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Antitrust: Revolution in the Supreme Court or Chipping Away at the Margins?

March 29, 2007

Analysis of:Antitrust laws take a beating from Supreme Court | www.chron.com

The Supreme Court has chosen to grant review on several antitrust cases in the last couple of years and has generally expressed skepticism at per se approaches in favor of a more nuanced, supposedly fact-based approach.  Some of these cases involved quite narrow or specific factual circumstances, however, and may not be the harbinger for revolutionary change.  Of considerable interest is the change of position on some key issues by the Department of Justice and differences of opinion between some of the enforcers at Justice and the FTC.

Antitrust analysis is likely to proceed but clearance with only potential commitments to treat other pharmacies fairly is likely

November 7, 2006

Analysis of:CVS Buying Caremark for About $21.2B | biz.yahoo.com

This merger is likely to attract a thorough antitrust review by the FTC because of that agency's concern with pharmaceutical sales and distribution generally, the magnitude of the transaction, and the fact that it may be a harbinger of future transactions of a similar nature.  The antitrust bar differs as to how extensive the review will be, but it seems unlikely at the end of the day that the deal will not go through.

Treble damages in Rico suits intended as deterrent and to stimulate enforcement

November 7, 2006

Analysis of:Vivendi sues T-Mobile for fraud | www.ft.com

The question has been asked about the reasons behind treble (triple) damages in RICO private lawsuits.  The reasons were borrowed from antitrust law although damage calculations and determinations of injury are different.

Antitrust analysis alone would be unlikely to affect this deal but politics might

October 31, 2006

Analysis of:NFU Meets with DOJ on Smithfield Acquisition | www.wisconsinagconnection.com

The DOJ will conduct a thorough review of this proposed merger, as the parties have clearly expected and several influential midwestern Senators have virtually demanded by threatening to hold hearings of their own.  At most this appears to be a borderline situation that would be unlikely to lead to substantial restructuring  on normal antitrust antitrust analysis alone.  At the end of the day it is unlikely that the DOJ would be pressured into taking more than token action and the Congress is not going to pass special legislation because of this deal, but query whether the merging parties will do something to appease local interests to allow the deal to be done sooner.

Standards for discounting on bundle of products still unclear

October 6, 2006

Analysis of:Johnson & Johnson Wins Antitrust Suit | dealbook.blogs.nytimes.com

This case involves the concept of bundled discounts which are a common practice in the pharmaceutical industry.  An antitrust issue arises when a company gives discounts or rebates based on purchases of a broad line of products which a producer of a single product or limited group of products claims makes it too difficult to compete fairly because if all the discounts are applied against that limited product offering it is hard to make highly profitable sales.  There is a lot of uncertainty in this area because of a case in the Third Circuit which held a company liable for this practice without any standards or any showing that the discounts or rebates be below cost.  The Department of Justice disappointed many antitrust lawyers by suggesting that the Supreme Court not grant certiorari to review the case, and the Court subsequently declined to review it.  Other courts have reached inconsistent decisions on what the legal standard should be.

AMD antitrust case against Intel will probably go to trial without allegations concerning foreign sales

October 5, 2006

Analysis of:AMD Antitrust Case Against Intel Set For Trial in 2009 | www.techweb.com

The court has ruled that AMD has no standing to pursue its claims in the US courts involving foreign sales.  Under this ruling, the scope of its case, though still substantial, is much reduced, and the scope of discovery should be somewhat simplified.  Although AMD will probably not be able to pursue these claims, including treble damage claims until and unless gets the ruling reversed in the future, it is pursuing relief before various agencies around the world.  None of those proceedings, however, would be likely to produce the potential damge award that might be available in a US court.

AMD's Continuing Legal Attack on Intel

September 22, 2006

Analysis of:AMD's Ruiz: Intel continues to abuse monopoly | news.com.com

AMD's case against Intel in the federal District of Delaware continues, and AMD continues publicly to emphasize its claims against Intel.  This is part of its strategy to challenge Intel in courts and agencies around the world.  A brief update on the case and some of the issues it presents in the US follows.

HCA buyout by investor group does not raise antitrust concerns

August 25, 2006

Analysis of:HCA Buyout Gets Antitrust OK | online.wsj.com

For the leveraged buyout of HCA by a consortium of investment firms, the FTC granted early termination of the waiting period during which antitrust review occurs.  This is a recognition by the government antitrust enforcers -- not surprisingly -- that there is no antitrust or competition-based impediment to the deal going forward.  The deal still must be approved by shareholders.  The more difficult antitrust issue may arise if the investment group subsequently seeks to sell the business to another entity in the same or closely related fields, particularly an issue with geographic overlap.

FTC to modify Rambus chip technology licenses

August 11, 2006

Analysis of:Rambus Had Monopoly On Chip Technologies, FTC Rules | www.businessweek.com

The FTC has unanimously found that Rambus violated Section 5 of the Federal Trade Commission Act in failing to disclose patents and patent applications at the time a standard-setting policy made decisions to adopt standards which Rambus claims are covered by the undisclosed patents.  The Commission will in a few months decide what remedy is appropriate, including whether Rambus may continue enforcing or charging royalties for all its patents and what a fair royalty should be going forward.  The decision does not directly expose Rambus to damages, does not sanction it for spoliation of evidence as the FTC staff had advocated, and will probably be appealled by Rambus if the FTC imposes remedies that are at all severe.  Rambus has largely won on fraud and monopolization theories based on similar factual allegation in the courts.

Senate bill to permit limited reimportation of Rx drugs from Canada--a drop in the bucket

August 2, 2006

Analysis of:Senate Approves Canadian Prescription Imports | www.boston.com

Legislation already exists that would authorize reimportation of pharmaceuticals on a larger scale if Health and Human Services makes certain certifications as to assurance of safety and strict and somewhat expensive recordkeeping and safety measures are taken.  HHS has never made that certification, and reimports are currently illegl and also constitute patent infringement under a Federal Circuit reinterpretation of patent law a few years ago.

The proposed legislation would only authorize reimportation from Canada and only for US citizens for individual use with a presecription, thus seemingly precluding bulk shipment to commercial enterprises for redistribution and having a relatively modest overall impact on drug pricing.  The bill affects only imports of approved drugs from Canada and thus would not authorize imports from other parts of the world, which have increasingly become sources for both gray market and outright counterfeits.  
    

Divestiture order places some burdens on Mittal

August 2, 2006

Analysis of:UPDATE 1-Mittal deal for Arcelor gets US antitrust approval | today.reuters.com

Mittal has agreed to a consent decree in connection with its acquisition of Arcelor that requires it to divest Arcelor's Defalco mill or, if that cannot be done, one of three U.S. mills that would be selected by the Department of Justice.  A question has been raised about the scope of Mittal's obligation and how much freedom it has to pick and choose among plants that it wishes to divest.  The answer is that Mittal must try to accomplish the Defalco mill and only then does the option to dispose of an alternate tin mill exist; the alternate mill would be chosen by the Government, not Mittal.

Potential Damages for Memory-Chip price Fixing

July 31, 2006

Analysis of:34 States Allege Memory-Chip Price Fixing | sacramento.bizjournals.com

A number of memory-chip manufacturers have pleaded guilty in the United States to price-fixing over a several year period   These companies have now been sued by the Attorney General of California and thiry-three other state AGs for treble damages under US and state antitrust law on behalf of government entities and in class actions on behalf of millions of consumers who purchased computers and other products containing the allegely price-fixed chips.  It is unlikely that the companies will win on liability grounds. But the extent of damages will be hotly disputed and probably not resolved for some time -- though at the end of the day, substantial but not ruinous settlement payments seem a likely result.

Congress urged to clear path for generic drugs

July 24, 2006

Analysis of:Congress urged to clear path for generic drugs | webcenter.netscape.compuserve.com

Authorized generics deliver concrete and substantial savings to consumers during the 180-day generic exclusivity period. But opponents, including FTC Commissioner Jon Leibowitz, observe that generics rely on the high profits they may earn during the 180-day exclusivity period to recoup their investment in mounting a patent challenge. The critics argue that Congress granted exclusivity as an incentive for more generics to enter the market and that the incentive is undermined when the additional profits resulting from reduced generic competition must be shared with a second generic.

FTC attack on Texas Realtors

July 24, 2006

Analysis of:FTC Accuses Austin Realtors Board of Anticompetitive Measures | www.dallasnews.com

The FTC has challenged Texas real estate brokers for steps taken to limit discount brokers and other innovative services from access to on-line listings and services that are increasingly esssential to the business.  The FTC has been challenging similar restrictions in the professions for a long period of time, etither through administrative proceedings or through comments on state legislation that would protect professions (including the legal profession) from new, lower cost competiton unless the private rule or government regulation is clearly necessary to protect competition.

Merger Review Chaos in Europe

July 14, 2006

Analysis of:Europe court annuls Sony-Bertelsman alliance | www.marketwatch.com

The European Court of First Instance has complicated the European merger review process by throwing out the decision of the European Commission approving the Sony-Bertelsman merger against an attack by an industry participant.  This decision will lead to even more extensive merger reviews and greater expense and uncertainty as private parties challenge decisions not to challenge a transaction or allow it to go forward with certain conditions. 

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