On May 27, 2008, the Antitrust Division settled its litigation against the National Association of Realtors (“NAR”) pending in the United States District Court for the Northern District of Illinois. The Antitrust Division explained the nature of challenge as follows: “[t]he first rule challenged by the Department required MLSs to permit traditional brokers to withhold their listings from VOWs [virtual office websites] by means of an ‘opt out.’ NAR does not permit brokers to withhold their listings from traditional broker members of an MLS. Many local MLSs adopted NAR’s policy before NAR suspended its policy during the Department’s investigation. In one market in which the MLS adopted the policy, all brokers withheld their listings from the one VOW in the community, which was then forced to discontinue its popular website. The second rule prevented a broker from educating customers about homes for sale through a VOW and then referring those customers (for a referral fee) to other brokers, who would help customers view homes in person and negotiate contracts for them. Some of the VOWs that focused on referrals also passed along savings to consumers as a result of increased efficiencies.” The consent decree (if approved under the Tunney Act) will require NAR to treat internet-based brokers the same as other brokers on the MLS and rescind these rules. Notably, the Antitrust Division and FTC have been aggressive in promoting competition among real estate brokers. They have obtained a number of settlements against real estate broker associations that had limited the ability of internet brokers to compete and have urged state legislatures not enact legislation that would have the same effect. The press release and proposed consent decree are attached. NAR (Proposed Consent Decree); NAR (DOJ Press Release)
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.
Mar
26
Posted by : | On : March 26, 2008
March 24, 2008. The Antitrust Division cleared the merger between XM Satellite Holdings and Sirius Satellite Radio — the only satellite radio providers. In its closing statement, the Antitrust Division concluded that it would be unlikely that the parties could raise prices post-merger. The Antitrust Division noted that the parties do not compete for current customers because the costs of equipment makes switching to the other provider impractical. The Antitrust Division concluded that relevant market for new customers would have to include alternative sources for audio entertainment in addition to satellite radio. The Antitrust Division further noted that future technology would only increase the competition faced by the parties. With respect to competition for sole source contracts with major auto manufacturers, those contracts are locked-in and there is unlikely to be any competition for those contracts for many years. Finally, the Antitrust Division noted that the transaction would result in substantial efficiencies (and cost savings) which further supported its conclusion that the transaction would not harm competition.
Mar
15
Posted by : | On : March 15, 2008
In March 2008, the Antitrust division (Criminal Section) lost two price-fixing cases. On March 7, 2008, after an 11-day trial, Judge Phyllis Hamilton of the United States District Court for the Northern District of California declared a mistrial in United States v. Swanson because of a hung jury (which voted 10-2 for acquittal). The Antitrust Division has decided not to re-try Swanson. Charles Swanson, a former U.S. executive of Hynix Semiconductor, was the only defendant to go to trial in the cartel prosecutions of DRAM manufacturers. Four corporations (Samsung, Hynix, Infineon and Elpida Memory) and 16 individuals pleaded guilty. Fines exceeded $730 million and individual prison sentences ranged from 3 to 10 months. John Barthko of Barthko Zankel Tarrant & Miller represented Swanson. On March 12, 2008, the U.K. House of Lords declined to extradite Ian Norris, the former CEO of Morgan Crucible who the Antitrust Division (Criminal Section) had indicted for price-fixing in connection with electrical carbon cartel. Price-fixing was not a crime in the U.K. at the time that Norris was indicted and, therefore, Norris was not subject to extradition for the offense. To avoid that obstacle, the Antitrust Division also charged Norris with obstruction of justice and sought his extradition on that charge. Norris is subject to further proceedings and potential extradition on the obstruction charge. He was represented by Lawrence Byrne (Linklaters LLP) in the United States and Alistair Graham (White & Case LLP) in the U.K. This is the fourth recent blow to the Antitrust Division’s Criminal Section. On November 30, 2007, the United States District Court for the District of Delaware dismissed a price-fixing indictment against Stolt-Nielsen holding that the Antitrust Division breached its amnesty agreement. See United States v. Stolt-Nielsen S.A., 524 F. Supp. 2d 609 (E.D. Penn 2007). Solt was represented by Mark Gidley and Chris Curran (White & Case LLP). On July 19, 2007, Stora Enso North America was acquitted of price-fixing in the United States District Court for the District of Connecticut. The jury returned its verdict in less than two hours.