April 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.

EU Regulators Set to Warn Halliburton on Baker Hughes Deal: Sources.  European Union antitrust regulators are planning to warn U.S. oil industry services group Halliburton Co that its plan to buy Baker Hughes will hurt competition, according to sources.  The move would add to Halliburton’s woes after the U.S. Justice Department filed a lawsuit this month to stop the deal because the combined company would only compete with Schlumberger NV in 20 business lines in the global well drilling and oil industry construction services industry.  Such a warning typically means the EU watchdog is poised to block a merger unless companies provide concessions to address its concerns.

Microsoft and Google Agree to Drop Mutual Complaints.  Microsoft and Google have agreed to withdraw complaints against each other with regulators around the world, as the two American tech giants continued recent efforts to settle the once-bitter conflicts between them.  The two companies also said they would try to resolve future squabbles before complaining to regulators, as they have in the past.

Trading Start-Up Files Antitrust Lawsuit in New York.  Derivatives trading start-up TeraExchange has filed an antitrust lawsuit in the U.S. District Court for the Southern District of New York alleging that some of the biggest banks in the world conspired to block customers from using its service.  The suit charges that 12 banks conspired to keep investors from trading interest rates swaps on its platform, which was founded in 2010.  Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, RBS and UBS were named in the suit.

Glaxo, Other Drug Makers Appeal UK Fines for Pay-to-Delay Deals.  GlaxoSmithKline is appealing a $54.5 million fine that was recently levied by UK regulators for illegally conspiring with several generic rivals to delay marketing of a lower-cost version of its Paxil antidepressant.  The generic manufacturers were also fined a total of about $7 million and are appealing those decisions, as well.  The appeals come two months after the UK Competitions and Market Authority found that between 2001 and 2004, Glaxo made payments totaling about $72 million to several generic companies as part of a settlement to end patent litigation that was filed by Glaxo against the generic drug makers.  In its appeal, Glaxo argued that the UK regulators failed to prove the deals restricted competition and that its own tactics did not constitute abuse of a dominant position in the market for antidepressants.

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Categories: Antitrust Enforcement, Antitrust Litigation, International Competition Issues

    April 18, 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.

    Rise of Institutional Investors Raises Questions of Collusion.  BlackRock, Vanguard and other big institutional investors own roughly 70 percent of the public stock market, according to some reports.  People are starting to ask whether this allows companies — now having the same owners — to compete less and raise prices.  In Senate testimony last month, the Justice Department’s antitrust chief, William J. Baer, said the department was investigating the potential antitrust implications of the rise of institutional shareholders.

    Exclusive: Trading start-ups prep major bank antitrust suits.  Two online trading start-ups are reportedly preparing antitrust suits alleging that major banks conspired to block customers from using their platforms to trade interest rate swaps.  TeraExchange and Javelin Capital Markets will claim the banks threatened to cut off customers who tried to trade on the platforms, according to sources.  Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, Royal Bank of Scotland and UBS will be named, the sources said.

    Deutsche Bank settles U.S. gold, silver price-fixing litigation.  Deutsche Bank AG has agreed to settle U.S. lawsuits accusing it of conspiring with other banks to manipulate gold and silver prices at investors’ expense, according to court papers.  The settlements were disclosed in letters filed in Manhattan federal court by lawyers representing investors and traders who accused Deutsche Bank of violating U.S. antitrust law.  Terms were not disclosed, but both settlements will include monetary payments by the German bank.  Deutsche Bank also agreed to help the plaintiffs pursue claims against other defendants.

    Canadian Pacific Ends Bid for Norfolk Southern.  After five months of pressure, three merger offers and one rejection from regulators, Canadian Pacific Railway said that it had abandoned efforts to combine with its American railroad counterpart Norfolk Southern.  Canadian Pacific withdrew a resolution for Norfolk Southern shareholders to vote on negotiations between the two companies, according to a statement by Canadian Pacific.  Norfolk Southern resisted the proposed railroad merger from the beginning, and the termination joins a string of proposed deals that have fallen apart in the last week because of regulatory concerns.

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    Categories: Antitrust Enforcement, Antitrust Litigation

      April 4, 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.

      FTC Accuses Endo, Other Drugmakers of Antitrust Violations.  The Federal Trade Commission has accused several drugmakers of violating antitrust laws by agreeing to delay the U.S. launches of cheaper generic versions of two popular pain treatments.  It’s the first so-called “pay for delay” case brought by the FTC in which a drug’s original maker agreed not to sell its own “authorized generic” version until well after a generic drugmaker began selling its product.  These arrangements guaranteed the generic drugmakers would have no competition, and so could keep prices high, for at least six months.  The FTC alleges Endo Pharmaceuticals Inc., maker of Opana ER pain pills and the Lidoderm pain patch, paid Impax Laboratories Inc. and Watson Laboratories Inc., respectively, to delay selling their approved generic versions.

      Uber CEO must face price-fixing lawsuit by passengers -U.S. judge.  Uber CEO Travis Kalanick failed on Thursday to win the dismissal of an antitrust lawsuit accusing him of scheming to drive up prices for passengers who use the popular ride-sharing service.  U.S. District Judge Jed Rakoff in Manhattan said Kalanick must face claims he conspired with drivers to ensure they charge prices set by an algorithm in the Uber smartphone app to hail rides, including “surge pricing” during periods of peak demand.  The plaintiffs claim that drivers conspired with Kalanick to charge fares set by the algorithm, with an understanding that other Uber drivers would do the same, even if they might fare better acting on their own.

      China antitrust proposals trigger foreign business fears over IP protection.  Foreign companies with dominant market positions could be increasingly forced to license technology to competitors or face sanctions under China’s latest draft antitrust policy guidelines, according to foreign business groups and attorneys.  The proposals include a so-called “essential facilities” doctrine, which assumes some core infrastructure and technology is so important, or the barriers to entry so high, that refusal to share constitutes monopolistic behavior.  If interpreted broadly, China’s antitrust policy could force companies to license their intellectual property to Chinese competitors or lower licensing costs to benefit local firms, at a time when China is seeking to promote domestic champions.

      EU Opens In-Depth Investigation Into Hutchison, Vimpelcom Italian Deal.  European Union antitrust regulators have opened an in-depth investigation into Hutchison’s planned merger of its Italian mobile telecoms business with Vimpelcom’s, on concerns it could lead to higher prices for consumers.  “The Commission has concerns that the transaction could lead to higher prices, less choice and reduced innovation for mobile customers in Italy,” the European Commission said in a statement on Wednesday.

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      Categories: Antitrust Enforcement, Antitrust Litigation, International Competition Issues

        March 30, 2016

        Competitors Engaged In Cooperative Processes Find They Face Competing Approaches By Southern District Of New York Judges Weighing Antitrust Liability

        By Robert M. Cross

        The scope of antitrust liability for competitors engaged in cooperative processes—such as setting benchmark interest rates—became murkier this week with a decision by the U.S. District Court for the Southern District of New York holding that manipulation of such a cooperative process could give rise to a viable price-fixing claim.

        On Monday, Judge Jesse M. Furman held in Alaska Electrical Pension Fund v. Bank of America Corporation, 14-cv-07126(JMF) (S.D.N.Y. 2016), that a group of “otherwise-competing” entities who are engaged in a cooperative process in which they do not compete may still be subject to antitrust liability if they conspire “to manipulate prices (or components thereof).”  Id. at 16.[1]

        Significantly, Judge Furman disagreed with the Southern District of New York’s previous holding in In re LIBOR-Based Financial Instruments Antitrust Litigation, 935 F. Supp. 2d 666 (S.D.N.Y. 2013) (“LIBOR I”), that engaging in a “cooperative endeavor” to manipulate prices insulates “otherwise-competing” entities from antirust liability.  Id. at 16.  These dueling decisions underscore the disagreements among jurists within the Southern District and contributes to the lack of clarity surrounding the scope of antitrust liability for actors who are normally competitors, but engage in cooperative, non-competitive, endeavors in which they allegedly manipulate prices.  Id. at 2.  The LIBOR I case is currently on appeal to the Second Circuit.  The Second Circuit’s ruling on that appeal may ultimately provide parties with more guidance on this complex issue.

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        Categories: Antitrust Enforcement, Antitrust Litigation

          March 28, 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.

          EU stops Halliburton, Baker Hughes deal probe again, wants more info.  Oilfield services provider Halliburton Co.’s plan to acquire smaller rival Baker Hughes is facing additional delay after European Union antitrust regulators halted their investigation into the $35 billion deal for the second time.  According to the European Commission, the companies have yet to provide an important piece of information.  “Once the missing information is supplied by the parties, the clock is re-started and the deadline for the Commission’s decision is then adjusted accordingly,” Commission spokesman Ricardo Cardoso said in an email.

          Judge Approves Sale of 2 Southern California Newspapers.  A federal bankruptcy judge has approved Digital First Media’s $52.3 million purchase of the Orange County Register and another Southern California newspaper after antitrust concerns scuttled plans for Tribune Publishing Co. to purchase the papers.  Freedom Communications decided to sell the Register and Press-Enterprise of Riverside to Digital First after another judge blocked a higher bid by the owner of the Los Angeles Times.  The transaction would give Denver-based Digital First, which publishes the Los Angeles Daily News, 11 daily newspapers and more than a dozen community weeklies in the greater Los Angeles area.

          6th Circuit revives hospital antitrust action.  Four Ohio hospitals and a financial-management company participating in a joint operating agreement do not constitute a single entity immune to claims that they conspired to keep a fifth hospital out of their market, a divided federal appeals court has held.  The 2-1 decision by the Sixth Circuit Court of Appeals revived an antitrust lawsuit filed in 2012 by the Medical Center at Elizabeth Place against Premier Health Partners and its four member hospitals in the Dayton, Ohio area.

          Judge dismisses ex-LA Clippers owner Sterling’s lawsuit vs NBA.  A federal judge has dismissed former Los Angeles Clippers owner Donald Sterling’s lawsuit accusing the National Basketball Association of violating antitrust laws in forcing him to sell the franchise in 2014.  U.S. District Judge Fernando Olguin in Los Angeles ruled that he was “skeptical that Sterling suffered any injury at all, let alone an antitrust injury,” given the record $2 billion price that former Microsoft Corp Chief Executive Steve Ballmer paid for the Clippers.  Sterling had sued in May 2014, after the league banned him for life following racist remarks he had made in a conversation recorded secretly by his girlfriend, V. Stiviano.

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          Categories: Antitrust Enforcement, Antitrust Litigation

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