An Eastern District of New York district judge recently rejected a motion to dismiss a multi-district Section 1 case alleging price fixing among Chinese producers of vitiman C. The defendants argued, with support from an amicus brief filed by the Chinese government, that the cartel was compelled by government policy and thus government action beyond the scope of the antitrust laws. The court refused to dismiss the claim, finding that the Chinese government’s role was too ambiguous. The court could not determine whether the government had approved, compelled, or merely permitted the cartel activity.
Google/Yahoo The Deal’s Off
November 8, 2008 – 2:23 pm
Update: The deal is off the table. Rather than face an antitrust battle, Google has pulled out.
After stating that they would not delay implementation of their advertising deal beyond a contractually agreed October 11 deadline, the the European Commission’s announcement that it had opended in investigation has apparently led Google and Yahoo reconsider. Both companies stated that they would continue to hold off, at least for a short time, while discussions with regulators continued.
G-Fee Conspiracy Case to Go Forward Against Fanny & Freddy
November 7, 2008 – 2:27 pm
A group of home mortgage holders prevailed on a portion of their complaint against Fanny Mae and Freddy Mac, alleging that the two mortgage guarantee corporations conspired to increase guarantee fees charged to mortgage lenders. Although the court dismissed the claims for injunctive relief, it allowed the damages claim to continue even though the plaintiffs are indirect purchasers who would ordinarily lack standing to sue.
DOJ Files Complaint & Proposed Settlement in Verizon Merger
November 7, 2008 – 2:21 pm
The Antitrust Division filed a complaint and proposed settlement requiring Verizon to divest its cellular business in 22 states to ensure continued competition after it acquires Alltel.
The FCC has approved the deal.
General Tobacco Challenges 1998 Tobacco Settlement
November 7, 2008 – 12:57 pm
General Tobacco, a relatively small, recent entrant into the tobacco business has sued the states attorneys’ general and tobacco companies participating in the 1998 settlement, which calls for tobacco companies to make payments to states to offset health care costs attributable to smoking. General Tobacco argues that the agreement anticompetitively restricts competition from new entrants because dealers are unwilling to carry products from non-parties to the settlement and the settlement’s terms discriminate against new signatories, like General Tobacco.
DOJ Won’t Challenge Delta-Northwest Merger
November 7, 2008 – 12:51 pm
The Antitrust Division closed its investigation of the proposed merger between Delta Air Lines and Northwest Airlines, the number 3 and 5 carriers in the United States. In doing so, the Division joined in European counterpart in concluding that the union would not substantially lesson competition. Overlapping routes were mininmal, the Division said, and adequate competition remained where overlaps did occur.
Kansas Sues Drug Makers For Price Inflation
October 28, 2008 – 3:01 pm
In another in a line of cases challenging drug company pricing practices, Kansas has sued a number of major drug companies for allegedly overcharging its Medicaid program by reporting higher average wholesale prices than it actually charged. The case has been filed in state court.
Refusal to Include Patent in Standard Not a Restraint of Trade
October 28, 2008 – 2:57 pm
The Fifth Circuit has held that a standard setting consortium’s decision not to include Golden Bridge Techonologies patent in a cell phone related standard, by itself, cannot constitute an unreasonable restraint on trade. By its very nature, the court held, a standard setting organization must select some patents and reject others. Absent evidence of anticompetitive effects beyond that inherent in the adoption of a standard, the decision to accept or reject a particular patent is not an unlawful restraint.
FTC Investigates Musical Instrument Pricing
October 28, 2008 – 2:52 pm
The Wall Street Journal has reported that the FTC is investigating musical instrument manufacturers practices of setting minimum advertised prices. These agreements set a floor on the price that music retailers can advertise, though not the price at which they can sell. The investigation is of particular interest because of the Supreme Court’s recent decision to abandon the per se rule against resale price maintenance.
FTC Sues to Block Off-Shore Oil Waste Disposal Acquisition
October 28, 2008 – 2:43 pm
The FTC has sought a temporary restraining order in the Southern District of Texas to block the acquisition of Newpark Environmental Services by CCS Corp. while proceeding before the FTC go forward. Both companies provide waste disposal services to the offshore oil and gas industry. The FTC claims that the companies are close competitors and that the acquisition would result in higher prices. CCS threatened to shut down its operations in the Gulf if the acquisition were not approved, but the FTC dismissed the threat as a pretext.