New York et al. v. Deutsche Telekom AG et al., No. 1:19-cv-5434 (S.D.N.Y.)

States challenged merger of T-Mobile and Sprint, the third and fourth-largest mobile telecommunications providers in the U.S., alleging that shrinking the national wireless carrier pool down from four to three providers would decrease competition and create higher prices for consumers. The US Department of Justice and seven states entered into a settlement with the parties…

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U.S. and Michigan v Blue Cross Blue Shield of Michigan, 10-14155-DPH (E.D.Mich. 2013).

USDOJ and plaintiff state challenged the use by Blue Cross/BlueShield of Michigan of Most Favored Nation clauses, alleging that their power in the market, combined with these clauses, violated state and federal antitrust law by stifling competition, leading to higher costs, and preventing new entry into the market. After the state legislature enacted a statute prohibiting health insurers from using most-favored-nation clauses in contracts with health care providers, USDOJ and Michigan dismissed the case.

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U.S. and Plaintiff States v. American Express Co. et al. No. 10-4496 (E.D.N.Y. 2010)

U.S. DOJ and plaintiff states filed suit challenging rules made by American Express, MasterCard and Visa that prevent merchants from offering consumers discounts, rewards and information about card costs, ultimately resulting in consumers paying more for their purchases. Visa and MasterCard settled with the Department of Justice and the litigating states immediately after the complaint was filed. Under the terms of the settlement, the two companies will be required to allow merchants to offer discounts, incentives and information to consumers to encourage the use of payment methods that are less costly. The proposed settlement requires MasterCard and Visa to allow their merchants to: 1) offer consumers an immediate discount or rebate or a free or discounted product or service for using a particular credit card network, low-cost card within that network or other form of payment; 2) express a preference for the use of a particular credit card network, low-cost card within that network or other form of payment; 3) promote a particular credit card network, low-cost card within that network or other form of payment through posted information or other communications to consumers; 4) communicate to consumers the cost incurred by the merchant when a consumer uses a particular credit card network, type of card within that network or other form of payment.
American Express did not agree to settle,and a trial was held, in which the court found for the plaintiffs. . The trial focused on credit card “swipe fees” which generate over $50 billion annually for credit card networks. Plaintiffs argued that price competition over merchant swipe fees has been almost non-existent and for decades the credit card networks have not competed on price because of the rules imposed by each of the networks that limit merchants’ ability to take advantage of a basic tool to keep prices competitive. That tool – commonly used elsewhere in the economy – is merchants’ freedom to “steer” transactions to a network willing to lower its price. Each network has long prohibited such steering to lower-cost cards. The court held that the American Express anti-steering rules block merchants from using competition to keep credit card swipe fees down, which means higher costs to merchants’ customers. The decision means that agreements the plaintiffs reached previously with MasterCard and Visa can be fully implemented pending the conclusion of any appeals.
After remedy submissions from the parties, the court entered an order prohibiting American Express from adopting rules or entering contracts that block merchants from encouraging their customers to use a particular credit card. Under the order, merchants must be permitted to: offer discounts for the use of particular cards; express a preference for particular cards; disclose to customers the cost merchants incur when the customer uses particular credit cards; and engage in other conduct to encourage use of favored credit cards. The order also requires American Express to: repeal any rules that block merchant steering; notify merchants of their freedom to engage in steering activities; and adopt compliance measures to ensure that its employees understand that they cannot continue to block steering by merchants that accept American Express cards.
The Second Circuit reversed the lower court decision that the restraints had an actual anticompetitive effect on interbrand competition. The Second Circuit held that plaintiffs failed to meet their burden of demonstrating an anticompetitive effect on the whole market because “without evidence of the NDPs’ net effect on both merchants and cardholders, the District Court could not have properly concluded that the NDPs unreasonably restrain trade in violation of § 1.”

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People v. Tempur-Pedic, No. (N.Y. Sup. Ct., NY Cty. Mar. 29, 2010)

State filed suit against Tempur-Pedic, a mattress manufacturer, alleging resale price maintenance. The state did not sue under its antitrust statute, but rather under N.Y. Gen. Bus. Law § 369(a). The State alleged that Tempur-Pedic’s Retail Partner Agreement restrained discounting in a variety of ways. the trial court held that the state’s General Business law did not make resale price maintenance illegal, but only made contractual provisions embodying resale price maintenance uneforceable.

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Louisiana v. Amgen, No. 08-0373 (Louisiana, Civ. Dist. Ct. for Parish of Orleans, 2009)

State parens patriae action, wholly under state law, alleging anticompetitive tying and pricing. The tying product was White Blood Cell Growth Factor, in which Amgen had a monopoly position, according to the complaint. The tied product was Red Blood Cell Growth Factor. Amgen’s product, Aranesp, competed with Procrit for this market. The complaint alleged that oncology clinics, which use these drugs, receive rebates on WBCGF purchases if they purchase above a certain amount of the RBCGF from Amgen. The case was removed to federal court, and the state filed a motion to remand, but the newly-elected Attorney General dismissed the case without prejudice before the motion was heard.

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FTC and California ex rel. Brown v. Watson Pharmaceuticals No. CV-09-00598 (C.D. Cal Feb. 12, 2009)

Plaintiff State and the FTC challenged so-called “reverse payment” agreement between Solvay Pharmaceuticals (patent holder) and Watson Pharmaceuticals, Par Pharmaceuticals and Paddock Laboratories that delayed the entry of a generic substitute for Androgel, a testosterone-replacement drug. State and the FTC alleged that Solvay, fearing the entry of lower-cost generic substitutes for Androgel, resolved patent litigation with the other three companies by making substantial payments to them, on the condition that they not enter the market with their generic version. the parties seek injunctive relief and fines of $2500 per violation under California antitrust law. Case was transferred to district court in Georgia and state did not re-file in Georgia, although the FTC did.

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Arizona ex rel. Goddard v. Gannett Co., Inc. (D. Ariz. 2009)

Two newspapers in Pima County sought to stop publishing one of the papers and share the profits on the other paper, pursuant to a change in their ongoing Joint Operating Agreement. Judge denied state’s request for TRO, on grounds that newspaper was a “failing firm.” State dismissed complaint.

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Minnesota v. Ovation Pharmaceuticals, Inc. 08 cv 6381, D.Minn.

Minnesota and the FTC filed companion cases in federal court, alleging that Ovation monopolized the market for drugs to treat PDA, a heart ailment in newborns. The complaint alleged that Ovation acquired the rights to the only two drugs used to treat PDA. Patents were expiring on the first drug, Indocin, when Ovation purchased the second drug approved for treatment of PDA. Upon making this purchase, Ovation raised the price of both drugs from $36 per vial to $500 per vial. The purchase of the rights to Indocin was below the HSR reporting threshhold.

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People ex rel. Spitzer v. Acordia and Wells Fargo (NY Sup. Ct.)

State alleged that insurance companies were paying kickbacks to Acordia, an insurance broker, for steering business to the insurer.

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Maine v. Flagship Cinemas Management, Inc., No. CV-03-087 (Kennebec Super. Ct. December 2003)

Complaint filed against owner of 12-screen suburban film complex, alleging defendant’s purchase of a downtown theater as well violated Maine’s antitrust law. The state sought divestiture of the downtown movie theater.

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