On September 27, FirstGroup plc entered into a settlement agreement with the DOJ for First Group to sell off a large school bus contract and associated assets in Alaska in order to progress with its acquisition of Laidlaw International Inc. Without the settlement agreement, the DOJ believed the transaction raised competition concerns in the provision of school bus transportation in Anchorage, Alaska. First Group and Laidlaw contract with school districts throughout the United States to provide school bus transportation services.
FTC ADVISES ROCHESTER PHYSICIAN ORGINIZATION IT WILL NOT RECOMMEND ANTITRUST CHALLENGE TO PROPOSAL FOR "CLINICAL INTEGRATION" PROGRAM
On September 21, 2007, Federal Trade Commission advised the Greater Rochester Independent Practice Association, Inc. (GRIPA), that it had no present intention to challenge the organization’s planned conversion to a non-exclusive physician network joint venture. GRIPA requested a staff advisory opinion regarding its proposal to combine and coordinate the provision of medical services to patients.
On September 20, 2007, Mr. Jacobi, the president and owner of Jacobi Industries Inc., pled guilty to a felony charge of conspiring to rig bids on U.S. Department of Defense (“DOD”) contracts for military tiedown equipment and cargo securing systems. Under the plea agreement, Mr. Jacobi agreed to pay a criminal fine of $20,000, and to cooperate with the Department's ongoing criminal investigation. Mr. Jacobi could also serve up to six months in prison.
On September 19, 2007, the European Commission (the “Commission”) adopted a package of proposals in order to reform the EU electricity and gas regulatory frameworks. The main proposals concerned unbundling, third country ownership and enhancing the power and independence of national regulators.
The Commission considers that existing legislation allowed companies to maintain network operations and supply and generation activities within a single vertically integrated legal entity and that this legislation damages the EU’s competitiveness. The Commission is therefore proposing new directives concerning the electricity and gas internal markets.
On September 17, Thomas O. Barnett, Assistant Attorney General for the Department's Antitrust Division, issued a statement scrutinizing the Court of First Instance of the European Communities (“CFI) decision to affirm the substance of the European Commission's (“EC”) March 2004 decision against Microsoft. Mr. Barnett said that “in light of the United States' own antitrust case and judgment against Microsoft, and the importance of the computer industry to consumers and to the global economy, the United States has a particular interest in the CFI’s decision.” He expressed concern that “the standard applied to unilateral conduct by the CFI, rather than helping consumers, may have the unfortunate consequence of harming consumers by chilling innovation and discouraging competition.” He reiterated that there appeared to be a common disconnect between U.S. antitrust enforcement and European antitrust enforcement. "In the United States, the antitrust laws are enforced to protect consumers by protecting competition, not competitors. In the absence of demonstrable consumer harm, all companies, including dominant firms, are encouraged to compete vigorously. U.S. courts recognize the potential benefits to consumers when a company, including a dominant company, makes unilateral business decisions, for example to add features to its popular products or license its intellectual property to rivals or to refuse to do so.” There is a perception that European antitrust regulators are more willing to accept arguments from competitors and seek enforcement remedies that help competitors rather than consumers. The U.S. antitrust agencies are more skeptical of competitor complaints. Mr. Barnett also commented that the DOJ “looks forward to continuing its wide-ranging and positive relationship with the EC on antitrust matters.”
THE COURT OF FIRST INSTANCE ESSENTIALLY UPHOLDS THE EUROPEAN COMMISSION'S DECISION AND FINDS THAT MICROSOFT ABUSED ITS DOMINANT POSITION
In a ruling released on September 17, 2007, the Court of First Instance (the “Court”), the second highest court in Europe, reaffirmed the European Commission’s (“EC”) 2004 decision that Microsoft abused its market power by tying its digital media player to the Windows operating system. By bundling these products together, Microsoft undercut existing competition in the digital media player market and created an anticompetitive market structure. The Court upheld nearly all the key points the 2004 EC decision and, in doing so, delivered a stinging rebuke to Microsoft. The Court’s ruling stated that the EC’s standard of interoperability between the Windows operating system and alternative digital media players was well conceived and that there is no inconsistency between that degree of interoperability and the remedy imposed by the EC.
The Court also upheld the EC directive to share confidential computer code with Microsoft’s competitors, a ruling that contains possible ramifications on other companies that possess market dominance in various software markets. The Court went on to declare that the EUR 497 million ($690 million) fine levied against Microsoft shall stand as is.
FORMER SALES REPRESENTATIVE IN CALIFORNIA CONVICTED FOR ROLE IN SCHEMES TO DEFRAUD THE FEDERAL E-RATE PROGRAM
On September 14, a federal grand jury in San Francisco convicted Judy Green, of Temecula, California, a former sales representative for her role in schemes to defraud the federal E-Rate program. Ms. Green was convicted on all charges in a 22-count indictment involving fraud, collusion, aiding and abetting, and conspiracy in connection with E-Rate projects at schools in seven states — Arkansas, California, Michigan, New York, Pennsylvania, South Carolina, and Wisconsin.
On September 13, a Fort Lauderdale, Florida federal grand jury returned an indictment charging two individuals in a conspiracy to rig bids fix prices and allocate market shares for sales of marine hose used to transport oil.
The indictment, filed in the U.S. District Court in Fort Lauderdale, Florida, charged Francesco Scaglia and Val M. Northcutt with participating in a conspiracy to suppress and eliminate competition by rigging bids, fixing prices, and allocating market shares for sales of marine hose in the United States and abroad.