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Monopoly Claims Can Survive Summary Judgment: Medtronic Must Defend Conduct in “Bone Mill” Market

One firm’s ability to break into the market for “bone mills” used in spinal-fusion surgery did not foreclose the possibility that medical device company Medtronic monopolized or attempted to monopolize the bone mill market, the U.S. Court of Appeals in Denver ruled last week. Bone mill manufacturer Lenox MacLaren Surgical Corporation raised sufficient fact questions, including questions regarding barriers to entry, to defeat summary judgment on its monopolization and attempted monopolization claims. The August 5, 2014, decision is Lenox MacLaren Surgical Corp. v. Medtronic, Inc., No. 13-1307.

The suit follows a falling out between Lenox and Medtronic. Lenox had sold some of its bone mi [...]

Can Bundled Discounts Be Illegal If Offered by a Firm Without Market Power?

Bundled discounts are common marketing schemes that normally benefit consumers and competition; however, courts and commentators have found certain circumstances when they might be illegal monopolization.  The line between hard competition and exclusionary conduct has confounded antitrust counselors and their pricing clients for years, but, it seemed like only companies with monopoly power need be concerned.  Now, a Pennsylvania district court in Schuylkill Health Systems v. Cardinal Health, Inc., et al., has further muddied the waters by allowing a bundling claim to proceed under Sherman Act Section 1, even after dismissing other claims for lack of market or monopoly power.

A bundled disc [...]

Making the Sentencing Guidelines Message Complete

As the U.S. Sentencing Commission considers reforms of the guidelines for antitrust crimes, it should take action to affirm the importance of antitrust compliance programs as an essential tool in the fight against cartels, and to provide a balance against the Antitrust Division’s past approach of refusing to consider compliance programs in any case for any purpose. The Division has been an outlier in the Department of Justice in rejecting the Sentencing Commission’s premise that companies may have violations even when they have good programs. The Division’s “one-size-fits-all” policy of never giving any type of benefit or credit for diligent compliance efforts, no matter what the f [...]

Substantial Reform of EU Merger Control on the Cards

On 9 July 2014, the European Commission published a White Paper setting out proposals to amend the EU merger control system. The proposed reform of the system is the most significant in the last 10 years and could have an impact on many corporate transactions.

The proposals

The proposals deal with the following:

  • the expansion of the Commission’s powers to review the acquisition of non-controlling minority shareholdings;
  • the streamlining of the case referral system between the Commission and the EU Member States; and
  • measures aimed at simplifying merger procedures, including amending the EU Merger Regulation so that extra-EEA joint ventures do not require notification, and the introduction [...]
Convictions, $500 Million Fine Upheld in Price Fixing Case Against AU Optronics; Foreign Trade Antitrust Improvements Act No Bar

The U.S. Court of Appeals in San Francisco last week upheld the price fixing convictions of Taiwanese electronics manufacturer AU Optronics (AUO), its U.S. subsidiary, and two company executives. The appellate court also affirmed a $500 million fine against AUO, the only defendant to challenge the sentence. The case is U.S. v. Hsiung, No. 12-10492.

In March 2012, following an eight-week trial, a jury found AUO, AU Optronics Corporation America (AUOA), and AUO’s former president and former executive vice president guilty of conspiring to fix prices of thin-film transistor-liquid crystal display (TFT-LCD) panels.  The display panels are used in flat panel computer monitors, notebook comput [...]

FTC/DOJ Workshop on Conditional Pricing Practices – Good as Far as It Goes

On June 23, 2014, the U.S. Federal Trade Commission and Department of Justice Antitrust Division held a workshop on “conditional pricing practices”—loyalty discounts, bundled discounts and similar pricing techniques.  Many economists, academic experts and practitioners, some of them even hailing from outside the Beltway, opined on the rationale for and against antitrust legality of such common marketing practices.  The agencies are to be congratulated for leading this discussion and advancing the thinking on this important topic; still, real-world businesses continue to look for clearer guidance than what has been provided by the agencies and courts to date, but the conference promis [...]

Second Circuit Clarifies Application of Foreign Trade Antitrust Improvements Act

The U.S. Court of Appeals in New York City on June 4 ruled that the Foreign Trade Antitrust Improvements Act (FTAIA) barred the antitrust claims of a Taiwanese electronics manufacturing company with facilities in China against a group of foreign competitors. In its decision, the court followed the Seventh Circuit’s recent decision in Minn‐Chem, Inc. v. Agrium, Inc., 683 F.3d 845, 2012-1 Trade Cases ¶77,943.

The judgment of the district court dismissing Lotes Co., Ltd.’s claims was affirmed, but on alternative grounds. Even if Lotes had alleged the statutorily required “direct, substantial, and reasonably foreseeable effect” on U.S. domestic or import commerce, any such effect did not [...]

So Whatever Happened to American Needle?

You remember American Needle, right?  It is the 2010 U.S. Supreme Court opinion that explains when the action of a joint venture is the action of a single entity or, instead, the result of an agreement among the joint venture members.  Now back on remand in federal district court in Chicago, some recent summary judgment decisions might eventually make the case known for some interesting market definition questions.

American Needle was a licensee of NFL Properties (NFL) that challenged under Sherman Act Section 1 the NFL’s decision in 2000 to terminate the licenses of American Needle and others to make NFL-trademarked hats and grant an exclusive license to Reebok.  One of the NFL’s def [...]

Is the FTC Changing Its Intellectual Property Rights Policy?

Commissioner Josh Wright of the U.S. Federal Trade Commission certainly is the gift that keeps on giving to antitrust commentators.  Rarely do many weeks go by without a Wright speech or dissenting opinion that cogently takes on an interesting competition issue, often one captured in an action by his fellow commissioners.  Last month’s example was a speech to the New York City Bar Association provocatively titled, “Does the FTC Have a New IP Agenda?”  Wright believes the answer to his question is “yes,” and that the shift is not helpful.  Much of the support for Wright’s assertion of a change comes from two FTC matters that predate his tenure and alarmed the business communit [...]

McSweeny Confirmed by Senate to Fill Vacancy at FTC, Will Give Democratic Majority to Commission

The Federal Trade Commission will soon be back to having a full complement of five commissioners. Today, the U.S. Senate, by a vote of 95 to 1, confirmed Terrell McSweeny to fill a vacancy at the agency created by the departure of Jon D. Leibowitz more than a year ago. The term runs through September 26, 2017.

The White House announced the nomination of McSweeny in June 2013. Although her nomination was not controversial, her confirmation was delayed because the Senate failed to take a vote before year’s end. In November 2013, the  Senate Commerce, Science, and Transportation Committee had voted to report the nomination to the full Senate; however, the nomination needed to be reconsidere [...]

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