The European Commission has launched a formal investigation into Google after several search service providers complained that the company had abused its dominant position by allegedly lowering the ranking of unpaid search results of competing services. The Commission said that it would also look into allegations that Google has implemented a series of policies to shut out competing search tools developments.
European Court of Justice Upholds Annul Cartel Fine
January 26, 2011 – 5:06 pm
The European Court of Justice (ECJ) dismissed the appeal brought by Repsol, General Quimica SA, and Repsol Quimica SA challenging a $4.9 million fine levied by the Commission. The ECJ upheld the fine, but reversed a lower court decision to hold the companies jointly and severally liable.
In 2005, the EC fined the companies for participating in a cartel that fixed rubber prices and exchanged confidential information. The next year Repsol and Repsol Quimica attempted to have the EC’s decision annulled, arguing that they were not responsible for the conduct of their subsidiary. The ECFI upheld the lower court’s decision and in addition found that the companies had engaged in restrictive business practices. The companies were held jointly and severally liable and fined a total of $108.9 million.
Once on appeal, the ECJ reversed the joint and several liability portion of the decision because the lower court failed to consider evidence that General Quimica operated independently from its parent companies. But the ECJ concluded that because that evidence would not have affected the EC’s decision, the fine remained intact.
Novir Lawsuits Sent to Jury
January 26, 2011 – 5:01 pm
Northern District of California’s Judge Claudia Wilken denied plaintiff’s motions for summary judgment sending several lawsuits against Abbott Laboratories to the jury. Plaintiffs allege that Abbott raised the price of its HIV drug Norvir in order to protect a separate drug, Kaletra, from competition. Judge Wilken said that the case could go forward on theories that Abbott engaged in predatory pricing and violations of its antitrust duty to deal.
Novir is an HIV drug that when combined with other protease inhibitors, would boost the properties of the combined drugs. Kaletra is Abbott’s combination of both Novir and PI lopnavir that competes in the “boosting market.” Plaintiffs allege that Kaletra held 75% of the boosting market, but its share declined when competitors entered the market and in response Abbott raised the price of Novir by 400% to maintain its monopoly. Novir is the only drug that allows the boosting effect to occur.
FCC Passes Comcast-NBC Merger With Conditions
January 26, 2011 – 4:49 pm
The FCC voted 4-1 to pass the Comcast-NBCU merger while imposing requirements that Comcast-NBCU provide its programming to bona-fide online distributors. Comcast-NBCU is also disallowed from discriminating based on relationships with Comcast-NBCU. In addition, Comcast-NBCU is required both to reduce the price of its broadband services for low-income citizens and include more diverse programs for Spanish speakers. The majority has called this merger a “significant transaction that has the potential to bring exciting benefits to consumers that outweigh potential harms.” But, Commissioner Michael J. Copps claims that the merger “grievously fails the public interest.” Copps believes that given the size of the merger, it should provide more benefits.
The US DOJ is reviewing antitrust concerns, but it believed to be unlikely to challenge the merger.
Class Certified in iPhone Exclusive Dealing & Monopolization Case
January 26, 2011 – 2:46 pm
Update January 2010: Northern District of California Judge James Ware dismissed with leave to amend a complaint filed by an indirect purchaser alleging that Apple charged anticompetitive fees for music that could play on non-Apple devices and had issued updates that reduced the value of i-pods because they limited the ability of the Apple device to play music from non-i-tunes sources. The court held that the complaint could not move forward for damages as an indirect purchaser claim and that the claims as stated failed to allege anticompetitive conduct.
Update December 2010: Northern District of California Judge James Ware has stayed class action proceedings relating to AT&T and Apple’s i-Phone agreements pending the U.S. Supreme Court’s decision in AT&T Mobility Corp. v. Concepcion, which will decide whether states can require class adjudication of arbitable claims. The court held that any prejudice to the plaintiffs as a result of delay would be outweighed by prejudice to the defendants from moving forward in the face of uncertain litigation standards.
Update October 2010: The Ninth Circuit has denied the defendants interlocutory appeal challenging class certification.
N.D. CA Judge James Ware certified a class of iPhone purchasers in litigation alleging that Apple and AT&T monopolized the market for iPhone voice and data services by entering their exclusive agreement. The court dismissed claims against Apple relating to the introduction of software that made phones inoperable.
Patent Exclusion Suit Dismissed on Standing Grounds
January 22, 2011 – 7:06 pm
Southern District of New York Judge Denise Cote dismissed antitrust claims filed by Siti against a nonprofit patent-holding company and telecommunications giants Verizon Communications Inc., Cisco Systems Inc. and Ericsson Inc. The plaintiff alleged that the defendants set up the holding company to o prevent small companies from selling or licensing their patents at fair market value. Through the holding company, the plaintiff alleged, the defendants conspired to fix prices and refused to buy patents from some owners. The court held that Siti lacked standing to challenge the defendants’ practices because it had previously sold the allegedly affected patents. Siti’s continuing interest in the patents under a revenue sharing agreement was, according to the court, too attenuated to establish antitrust standing.
Montana State Antitrust Dispute Resolved on Summary Judgment
January 22, 2011 – 6:26 pm
District of Montana Judge Richard F. Cebull dismissed state antitrust claims filed by Montana Camo brought under the state’s Unfair Trade Practices Act, granting Cabela’s motion for summary judgment. The plaintiff supplied camouflage clothing and licensed clothing designs to Cabela’s until disagreements arose over pricing. Montana Camo claims that Cabela’s violated state antitrust law by (1) buying keywords that redirect Internet searches for “Montana Camo” toward Cabela’s site, and (2) entering resale price fixing agreements. The court held that the first type of conduct, while “underhanded” hurt only the plaintiff and not the competitive process. With respect to price fixing, the court found insufficient evidence of an actual agreement. “The undisputed evidence is that prices were not fixed,” Judge Cebull wrote.
Summary Judgment Granted on Sherman Act Claim in Universal Distribution Case
January 18, 2011 – 9:33 pm
Eastern District of New York Judge Roslynn Mauskopf granted summary judgment on the Sherman Act claim brought by a pair of video distributors against Universal Music & Video Distribution Corp., Ingram Entertainment Inc., and VPD IV Inc. Judge Mauskopf adopted Magistrate Judge Joan Azrack’s report and recommendation, which outlined how plaintiffs had failed to expose the existence of a supplier-dealer conspiracy. Plaintiffs argued that defendants met and maintained friendships between executives and that these relationships supported an inference that they conspired to exclude plaintiffs from distributing Universal product. But Judge Azrack rejected that contention, explaining that the evidence was ambiguous and did not demonstrate that the two engaged in a conspiracy to undercut or harm the plaintiffs’ businesses. Rather, Judge Azrack concluded that Universal might have acted alone in deciding to change its distribution program.
Although the Sherman Act claim was discharged, the case will continue on Robinson-Patman Act, breach of contract, and fraud claims.
EC Closes Investigation into Visa’s Debit Transaction Fees
January 18, 2011 – 9:31 pm
The EC stopped investigating Visa Europe’s debit card transaction fees after charged by Visa proposed that it substantially reduce its fees. In April, 2010, Visa Europe offered to cap for the next four years the “maximum weighted average for its multilateral interchange fees (MIF) at .2% of the transaction.” The customer’s bank charges the MIF for handling the transaction to the merchant’s bank, which then gives the merchant the transaction minus the MIF. The merchants then offset the MIF by marking up the price of the goods and passing the cost off to the consumer. Visa’s capping the fees is intended to place the MIF at a level that would leave merchants indifferent to the means of payment.
Federal Jury Levies $11.3 Million Verdict Against CareCore
January 17, 2011 – 10:39 am
An Eastern District of New York jury found that CareCore National and owners of CareCore radiology practice engaged in anticompetitive practices. In 2008, the plaintiff, a group of New York Stand-Up MRI PC radiology practices, sued alleging that CareCore and other radiology practices conspired to prevent the plaintiff from becoming participating network providers of MRI scans in New York. By engaging in the conspiracy, CareCore intended to shield CareCore-owner radiology practices from competition. This agreement prevented patients from receiving scans from competing radiology practices, specifically those that offered stand-up MRI scans. The jury concluded after a two-week trial the plaintiff had presented evidence of a conspiracy.