Update July 2010: The Third Circuit has affirmed holding that “[t]he Sherman Act does not forbid sanctioning bodies and other sports-related organizations from freely (i.e., without any coercion or improper interference) adopting exclusive equipment requirements, so long as such organizations otherwise possess, in good faith, sufficient pro-competitive or business justifications for their actions.” The court justified its ruling on the ground that sanctioning bodies have no interest in creating monopoly supply chains and that poor decisions will lead to competitive loses.
Update October 2009: Specialty Tires has stated an intent to appeal the grant of summary judgment against it.
InRace Tires America Inc., Specialty Tires of America Inc. et al. v. Hoosier Racing Tire, Western District of Pennsylvania Judge Terrence F. McVerry has thrown out an antitrust lawsuit accusing Hoosier Racing Tire Corp. of conspiring with a major dirt track racing organization to create a monopoly in the market for specialized tires, holding that plaintiff Specialty Tires of America, Inc., failed to provide evidence demonstrating its losses were the result of an unlawful act. In its lawsuit Specialty Tires alleged that 1) Hoosier and co-defendant Dirt Motor Sports Inc. have significant market share in the dirt oval race track and race tire sale markets; and 2) Hoosier promulgated a “Hoosier-only” tire for its sanctioned events in exchange for payment from Dirt Motor. In his opinion Judge McVerry pointed out that 1) while defendant racing organization is the largest in the U.S., it has two major competitors; and 2) sanctioning bodies generally do not buy tires themselves, but rather establish the parameters of the type of tire that may be used in a race, and Specialty Tires itself has supported single tire rules and has engaged in an unsuccessful bidding competition with Hoosier for the years 2008 to 2010. Therefore, the only injury Specialty Tires has sustained is exclusion, which is “the inevitable result of competition for exclusive contracts.”
Update June 2010: The Third Circuit rejected the dealer’s appeal on grounds that the court admitted irrelevant prejudicial evidence.
In an Eastern District of Pennsylvania case, a Mack Truck dealer alleged that Mack oversaw a conspiracy among its dealers to maintain truck prices and to discipline any dealer that, like plaintiff Toledo Mack, sought to pursue and aggressive price cutting strategy. A jury recently rejected the conspiracy claim, ruling in favor of Mack Truck.
Judge Myron Thompson, M.D. Ala, dismissed a complaint filed by medical supply equipment companies against several hospitals in the Montgomery, Alabama, area. The complaint alleged that the hospitals violated the antitrust laws by entering exclusive agreements to provide durable medical equipment such as beds, walkers, and wheelchairs, in house. The plaintiffs alleged that the hospital formed relevant sub-markets. The court disagreed, finding a single broader market for medical equipment in which the defendants lacked market power.
The Antitrust Division is requiring Election Systems & Software (“ESS”) to sell off allversions of Premier’s hardware, software, and firmware used to record, tabulate, transmit or report votes. The buyer must also be granted a license to use ESS’s software for disabled voters. A division spokesperson stated that the divestiture will restore competition allowing for competitive bids for immediate voting system needs and would spur innovation going forward. This is another example of the enforcement agencies increased interest in consummated mergers and acquisitions. Because of its size, this one did not require pre-merger notification.
FTC ALJ ordered Polypore to sell the stake in Microporous to an FTC-approved buyer within six months of the final order. Polypore had acquired the battery maker just over two years ago, and the FTC at that time sought unsuccessfully to block the deal. The ALJ found that the FTC demonstrated that the merger had reduced competition in four distinct batter markets. This case may be evidence of a growing desire at the enforcement agencies to attack consummated mergers that are lessening competition.
Judge Nicholas Garaufis, E.D. N.Y., refused to dismiss suits filed by major drugstore chains challenging the so-called anti-steering rules imposed by American Express to limit merchant conduct that would dissuade customers from using AmEx cards. Although the court agreed that the entry into the merchant card acceptance agreements triggered the start of the statutory period and that those agreements were entered more than four years ago, the court held that each increase in AmEx’s merchant fees imposed new antitrust injury and thus re-triggered the statute of limitations.
Update May 2010: The EC and Visa have reached an agreement to reduce debit card fees by .2%. A comment period will proceed and then an evaluation of the effectiveness of the reduction.
In late April, Visa Europe commited to cut its multilateral interchange fees (MIFs) for debit card payments to .20% as the maximum weighted average MIF for all cross border transactions and for national transactions in a number of Member States with debit cards.
Judge James Zagel, N.D. Illinois, permitted monopolization claims against BP for seeking to corner the market for propane to proceed. The court held that issues of fact prohibit summary judgment on BP’s standing and statute of limitation defenses.
Judge Edward Shea, E.D. Washington, granted judgment on the pleadings in a case challenging Washington State Department of Health regulations restricting the number of hospitals that provide angioplasties. The court held that regardless of the competitive effects regulations they are exempt from antitrust scrutiny by the state action doctrine.
Judge Robert Patterson, Southern District of New York, dismissed without prejudice Integrated Systems complaint alleging that Honeywell had orchestrated a price-fixing conspiracy among retailers and terminated the plaintiff’s dealership when it refused to go along. The court held that allegations of complaints by competing dealers were insufficient to properly allege a conspiracy and that the plaintiff had failed to allege a relevant market or any injury to competition.