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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 [...]

Combination of Idaho’s Largest Health System and Largest Physician Practice Must Be Unwound

Within the span of about two weeks, each of the federal antitrust agencies has been handed a major win in their merger enforcement efforts.

Last Friday, it was the Federal Trade Commission’s turn. The U.S. district court in Boise ordered St. Luke’s Health System, Ltd.—the largest health care system in Idaho—to divest Saltzer Medical Group—the state’s largest independent, multi-specialty physician practice—after concluding that St. Luke’s 2012 acquisition of Saltzer violated Section 7 of the Clayton Act and the Idaho Competition Act. In that matter, the FTC and the State of Idaho joined a challenge initiated by private plaintiffs.

On January 8, the federal district court in San Fr [...]

The FCC’s Incentive Auction: Getting Spectrum Policy Right

The authors are David Balto, an antitrust attorney in Washington, D.C., who was formerly a policy director of the Federal Trade Commission, attorney-adviser to Chairman Robert Pitofsky, and trial attorney at the U.S. Department of Justice, and Hal J. Singer, Ph.D., who is a Managing Director at Navigant Economics and a Senior Fellow at the Progressive Policy Institute.

As the Federal Communications Commission (FCC) considers how to allocate the broadcasters’ spectrum in the upcoming “incentive auction,” it should be guided by economic principles designed to maximize social benefits. To date, the spectrum policy debate largely has been driven by considerations of the private benefits of [...]

Can the FTC Be a Fair Umpire?

Nearly 100 year ago, Congress established the Federal Trade Commission to protect consumers against unfair, deceptive and anticompetitive practices.  Part of the reason for its creation was to create an independent, fair and expert body to resolve complex antitrust claims, because the federal courts seemed incapable of enforcing the antitrust laws.  So Congress enabled the FTC to adjudicate its own cases in an administrative process.

Over the century, the Commission had many successes, but its power to adjudicate cases has always been controversial.  The FTC issues complaints which are adjudicated before an FTC Administrative Law Judge and that decision can be appealed to the Commission. [...]

Arbitration Agreement Did Not Prevent Effective Vindication of Antitrust Rights

Consumers and small businesses that are parties to contracts containing arbitration agreements will find it tougher, if not impossible, to avoid the terms of those agreements and pursue an antitrust action in court against the other contracting party, in light of a recent U.S. Supreme Court ruling.

Noting that “the antitrust laws do not guarantee an affordable procedural path to the vindication of every claim,” a sharply divided Supreme Court ruled on Thursday that a contractual waiver of class arbitration is enforceable under the Federal Arbitration Act (FAA), even though the cost of individually arbitrating the federal statutory claim exceeded the potential recovery. The High Court [...]

Antitrust Division Lawyer Picked to Fill Vacancy on Federal Trade Commission

Terrell McSweeny, Chief Counsel for Competition Policy and Intergovernmental Relations at the Department of Justice Antitrust Division, is President Obama’s pick to fill the current vacancy on five-member Federal Trade Commission.

The White House announced today the President’s intention to nominate McSweeny. According to the announcement, McSweeny has served in the senior counsel position at the Antitrust Division, since 2012.  Prior to that, she served as Deputy Assistant to the President and Domestic Policy Advisor to the Vice President at the White House from 2009 to 2012.

Based on her background, McSweeny appears to be a Democrat. If confirmed, she would provide the Democrats with a th [...]

A Legal Rationale for Liability Under Section 2 of the Sherman Act for Patent ‘Hold-up’ by Patent Assertion Entities with Respect to Standard Essential Patents

(Note:  In December 2012, the Department of Justice and the Federal Trade Commission held a Hearing on the impact of patent assertion entities (PAEs) on innovation and competition and the implications for antitrust enforcement policy.  The Agencies then issued a Request for Public Comments on the topic of the Hearing.  In response, on April 5th, Richard Wolfram submitted the following comment to the DOJ and FTC, adapted and shortened here for Antitrust Connect.  The full Public Comment – one of almost 70 public comments submitted to the Agencies — is available at http://www.ftc.gov/os/comments/pae/pae-0066.pdf or from the author.)

This comment is submitted in my personal capacity and d [...]

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