On November 26, 2012, the Federal Trade Commission (“FTC”) announced that it will allow Robert Bosch GmbH (“Bosch”) to acquire SPX Service Solutions, U.S. LLC (“SPX”) after Bosch entered into a settlement agreement that resolves the FTC’s allegations that Bosch’s acquisition of SPX, as originally proposed, would have been anticompetitive. In addition, Bosch and the FTC entered into a settlement agreement resolving anticompetitive conduct that occurred prior to the announcement of the acquisition.
Believe it or not, but on September 25, 2012, the Democrats and Republicans got sued in United States District Court for the Central District of California. They are accused under the antitrust laws of monopolizing the market for televised presidential debates in the United States by controlling the field of candidates in the race for president and vice president.
On July 31, 2012, the Federal Trade Commission (Commission) issued a statement withdrawing the Commission’s nine-year-old Policy Statement on Monetary Equitable Remedies in Competition Cases (Policy Statement). The statement’s withdrawal was approved on a 4-1 split vote, with Commissioner Maureen K. Ohlhausen casting the lone no vote and issuing a dissenting opinion.
On July 16th, the Third Circuit Court of Appeals ruled that pharmaceutical “pay-for-delay” settlements whereby cash is paid from a patent holding company to a generic manufacturer that agrees not to enter a market as prima facie evidence of an antitrust violation. The Third Circuit rejects the more lenient standard adopted by the other Circuit Courts. With the circuit courts split on the issue, the issue is now ripe for Supreme Court review.
On June 27th, 2012, the 7th Circuit established elements extending the reach of United States antitrust law to certain cases where foreign companies engage in anticompetitive conduct outside the United States. (Minn-Chem, Inc., et al., v. Agrium Inc., No. 10-1712, slip op. (7th Cir. June 27, 2012)).
In June 2009, the Federal Trade Commission (“FTC” or “the Commission”) authorized the staff to conduct an investigation to determine whether Church & Dwight was using exclusionary practices such as conditioning discounts or rebates to retailers on the percentage of shelf or display space dedicated to Trojan brand condoms and “other products” sold and distributed by Church & Dwight.
In light of the Department of Justice’s attempt to block telecom giant, AT&T from acquiring T-Mobile, the Hudson Institute recently released a report discussing antitrust policy as it applies to the growth of innovation. See Irwin Stelzer, Antitrust Policy in an Age of Rapid Innovation, BRIEFING PAPER (Hudson Inst., Washington, D.C.) Oct. 2011.
On September 23, 2011, the Seventh Circuit Court of Appeals dismissed a case brought by a group of corporations that filed an antitrust suit against the major players in the potash industry, ruling that plaintiffs failed to allege specific facts sufficient to plead a plausible “direct, substantial, and reasonably foreseeable” connection between the alleged foreign anticompetitive activity and the domestic potash market. As the Foreign Trade and Antitrust Improvements Act (“FTAIA” or “Act”) develops through case law, antitrust lawyers and academics hoped that this latest case, Minn-Chem Inc. v. Agrium Inc., would provide more guidance in interpreting the Act’s three-step test. However, it seems that this case spurred more questions than answers.
The FTAIA limits enforcement of U.S. antitrust laws in situations where there are no clear effects on U.S. consumers. The Act aims to regulate foreign trade or commerce with foreign nations via a three-step test: (1) Did the conduct involve U.S. import trade or import commerce? (2) If not, does the conduct involve trade with foreign nations? and (3) If the conduct involves trade with foreign nations, does it have a “direct, substantial, and reasonably foreseeable effect” on the U.S. market?
Judge William H. Pauley III of the United States District Court for the Southern District of New York entered final judgment in a review of a consent order under the Tunney Act and ruled that disgorgement was a proper remedy in a Sherman Act case involving manipulation of electricity rates in New York City.
On October 18, 2010, the U.S. Department of Justice (“DOJ”) and the Michigan Attorney General challenged Blue Cross Blue Shield (“BCBS”) of Michigan in a civil antitrust action. The complaint alleges that “most-favored nation” (“MFN”) clauses in BCBS contracts with Michigan hospitals raises health-care costs for Michigan residents and employers and excludes other insurers from the Michigan health-care market. United States v. Blue Cross Blue Shield of Michigan, No. 2:10-cv-14155-DPH-MKM (Mich. E. Dist. Oct. 18, 2010).
On October 4, 2010, the Antitrust Division announced that it along with the states of Connecticut, Iowa, Maryland, Michigan, Missouri, Ohio, and Texas filed a civil antitrust lawsuit in U.S. District Court for the Eastern District of New York challenging rules that American Express, Master Card, and Visa have in place that prevent merchants from offering consumers discounts, rewards and information about card costs, ultimately resulting in consumers paying more for their purchases.
On April 29, 2010, a panel of three judges at the Second Circuit Court of Appeals gave hope to the opponents of pay-for-delay settlements, when the Court’s decision invited plaintiffs-appellants of Arkansas Carpenters Health and Welfare Fund v. Bayer AG to petition for an en banc rehearing of the case. On September 7, 2010, however, the Court denied Appellants’ petition without providing any reasoning.
In the State of California v. Safeway, Inc. (“California v. Safeway”), the United States Court of Appeals for the Ninth Circuit answered the question of whether the non-statutory labor exemption excused a profit-sharing agreement that would ordinarily violate the antitrust laws. The Court found that the exemption did not excuse the agreement, because the functioning of the collective bargaining process did not require it. Instead, the agreement constituted “an economic weapon used by the employers in their efforts to prevail in a labor dispute.”
On July 12, 2010, the California Supreme Court addressed the issue of “whether under the Cartwright Act an antitrust defendant can defeat liability by asserting a pass-on defense.” Clayworth v. Pfizer, Inc., No. S166435, 2010 WL 2721021 (Cal. July 12, 2010). The Cartwright Act is California’s state antitrust law. Unlike federal law, which limits antitrust damage claims to “direct purchasers,” the Cartwright Act allows indirect purchasers as well to sue on antitrust claims. In a unanimous decision, the California Supreme Court held consistent with federal law that California law bars a pass-on defense in most circumstances, even though both direct and indirect purchasers may sue for treble damages.
On June 14, 2010, Federal Trade Commission Chairman, Jon Leibowitz, gave a speech to the American Medical Association in Chicago amid ongoing tension between the two groups with respect to antitrust regulation in the medical industry. In an effort to address the AMA’s concerns, and to bolster a more productive relationship between the organizations, Leibowitz offered an explanation of the FTC’s position on antitrust in the medical arena as well as some promising options for the future of healthcare regulation.
On June 15, 2010, Howard Shelanski, Deputy Director for Antitrust in the Bureau of Economics at the Federal Trade Commission, appeared before the House Committee on the Judiciary’s Subcommittee on Courts and Competition Policy and delivered a prepared statement on behalf of the Commission. In his appearance, Mr. Shelanski requested legislative action in light of the Supreme Court’s decisions in Verizon v. Trinko and Credit Suisse v. Billing . Both of these recent cases have implications for bringing antitrust actions in federal court in regulated industries.
On November 2, 2009, the Federal Trade Commission (“FTC”) released an opinion stating that the Realcomp II (“Realcomp”), a real estate multiple listing service (“MLS”) serving southeast Michigan, took part in anticompetitive practices by restricting some of its members access to its database.
On September 18, the DOJ presented its a statement of its views regarding the proposed class action settlement between the American Association of Publishers and Google. As the parties continue to modify the settlement agreement, the DOJ issued a statement of interest to the court to provide the court with the Antitrust Division's concerns relating to a potential settlement.
On September 4, 2009, the Department of Justice (“DOJ”) announced that it would not challenge a joint purchasing agreement of certain medical supplies between Memorial Health, Inc (“Memorial”) and St. Joseph’s/Candler Health System (“St. Joseph’s/Candler”). The efficiencies produced by the joint purchasing agreement will reduce transactions for the hospitals and will result in lower costs and increased hospital services to consumers.
Memorial and St. Joseph's/Candler are 501(c)(3) non-profit organizations that own acute tertiary care hospitals in Savannah, Ga., that serve Southeast Georgia and the low-country area of South Carolina. Memorial owns and operates the Memorial Health University Medical Center. St. Joseph's/Candler owns and operates St. Joseph's Hospital and Candler Hospital.
On August 5, 2009, Attorney General Eric Holder and Agriculture Secretary Tom Vilsack announced that the Department of Justice and the U.S. Department of Agriculture ("USDA") will hold joint public workshops to explore competition issues affecting the agriculture industry and the appropriate role for antitrust enforcement in agriculture. These are the first joint DOJ/USDA workshops ever to be held to discuss competition and regulatory issues in the agriculture industry.
On June 4, 2009, Alta Bates Medical Group, Inc. ("Alta Bates"), a 600-physician independent practice association serving the Berkeley and Oakland, California, area, agreed to settle Federal Trade Commission charges that it violated the antitrust laws by fixing prices charged to health care insurers. The proposed consent order agreed to by the doctor group and the FTC prohibits Alta Bates from collectively negotiating fee-for-service reimbursements and engaging in related anticompetitive conduct.
On May 11, 2009, Christine A. Varney, Assistant Attorney General in charge of the Department's Antitrust Division, delivered her first speech at an event sponsored by the Center for American Progress. The speech, entitled "Vigorous Antitrust Enforcement in this Challenging Era," confirms that the new administration intends be much more active role than the Bush administration in terms of antitrust enforcement. Her speech primarily focused on the Department's approach to enforcing Section 2 of the Sherman Act, which prohibits monopolization or attempts to monopolize.
BRISTOL-MYERS TO PAY $2.1 MILLION FOR FAILURE TO DISCLOSE AGREEMENT TO DELAY GENERIC ENTRY OF PLAVIX
On March 26, 2009, Bristol-Myers Squibb Company ("BMS") agreed to pay a fine of $2.1 million for failing to inform the Federal Trade Commission of oral agreements reached with Apotex, Inc., regarding potential generic competition to its drug Plavix. BMS’s conduct violated a 2003 FTC Order and the Medicare Modernization Act, which requires that certain patent lawsuit settlment agreements be accurately reported to both the Commission and the U.S. Department of Justice ("DOJ"). The complaint alleges that BMS failed to disclose that, as part of a patent settlement in which Apotex agreed not to launch its generic version of Plavix for several years, BMS also orally said that it would not compete with Apotex during the first 180 days after Apotex entered with its new generic drug.
On July 16, 2008, the European Commission (“EC”) announced that it would expand its investigation of the Intel Corporation by filing new antitrust charges. The charges allege that Intel provides inducements, such as discounts, rebates, and marketing payments, to computer manufactures discouraging them to use chips made by Intel’s smaller rival Advanced Micro Devices (“AMD”). Intel’s ubiquitous x86 chips are found in 75 percent of all personal computers and low-cost servers.
On June 2, 2008 Chancellor William B. Chandler III of Delaware decided to unseal the complaint in a case brought by two pension fund shareholder groups against Yahoo and its Board of Directors. The plaintiffs accused the Yahoo Board of Directors, especially CEO Jerry Yang, of violating their fiduciary duties and enacting barriers such as a severance package for employees to thwart an acquisition by Microsoft.
DEPARTMENT OF DEFENSE CONTRACTORS ARRESTED FOR CONSPIRING TO STEAL INFORMATION ON FUEL SUPPLY CONTRACTS
Two U.S. Department of Defense (“DOD”) contractors were arrested in New York City on January 6, 2008, and charged with conspiring to steal information relating to DOD contracts to supply fuel to DOD aircraft worldwide. Two contractor firms and a third individual are also charged with participating in the conspiracies. The Department said the conspiracies took place from about February 2005 to about July 2006.
On November 7, 2007, the Department of Justice announced that Mister A.C. Ltd. (Mister A.C.), a Rockville Center, N.Y. heating, ventilation and air conditioning (HVAC) services company and its owner, Michael Vignola, pleaded guilty in U.S. District Court in Manhattan for rigging bids to NYPH from approximately 2002 until January of 2006. Mr. Vignola also pled guilty to one count of conspiracy to defraud NYPH by paying kickbacks to NYPH employees from approximately 2001 until January 2006.
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 January 8th, a payment processor violated federal law when it debited, or tried to debit, more than $9.9 million from consumers’ bank accounts – at $139 each – without their approval. According to a complaint the FTC filed in federal court, Nevada-based InterBill Ltd. acted on behalf of a fraudulent enterprise known as “Pharmacycards.com.” In 2004 the FTC charged Pharmacycards with debiting millions of dollars from consumers’ checking accounts, without their consent, for nonexistent discount pharmacy cards.
Federal Trade Commission Reaches New Year’s Resolutions with Four Major Weight-Control Pill Marketers
The FTC filed complaints on January 4th, in four separate cases alleging that weight-loss and weight-control claims were not supported by competent and reliable scientific evidence. Marketers of the four products –Xenadrine EFX, CortiSlim, TrimSpa, and One-A-Day WeightSmart –settled with the FTC, surrendered cash and other assets worth at least $25 million, and agreed to limit their future advertising claims.
On December 29, the Federal Trade Commission announced its decision to challenge the conduct of several organizations representing more than 2,900 independent Chicago-area physicians for agreeing to fix prices and for refusing to deal with certain health plans except on collectively determined terms. The FTC’s complaint charges that the actions of Advocate Health Partners (“AHP”) and other related parties unreasonably restrained competition in violation of Section 5 of the FTC Act. The consent order settling the FTC’s charges prohibit the respondents from engaging in such anticompetitive conduct in the future.
On November 28, a Florida business and its owner, who marketed purported height-enhancing pills for kids and young adults, agreed to pay $375,000 to settle charges that their advertising claims were deceptive. The Federal Trade Commission charged the defendants with making false and unsubstantiated claims for HeightMax, as well as for two other supplements, Liposan Ultra Chitosan Fat Blocker and Osteo-Vite.
On November 16, Guidance Software Inc. agreed to settle Federal Trade Commission charges that its failure to take reasonable security measures to protect sensitive customer data contradicted security promises made on its Web site and violated federal law. According to the FTC, Guidance’s data-security failure allowed hackers to access sensitive credit card information for thousands of consumers. The settlement will require the company to implement a comprehensive information-security program and obtain audits by an independent third-party security professional every other year for 10 years.
Federal Trade Commission Chairman Deborah Platt Majoras announced on November 14 that Mary Beth Richards will join the agency as Deputy Director of the Bureau of Consumer Protection. Richards comes to the FTC from the Federal Communications Commission, where she served as Deputy Bureau Chief and Chief of Staff in the Consumer and Governmental Affairs Bureau.
On November 13, a U.S. District Court shut down an operation that secretly downloaded multiple malevolent software programs, including spyware, onto millions of computers without consumers’ consent, degrading their computers’ performance, spying on them, and exposing them to a barrage of disruptive advertisements. The Federal Trade Commission asked the court to order a permanent halt to these deceptive and unfair downloads, and to order the outfit to give up its ill-gotten gains.
A company that sent unsolicited commercial e-mail after consumers asked it to stop agreed to pay a $50,717 civil penalty on November 6 to settle Federal Trade Commission charges that it violated federal law. The FTC charged Yesmail Inc., doing business as @Once Corporation, with sending e-mail on behalf of its clients more than 10 business days after recipients asked it to stop.
On November 3, Zango, Inc., formerly known as 180solutions, Inc., one of the world’s largest distributors of adware, and two principals agreed to settle Federal Trade Commission charges that they used unfair and deceptive methods to download adware and obstruct consumers from removing it, in violation of federal law. The settlement bars future downloads of Zango’s adware without consumers’ consent, requires Zango to provide a way for consumers to remove the adware, and requires them to give up $3 million in ill-gotten gains.
On October 5, an Internet business that advertised and sold consumers’ phone records and records of credit card accounts to third parties agreed to settle Federal Trade Commission charges that it violated federal law. The settlement bars the defendants from obtaining or selling consumers’ confidential phone and credit account records unless authorized by law or court order’ and requires that they give up the money they made selling phone records in the past.
The Federal Trade Commission (“FTC”) sent letters on September 27, 2006 to 166 advertisers and 77 media outlets warning them that their advertisements targeting Hispanics are potentially deceptive. The ads were spotted during a one-day surf of Spanish-language newspaper, magazine, Internet, radio, and television advertisements by 60 partners around the United States and Latin America, coordinated by the FTC.
On September 20, 2006, the federal district court in Chicago ruled for the Federal Trade Commission (“FTC”) in its case against the marketers of the Q-Ray ionized bracelet following a bench trial earlier this summer. In a decision issued September 8, the court found that advertising by Que Te (Andrew) Park and his companies was false and misleading in representing that the bracelet provides immediate, significant, and/or complete pain relief, and that scientific tests proved that it relieves pain.
FCC’s First Auction of Advanced Wireless Services Spectrum Licenses Raises Total Gross Bids of Nearly $13.9 Billion
The FCC’s first auction of Advanced Wireless Service (“AWS”) spectrum licenses ended on September 18. A total of 1,122 licenses were offered in the auction, and 104 bidders won 1,087 licenses. The AWS licenses can be used to provide any of a wide array of innovative wireless services and technologies, including voice, data, video, and other wireless broadband services offered over Third Generation (“3G”) mobile networks.
The Federal Trade Commission (“FTC”) brought a permanent halt on September 14, 2006 to four illegal spamming operations – including one that offered the opportunity to “date lonely wives” and two that hijacked the computers of unwitting third parties and used them to pelt consumers with graphic sexually explicit e-mail. The FTC charged the operators with sending spam that violated provisions of the CAN-SPAM Act, and halted the illegal spamming.
On September 13, the competition regulator for the European Union clashed with Microsoft, this time over security upgrades in the company's new Windows Vista operating system. The European Commission, the European Union's executive arm, warned Microsoft against foreclosing competition in computer security by tying new security featrues into its Windows operating system. Both Symantec and Adobe, the U.S. software groups, raised concerns over the inclusion in Vista of software that rivals their own offerings.
On September 12, Deutsche Lufthansa said it would pay $85 million to settle 80 class-action lawsuits in the United States in a price-fixing inquiry involving its air cargo unit. The payment would release the airline and Swiss International Air Lines, which it is taking over, from pending lawsuits in the United States. The settlement is subject to court approval. Lufthansa Cargo is among nine airlines accused of violating antitrust laws by fixing prices in the $50 billion global air cargo market. The European Union and United States authorities requested information from at least 12 carriers in February; the inquiry focused on surcharges for fuel and security risks.
The European Commission (“EC”) enlarged the scope of its antitrust review of Intel on September 12 to investigate whether the company pressured an electronics retailer to exclude chips made by Advanced Micro Devices (“AMD”). The relationship between Intel, the world's largest chip maker, and the retailer, the Media Market division of the German company Metro, was being investigated by the Bundeskartellamt, Germany's competition agency, after a complaint by AMD. However, the EC is taking over the case because it is already looking at whether Intel pressured computer makers to prevent AMD from gaining market share.
On September 11, 2006, a federal judge ordered a magazine subscription seller to pay a civil penalty of more than $5.4 million and give up more than $1.6 million of his ill-gotten gains for violating a 1996 Federal Trade Commission (“FTC”) consent order and the FTC’s Telemarketing Sales Rule (“TSR”). This amount is the largest civil penalty the FTC ever obtained for a violation of a consent order in a consumer protection matter.
Social networking Web site operators Xanga.com, Inc. and its principals, Marc Ginsburg and John Hiler, will pay a $1 million civil penalty for allegedly violating the Children’s Online Privacy Protection Act (“COPPA”), and its implementing Rule, under the terms of a settlement with the Federal Trade Commission (“FTC” or “Commission”) announced on September 7, 2006. According to the FTC, Xanga.com collected, used, and disclosed personal information from children under the age of 13 without first notifying parents and obtaining their consent. The penalty is the largest ever assessed by the FTC for a COPPA violation, and is more than twice the next largest penalty.
The Federal Trade Commission today told the Senate Judiciary Committee that the agency protects health care consumers from anti-competitive conduct by enforcing antitrust laws, and that the FTC is committed to working with physicians and other providers to give them guidance to avoid antitrust pitfalls as they respond to market challenges.
On August 22, the manufacturer of a magnetic “fuel saving” and emissions-reduction device that did not save fuel or reduce emissions will pay $4.2 million to settle Federal Trade Commission (“FTC”) charges that his advertising claims were false. The FTC will seek to provide redress to consumers who bought the device based on the false advertising claims. In addition, the defendants will be banned from selling or manufacturing magnetic fuel savings and emissions reduction devices.
The Federal Trade Commission filed a complaint on August 15 in U.S. district court, seeking to halt an operation that downloads software barraging consumers with pop-ups demanding payment to make the pop-ups go away. The Office of the Attorney General of the State of Washington also sued the operators.
Internet Video Distributor VDC Complains to FCC about Inability to Secure Carriage Deals with Established Cable Networks
In an August 14 letter to the FCC, internet video distributor VDC Corp. (“VDC”), owner of VDC.com, complained that it is having difficulty securing carriage deals with established cable networks. While VDC.com distributes content from Discovery Communications, most of the company’s carriage deals are with smaller cable networks such as The Pentagon Channel and Mav TV. The broadband video site also carries home-shopping channels QVC and ShopNBC. VDC chairman Scott Wolf said that VDC plans to seek relief from the FCC “in the next few weeks” under the FCC’s program access rules. In his letter to FCC chairman Kevin Martin, Wolf alleges that some cable networks are balking at licensing their networks to VDC.com because of “external influence, mainly from the large [cable] MSOs.”
The Federal Trade Commission (“FTC”) announced on August 10 that it entered into a court settlement with Nomrah Records, Inc. and its president, Mark Harmon – named defendants in the recent DIRECTV telemarketing case. Under the settlement, filed by the U.S. Department of Justice on the FTC’s behalf, Harmon will pay a $75,000 civil penalty and both he and the company will be barred from violating the Do Not Call (“DNC”) Rule and Telemarketing Sales Rule (“TSR”) in the future.
On August 10, the Chinese government issued rules outlining the conditions for foreign investment in local companies through share swaps, paving the way for such transactions in merger and acquisition deals. The regulations also cover the entry of foreign investors in local companies through mergers and acquisitions.
An operation selling Chinese herbal supplements was banned on August 9 from claiming its products treated or cured diseases, to settle Federal Trade Commission (“FTC”) charges it violated a previous court order. The FTC alleged the sellers of Dia-Cope, a pill claimed to prevent, treat, and cure diabetes, violated the order by misrepresenting the health benefits of their product and misrepresenting that clinical trials proved their claims. The defendants will also give up their ill-gotten gains – all of the assets they received from the sale of Dia-Cope.
Justice Department Will Not Oppose Proposal to Form Textile Rental and Laundry Services Joint Venture
On August 8, the DOJ announced it would not oppose a proposal which would allow 10 textile maintenance companies to bid jointly to provide textile rental and laundry services to national healthcare outpatient centers. Based on representations made in the proposal by Linen Systems for Healthcare LLC, the DOJ concluded that the proposed joint venture is not likely to produce anticompetitive effects and could create a new competitor for national accounts.
Newly appointed FCC member Robert McDowell supports agency involvement to ensure that phone companies can enter local cable-TV markets without having to overcome a lot of red tape. On August 8, during his first meeting with reporters at FCC headquarters, McDowell said “I do think we can do a lot to help speed the deployment of video penetration and marry it up with that broadband penetration by clearing some of that regulatory underbrush.”
On August 7, the FCC reaffirmed its ruling that Time Warner Cable (“Time Warner”) had to carry the NFL Network for 30 days on systems just acquired from Comcast and Adelphia Communications. On August 4, Time Warner threatened to take the FCC to court if the agency did not back down and allow it to drop NFL Network. Following the release of the FCC’s second decision, Time Warner did not commit to a court fight over the need to provide consumers a 30-day notice before deleting a channel. “Time Warner Cable continues to believe that the FCC has misconstrued the notice rules and has ordered a remedy that is in clear violation of the First Amendment. The FCC's action has resulted in exacerbating, not avoiding, consumer confusion,” Time Warner spokesman Mark Harrad said.
The FTC and the Federal Reserve Board on August 7 issued a joint report to Congress on compliance with the consumer dispute provisions of the Fair Credit Reporting Act (“FCRA”). The Fair and Accurate Credit Transactions Act of 2003 (“FACT Act”), which generally amends the FCRA, required the FTC and the Board to conduct a study of the extent to which consumer reporting agencies and furnishers of information to consumer reporting agencies (“CRAs”) complied with certain FCRA requirements.
A company and its owner selling contact lenses directly to consumers via three Web sites are settling Federal Trade Commission (“Commission” or “FTC”) charges they violated federal law by failing to verify consumers’ prescriptions as required by the Commission’s Contact Lens Rule. They will pay $40,000 in civil penalties and will be prohibited from violating the Rule in the future.
By a unanimous vote, the Federal Trade Commission (“Commission” or “FTC”) determined on August 2 that computer technology developer Rambus, Inc. unlawfully monopolized the markets for four computer memory technologies incorporated into industry standards for dynamic random access memory (“DRAM”) chips. DRAMs are widely used in personal computers, servers, printers, and cameras.
Testifying on behalf of the Federal Trade Commission (“FTC”) before the U.S. Senate’s Special Committee on Aging, Commissioner Jon Leibowitz described the FTC’s work in the area of branded and generic pharmaceutical competition and discussed barriers that can lead to the delay of generic entry into the U.S. marketplace.
The Federal Trade Commission will host three days of public hearings to examine how evolving technology will shape and change the habits, opportunities and challenges of consumers and businesses in the coming decade. The event will bring together experts from business, government and technology sectors, consumer advocates, academicians, and law enforcement officials to examine emerging technologies and to explore technologies that are currently evolving.
On July 31, the U.S. District Court for the Northern District of Georgia barred a purported former preacher, his two sons, and his companies from selling a healthcare business opportunity promising consumers millions of dollars if they participated in an alleged network of Medicaid providers. In fact, according to the Federal Trade Commission (“FTC”) complaint, the defendants’ business model required participants to break numerous state and federal laws.
On July 28, the FCC issued a public notice in which its Wireless Telecommunications Bureau (“Bureau”) identifies 168 applicants found to be qualified to bid in the upcoming auction of Advanced Wireless Services licenses in the 1710-1755 MHz and 2110-2155 MHz bands (“AWS-1”) (Auction No. 66). Bidding in Auction No. 66 is scheduled to begin on Wednesday, August 9, 2006.
Canadian telemarketers settled Federal Trade Commission (“FTC”) charges on July 26 that they fraudulently marketed and sold credit card loss protection and healthcare discount plans to U.S. consumers in violation of federal law. Their telemarketing boiler rooms were shut down, and they will pay $200,000 in consumer redress as part of the settlement.
On July 25, the Federal Trade Commission (“FTC” or “Commission”) told the Subcommittee on Housing and Community Opportunity of the House Financial Services Committee that changes in the real estate industry, which increasingly incorporate the Internet into their business models, give consumers “the choice to save potentially thousands of dollars in commissions in exchange for taking on more work.” Maureen Ohlhausen, Director of the FTC’s Office of Policy Planning told the Committee that the Commission has a long history of preventing unfair methods of competition and ensuring that real estate markets remain competitive.
On July 18, Britain’s House of Lords overturned the Court of Appeal’s decision in Inntrepreneur Pub Company and others v Crehan, the first case in which a UK court awarded damages for harm suffered as a result of a competition law infringement. As a result, there is now no longer any UK law precedent in which damages for loss suffered as a result of an infringement of competition law have been awarded.
On July 18, Jacques Barrot, the European Commission’s (“Commission” or “EC”) Vice-President in charge of transport, announced the Commission’s intention to improve legislation in relation to the single market for aviation. While the Commission believes that the liberalization of the airline industry brought considerable benefits to consumers, such as reduced air fares, increased routes and greater access to remote regions, it notes that there is room to improve price transparency and the consistent application of legislation.
On July 17, the Commission published its second Interim Report in relation to the retail banking part of its sectoral inquiry into the financial services sector in the Community. The first Interim Report dealt with the payment cards and the second Report covers Current Accounts and Related Services.
Competitors, Regulators, and Law Enforcement Officials Seek Halt Sale of Verizon’s Puerto Rico Telecom Assets
Also on July 14, several parties asked the FCC to deny license transfers related to the proposed sale of Verizon Communications, Inc.'s (“Verizon”) Puerto Rico telecom assets – including the incumbent local exchange carrier and its second largest wireless service operator – to America Movil S.A. de C.V. (“American Movil”). Competitors are concerned that the new operators will block the development of competition, regulators in Puerto Rico are dubious of the proposed deal's public-interest claims, and law enforcement officials want more time to examine national security and other questions.
On June 19, the DOJ announced that it will not challenge a proposal by the Fair Factories Clearinghouse (“FFC”) to operate a database that member companies can use to collect and voluntarily share information about workplace conditions in manufacturing facilities around the globe. The DOJ's position was stated in a business review letter from Thomas O. Barnett, Assistant Attorney General in charge of the Department's Antitrust Division, to counsel for the FFC and World Monitors Incorporated.
On May 23, the South Korean Fair Trade Commission ("KFTC") rejected an objection lodged by Microsoft in March over a ruling that the company should unbundle its media player and messaging service from Windows software, echoing a similar decision made by the European Commission in 2004 that it unbundled its media player and messaging program in its European software packages. In December 2005, the KFTC fined Microsoft approximately $34.3 million, the largest fine ever imposed on a foreign firm.
On May 22, it was reported that FCC Chairman Kevin Martin is putting pressure on senior agency staff to complete their review of the $17.6 billion carve-up of Adelphia Communications Corp. (“Adelphia”) by Comcast Corp. (“Comcast”) and Time Warner Inc. (“Time Warner”). According to sources close to the agency, Martin hopes to receive a draft of an order clearing the transaction, with some conditions, before the end of May. If Martin signs off, that order would then be distributed to the four other FCC commissioners. Martin expects his colleagues would approve the deal a few weeks later.
On May 16 and May 17, the Japanese Fair Trade Commission (FTC) raided approximately 20 contractors over bid-rigging allegations in projects ordered by the Japanese Defense Facilities Administration Agency as well as engineering and construction works at a U.S. military facility in Iwakuni, Yamaguchi Prefecture in conspiracy with officials of the Defense Facilities Administration Agency.
On May 16, the European Commission raided 20 gas companies across five countries following suspicions that the targeted firms restricted “access to pipeline and storage facilities” and engaged in certain “concerted practices between incumbents that can be described as market-sharing,” according to an EC spokesperson. Among the companies raided were Germany’s RWF, France’s Gaz de France, Austria’s OMV, and Belgium’s Fluxys. Companies in Italy were also raided.
On May 15, the DOJ announced that David L. Meyer has been appointed to serve as the Deputy Assistant Attorney General in charge of civil enforcement for the Division. Meyer will oversee three of the Division's civil sections. Previously, Meyer served the Antitrust Division as Special Assistant to Assistant Attorney General Charles F. Rule from 1987 to 1989. Meyer clerked for Judge Ralph K. Winter of the U.S. Court of Appeals for the Second Circuit from 1986 to 1987.
On May 12, the DOJ told the U.S. District Court for the District of Columbia that it is necessary to extend the term of certain portions of the Microsoft final judgment by at least two years. The DOJ said that an extension is necessary due to Microsoft's difficulty in improving the technical documentation it provides to licensees. Section III.E of the final judgment requires that Microsoft make available to competing server software developers, on reasonable and non-discriminatory terms, certain technology used by Microsoft to make its server operating systems interoperate with client PCs running the Windows operating system. The DOJ has stated that its goal is to make the technical documentation being developed by Microsoft as consistent as possible under the final judgment in the United States and under the licensing program provided for by the decision of the European Commission.
On May 11, Italy’s antitrust authority ruled that Prime Minister Berlusconi did not violate conflict of interest rules when his government approved subsidies to Italians who purchase digital television decoders. While critics of the subsidies claimed that they favored Mediaset SPA, Berlusconi’s own television broadcasting empire, the antitrust authority found that the €10 million ($12.7 million) went to two of Italy’s 20 regions and were to pay for only certain types of decoders, meaning that the overall financial impact on the market was minimal. The European Commission is also investigating the matter due to concerns that the grants distort fair business competition because they are available only for traditional broadcast television and not satellite broadcasts.
On May 9, a judge with the U.S. Court of Appeals for the D.C. Circuit raised questions about EarthLink, Inc.'s (“EarthLink”) assertion that the FCC erred when it stopped requiring the Bell operating companies (“BOCs”) to make available unbundled network elements for the broadband market because there isn't any competition in the sector. The judge noted that telcos are not the leading provider of high-speed Internet services nationally. Judge David B. Sentelle asked EarthLink attorney Mark O'Connor how the Bells could be the dominant player in the market, as the Internet service provider charged, when they have less of the market than cable modem service providers.
Speaking to the Tennessee Telecommunications Association on May 2, FCC Commissioner Deborah T. Tate said that any revamping of the 1996 Telecommunications Act should include language that permits the government to play a limited role in creating fair rules, while allowing the marketplace to drive industry development and innovation in such areas as broadband and advanced services. According to Tate, ensuring competition is an important goal for any telecom bill passed by Congress this year. While some regulation is necessary, it has to let companies “take into account their business plans and the economic realities they face” so they can operate their business, she said. “A light regulatory touch is particularly critical to encouraging the deployment and use of broadband.”
On April 27, the DOJ announced that Assistant Attorney General Thomas O. Barnett will participate in the fifth annual International Competition Network (“ICN”) Conference in Cape Town, South Africa, on May 3-5, 2006. At the conference, senior antitrust officials and private antitrust experts from around the world as well as representatives from intergovernmental organizations will meet to discuss competition issues. The ICN conference will focus on the recent work of its four substantive working groups – (1) Cartels, (2) Mergers, (3) Antitrust Enforcement in the Telecommunications Sector, and (4) Competition Policy Implementation. ICN member agencies participate in these project-oriented working groups to address policy and enforcement issues and formulate proposals for ICN consensus. Private sector experts and intergovernmental organizations are active participants in the working groups. Conference discussions will address the issues considered by the four working groups and will include: obstruction of justice in cartel investigations; digital evidence gathering; the interaction of public and private enforcement in cartel investigations; the analytical framework for merger review; suggested best practices in antitrust enforcement in the telecommunications sector; and the promotion of competition policy in developing and transition economies. Participants will also discuss the implementation of the ICN Recommended Practices for Merger Notification and Review Procedures and other ICN work product.
On April 24th, the Federal Trade Commission’s Bureau of Competition issued a summary of agreements filed with the Commission in fiscal year 2005 (ending September 30, 2005) by generic and branded drug manufacturers. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires drug companies to file certain agreements with the FTC and the U.S. Department of Justice. The summary provides information regarding the 20 agreements that were filed with the FTC in FY 2005, involving 16 different products. It also compares FY 2005 data with those received in FY 2004 and with findings of the Commission’s 2002 study entitled “Generic Drug Entry Prior to Patent Expiration.”
On March 29th, the Federal Trade Commission announced its intention to conduct a study of the use, and likely short- and long-term competitive effects, of authorized generics in the prescription drug marketplace. An authorized generic is chemically identical to a particular brand-name drug, but the brand-name manufacturer authorizes it to be marketed in a generic version. This study continues the FTC’s research and development efforts to identify and report on marketplace trends and developments that affect the price of prescription drugs. Comments on the FTC’s “Authorized Generic Drug Study” were accepted until June 5, 2006. The Commission also authorized the staff to use compulsory process to collect the information needed for the study from approximately 80 brand-name drug manufacturers, 10 authorized generic companies, and 100 independent generic manufacturers.
On March 28th, Federal Trade Commission Chairman Deborah Platt Majoras announced the appointments of two new deputy directors of the FTC’s Bureau of Competition. Kenneth L. Glazer joins the agency from The Coca-Cola Company, and David P. Wales, Jr. from Cadwalader, Wickersham & Taft LLP’s Washington office.
On March 27th, Federal Trade Commission Chairman Deborah Platt Majoras kicked off an International Competition Network workshop to discuss the implementation of the ICN’s recommended practices for merger notification and review. These standards are designed to make the process for reviewing mergers more effective and efficient for both the merging parties and the sometimes multiple agencies reviewing the merger. Participating in the two-day workshop in Washington, DC, hosted by the FTC and the Department of Justice’s Antitrust Division, were nearly 100 delegates from 35 jurisdictions. The ICN is made up of 97 antitrust agencies from 85 countries, and is supported by non-governmental experts from around the world.
The staff of the FTC stated on March 18 in an advisory opinion letter that the proposed plan by a physician-hospital organization that would involve collective bargaining with insurers over doctor fees likely would violate federal antitrust laws. The staff concluded that the price and other competitive restraints proposed by the network were not reasonably necessary to achieve any of its potential efficiencies.
On March 14th, the FTC announced that Valassis Communications, Inc., a leading producer of free-standing newspaper inserts ("FSIs") in the United States, has settled charges that it attempted to collude with News America Marketing, its only FSI rival, to eliminate competition between the two companies. Under the consent order settling the FTC’s complaint, Valassis is barred from engaging in, or attempting to engage in, similar anticompetitive conduct in the future. FSIs are multi-page booklets containing discount coupons for the products sold by various firms. They are inserted into newspapers for distribution to consumers. For the manufacturers of consumer-packaged goods and others, FSIs are a uniquely efficient way to distribute coupons on a mass scale. On a typical Sunday, Valassis’ and News America’s FSIs are distributed to more than 50 million households in hundreds of newspapers nationwide.