October 25, 2012

Solyndra Charges Chinese Energy Companies With Eclipsing Solar Competition

Solar firm Solyndra LLC is accusing three Chinese solar panel manufacturers of driving it into bankruptcy through a scheme to monopolize the solar panel industry, in an antitrust suit filed in the U.S. District Court for the Northern District of California.

Solyndra attempted to revolutionize rooftop solar energy collection with a cylindrical panel designed to make solar energy more affordable and accessible.  However, last year Solyndra, along with several other green energy companies that received government funding, filed for bankruptcy.

Solyndra’s complaint in Solyndra LLC v. Suntech Power Holdings Co. et al. alleges Solyndra’s bankruptcy was caused by a monopolization scheme engineered by China’s Suntech Power Holdings Company LTD., Trina Solar Limited and Yingli Green Energy Holding Company Limited, and their American subsidiaries.  Solyndra is seeking $1.5 billion in damages.

According to the compliant, the group secured large investments from Chinese banks so they would have the financial backing to sell solar panels below the prices it costs to manufacture them.  The companies then allegedly used the green energy trade association, China New Energy Chamber of Commerce, to share industry information and coordinate prices.  Solyndra claims that subsidies from the investors and the trade group covered up the conspiracy and enabled the defendants to dump solar panels into the American market.

Solyndra alleges that its claims are supported by investigations conducted by the U.S. Department of Commerce and the International Trade Commission, including determinations by the Commerce Department that the defendants “dumped” solar panels into the U.S. market at “less than fair value.”

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Categories: Antitrust Litigation

    October 22, 2012

    Radio Trade Group Seeks To Change SESAC’s Tune In Antitrust Action

    SESAC, the performance rights organization formerly known as the Society of European Stage Authors & Composers, is facing a second antitrust lawsuit brought by broadcast groups after the Radio Music License Committee (“RMLC”) filed a complaint in the U.S. District Court for the Eastern District of Pennsylvania alleging that SESAC’s blanket fees for songs are anticompetitive.           

    SESAC is one of three performance rights organizations that work with songwriters and musicians to give the media and consumers the ability to use copyrighted music through licenses.  RMLC is a radio trade group comprised of thousands of radio stations in the United States.

    According to RMLC’s complaint, SESAC has allegedly used its for-profit status to establish a monopoly.  Not only are the other two performing rights organizations, BMI and ASCAP, non-profit organizations, but their fees are regulated pursuant to consent decrees with the U.S. Department of Justice (“DOJ”).

    RMLS alleges that SESAC has used higher royalty fees to entice the most popular and profitable artists to join their repertory.  The SESAC repertory includes songs from music legends such as Bob Dylan, Neil Diamond and Rush as well as current pop hits by Enrique Iglesias and Usher.

    RMLC alleges that broadcasters cannot avoid using SESAC songs.  According to RMLC, its stations are forced to purchase SESAC licenses at high prices due to the organization’s practice of charging blanket fees rather than licensing a few songs, artists’ collections or songs in one musical genre.

    The complaint also accuses SESAC of conspiring to eliminate competition by entering into exclusive agreements with each of the 23,000 artists in their repertory, which prevent SESAC affiliates from licensing their music to RMLC members directly.

    In contrast, the consent decrees entered in antitrust suits brought by the DOJ bar BMI and ASCAP from mandating blanket fees or entering into exclusive agreements with the artists.  

    RMLC isn’t the first group to allege that SESAC’s licensing fees are exorbitant and anticompetitive.  A similar antitrust action filed in 2009 by a group of local television stations is pending in the U.S. District Court for the Southern District of New York.

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    Categories: Antitrust Law and Monopolies, Antitrust Litigation

      October 16, 2012

      Egg Producers Can’t Crack Antitrust Suit

      Sparboe Inc. and Land O’ Lakes Inc. continue to face a multidistrict antitrust litigation alleging they conspired to limit supply to increase the price of eggs after the U.S. District Court for the Eastern District of Pennsylvania struck down most of their arguments to dismiss the case.

      Six grocers and food manufacturers that directly purchase eggs from Sparboe and Land O’ Lakes claim in the multidistrict case of In Re: Processed Egg Products: Antitrust Litigation that the companies used two trade associations to conceal anticompetitive behavior.

      For example, the plaintiffs allege the defendants conspired to decrease egg supply through the development and implementation of animal health guidelines, which increase the size of hen cages through chick hatch reduction.

      The plaintiffs also allege that defendants used a trade group, the United States Egg Marketers, to export eggs for the purpose of limiting domestic supply so that domestic prices would rise.

      Judge Gene Pratter denied most of defendants’ motions to dismiss after acknowledging that each of the actions the trade associations implemented could have been driven by a legitimate concern to improve the health of chickens or the industry as a whole.  However, the court also stated that “reducing chick hatch while agreeing to not increase production capacity would, in the absence of agreement, be contrary to an individual egg producer’s business interests.”  As the court explained, a producer that followed such trade group guidelines “would be unable to enlarge its operations, fill additional barns, and expand egg production.”

      The court concluded that “[w]hen a defendant’s action is only economically beneficial if considered from a group perspective, a reasonable inference of conspiracy exists.”

      The court did dismiss, without prejudice, Sherman Act claims that plaintiff, Giant Eagle made against Land O’ Lakes, finding the allegations of Land O’ Lakes’ participation in the conspiracy to be inadequate.

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      Categories: Antitrust Litigation

        October 11, 2012

        Internet Classified Ads Become Antitrust Battleground

        craigslist, the popular classified ad website, faces monopolization and unfair competition claims now that 3Taps Inc., a website that indexes data, has filed a counterclaim in craigslist, Inc. v. 3Taps, Inc. et al., a copyright infringement lawsuit.

        In July, craigslist filed a complaint in the U.S. District Court for the Northern District of California, claiming copyright infringement by defendants 3Taps and PadMapper, Inc., who are alleged to have “mass-harvest[ed] and redistribute[d]” craigslist content and violated its trademarks.  3Taps redistributes listings on craigslist to Web developers, which increases the availability of such classified ads, but without the permission of craigslist, which alleges that it is entrusted with its users’ personal contact information.

        In its counterclaim, 3Taps acknowledges that the company redistributes craigslist data but alleges that it is merely gathering public information from third party search engines, such as Google or Bing.  3Taps alleges that craigslist has misused its dominant market position through the misuse of cease-and-desist letters and copyright infringement suits, because the information 3Taps indexes allegedly “is factual material not subject to copyright protection.”

        The counterclaim alleges that “[m]arkets served inefficiently by an overwhelmingly dominant participant like craigslist are entitled to ‘liberation’ from anti-consumer inefficiencies, obstructions of fair use, and a range of other consumer-hostile behaviors that impede access to public information.”

        3Taps’ counterclaim seeks damages and injunctive relief, including prohibiting craigslist from filing “sham lawsuits” and “engaging in copyright misuse.”

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        Categories: Antitrust Litigation

          October 3, 2012

          DOJ Calls For Greater International Antitrust Cooperation

          The expansion of international cooperation in antitrust enforcement in recent years is likely to continue and benefit both businesses and consumers, according to a top U.S. antitrust enforcer.

          Joseph Wayland, Acting Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice, surveyed the benefits of international cooperation among antitrust authorities in a recent speech at the International Bar Association’s Annual Competition Conference in Florence, Italy.

          According to Wayland, international cooperation helps to achieve three principal purposes of antitrust enforcement – increasing the understanding of the competitive process, the effectiveness of competition enforcement, and the efficiency of global enforcement in order to facilitate and promote economic activity to the benefit of consumers.

          Wayland suggested that greater coordination of antitrust enforcement at the international level would help companies understand competition rulings and lessen the chances of companies facing unfair penalties in multiple jurisdictions.

          “Our goal as antitrust authorities should be to avoid, as much as possible in a multi-authority world, imposing inconsistent, conflicting, or inefficient rules on businesses, either generally or in individual cases,” Wayland said.

          Wayland argued that increased cooperation was leading to more effective enforcement.  With greater globalization, it is necessary for competition regulators to learn how competition works in markets that are no longer just local in scope.

          Wayland gave several examples of international cooperation in investigating and prosecuting cartels that operate across national borders.  In the Auto Parts investigation, the Antitrust Division worked with its enforcement counterparts in Japan, the European Union, Canada and other antitrust agencies around the world.  The Antitrust Division has already obtained criminal fines of nearly $800 million as a result of that investigation.

          The Antitrust Division has also worked closely with the European Commission on civil enforcement matters, such as the e-books matter, which led to the Division filing a lawsuit – U.S. v. Apple, Inc. – against Apple and five of the largest book publishers in the U.S., alleging that they had conspired to increase the prices of e-books.  While three of the publishers settled, the Antitrust Division is continuing to litigate against Apple and the other two publishers.

          Finally, Wayland discussed how international antitrust cooperation can increase economic activity that benefits consumers.   He noted that recent international coordination among competition authorities has helped consumers, who largely bear the costs of cartels and monopolies.

          For example, the Antitrust Division, the European Commission and the Canadian Competition Bureau coordinated their enforcement activities in reviewing the United Technologies/Goodrich transaction – the largest merger in the history of the aircraft industry – which enabled the antitrust enforcers to agree on what conditions needed to be met for the merging parties to address the competitive concerns that were raised both in the U.S. and internationally.

          To make compliance easier, all three agencies approved the merger on the same day and coordinated the conditions imposed on the merger for approval.

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          Categories: Antitrust Enforcement, International Competition Issues


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