Antitrust Litigation Highlights

July 12, 2014

Amazon Under Antitrust Probe Over e-Book Wrangling

On July 11, 2014, Germany’s association of booksellers announced that European Union (“EU”) officials contacted them regarding its dispute with Amazon.com. The booksellers have already asked German antitrust authorities to investigate Amazon, alleging that the online retailer is delaying the shipment of one of its member, Bonnier AG’s books over a dispute on the price of the publisher’s e-books.

Amazon, in response, stated that Bonnier AG wanted Amazon to charge prices for its e-books that would have been higher than its hard-copy books. According to Amazon, their regular course of action is to charge lower prices for e-books compared to the hard copies. Amazon has been caught in similar disputes, including one with French publisher Hachette Book Group. Amazon is thought to be attempting to boost its margins in its e-books division by negotiating lower prices from publishers.

Similar cases may give prediction to Amazon’s course of action in the face of antitrust investigation. In 2012, Apple Inc. and four publishers changed the pricing model for e-books in Europe in the face of scrutiny from EU antitrust authorities. They were suspected to have conspired to keep Amazon from charging less for e-books.

May 28, 2014

Japanese Auto Part Makers Appeal U.S. Court Ruling on Industry-wide Conspiracy

by Doyle, Barlow & Mazard PLLC

On May 27, 2014, the attorneys of Japanese auto part companies filed a motion in a federal court in Michigan, indicating they will appeal to the Sixth Circuit Court of Appeals a ruling made by U.S. District Judge Marianne Battani that established a premise that an industry-wide cartel conspiracies existed among Japanese auto part makers.

A flurry of cases have been filed against most Japanese auto part companies, including companies previously uninvolved in cartel allegations, after Judge Battani’s ruling.

The mood in the plaintiff camp is bullish despite the appeal and attempts by the defendant side to block plaintiff’s motions to better coordinate the various civil suits. In particular, the plaintiff’s attorneys pointed out that many defendants have already made guilty pleas, making it more difficult for defendants to convince an appellate court to dismiss the case. Others noted that “courts try not to dismiss anything at this early stage unless there’s really nothing there.”

April 25, 2014

Silicon Valley Firms Settle Anti-Poaching Class Action Case

by Doyle, Barlow & Mazard PLLC

On April 24, 2014, Apple, Google, Intel and Adobe agreed to settle a major antitrust case regarding an alleged no employee-poaching agreement in an effort to lower employee compensation.

According to the lawsuit, Apple, Google, Intel, Adobe, Intuit, Pixar and LucasFilm signed a no-solicitation agreement dating from as far back as 2005. These companies agreed to create “no-contact” lists for their recruiters, keeping those on the list off-limits for employee recruitment efforts.

Intuit, Pixar and LucasFilms (whose employees comprise 8% of the total of 60,000 people involved in the class action case) have previously settled for $20 million. The current settlement comes on the heels of the commencement of a Department of Justice (“DOJ”) investigation into the agreements. None of the defendants admitted to any wrongdoing.

April 11, 2014

Power Conference Commissioners Discuss Legal Threats

by Doyle, Barlow & Mazard PLLC

On March 17, 2014, sports labor attorney, Jeffrey Kessler, filed suit against the NCAA and five power conferences, alleging that capping player compensation at the cost of a scholarship is an antitrust violation. The lawsuit argues that limiting player compensation amounts to “price-fixing,” and should be considered a violation of existing antitrust laws. Unlike previous suits, this one does not seek damages. The goal of the lawsuit is to change the entire NCAA system and to require a system where players are fairly compensated.

The suit names the NCAA, the ACC, the Big 12, the Big Ten, The Pac-12, and the SEC as defendants. The plaintiffs are Rutgers basketball player, J.J. Moore; Clemson football player, Martin Jenkins; UTEP football player, Kevin Perry; and University of California football player, William Tyndall; though as a class action claim, the lawsuit hopes to represent all FBS football players and D-I basketball players.

NCAA and the commissioners of the power five college conferences are concerned that this lawsuit may bring down the NCAA’s model of player amateurism. If players were paid market value, then they would be given the same power as their coaches, who negotiate multi-million dollar contracts with their employers.

February 20, 2014

Utah Pretzel Maker Sues Competitor Under Antitrust Laws

by Doyle, Barlow & Mazard PLLC

On February 19, 2014, the Utah ready-made soft pretzel maker, Sparky’s Pretzel, filed an antitrust complaint against Utah Pretzel and Valley Fair Mall, asserting that the two defendants are colluding to keep it out of the northern Utah ready-made pretzel market.

According to Sparky’s Pretzel, its long-running tenancy in Valley Fair Mall, beginning in 2004, ended in 2010 after the mall’s operators conditioned the renewal of the lease on it to stop selling pretzels or pretzel-related products, to stop offering food or drink items present on or associated with Sparky’s menu, and to change its name and relocate to another location in an undeveloped corridor of Valley Fair Mall. At the same time, Sparky’s Pretzel approached every other mall in Davis, Utah, Salt Lake and Weber counties for an alternative space, but were faced with the same demands as those made by the Valley Fair Mall. All of the malls that Sparky’s Pretzel made contact with also hosted stores of Utah Pretzel. Utah Pretzel subsequently moved into Valley Fair Mall soon after Sparky’s Pretzel vacated its location on July 25, 2010. Sparky’s Pretzel argues that Utah Pretzel and Valley Fair Mall conspired in early 2010 to keep it, Utah Pretzel’s only significant competitor in the northern Utah market, from doing business in the Valley Fair Mall, despite the fact that Sparky’s Pretzel was already very close to signing a long-term contract renewal with Valley Fair Mall’s management.

Sparky’s Pretzel’s complaint to the U.S. District Court for the District of Utah alleges that there exists a distinct ready-made pretzel market and that few substitutes to ready-made pretzels are available to consumers, making the demand for ready-made pretzels inelastic. Utah Pretzel, as the exclusive vendor of ready-made pretzel in Davis, and SaltLake counties except for a single shop in Salt Lake City’s airport, already controls 92% of the ready-made pretzel market in Utah.

February 19, 2014

Judge Dismisses Hotel Price Fixing Case

by Doyle, Barlow & Mazard PLLC

On February 18, 2014, U.S. District Judge Jane J. Boyle granted a motion by U.S. hotel chains and online travel agencies to dismiss without prejudice an antitrust case alleging consumers paid inflated prices on hotel rooms booked online.

Judge Boyle believed there to be two main arguments from the plaintiffs: first, defendants conspired to restrain competition in the US market for “direct online sale of hotel room reservations” and second, the defendants’ advertisements guaranteeing the best price available online were unfair to consumers because the prices were actually the same across all online channels.

Judge Boyle rejected the plaintiff’s arguments on both counts because they were not based on sound evidence. Instead, the plaintiffs only speculated as to the motive of the defendants. For example, the plaintiffs argued that the defendants shared a common motive to eliminate price competition in the online market. However, just because the defendants’ business interests can be recast in a suspicious light does not mean the allegations suggest an actual conspiracy was formed, noted the judge.