Antitrust Advocate

Antitrust Advocate

News, Developments and Practical Advice from Antitrust Leaders

‘Actavis’ Still Raising More Questions Than It Answers

Posted in Patents

FDA_78466110Nearly two years after the U.S. Supreme Court’s decision in Federal Trade Commission v. Actavis, 133 S. Ct. 2223 (2013), “reverse payment” settlements in patent litigation between brand-name drug manufacturers and potential generic entrants remain a hot topic in the antitrust world. At the American Bar Association’s Antitrust Law Spring Meeting, held in Washington, D.C., last month, reverse payments were discussed at numerous sessions, including one session devoted exclusively to the topic.

Reverse payments are payments made in connection with the settlement of patent litigation between the manufacturer of a brand-name drug and a competitor seeking to market a generic version of that drug. They are called reverse payments because they flow in the opposite direction from that expected in a litigation settlement. They are payments from the brand-name manufacturer plaintiff (the party claiming patent infringement) to the generic competitor defendant (the party accused of patent infringement). Continue Reading

Fit to Be Tied: Appeals Court Redefines Tying Arrangements Based on Bundled Pricing

Posted in Antitrust Compliance

bigstock-Dollars-Background-from-packs-45251779Corporate antitrust compliance programs often spotlight the dangers of tying arrangements. Those risks arise when a seller with a dominant position in one product coerces its customers by offering that must-have product only if customers buy a second product that they don’t want (or at least would rather buy elsewhere).

Tying arrangements are easy for risk managers to spot when the link between the two products is explicit – if you want product A, you have to buy product B too. A recent federal court of appeals decision focuses on a different kind of linkage: when a company sells product A by itself, but offers deep discounts if customers buy product B as well. Continue Reading

Apple’s Streaming Music Service Under Investigation

Posted in Antitrust Compliance

Modern communication technology mobile phoneIt has been a busy several months for antitrust regulators and the tech giants whose alleged conduct has recently drawn their ire. Just a few weeks ago, Google formally became the subject of a European investigation into its alleged skewing of Google search results to favor other Google products and the tying of its apps to developers’ use of the Android OS. Now, Apple is reportedly under scrutiny, this time by U.S. and European officials, over its soon-to-be-launched streaming music platform. Continue Reading

Google Faces European Antitrust Investigation

Posted in Antitrust Compliance

European union conceptIt’s official: on Wednesday, in a formal Statement of Objections, the European Union’s antitrust chief formally accused Google of abusing its dominant position in the web search arena.

The European Commission is focused on Google’s alleged practice of skewing search results to divert users of Google’s search engine to other Google-owned websites, products, and services, particularly travel, shopping, and navigation websites. In addition, the EC is separately investigating allegations of alleged agreements between Google and mobile device manufacturers related to Google’s Android platform – it is claimed that such phone manufacturers that agree to use Google’s open-source Android platform face contractual obligations to place Google’s other apps in prominent positions on the mobile devices. Furthermore, Margrethe Vestager, the competition commissioner, has indicated that the inquiry may expand over time. Continue Reading

BakerHostetler Releases White Paper on FTC Act Section 5 Symposium

Posted in FTC Act

BakerHostetler’s Antitrust and Competition team is delighted to share with you a white paper we prepared highlighting points of interest from the February 26, 2015 Symposium we hosted on Section 5 of the Federal Trade Commission Act. We hope you enjoy the white paper’s insider perspective on interpretation and enforcement of Section 5. Below is a list of other resources on the discussion that took place at the Symposium:

If you have any questions about the material presented in this white paper or about the Symposium in general, please contact Carl W. Hittinger at chittinger@bakerlaw.com or 215.564.2898.

Symposium Advances Debate Over FTC’s Section 5 Enforcement Powers

Posted in Articles, BakerHostetler, Events, Sherman Act 5

What is an “unfair method of competition” for purposes of the Federal Trade Commission’s enforcement powers? For more than 100 years, lawyers, economists and other experts—as well as courts—have debated that question, trying to determine exactly what conduct Congress meant to prohibit, beyond conduct already condemned by the antitrust laws, when it enacted Section 5 of the FTC Act of 1914. The Baker & Hostetler-sponsored Symposium on Section 5, held in Washington, D.C., on Feb. 26, assembled, for the first time in a public forum, key decision-makers and experts from all three branches of government to debate the future of FTC’s competition enforcement authority as the agency embarks on its second century. (The last symposium on Section 5 took place in 2008 but was an internal workshop for the FTC.) The vigorous exchange of opinions among the 14 distinguished symposium speakers clarified the terms of the dialogue over whether the FTC should adopt formal guidelines to finally define “unfair methods of competition” and place limits on its enforcement discretion under its “stand-alone” Section 5 authority—that is, its power to pursue anti-competitive conduct not reached by the Sherman or Clayton antitrust acts. Continue Reading

Oregon Federal Court Weighs In on Disputed Umbrella Theory of Damages

Posted in Antitrust Litigation

An Oregon federal court recently relied on the so-called umbrella theory of damages to decide that the plaintiffs had an antitrust injury necessary to pursue an injunction. While this decision has garnered attention for enjoining the defendants from completing an acquisition, it also is noteworthy for its reliance on the disputed umbrella theory of damages.

This theory generally refers to antitrust damages that may result when non-conspiring market participants adjust their prices to correlate with the defendants’ alleged fixed prices. It is said that non-conspirators are able to make these adjustments because the alleged conspiracy creates a “price umbrella” under which the non-conspirators can shelter without fear of being challenged on prices. Litigants have disputed for many years whether this theory supports damages recoverable under federal antitrust law. Continue Reading

CFIUS Report Reflects Continued Need to Plan for Government Scrutiny of Cross-border Transactions

Posted in CFIUS

The Committee on Foreign Investment in the United States (CFIUS) recently reported its 2013 activities, confirming the continuation of its heightened review and investigation of certain foreign direct investments in U.S. businesses.

CFIUS, a panel of high-level Washington bureaucrats, was described in a prior post. CFIUS reviews and investigates mergers and acquisitions that could result in foreign control of entities engaged in interstate commerce in the United States and determines (or recommends to the U.S. president) whether to disallow or block transactions when there is credible evidence that they threaten national security, which was covered in a prior post. Continue Reading

FTC’s Appellate Win Reflects Focus on Health Care Consolidation

Posted in Antitrust Litigation, Articles, FTC Act, Healthcare, Merger

In an important victory for the Federal Trade Commission in the appellate courts, the U.S. Court of Appeals for the Ninth Circuit recently affirmed last year’s decision from the District of Idaho in Saint Alphonsus Medical Center v. St. Luke’s Health System, No. 14-35173, in which the FTC successfully sued to undo a 2012 merger of two health care providers in Nampa, Idaho.

As reported in this column last year, the FTC—joined by the state of Idaho and certain competitor hospitals—filed an action in the U.S. District Court for the District of Idaho in 2013 to unwind a merger between St. Luke’s Health Systems, an Idaho health care system, and Saltzer Medical Group, an Idaho-based physician group. St. Luke’s operated several hospitals in Idaho and employed 500 physicians, including eight primary care doctors based in Nampa. Saltzer employed 16 primary care doctors in Nampa. After years of negotiation regarding potential affiliation, St. Luke’s acquired the assets of Saltzer in December 2012. Following the Saltzer acquisition, St. Luke’s controlled 80 percent of the adult primary care physicians in Nampa. The FTC’s complaint asserted that the combination violated Section 7 of the Clayton Antitrust Act, which prohibits mergers if “the effect of the acquisition may be substantially to lessen competition, or tend to create a monopoly.”

Continue Reading