Kensington Antitrust Advisors Group

EU Magazine Paper Merger Investigation

May 12, 2011 – 2:11 pm

The EC is investigating the planned paper industry acquisition by UPM-Kymmene Corporation of Myllykoski Corporation and Rhein Papier GmbH. The EC is concerned that the merger will restrain competition in the magazine paper market. The Commission now has 90 working days, until 19 July, 2011, to take a final decision.

Posted in EU News, Merger Review | Comments (0)

Medical Equipment Rental Antitrust Claims Must be Arbitrated

May 12, 2011 – 2:08 pm

Eastern District of Texas Judge David Folsom has held that Freedom Medical Inc. must arbitrate its antitrust claim against medical device rental firm Premier Purchasing Partners. Freedom had used a Premier on-line system called Passport that requires users to agree to arbitrate any disputes. The plaintiff analogized the agreement to a mandatory click through agreement, but the court held that as a sophisticated market participant, Freedom was bound by the agreement. The court did hold the limitation to single damages invalid as inconsistent with the antitrust laws treble damage standard.

Posted in Arbitration Issues, US Federal Courts | Comments (0)

Ninth Circuit Refuses to Stay Medical Lab Merger

May 12, 2011 – 1:48 pm

The Ninth Circuit has upheld a district court decision refusing the FTC’s request that the court stay, pending FTC administrative proceedings, the merger of Laboratory Corp. of America and Westcliff Medical Laboratories. The FTC alleged that the merger would enable two labs to control 89% of the capitated billing market. The court agreed with a dissenting FTC commission that the market was too narrow because labs providing analysis on a fee for services basis could easily provide capitated bill. The court also expressed the view that Westcliff might not surviv

Posted in Federal Trade Commission, market definition, Merger Review, US Federal Courts | Comments (0)

Heavy Duty Manual Transmission Verdict Upheld

May 12, 2011 – 1:35 pm

District of Delaware Judge Sue Robinson denied defendant Eaton Corp.’s motion for judgment seeking to overturn a jury verdict finding that Eaton violated Sections 1 and 2 of the Sherman Act. The plaintiffs, transmission manufacturer competitors ZF and Meritor, argued that Eaton took anticompetitive actions to foreclose the plaintiffs from the manual transmission market. These included long-term exclusive dealing arrangements. Eaton argued that the challenged agreements were not intended to serve an anticompetitive purpose and did not raise price. The court nonetheless upheld the verdict on the ground that the plaintiff had presented sufficient evidence of market foreclosure.

Posted in Exclusive Dealing, market definition, Section 2 Standards, US Federal Courts | Comments (0)

SESAC Music Licensing Antitrust Attack to Move Forward

May 12, 2011 – 11:46 am

Southern District of NY Judge Naoimi Buckwald denied a motion to dismiss filed by SESAC LLC in a case filed by several television stations. The plaintiffs allege that SESAC acted anticompetitively in offering copyright licenses to songs only on a blanket license all or nothing basis. SESAC is one of three copyright licensing organizations that controls substantially all music copyrights. The other two, ASCAP and BMI, have operated under consent decrees with the Department of Justice for many years. SESAC argued that the plaintiffs had failed to allege a relevant market, but the Court held that music licensing did constitute a relevant market. Recognizing that private suits against the other licensing agencies had permitted blanket licenses to stand, the court held that those cases were decided after trial considering all of the facts and circumstances.

Posted in Copyright Issues, Section 2 Standards, Tying Claims, US Federal Courts | Comments (1)

Coin Graders Case Against E-bay Dismissed

May 12, 2011 – 11:35 am

Northern District of California Judge Ronald Whyte dismissed a case by small coin grading service against E-bay and five large grading services. The complaint alleged that the defendants agreed that the five services would be favored on E-bay, restraining the ability of smaller grading services to complete. The court held that the allegations were insufficient to create a plausible inference of a conspiracy in light of the justification of protecting customers from purchasing counterfeit coins.

Posted in Section 2 Standards, Standard for Alleging Conspiracy, Tying Claims, US Federal Courts | Comments (0)

Iowa Cement Conspiracy Case Dismissed

May 12, 2011 – 10:37 am

Northern District of Iowa Judge Mark Bennett dismissed a case filed by contractors and other plaintiffs against Iowa cement companies alleging a broad agreement to fix prices. Plaintiffs supported the conspiracy allegations by pointing to plea agreements in criminal cases in which executives at the cement companies admitted price fixing. The court found, however, that the admissions related only to a few specific instances of bid rigging and were insufficient to permit a plausible inference of a broad conspiracy that would have raised prices generally.

Posted in Cartel Activity, Standard for Alleging Conspiracy, US Federal Courts | Comments (0)

Drug Patent Sham Litigation Case Dismissed

May 12, 2011 – 10:32 am

The Federal Circuit has upheld a decision dismissing Mylan’s sham litigation claims against AstraZeneca. Mylan claimed that AstraZeneca conspired with others to file patent infringement claims against any generic drug manufacturer seeking to introduce a generic version of Prilosec. The court held, however, that because AstraZeneca won some of the infringement cases and had survived a summary judgment motion in the case against Mylan, that the plaintiff could not satisfy the relevant standard of showing that the infringement litigation was objectively baseless.

Posted in Patent Litigation, US Federal Courts | Comments (0)

Merchant Fee Case Against AmEx to Move Forward

May 12, 2011 – 10:25 am

The Second Circuit has reaffirmed its decision that a merchant class action challenging the fees that American Express charges merchants to accept its cards can move forward. The merchants argued that AmEx unlawfully tied the acceptance of its charge cards to acceptance of its credit cards. Although the merchants are willing to pay a premium to accept the charge cards, they contend that the credit cards should be priced lower. The district court originally dismissed the case on the ground that many merchants had contracts requiring them to arbitrate claims against AmEx. The Second Circuit held that the question whether a waiver was valid was a question for the court, not an arbitrator. The court further held that the waiver was unenforceable because it would effectively strip the merchants of their ability to prosecute their antitrust claims. The U.S. Supreme Court vacated and remanded the decision, instructing the Second Circuit to reconsider the case in light of the Supreme Court’s decision in Stolt-Nielsen, which held that class arbitration could not be forced on parties that had not agreed to it. The Second Circuit reaffirmed its earlier decision, holding that Stolt-Nielsen did not require courts to enforce class action waiver provisions.

Posted in Arbitration Issues, Section 2 Standards, Tying Claims, US Federal Courts | Comments (0)

Key Cutting Machine Monopolization Case to Move Forward

May 11, 2011 – 5:24 pm

Northern District of Ohio Judge David Dowd refused to dismiss antitrust claims filed by automatic key-cutting machine manufacturer Hy-Ko Products, Inc., and the leading key-cutting machine manufacturer, the Hillman Group, and the leading supplier of blank keys, Kaba Ilco, Corp. The plaintiff alleges that the defendants, acting separately and in concert, used their market power to stymie the plaintiff’s entry into the key cutting machine market. Allegations include claims of tying and disparagement.

The court stayed discovery in the antitrust case pending resolution of a patent dispute between Hy-Ko and Hillman with respect to patents covering key cutting machines.

Posted in Bundled Discounts, Cartel Activity, Patent Litigation, Section 2 Standards, Tying Claims, US Federal Courts | Comments (0)