The Antitrust Week In Review
Here are some of the developments in antitrust news this past week that we found interesting and are following.
Is it time for the class action plaintiffs’ bar to skirt the 1st Circuit? Here’s a tip for class action defendants in New England and Puerto Rico: If you credibly threaten to turn your case into a series of mini-trials over class membership, you can probably beat class certification. That’s the upshot of a new ruling from the 1st U.S. Circuit Court of Appeals in Bais Yaakov of Spring Valley v. ACT Inc, in which Judges Sandra Lynch, William Kayatta and David Barron affirmed the denial of class certification to a prospective class of schools that allegedly received fax advertisements from ACT, the educational testing company. The 1st Circuit concluded that ACT had offered a heap of evidence to show that many schools had consented to receive the allegedly improper faxes, so the class could not satisfy the federal procedural rule that requires classwide issues to predominate over individual inquiries.
Analysis: Apple’s App Store concessions fail to address concerns of lawmakers. In the space of a week, Apple Inc made two sets of changes to its App Store rules, which are the subject of lawsuits, regulatory probes and legislation around the world. But, according to lawmakers, the tweaks do not address their biggest concerns. Lawmakers are considering dismantling the App Store business model, an outcome that could cost Apple about 6% of its sales – an amount equal to $16 billion in its last fiscal year – and shave up to 15% off its profit, according to an estimate last year from analyst firm Cowen. Among Apple’s “concessions” is allowing Netflix Inc and other subscription services to provide a link to out-of-app paid signups that avoid Apple commissions. But many of these companies had already quit using Apple’s payment systems, so the move is largely symbolic and unlikely to affect Apple’s finances.
FTC Fines Capital One CEO Richard Fairbank for Repeatedly Violating Antitrust Laws. The Federal Trade Commission announced that Richard Fairbank, CEO of Capital One Financial Corp., will pay a $637,950 civil penalty to settle charges that his acquisition of Capital One Financial stock violated the Hart-Scott-Rodino Act. Fairbank’s recent multi-million dollar compensation package included over 100,000 Capital One Financial shares in 2018, which increased his holdings to $168 million. The complaint alleges that Fairbank failed to report his sizable stock windfall to federal antitrust authorities and illegally finalized the acquisition before the agencies could investigate. While Fairbank is a repeat filing offender with wrongdoing spanning two decades, this FTC order is the first time he has been penalized.
Edited by Gary J. Malone