In Ross v. Bank of Am., N.A., No. 06-4755, 2008 WL 1836640 (2d Cir. Apr. 25, 2008), plaintiffs had alleged that the standard arbitration clauses in their credit card agreements with several issuers was the product of a conspiracy in violation of the Section 1 of the Sherman Act. The district court held that plaintiffs had no Article 3 standing because they had not yet initiated a dispute that triggered arbitration. The Second Circuit reversed holding that the provision in their agreements alone was sufficient to confer standing.
May
16
Second Circuit Finds Article 3 Standing in Antitrust Challenge to Credit Card Arbitration Provisions
Posted by : | On : May 16, 2008
May
16
Posted by : | On : May 16, 2008
On May 14, 2008, the Fifth Circuit rejected North Texas Specialty Physicians’ petition for review of an order that found certain of its activities constituted price-fixing and therefore violated Section 1 of the Sherman Act and Section 5 of the FTC Act. North Texas Specialty Physicians v. FTC, No. 06-60023, 2008 WL 2043040 (5th Cir. May 14, 2008). The Fifth Circuit found that the agreement among the physicians met the commerce requirement because if successful, “the advantages of competition have been adversely affected for out-of-state employers and payors.” The court affirmed the FTC’s use of the “quick look” and the FTC’s holding that the fee setting provisions were unrelated to any of the organization’s procompetitive efficiencies. The court modified one provision in the FTC’s remedial order, however, that prohibited the NTSP from entering into an agreement with its members where they “deal[t with, refuse[d] to deal, or threaten[ed] to refuse to deal with any payor.” As the court observed, “it is difficult to see how the NTSP can both deal and refuse to deal with any payor.” The rest of the order was affirmed.
Apr
24
Posted by : | On : April 24, 2008
Yesterday, the United States Court of Appeals for the D.C. Circuit granted Rambus’ petition for review. This decision was much awaited among antitrust counselors because it represented an attempt by the FTC to extend the antitrust laws to cover deceptive practices directed at standard-setting organizations. After administrative proceedings, the FTC held that Rambus violated Section 2 of the Sherman Act and Section 5 of the Federal Trade Commission Act by concealing to a standard-setting organization that it held patents in a technology which it urged the organization to adopt. Rambus then allegedly used the organization’s adoption of its technology to overcharge for licenses. In rejecting the claim under Section 2, the court explained, “if JEDEC, in the world that would have existed but for Rambus’s deception, would have standardized the very same technologies, Rambus’s alleged deception cannot be said to have had an effect on competition in violation of the antitrust laws; JEDEC’s loss of an opportunity to seek favorable licensing terms is not as such an antitrust harm. Yet the Commission did not reject this as being a possible—perhaps even the more probable—effect of Rambus’s conduct. We hold, therefore, that the Commission failed to demonstrate that Rambus’s conduct was exclusionary, and thus to establish its claim that Rambus unlawfully monopolized the relevant markets.” Rambus Inc. v. FTC, No. 07-1086 at 19 (D.C. Cir. Apr. 22, 2008). With respect to Section 5 of the FTCA, the court also expressed “serious concerns about strength of the evidence relied on to support some of the Commission’s crucial findings regarding the scope of JEDEC’s patent disclosure policies and Rambus’salleged violation of those policies.” Id. Notably, the court did not address whether such conduct would violate Section 5 even if it could not support liability under the Sherman Act. The FTC has recently taken such a position in its action against Negotiated Data in the March 10, 2008 Post. A copy of the slip opinion in Rambus is attached.
Apr
22
Posted by : | On : April 22, 2008
The Antitrust Division (Criminal Section) has been busy lately. On April 19, the Criminal Section obtained plea agreements in two separate investigations. Today, the Criminal Section announced the unsealing of an indictment in the United States District Court for the Northern District of California. The indictment alleges that defendants agreed to have one company withdraw from bidding to supply TACOM night vision goggles to a military procurement unit for Iraq. The indictment charges wire fraud, conspiracy to commit wire fraud and money laundering. Notably absent is a charge for violating Section 1 of the Sherman Act. The failure to charge such an offense usually indicates that no actual bid was rigged. The March 15, 2008 Post discusses the Criminal Section’s spotty trial record over the last year.
Apr
18
Posted by : | On : April 18, 2008
Today, an Italian executive agreed to plead guilty for his involvement in the Marine Hose Cartel. His plea agreement includes incarceration of one year and one day and a $20,000 fine. In addition, a Long Island defense contractor agreed to plead guilty to bid rigging and a conspiracy to commit wire fraud for his participation in a conspiracy to rig bids on Navy contracts for straps which are used to secure munitions. His sentence was left entirely to the Court’s discretion. Most criminal cases brought by the Antitrust Divisions are resolved by plea agreements. As discussed in the March 15, 2008 Post, the trial record of the Criminal Section (Antitrust Division) has been spotty. It has lost three trials within the last year.