s final approval of these settlements follows the recent announcement of another, much larger, proposed settlement in the same lawsuit with tech heavyweights Google, Apple, Intel, and Adobe Systems.  That settlement is reported to total $324 million.

    The class action complaint alleges that several high-profile companies conspired to fix wages and eliminate competition for workers in high-tech industries.  The case has received considerable media attention because of allegations that Steve Jobs, the late CEO of Apple, was centrally involved in the conspiracy at both Pixar and Apple.  In an unusual twist, one of the named class representatives recently objected to the proposed settlement with Google, Apple, Intel, and Adobe.  The court has scheduled a hearing regarding preliminary approval of that settlement for June 19, 2014.

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    Categories: Antitrust Litigation

      May 16, 2014

      Two Calls Go Against The NCAA In Student-Athletes’ Name and Likeness Litigation

      By David Scupp

      The NCAA was on the losing end of two orders entered this week in the In re NCAA Student Athlete Name & Likeness Licensing Litigation.

      The U.S. District Court for the Northern District of California denied the NCAA’s motion for leave to file a motion for partial reconsideration of the court’s order denying the NCAA’s motion for summary judgment on antitrust claims of current and former student-athletes who were denied compensation for the commercial use of their name, image, and likeness. The NCAA had argued that the court should reconsider its finding that providing financial support to women’s sports and less prominent men’s sports is not a legitimate procompetitive justification for the NCAA’s challenged restrictions on student-athlete pay.

      In its summary judgment decision, the court held that the market for women’s sports and less prominent men’s sports is separate from the market for Division I men’s football and basketball, and found that it would be “improper to validate a practice that is decidedly in restraint of trade simply because the practice produces some unrelated benefits to competition in another market.” The court also found that this procompetitive justification failed because the record contained undisputed evidence that the NCAA could support women’s sports and less prominent men’s sports through less restrictive means.

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      Categories: Antitrust Litigation

        May 7, 2014

        DOJ And FTC Will Discuss Whether Bundled Discounts Are A Bundle Of Antitrust Trouble Or A Bundle Of Joy For Consumers

        By Ankur Kapoor[1]

        The Federal Trade Commission (“FTC”) and the Antitrust Division of the U.S. Department of Justice will attempt to unravel the antitrust pros and cons of bundled discounts and other conditional-pricing practices in a one-day public workshop on June 23, 2014.

        Bundled discounts, which are discounts offered for the purchase of a “bundle” of goods or services, exist in many markets.  The undisputed heavyweight champion of bundled discounts is the fast-food value meal, for which you pay some five cents more to get the fries (how can you say no to that?).

        Although most bundled discounts are good for competition because customers love a good deal, there are cases where bundled discounts can exclude competition and, on balance, harm consumers.  For example, when a company has a monopoly in one product market (say, broadband internet service), it can raise prices in that market and then offer a “discount” only to customers that also buy some other product in a competitive market (say, telephone service).  Because customers need the monopoly product and don’t want to turn down the “discount” on that product, they end up buying the second product from the monopolist as well, to the exclusion of other companies competing in the second product market.  Even if competitors may be able to compete in the first product market, that complicates but does not eliminate the anticompetitive potential of the bundled discount.

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        Categories: Antitrust Enforcement, Antitrust Litigation

          May 1, 2014

          The NBA Constitution Might Well Block Donald Sterling From Challenging A Forced Sale Of His Clippers In Court

          By Jeffery I. Shinder and David Scupp

          Donald Sterling is going to find the NBA constitution a major roadblock if he attempts to fight in court the NBA’s decision to seek his ouster as owner of the Los Angeles Clippers.

          Yesterday, we analyzed the antitrust implications of the NBA’s decision to respond forcefully to Sterling’s recently reported offensive and racially charged comments.  In addition to imposing a lifetime ban from NBA activities and a fine of $2.5 million, NBA Commissioner Adam Silver announced that he would urge the NBA Board of Governors to force Silver to sell his basketball team.  We concluded that while joint activity of NBA teams could raise antitrust issues under certain circumstances, it would be difficult for Sterling to prove that his particular expulsion amounted to an antitrust infraction, particularly because it is unlikely that he could show that the NBA’s action caused any competitive foreclosure or impact on price or innovation.

          However, apart from the difficulties inherent in proving an antitrust claim, Sterling would also have to overcome two legal barriers contained in the NBA’s constitution, which the league recently made public in the wake of the Sterling controversy.

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          Categories: Antitrust Litigation

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