March 13, 2014

Show Me The Money Or Go Home: Federal Courts Wrestle With Addressing Reverse-Payment Settlements After Supreme Court’s Actavis Decision

By Ankur Kapoor and Rosa M. Morales

Nearly a year after the Supreme Court held in FTC v. Actavis that reverse-payment settlement agreements between branded and generic pharmaceutical companies are subject to antitrust scrutiny under the rule of reason, federal district courts are struggling with the thorny issue of whether plaintiffs need to show them the money.

More specifically, district courts remain confounded by what constitutes a “payment” for purposes of antitrust challenges to settlements of Hatch-Waxman pharmaceutical patent infringement litigation, and whether a monetary transfer from the patent holder to the alleged infringer, i.e., a “reverse payment,” is necessary to state an antitrust claim attacking the competitive effects of the settlement.  Before embarking on a rule-of-reason analysis in such cases, some district court judges seem reluctant or unwilling to say “go” before they see the green.

As discussed in a previous post – “Are Bright-Line Rules The Right Prescription For Reverse-Payment Cases?” – in January the U.S. District Court for the District of New Jersey dismissed the antitrust challenge to a reverse-payment settlement in In re Lamictal Direct Purchaser Antitrust Litigation because there was no cash payment from the patent holder to the would-be generic competitor, and narrowly interpreted Actavis as imposing a “bright-line” requirement of a cash payment.  The court therefore held that it was unnecessary to engage in the requisite full-blown rule-of-reason analysis to determine the settlement’s anticompetitive effects (if any).

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

    March 3, 2014

    EU Accepts Visa Interchange Fee Caps

    By Aymeric Dumas-Eymard

    Visa has just closed a chapter of its antitrust woes in the European Union.

    On February 26, 2014, the European Commission announced that it had rendered legally binding the commitments offered by Visa Europe to cap its yearly weighted average Multilateral Interchange Fees (MIFs) for consumer credit card transactions at a level of 0.3% of the value of the transaction.  The cap will apply with immediate effect to cross-border credit transactions within the EEA (i.e., where the issuer and the acquirer are in different EEA countries) and with a two-year delay to domestic credit card transactions in certain EEA countries.

    Visa offered these commitments to resolve proceedings opened by the European Commission in 2008 with respect to both debit and credit card cards.  In 2010, the Commission accepted Visa’s commitment to cap its debit card MIFs at 0.20% of transaction value.  However the investigation continued with respect to credit card transactions.  The Commission issued a supplementary Statement of Objections in July 2012, setting forth its continuing concerns with Visa’s practices in the credit card space and, in particular, the level of its interchange fees.

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    Categories: Antitrust Litigation, Antitrust Policy, Legislative Updates

      February 10, 2014

      Umbrella Liability For Price Fixing: Does The Forecast Call For More Damages In The EU And U.S.?

      A View from Constantine Cannon’s London Office

      By Irene Fraile and Ankur Kapoor

      The European Union may be on the verge of embracing “umbrella liability”—a theory of liability that would significantly increase the exposure of members of anticompetitive cartels.

      The European Court of Justice is being urged by one of its advocates general to hold that, under EU law, victims of cartels can seek damages from cartel members for higher prices paid to non-cartel members that were able to raise their prices under the pricing “umbrella” created by the cartel. If the Court of Justice endorses such umbrella liability, antitrust liability in the EU could diverge from the approach evolving in U.S. courts which have been reluctant to embrace umbrella liability. click here for more »

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      Categories: Antitrust Enforcement, Antitrust Law and Monopolies, Antitrust Legislation, Antitrust Litigation, Antitrust Policy, International Competition Issues

        December 23, 2013

        Is the Apple Monitor Roving Far Afield?

        By Ankur Kapoor

        In the latest skirmish in the e-books case of United States v. Apple, Inc., Apple has accused the external compliance monitor appointed by the court of conducting a “roving” and “unfettered” investigation into Apple’s business practices, including seeking to interview lead designer Jony Ive and board member and former Vice President Al Gore.

        Apple is now moving the U.S. District Court for the Southern District of New York to suspend the court’s appointment of the external compliance monitor pending Apple’s appeal of that appointment.  According to Apple, the monitor is not only interfering with Apple’s business by exercising wide-ranging investigative powers, but is also charging excessive fees.  In a December 13, 2013, letter to the court responding to Apple’s court filings, the U.S. Department of Justice disputed Apple’s accusations and stated that, based on the DOJ’s review, the monitor’s “actions to date have been wholly within the scope of his authority under the Final Judgment.”  Judge Denise Cote will hear oral arguments on Apple’s motion on January 13, 2014.

        In its filings with the court, Apple portrays an aggressive monitor seeking to examine Apple’s internal antitrust compliance program well before the court ordered Apple to have that program in place.  While the monitor certainly needs to understand Apple’s business before he can begin to evaluate Apple’s internal compliance program, it is questionable that needing to understand Apple’s business would justify seeking interviews with individuals who have little, if anything, to do with Apple’s day-to-day business operations and antitrust compliance program.  click here for more »

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        Categories: Antitrust Enforcement, Antitrust Litigation, Antitrust Policy

          August 30, 2013

          U.K. Competition Appeals Court Finds Reform Plan Less Than Appealing

          The United Kingdom’s Competition Appeal Tribunal is expressing serious doubts that the British government’s plan to streamline competition appeals will actually reform the process for the better.

          The Tribunal expressed its doubts and criticisms in a detailed response to the government’s plan for “Streamlining Regulatory and Competition Appeals,” which was published by the Department of Business Innovation and Skills (“BIS”) in June.  In making this response, the Tribunal cited its central role in the private enforcement of competition law in the U.K.

          The BIS proposal has the announced goal of simplifying and accelerating the appellate process for both government competition authorities and regulators.  The Tribunal, however, expressed doubts that the reforms would achieve these goals, and concerns that they would be inconsistent with the approaches taken by EU courts and competition policy.

          According to the Tribunal, the BIS proposal “contains little, if any, analysis of the competition system; it appears not to appreciate the significance of current expectations and developments at the European level in relation to appeals in competition cases; and it threatens to undermine a key element of the government’s current reform of the competition system.”

          Although the Tribunal agreed with the goal of speeding up competition appeals, it disagreed with the government’s suggestion that its current appellate rules encouraged meritless appeals or allowed the introduction of too much new evidence on appeal.  The Tribunal stated that “We do not believe that placing specific restrictions upon the admission of such ‘new’ evidence, or upon CAT timetables or other procedures is either necessary or sensible.”

          The Tribunal also criticized the proposal to lower the standard of review in competition cases.  The Tribunal disagreed with the proposal’s view that a lower standard of review was justified by the EU’s General Court standard of review for antitrust decision of the European Commission.  According to the Tribunal, the proposal “fails to take account of the way in which the EU courts are developing their own appeal procedures to comply with the fundamental requirement of compliance with the [European Convention on Human Rights], in the light of widespread and growing concern about the more limited scope which has at times been attributed to the review carried out by the General Court in that context.”  The Tribunal stated that “at a time when pressure for more intense judicial scrutiny within the EU competition regime is increasing, the government appears to be contemplating the restriction of such scrutiny in the U.K. system.”

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          Categories: Antitrust Policy, International Competition Issues

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