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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Florida v. General Chemical Corp. No. 2:17-00384 (D.N.J. Jan. 19, 2017)

Plaintiff state filed action in federal court alleging market allocation and price-fixing among manufacturers of the chemical liquid aluminum sulfate, which is a coagulant used to remove impurities and other substances from water. It is used primarily by municipalities in wastewater treatment. There are high barriers to entry and substitution is difficult. There have been several USDOJ indictments in the industry. The complaint alleged that the defendants conspired to circumvent competitive bidding and independent pricing and to raise liquid aluminum sulfate prices by submitting artificially inflated bids in Florida from 1997 through at least February 2012. The state alleged that fraudulent concealment of the conspiracy tolled the statute of limitations.

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Commonwealth of Kentucky ex rel. Beshear v. Marathon Petroleum Co. LP, No. 3:15-cv-00354 (May 12, 2015)

State filed suit against Marathon, alleging Marathon engaged in anti-competitive practices that lead to higher gas prices for Kentucky consumers in violation of state and federal antitrust laws. State alleged that Marathon abused its monopoly position after its merger with Ashland Oil in 1998. The state alleged, among other actions, that Marathon requires some retailers, thought its supply agreements, to purchase 100 percent of their RFG from Marathon, with penalties if the retailers fail to do so. The agreements also prohibit unbranded retailers from challenging Marathon’s pricing. According to the complaint, Marathon further reduces competition by adding deed restrictions to some of the property parcels it sells that prohibit the purchaser of the property from selling gas or operating a convenience store. Some of the restrictions have an exception that will allow for development of a gas station if the station sells only Marathon gas. State sought injunctive relief, civil penalties of $2000 per violation, restitution to citizens and to the state and attorneys’ fees. Defendants moved to disqualify the outside counsel retained by the state on the grounds that the contingent fee arrangement was improper. The court denied Marathon’s motion to dismiss as to the federal antitrust, state antitrust and deceptive practices claims, but denied the state’s unjust enrichment claim because consumers only conferred an indirect benefit on Marathon by buying gasoline at allegedly inflated prices, not a direct benefit.

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Board of Regents v. Atlantic Coast Conference, No. (Cir. Ct. Pr. George’s Cty. Maryland, Jan. 18, 2013)

After the University of Maryland decided to leave the Atlantic Coast Conference (ACC) for the Big Ten Conference for its collegiate athletics, the ACC sued the university in North Carolina. The state then sued in Maryland courts, seeking a declaratory judgment that the fee imposed by the ACC on the university was excessive and was a violation of state antitrust laws because the fee was an illegal restraint of trade. The case has been stayed and the stay has been appealed.

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State of Florida et al. v. Hitachi-LG Data Storage Inc. et al., No.3:13-cv-01877

After Hitachi-LG Data Storage, Inc. was charged with a 15-count felony charge by the United States Department of Justice, pleaded guilty to bid-rigging and price-fixing of Optical Disc Drives (ODDs) and paid a $21.1 million criminal fine, Florida filed suit. The suit alleged that Hitachi-LG Data Storage, Inc. and its subsidiary, Hitachi-LG Data Storage Korea, Inc., participated in meetings, discussions, and communications to share competitively sensitive information, in order to rig bids for ODDs sold to Dell Inc., Hewlett-Packard Company, and Microsoft Corporation. The state is seeking equitable relief, damages, and civil penalties for Florida consumers, businesses, and governmental entities.

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U.S. and Michigan v. Blue Cross Blue Shield of Michigan, 10-14155 (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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