February 17, 2015

China’s Record $1 Billion Fine Against Qualcomm Could Signal A Tough New Antitrust Cop On The Block

A View from Constantine Cannon’s London Office

By Yulia Tosheva and James Ashe-Taylor

China’s imposition of a nearly $1 billion fine on Qualcomm, the world’s largest supplier of smartphone chips, is noteworthy not just because it is a record-breaking antitrust fine for China, but also because it serves as a warning for international companies that antitrust enforcement now spans the globe.

As reported on February 9, 2015, China’s National Development and Reform Commission (NDRC) reached a long-awaited settlement with Qualcomm, following a 14-month antitrust investigation into Qualcomm’s patent licensing practices.

The San-Diego based chipmaker, which makes about half of its global revenue in China, agreed to pay a record fine of $975 million, the highest penalty ever imposed in Chinese antitrust enforcement history. The size of Qualcomm’s fine is larger than the total amount of antimonopoly fines imposed by the NDRC in 2014.

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Categories: Antitrust Litigation

    February 16, 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.

    China Hits Qualcomm With Fine.  Qualcomm has agreed to pay a $975 million fine for violating China’s antimonopoly law.  As part of the deal, Qualcomm has also agreed to lower its royalty rates on patents used in China for high-speed wireless data, which will help smartphone makers in China.

    Expedia to Buy Orbitz for $1.34 Billion to Take On Priceline.  Expedia seeks to acquire Orbitz for $1.34 billion, in an effort to reclaim the lead in global online travel bookings from Priceline, and fend off newer competitors such as Google.  Although the deal would reduce competition among online travel agents, Expedia hopes that antitrust regulators will not block it in light of increased competition from Google and others in the total U.S. travel sales market.

    Mergers: Commission opens in-depth investigation into proposed acquisition by Siemens of rotating equipment manufacturer Dresser-Rand.  The European Commission has opened an in-depth investigation into whether the proposed acquisition of rotating equipment manufacturer Dresser-Rand of the U.S. by Siemens of Germany complies with EU merger regulations.  Both companies supply turbo compressors as well as the engines that drive those compressors.

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    Categories: Antitrust Litigation

      February 11, 2015

      FTC Convinces Ninth Circuit That Improved Patient Care Is No Cure For Anticompetitive Healthcare Merger

      By Matthew L. Cantor

      The Federal Trade Commission (“FTC”) chalked up another victory against a healthcare merger yesterday as the U.S. Court of Appeals for the Ninth Circuit Court of Appeals affirmed the decision of the U.S. District Court for the District of Idaho blocking a merger between St. Luke’s Health System and a primary care physician (“PCP”) group in Nampa, Idaho.

      The appellate court’s decision in the closely-watched case of St. Alphonsus Medical Center v. St. Luke’s Health System held that the district court correctly found that, even though the merger could have improved the delivery of health care in the Nampa market, such a defense was inadequate under antitrust law because there was no showing that the merger would increase competition or decrease prices.  Notably, the Ninth Circuit agreed with the lower court that the issue of patient outcomes was irrelevant to whether the merger offended antitrust law under Section 7 of the Clayton Act.  The Ninth Circuit held that the merger was anticompetitive, particularly because the merger would have increased concentration in the relevant market for PCP services in Nampa and barriers to entry in that market are high.

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      Categories: Antitrust Litigation

        February 8, 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.

        Staples and Office Depot Say a Merger Will Keep Them Competitive.  Staples and Office Depot are hoping to convince antitrust regulators that their $6.3 billion merger should be approved because the office supply world’s a different place from what it was in 1997, when their previous attempt to combine was blocked by the FTC.  The two retailers are arguing that the past 18 years has seen the business selling office supplies become more competitive due to efforts by rivals such as Walmart, Target and Amazon.

        Last Swing in Court by San Jose to Get Oakland A’s to City.  The San Jose City Council has voted to seek Supreme Court review of the decision by the U.S. Court of Appeals for the Ninth Circuit that baseball’s antitrust exemption bars San Jose’s lawsuit that aims to stop Major League Baseball from blocking the Oakland Athletics’ proposed move to the city.  The Ninth Circuit’s reluctant application of the anachronistic—yet still followed—baseball antitrust exemption was examined by this blog last month.

        Assistant Attorney General Bill Baer Delivers Remarks at the Global Competition Review Fourth Annual Antitrust Law Leaders Forum.  Bill Baer, the top antitrust enforcer at the U.S. Department of Justice, gave a speech warning that merging companies had better be prepared to make meaningful concessions designed to boost competition, or risk being sued by the DOJ’s Antitrust Division. The antitrust enforcer discussed the concessions that the parties had to concede in order to win regulatory approval of the $11 billion American Airlines-US Airways merger, and Anheuser-Busch InBev’s $20 billion acquisition of Grupo Modelo.

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        Categories: Antitrust Litigation

          February 4, 2015

          Fifth Circuit Rejects Jury Verdict Of Quarter Horse Conspiracy, Finding Elite Animal Registries To Be A Horse Of A Different Color

          By Seth D. Greenstein

          A panel of the U.S. Court of Appeals for the Fifth Circuit has reversed a jury’s verdict that a horse breeding association illegally conspired with some of its members to exclude genetically cloned horses from its elite quarter horse breeding registry, holding the plaintiffs’ circumstantial evidence was insufficient to rebut an inference of independent conduct.

          The court in Abraham & Veneklasen Joint Venture v. American Quarter Horse Association also discussed, but declined to decide, whether the American Quarter Horse Association (the “AQHA”) constitutes a single entity incapable of conspiracy, or whether the independent entities comprising the association were capable of engaging in concerted action.

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          Categories: Antitrust Litigation

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