July 25, 2016

The Antitrust Week In Review

Here are some of the developments in antitrust news this past week that we found interesting and are following.

Price-Fixing Truck Makers Get Record E.U. Fine: $3.2 Billion.  The European Union’s antitrust chief imposed a record fine of 2.9 billion euros, or $3.2 billion, on a group of truck makers on Tuesday, part of a trend toward steeper penalties for competition violations in the 28-nation bloc.  The fine was for price-fixing and operating a secretive system aimed at delaying the installation of pollution-curbing exhaust pipes and engines.  Earlier this month, the European Commission, the bloc’s executive arm, announced a new round of antitrust charges against Google, on suspicion that some of the company’s advertising products had restricted consumer choice.

U.S. Moves to Block Massive Health Insurer Deals Led by Anthem, Aetna.  U.S. antitrust officials on Thursday moved to block an unprecedented consolidation of the national health insurance market, filing a lawsuit against Anthem Inc.’s proposed purchase of Cigna Corp and Aetna Inc.’s planned acquisition of Humana Inc.  The U.S. Department of Justice said the two multibillion-dollar mergers would reduce competition, raise prices for consumers and stifle innovation if the number of large, national insurers were to fall from five to three.  It was the latest example of the Obama administration challenging massive combinations in major industries, from oilfield services to telecommunications.

Daimler Says It has Made Provisions for 1 Billion Euro Anti-Trust Fine.  German truck maker Daimler has made provisions to cover a billion-euro cartel fine imposed by the European Commission.  EU antitrust regulators handed down a record 2.93-billion-euro ($3.24 billion) fine on truck makers Daimler, Paccar, Volvo/Renault and Iveco for taking part in a cartel related to emissions-reducing technology.  “We can confirm that a settlement has been reached with the EU Commission in the antitrust investigation. The fine that has been imposed (on Daimler) amounts to approximately 1.009 billion euros,” Daimler said in a statement, adding that it had made provisions to cover the fine.

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Categories: Antitrust Enforcement, International Competition Issues

    July 22, 2016

    Department of Justice Moves Mega Beer Merger One Round Closer

    By Matthew Vaccaro

    U.S. Department of Justice (“DOJ”) antitrust officials have approved Anheuser-Busch InBev’s (“ABI”) $107 billion takeover of SABMiller, on condition that ABI divest substantial assets, agree to prohibitions of certain distribution practices, and submit to ongoing agency oversight of ABI’s future acquisitions of distributors and craft brewers.

    If approved by the U.S. District Court for the District of Columbia, the settlement agreed to by DOJ and ABI will permit consummation of a mega merger of the world’s two largest brewers by revenue, which together account for 70% of beer sales in the U.S.  ABI owns more than 40 major beer brands sold in the U.S., including Budweiser, Busch, and Michelob.  SABMiller is currently the majority shareholder of MillerCoors, which owns all of Miller’s American brands and operations.  In order to gain the U.S. antirust regulators’ approval of the merger, ABI has agreed to sell SABMiller’s entire interest in MillerCoors, including its worldwide Miller brand rights.

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    Categories: Antitrust Enforcement

      July 19, 2016

      The Antitrust Week In Review

      Here are some of the developments in antitrust news this past week that we found interesting and are following.

      Google Faces New Round of Antitrust Charges in Europe.  When it comes to Europe’s lengthy investigations into Google, Margrethe Vestager, the European Union’s competition chief, is hoping that the third time’s a charm.  Ms. Vestager announced on Thursday a new round of antitrust charges against the company — the third set since early 2015 — claiming that some of the company’s advertising products had restricted consumer choice.  The efforts are part of her continuing push to rein in Google’s activities in the European Union, where the Silicon Valley company has captured roughly 90 percent of the region’s online search market.

      Antitrust ruling on big mergers expected soon.  A U.S. Justice Department decision on the proposed mergers of Aetna Inc. and Humana Inc., and Anthem Inc. and Cigna Corp., could come as soon as this week.  Hartford, Connecticut-based Aetna met earlier this month with Justice Department officials to make its case for its $37 billion merger with Louisville, Kentucky-based rival Humana, just two weeks after a similar meeting involving the $54 billion merger of Indianapolis-based Anthem and Bloomfield, Connecticut-based Cigna, Bloomberg reported.

      Teva says Allergan deal to close ‘any time’, expects U.S. antitrust clearance.  Teva Pharmaceutical Industries Ltd said on Wednesday it expected its $40 billion deal to buy Allergan Plc’s generics business to close “at any time,” even as the companies extended the deadline for completing the transaction to October to allow more time for the U.S. antitrust review.  The deal was announced more than a year ago and had been expected to wrap up last month, but it has taken longer as the companies have arranged sales of more drugs than anticipated to clear the antitrust regulators.  The deal closing is contingent on clearance from the U.S. Federal Trade Commission, the antitrust regulator reviewing the deal, which the companies said they expect at any time.

      Bayer Raises Takeover Bid for Monsanto.  The German industrial giant Bayer raised its all-cash takeover bid for Monsanto on Thursday, turning up the heat in its pursuit of the American agricultural company.  In a news release, Bayer said that it had increased its offer to $125 a share from $122 a share.  The German company also proposed a $1.5 billion breakup fee if a merger of the two companies ran afoul of government regulators — a concession to concerns that a transaction could raise opposition from antitrust officials.  Though the two companies operate on separate sides of the agricultural business, regulators may closely scrutinize a merger that could put additional pricing pressure on farmers.

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      Categories: Antitrust Enforcement, Antitrust Litigation, International Competition Issues

        July 18, 2016

        Health Plan Members Convince Ninth Circuit to Revive Antitrust Class Action Against Dominant Northern California Healthcare Provider Sutter Health

        By Rosa M. Morales

        An antitrust class action challenging the dominance of healthcare provider Sutter Health in Northern California received a new lease on life Friday as the U.S. Court of Appeals for the Ninth Circuit held that plaintiffs’ geographic market allegations were sufficiently detailed and plausible to survive a motion to dismiss.

        In Djeneba Sidibe, et al. v. Sutter Health, No. 14-16234 (9th Cir. July 15, 2016), a three-judge panel unanimously reversed and remanded the district court’s dismissal of the third amended complaint.  Acting on behalf of an alleged class of health plan members, the plaintiffs charge that Sutter Health violated Sections 1 and 2 of the Sherman Act and California’s Cartwright Act.

        Matthew L. Cantor of Constantine Cannon argued on behalf of the putative class that the district court erred by requiring plaintiffs to allege “evidentiary facts” to support the “plausibility” of plaintiffs’ geographic market definition at the pleadings stage.  The Ninth Circuit agreed, holding that plaintiffs had indeed pleaded sufficient allegations to render their markets plausible.

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        Categories: Antitrust Litigation

          July 15, 2016

          Consumer Financial Protection Bureau’s Far-Reaching Proposed Rule Would Free Consumers From Class Action Bans In Mandatory Arbitration Clauses

          By James J. Kovacs

          Consumer lawsuits got a big boost on May 3, 2016, when the Consumer Financial Protection Bureau (“CFPB”) published its long-awaited proposed rule to prohibit class action bans in mandatory arbitration clauses.

          Mandatory pre-dispute arbitration clauses require plaintiffs to seek remedial relief before an arbitrator instead of a state or federal court. If adopted, the CFPB’s proposed rule would effectively eliminate the use of pre-dispute arbitration agreements to block class-action lawsuits, affecting a large number of entities that offer financial services to consumers.

          Arbitration agreements have long been favored in the United States. Notably, in 2011, the Supreme Court held that federal arbitration law preempts any state law attempting to prohibit class-action waivers in arbitration agreements.

          However, in passing the Dodd-Frank Act, Congress authorized  the CFPB to conduct analysis and “prohibit, or impose conditions and limitations” on arbitration agreements between consumers and financial services providers.  In March 2015, the CFPB finished its analysis and released its Arbitration Study – a study designed to review mandatory pre-dispute arbitration clauses in contracts for credit cards, checking accounts, prepaid cards, payday loans, private student loans, and mobile-wireless services. The study determined that the six consumer-finance markets contained a significant number of mandatory pre-dispute arbitration clauses impacting “tens of millions of consumers.”

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          Categories: Antitrust Litigation

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