September 10, 2009 – 9:37 am
Update Sept. 2009: In Synergetics USA Inc. v. Alcon Laboratories Inc. et al., Southern District of New York Judge Denise Cote denied microsurgical device maker Synergetics USA Inc.’s bid to revive its theory of price coercion in an antitrust suit accusing Swiss rival Alcon Inc. of illegal product tying. Judge Cote ruled that Synergetics was not entitled to reconsideration of her order dismissing the coercion prong of its tying claim because it had not produced evidence of a pricing scheme that made the joint purchase of the products at issue the only economically viable option. The judge did however, allow Synergetics to proceed with its product tying case on a refusal-to-sell theory.
In Synergetics USA Inc. v. Alcon Laboratories Inc. and Alcon Inc., an antitrust suit brought by Synergetics USA against Alcon and its U.S. subsidiary, accusing them of engaging in anti-competitive conduct by using their monopoly power for vitrectomy machines to bias surgeons’ purchasing decisions toward its surgical equipment, survived a motion to dismiss. Southern District of New York Judge Denise Cote ruled that although Synergetics failed to adequately plead price coercion or predatory pricing, its allegations of illegal product tying against defendants on a refusal-to-sell theory were sufficient. In rejecting Alcon’s argument that Synergetics’ tying allegations concerned an insubstantial amount of commerce as they relate to just two health care institutions, Judge Cote held that 1) “the complaint need not specify a value of lost commerce and by alleging that Alcon has refused to sell cassettes without light pipes to two health care institutions, Synergetics has given fair notice of its claim and identified a plausible theory of impact on a substantial volume of commerce”; and 2) “Synergetics may be able to prove foreclosure of a substantial volume of commerce if in discovery it uncovers sufficient evidence of practice to refuse to sell cassettes unless customers purchased light pipes.”
September 10, 2009 – 9:35 am
In Booklocker.com Inc. v. Amazon.com Inc., Maine District Court Judge John A. Woodstock Jr. rejected Amazon.com Inc.’s bid to toss a proposed antitrust class action filed against it by print-on-demand (POD) book publisher Booklocker.com Inc. The case alleges that Amazon improperly tied the use of its Internet site to the printing services of its subsidiary BookSurge by requiring Booklocker to use BookSurge to print their titles in order to list them on the Amazon Web site. The Court found that Booklocker 1) sufficiently alleged a condition that established a tie by claiming that Amazon made threats to POD publishers to cut off their access to its bookstore site unless they used BookSurge’s printing services; 2) had met its burden to show sufficient economic power at this stage; and 3) adequately alleged that a tie of Amazon’s sale of books online to its printing services foreclosed a substantial amount of commerce in the printing service. Although allowing the lawsuit to proceed, the court declined to make a premature judgment on the most important question, which is whether Amazon had foreclosed competition on the merits in the market for POD printing by its conditioning of access to the direct Amazon sales channel.
September 10, 2009 – 9:32 am
In Comcast Corp. V. FCC, District of Columbia’s Circuit Court of Appeals scrapped the Federal Communication Commission’s subscriber-share limit for cable providers, handing cable challengers a victory in a 16-year effort to scrap the ownership cap. The Court held that the FCC had clearly failed to take into account growing competition for video programming from satellite and fiber optics providers when limiting cable providers to the 30 percent subscriber-share limit. Although the ruling vacates the subscriber-share limit, cable companies remain subject to applicable antitrust laws.
September 10, 2009 – 9:16 am
On Sept. 9, 2009, the European Court of First Instance (CFI) dismissed Clearstream’s challenge to an EC ruling that Clearstream Banking AG and its parent company Clearstream International SA violated Article 82 by refusing to supply clearing and settlement services to one of its customers and by applying discriminatory prices to that same customer.
September 10, 2009 – 9:12 am
The European Court of Justice dismissed Akzo Nobel‘s appeal of a 2007 Court of First Instance judgment affirming a fine for cartel activities regarding choline chloride, a feed additive. The fine included the participating subsidiaries as well as the parent company on a theory of joint and several liability. The decision amounts to high court confirmation of the EC’s view that a parent company may be held liable for anti-competitive behavior of its subsidiaries even if did not itself participate in those activities.
September 8, 2009 – 4:08 pm
Update September 2009: A group of California pharmacies have filed a challenge to the merger in the Northern District of California. The pharmacies cite the fact that banks receiving TARP money are financing the deal as well as the size of the merged firm as grounds for blocking the deal.
Pfizer Inc. has secured the European Commission’s blessing for its proposed $68 billion acquisition of Wyeth Inc., subject to the divestiture of several animal health vaccines, pharmaceuticals and medicinal feed additives in the European Economic Area. This divestiture has eased the EU’s earlier concerns that the proposed transaction would significantly impede effective competition in the EEA. Although clearing this obstacle, the deal still remains subject to scrutiny by U.S. and other regulators, expiration of a waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the approval of Wyeth’s stockholders.
August 31, 2009 – 9:48 am
In Pecover et al. v. Electronic Arts Inc., Northern District of California Judge Vaughn Walker refused to throw out Sherman Act and California’s Cartwright Act claims in a proposed consumer class action alleging that Electronic Arts Inc.’s exclusive licenses with various football leagues have “killed off” competition for its Madden series of football games, which allowed EA to hike prices by nearly 70 percent. In its motion to dismiss EA argued that 1) plaintiffs had not shown that there was a recognizable product market for football video games for the purposes of the Sherman Act; and 2) multiple exclusive agreements with different leagues cannot constitute restraint of trade under the Cartwright Act because such a rule would deny licensors the benefit of bidding competition. The court rejected EA’s arguments and held that 1) based on the complaint, there is little to no market for football games that are not based on real teams and players, so the allegations that the licensing deals forced competing football games out of the market and allowed EA to raise prices are sufficient to allege a product market under the Sherman Act; and 2) while multiple licenses are not per se illegal under the Cartwright Act, they could still constitute a violation by “depriving the marketplace of independent sources of economic power.”
August 31, 2009 – 9:46 am
In In the Matter of Alta Bates Medical Group Inc., the FTC resolved its price-fixing concerns that the company had 1) made, received, rejected and countered price offers to and from insurers without going back to its individual doctors to find out what price each would take for their services; 2) tried to limit the products Keiser Permanente Insurance Corp. could offer to consumers with the “sole purpose” of “impeding competition” for medical services in the region; and 3) did not sufficiently integrate individual practices that make up its membership either financially or clinically to allow the group to negotiate the fee-for-service contracts on a collective basis. The proposed consent order the two sides settled on provides that while Alta Bates is still permitted to 1) continue to negotiate the capital payment contracts; and 2) handle any negotiations required for it to take part in “qualified risk-sharing or “qualified clinically-integrated” joint arrangements, Alta Bates 1) is barred from fixing prices or engaging in future concerted refusals to deal with certain insurers; 2) must tell FTC before making certain types of contracts with insurers; and 3) must end some of its pre-existing contracts stemming from the illegal collective negotiations without incurring penalties.
August 23, 2009 – 11:10 am
Update August 2009: Judge Thomas Zilly, Western District of Washington, dismissed a private civil action alleging a conspiracy to increase prices in Pacific shipping routes. The court held that the plaintiffs allegations of parallel price increases in a market with rising fuel costs and guilty pleas by executives relating to shipping in another geographic area was insufficient to allege a conspiracy. The court also held that the defendants were insulated from damages liability by the filed rate doctine. The government has an on-going prosecution dealing with Pacific shipping routes.
In an on-going DOJ investigation, four executives pleaded guilty, accepting $20,000 fines and jail time, for anticompetitive activities relating to a conspiracy to set prices, rig bids, and allocate markets in coastal shipping.
August 20, 2009 – 4:14 pm
In AT&T Services Inc. et al. v. Madison Square Garden LP and Cablevision Systems Corp., in a 56-page complaint AT&T Inc. has asked the FCC to prohibit Cablevision Systems Corp.’s from denying AT&T access to its high-definition programming for two of its Connecticut regional sports networks. AT&T obtained the standard versions of these networks after filing a program access complaint with the FCC against Cablevision, however, after the agreement closed, the companies agreed to handle the HD issues separately. According to the latest AT&T complaint, Cablevision continues to withhold the HD version of the networks because “such programming is terrestrially delivered and thus outside the scope of the FCC’s program access rules.” To counter this argument, AT&T based its complaint on FCC rules created in October 2007, and upheld by the District of Columbia Court of Appeals, banning apartment building owners from striking exclusive deals with cable providers. In its complaint, AT&T claims that because Connecticut is so close to New York and only has one professional sports team, the New York-based sports programming provided by the networks is in high demand in Connecticut.