How Do I File My Antitrust Complaint in the European Union? An Example from the Intel Case

November 11, 2017 | Bona Law PC

As a US company doing business internationally, you might wonder what are the legal rules and procedures currently in place in the European Union to file an antitrust complaint.

First, you should understand that The Treaty on the Functioning of the European Union (TFEU) is based on the existence of a single market with free movement of goods and services throughout the European Union. The antitrust rules included in the TFEU, such as those against anti-competitive agreements, abuses of dominant position, certain problematic mergers and state aid, are essential to achieve that free movement.

Second, an important distinction from US antitrust law is that EU antitrust law is mainly enforced by public authorities: by the European Commission at EU level, and by national competition authorities (NCAs) at national level.

Third, EU antitrust law is also enforced—to a lesser extent—through ordinary litigation before the appropriate national courts of each Member State.

Last but not least, we shouldn’t forget that each Member State within the EU has also its own domestic antitrust rules, often mirroring EU rules, but sometimes with important procedural and substantive differences.

How the different antitrust laws are applied in the EU between NCAs, the European Commission and national courts, deserves an independent post on its own. For now, however, just keep in mind that as a plaintiff, you could also file an antitrust complaint in the EU before a national court.

In the meantime, if you want to know more about this issue, please see: (i) Council Regulation (EC) No 1/2003 on the implementation of the rules on competition, (ii) Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC (See more information here), and (iii) Notice on Cooperation within the network of competition authorities in the European Competition Network (See more information here).

Let’s return to our discussion on the application of EU antitrust rules by the European Commission. In the European Union, the Directorate General for Competition of the European Commission (“the Commission”), together with NCAs, directly enforces EU competition rules, Articles 101-109 of the Treaty on the Functioning of the European Union. The two most important articles, for the purpose of this post, are articles 101 and 102 TFEU.

Article 101 of the Treaty prohibits agreements between two or more independent market operators that restrict competition. It covers: (i) horizontal agreements between actual or potential competitors operating at the same level of the supply chain; (ii) and vertical agreements, between firms operating at different levels, such as an agreement between a manufacturer and its distributor.

Article 102 of the Treaty prohibits dominant firms from abusing that position, for example, by charging unfair prices, by limiting production, or by refusing to innovate to the prejudice of consumers.

HOW DOES AN ANTITRUST CASE START IN THE EU?

The investigation

For Article 101 TFEU cases, the Commission and NCAs have important investigative powers under Regulation 1/2003.

The initiation of a Commission investigation might be the result of: (i) the Commission (or an NCA) launching an inquiry of its own initiative; (ii) a third party with information who approaches the Commission, such as a competitor or customer, (iii) a party to a cartel (or anti-competitive agreement) acting as a whistleblower under the existing leniency program, or (iv) when an NCA refers a case with a cross border element to the Commission through the ECN network.

Under Article 102, a case can originate either upon receipt of a complaint or through the opening of an investigation at the commission’s initiative.

Continue reading →

Top Antitrust Attorney Steven Levitsky Leaves DLA Piper to Open Bona Law’s New York Office

October 22, 2017 | Bona Law PC

We are ecstatic that Steve Levitsky agreed to join us in New York. It isn’t every day that an antitrust attorney of Steve’s caliber becomes available, let alone fits so perfectly into a law firm’s approach, culture, and plans. But that is the happy situation in which we find ourselves.

You can read our press release about the move here.

As you can tell, I am very excited about this next chapter in Bona Law’s history. As you can see, we now have two offices: La Jolla, California and New York, New York.

Bona Law is an antitrust boutique firm. Our client base has been worldwide for quite some time and we have had cases and other matters all over the country. So the move to add a New York office doesn’t change our focus: We have always been a national antitrust boutique firm.

But I think opening our New York office signals to the marketplace more directly that we are a national law firm that competes with biglaw for antitrust. And adding Steve to our team—with his decades of big firm antitrust experience and worldwide client base—confirms our place.

Steve Levitsky’s antitrust experience includes the big three of litigation, antitrust counseling, and antitrust merger work. But what is even more exciting for us is that Steve is particularly known for his antitrust merger expertise, which is an area in which I have much less experience.

Over the last few years, I have heard repeatedly that many companies that have an HSR filing or other antitrust merger issues are frustrated that they don’t options other than big law firms. Well, now they do: Steve has managed the antitrust side of countless complex merger transactions, domestic and global—many of them worth over $10 billion.

So if you are a corporate attorney or business with antitrust merger or acquisition issues, you should contact Steve.

Steve has such an impressive background that he would, frankly, fit in at any law firm. He would substantially raise the average quality of the attorneys no matter where he would have gone. Our traditional press release and website article goes into his background, so I am not going to repeat it here.

I enjoy writing articles for The Antitrust Attorney Blog because it allows greater flexibility in what I tell you. I try to offer some of the informal truths relating to antitrust and law practice that, although vitally important, are not usually discussed so straightforwardly.

So, obviously, adding Steve to our team is a huge deal because he is a great lawyer. But my excitement about this move goes well beyond that obvious point.

Continue reading →

Proposed Legislation to Grant Antitrust Immunity to State Licensing Boards Misses Mark

August 23, 2017 | Bona Law PC

Author: Aaron Gott

Senators Mike Lee, Ted Cruz, and Benjamin Sasse recently proposed a bill to enact the Restoring Board Immunity Act of 2017, which would give state licensing boards antitrust immunity that they may not otherwise be entitled to under the state-action immunity doctrine. The bill provides this immunity if the states fulfill some conditions: they must make efforts to reform their occupational licensing schemes and either provide active supervision of boards by creating an office to oversee them or provide for a specific form of judicial review of licensing board actions.

While the bill seeks to make some promising advancements to curtail overbearing state occupational regulation, it misses the mark in several ways.

As a Bona Law attorney, I regularly help clients suffering the wrath of professional licensing boards. It is very rewarding work, but it is also difficult work because the entire system—from state executive branches to federal courts—overwhelmingly defers to these licensing boards. The boards are confident in their ability to do whatever they want because they’ve enjoyed extreme deference in constitutional cases since the progressive era.

Our most effective tool is the threat of antitrust litigation—a tool that has only recently been used. First I’ll explain how all of this works so that you can better understand why this bill is a bad idea.

How Licensing Boards Work

Most licensing boards are created by some enabling statute that was pushed through the state legislature after a bunch of competitors in the same industry got together and formed a powerful lobby. Nine times out of ten, a professional licensing board justifies its existence and its conduct with vague and unsupported claims that public welfare is at stake. The enabling legislation often provides the governor the authority to appoint members of the profession, and perhaps one or two “public” members (persons who are not part of the profession), to serve on the licensing board.

Invariably, the board members who also compete in the market eventually use their power on the board to benefit their own pecuniary interests:

Licensing Requirements. . Organizations like the Institute for Justice have analyzed state-by-state data and published significant literature about occupational overregulation. The bill appears most focused on licensing requirements. Antitrust litigation typically does not focus on the licensing requirements category of restraints because they are easy to pretextually justify, because the lobbying effort is protected by the Noerr-Pennington doctrine, and because they primarily affect new entrants (who are unlikely to organize a collective resistance, let alone the resources to finance antitrust litigation).

This raises an important question: if most antitrust litigation against boards does not relate to the occupational licensing reforms sought by the bill, why are we considering a broad antitrust exemption as the carrot for states to implement the reforms?

Expanding the Scope of Practice. Where boards prevent competitors who are not licensees within their jurisdiction from competing with them. A seminal example is what occurred in North Carolina Board of Dental Examiners v. FTC: the North Carolina dental board sent cease-and-desist letters to nondentist teeth whiteners asserting that teeth whitening was the practice of dentistry. Teeth whitening is not mentioned in the North Carolina statutes governing dentistry, but the board asserted it anyway because the dental board members and their professional trade group friends were losing profits to disruptive nondentist competitors who offered lower prices to consumers.

Similarly, the California Veterinary Medicine Board recently sent cease-and-desist letters to animal chiropractors, claiming that performing chiropractic adjustments on animals is the practice of veterinary medicine (even though performing human chiropractic adjustments is not the practice of human medicine).

Setting the Rules of Competition. Where boards prevent competitors who are licensees within their jurisdiction from competing in ways they don’t like. For example, some state funeral director boards have imposed or considered imposing substantial infrastructural requirements on their licensees (such as having an embalming room) with the ultimate goal of restricting the geographic scope of competition.

Side note: state funeral director boards have been among the worst culprits of blatant anticompetitive activity, even going so far as enacting rules to prevent monks who handcraft caskets from competing in the lucrative market for casket sales.

As you can see, boards have substantial power and states don’t seem to care that they regularly abuse it. So at first glance, a bill that incentivizes states to reassess their occupational licensing schemes with a critical eye is probably a good thing, right? If that were what it did, and it didn’t attempt to foreclose otherwise legitimate antitrust claims through the state action doctrine, then it wouldn’t be so objectionable.

The Bill

You can read the text of the bill here, but it works like this: all licensing boards and their members are not subject to the Sherman Act if the following conditions are met:

The actions of the board/member are authorized by a nonfrivolous interpretation of the occupational licensing laws of the state.
The state adopts a policy of using less restrictive alternatives to occupational licensing;
The state either:
1. Enacts legislation providing for active supervision of the actions of an occupational licensing board, which requires creating a central office to oversee all licensing boards; or
2. Enacts legislation providing for judicial review of occupational licensing laws.

The bill has a savings clause that states the immunity only applies to “personal qualifications required to engage in or practice a lawful occupation.” As you will see below, this clause could be very important, depending on how courts would construe it.

Continue reading →

Marketplace Bullying and Bona Law’s Antitrust Lawsuit in the Cement and Ready Mix Concrete Markets

August 16, 2017 | Bona Law PC

Bona Law filed an antitrust lawsuit on behalf of our client in the Northern District of Georgia alleging antitrust violations in the cement and ready mix concrete markets. More on that later.

But first I am going to tell you a fictional story about your nine-year-old son and his first entrepreneurial endeavor. If you don’t want to hear about your son, you can skip to the next section, about Bona Law’s new case.

The Lemonade Stand

You don’t have a nine-year-old son? Well … you do for this story. Congratulations, it’s a boy!

As you know, your son’s name is Johnny. You call him Little Johnny, but he is growing so fast, you are not sure how much longer the “Little” will last. But you treasure these times because they grow up so quickly.

And speaking of growing up quickly, Johnny sure is maturing. You tried to get him to clean-up around the house for an allowance, but he turned you down. He said he doesn’t want to be an employee and taking a job with you will just lead him into the rat race. Why would he want to do that?

Instead, Johnny says, he wants to start his own business. Ownership is where the money is, he says. Johnny wants to build cash flow, so he can just skip the rat race. Smart kid.

Okay, you say, “why don’t you start a lemonade stand?”

Johnny is excited. This is his first business—his first taste of Capitalism!

“Yes, I’ll build the best lemonade stand in the neighborhood, will serve the best tasting lemonade, and will be very careful with my costs, so I can charge a lower price and sell the most lemonade.”

Apparently Johnny has been paying attention to the business podcasts you have been listening to in the car.

As you know, you just moved to a wonderful neighborhood in the San Diego area. After years on the east coast, dealing with the harsh weather and sometimes harsh people, you are excited that you are now in paradise. The weather is incredible all year here and the constant sunshine puts you in a great mood.

Of course, it is tough to move to a new area, especially for kids. Johnny is excited, but a little nervous. He doesn’t know many kids in the neighborhood yet, and doesn’t start school until the fall—it is still July.

You and he have both noticed, however, that the neighborhood has a few lemonade stands—and many thirsty neighbors—so this might be a good way for him to make some friends and get to know the neighborhood.

You help Johnny build a stand, but to his credit he does most of the work—his enthusiasm for the venture has produced a work ethic in him you’ve never seen. You also admire his efforts to plan out his purchase of supplies, opting for Costco so he can buy what he needs in bulk at a low cost per glass (as he explained to you).

Johnny now has everything ready for his business: a stand with an attractive sign, cups, a money box, raw materials to make lemonade, a cooler, a couple chairs for him and his friend (or you, when you want to stop by), and, most importantly, the joy of ownership from starting his own business. You’ve never seen him so happy.

You drive around the neighborhood with him and discover that other kids seem to be selling lemonade at $7 per glass, which seems a little high, but it is a wealthy neighborhood, so perhaps that is the market price? It has been a warm, surprisingly humid summer in San Diego. You discuss with Johnny how that weather pattern increases demand. Of course, it did seem odd to you that everyone was selling lemonade at exactly $7 per glass, but you dismiss it.

Continue reading →

Ongoing Competition Enforcement Actions Arising Out of the European Commission’s E-Commerce Market Study

July 27, 2017 | Bona Law PC

Author: Luis Blanquez

In our prior article, we discussed the European Commission’s final report of its study of the EU’s e-commerce market for consumer goods and digital content.

In this article we describe EU investigations and enforcement actions that arose from the EC’s final e-commerce market study. While the final report itself offers companies doing business in the EU helpful guidance, the Commission’s actual conduct is perhaps an even better indicator of how the EC will implement what it learned.

Since the European Commission published its Final Report, it has opened investigation of about 20 companies.

Below is a summary of the relevant cases that the EC recently opened. We expect additional cases in the future in this area, both at EU and national level.

Geo-blocking cases

Video Games

On February 2, 2017, the EC opened an investigation to analyze bilateral agreements between Valve Corporation, owner of the Steam game distribution platform, and five PC video game publishers: Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax.

This investigation concerns geo-blocking practices, where companies prevent consumers from purchasing digital content, in this case PC video games, because of the consumer’s location or country of residence. After the purchase of certain PC video games, users need to confirm that their copy of the game is not pirated to be able to play it. This is done with an activation key.

The investigation focuses on whether such agreements require the use of activation keys for the purpose of geo-blocking.

Clothing Company, Guess

On June 6, 2017, the EC opened an investigation against clothing manufacturer Guess. The EC is analyzing whether Guess’s distribution agreements impose cross-border sales restrictions on (i) retailers making online sales to consumers in other Member States, (ii) or wholesalers, selling to retailers in other Member States.

Interestingly, as a result, other clothing manufacturers such as Mango, Oysho and Pull&Bear have now started to review and revise their distribution agreements. Other companies, such as coffee machine manufacturer De Longhi, and photo equipment manufacturer Manfrotto, are doing the same (See here).

Hotel Pricing Discrimination

On February 2, 2017, the EC opened another investigation into hotel accommodation agreements between the largest European tour operators on the one hand: Kuoni, REWE, Thomas Cook and TUI, and Meliá Hotels on the other hand.

The EC encourages hotels to develop and introduce innovative pricing mechanisms to maximize room usage. But the EC is concerned that these agreements may contain clauses that discriminate among customers based on their nationality or country of residence. As a result, customers may not be able to see the full hotel availability, or book hotel rooms at the best prices, simply because of the consumer’s nationality or place of residence.

Licensed Merchandising Products

On June 14, 2017, the EC opened more investigations into the licensing and distribution practices of Nike, Sanrio and Universal studios. These three companies license intellectual property rights to manufacturers of merchandising products such as the Fútbol Club Barcelona, Hello Kitty and Minions merchandise, respectively.

The EC is concerned that these companies, in their role as licensors of rights for merchandising products, may have restricted the ability of their licensees to sell licensed merchandise cross-border and online.

Resale Price Maintenance cases

Consumer electronics manufacturers

The EC has opened another investigation against Asus, Denon & Marantz, Philips and Pioneer. In this case, the EC is concerned that the companies involved might be restricting the ability of online retailers to set their own prices for widely used consumer electronics products such as household appliances, notebooks and hi-fi products.

This is the first resale price maintenance case that the EC has initiated in a long time. Instead, the Member States themselves have scrutinized resale price maintenance at national level during the last decade.

Germany, for example, has recently published a new guidance note on resale price maintenance. The Competition and Markets Authority (“CMA”) in the UK also published additional guidance on these types of pricing agreements in the form of an open letter, a film, a 60-second summary, and case studies.

Indeed, the CMA recently fined National Lighting Company (NLC), a light fittings supplier, £2.7 million for restricting online prices. They also sent out warning letters to others in the industry. In 2016, the CMA also fined two other online companies for resale price maintenance practices: Ultra Finishing Limited (“Ultra”) in the Bathroom fittings sector and ITW Limited in the commercial refrigeration sector.

Continue reading →

The European Commission Scrutinizes the E-Commerce Market: Lessons From its Final Report

July 24, 2017 | Bona Law PC

Author: Luis Blanquez

BACKGROUND

Over the past two years, the European Commission (“EC”) has been scrutinizing the e-commerce market of consumer goods and digital content in the European Union. This is a key step on the Commission’s Digital Single Market strategy to improve access to digital goods and services.

Such strategy includes legislation to promote cross border e-commerce through the following:

The harmonization of rules for the supply of digital content and online sales of goods;
A proposal to regulate geo-blocking;
Copyright modernization rules aimed at facilitating access to digital content across borders and;
A proposal to address unfair contractual clauses and trading practices identified in platform-to-business relationships.

In May 2015, the EC started in parallel its Sector Inquiry to identify possible competition concerns affecting European e-commerce markets. Its main purpose was to gather information on companies’ conduct and barriers to cross-border online trade, looking at online sales of consumer goods and digital content. In September 2016, the EC published a report with its preliminary findings, together with a Staff Working Document.

Finally, in May 2017, the EC issued its Final Report.

You can read our follow-up article to this one about ongoing EC enforcement actions arising out of the E-Commerce Report.

You might also enjoy our articles on EU dominance abuse and antitrust compliance programs in the US and EU.

RELEVANT FINDINGS

The EC outlines in the Final Report what it considers as the key issues in the field of e-commerce. It acknowledges the changing characteristics and fast-growing tendency of a sector with an increasing economic role in today’s economy. It further identifies business practices and barriers that could restrict competition and limit consumer choice.

The EC reviewed more than 2,600 agreements concerning the distribution of goods in the EU, and received more than 6,800 licensing agreements from digital content providers and rights holders. The main findings in the Final Report differentiate between consumer goods and digital content.

(A) CONSUMER GOODS

Contractual Restrictions on Cross-Border Sales: Geo-Blocking

The Sector Inquiry identifies contractual restrictions between operators in the online market that the EC believes could cause problems. Unilateral decisions by non-dominant firms, however, fall outside the scope of EU competition law.

But before telling you which contractual restrictions are problematic, let me explain first what the term “geo-blocking” means. Basically, it refers to practices that prevent cross-border sales in the EU. These include the following:

Blocking access to websites by users located in another Member State—for example when a customer located in Madrid tries to acquire a product via a French website, and is prevented from doing so because the website has been blocked due to its Spanish IP address;
Automatic re-routing of a customer to another website of the same or a different service provider—for example when a customer located in Madrid trying to access a French website is directly re-routed to the company’s Spanish website; or
Payment refusals based on the place of residence of the customer—for example when the payment to the French website is refused because the credit card used is linked to an address in Spain, or the delivery to Spain is denied based on the customer’s residence.

So back to the relevant contractual restrictions now: The EC is concerned about how retailers face contractual restrictions from suppliers, which prevent such cross-border selling on-line.

These questioned agreements are ones that (i) are not covered by the EC “safe harbor” under the Vertical Block Exemption Regulation (“VBER”) – this is if parties to the agreements have market shares above 30%, or there are hardcore restraints involved, (ii) preventing cross-border sales between Member States in distribution agreements, may infringe EU Competition rules.

Restrictions on the use of online marketplaces

An online marketplace is a website that facilitates shopping from different sources, such as Amazon or eBay.

An absolute ban on online selling is considered a hard-core restriction under EU law. There is, however, an important ongoing debate in Europe as to whether an absolute ban on selling via marketplaces is contrary to EU rules.

In Germany, the Bundeskartellamt issued an infringement decision against Asics on its ban to sell via online marketplaces. In April 2017, the Dusseldorf Regional Higher Court found that only the price comparison tool restrictions involved in the case were anticompetitive.

At EU level there are currently two preliminary rulings pending. One the Coty case, where the high EU court has been asked to analyze the restrictions imposed on a selective distribution agreement by manufacturer Coty on one of its authorized distributors to sell products via third party online platforms. The second one is the Samsung and Amazon case, concerning a ban on resale outside a selective distribution network and on a marketplace, by means of online offers on several websites operating in various Member States.

In its Final Report, the EC does not consider marketplace selling bans as hardcore restraints. It may, however, still scrutinize them on a case by case basis, if parties to the agreements have market shares above 30%, or there are hardcore restraints involved, according to the VBER.

Selective distribution agreements: Requirements for brick-and- mortar shops

Contractual requirements to operate at least one brick-and-mortar shop under a selective distribution agreement are compatible with the EU competition rules, as long as they are linked to quality or brand image.

The EC, however, states in its Final Report that brick-and-mortar shop requirements imposed for the sole purpose to exclude online operators from the market, may infringe EU competition rules.

Pricing restrictions: Resale Price Maintenance (“RPM”) and Price collusion

E-commerce has significantly increased price transparency, competition on price and opportunities for users to compare different options in the internet. According to the EC’s investigation, almost 30% of manufacturers systematically track resale prices: 67% track resale prices manually, whereas 38% use specific software (spiders).

The Final Report highlights that this may also increase the risk of RPM or collusion between competitors.

Resale Price Maintenance (RPM)

The imposition of minimum resale prices is considered a hardcore restriction under EU Competition law. Similarly, when manufacturers seek to enforce compliance with recommended prices through contractual restrictions or some form of coercion, they may also infringe competition rules.

The EC is concerned that online price transparency may facilitate such practices, making it easier for manufacturers to detect deviations and enforce RPM provisions.

You can read articles on The Antitrust Attorney Blog on Resale Price Maintenance here.

Price collusion

Price fixing between competitors is considered one of the most serious infringements under EU competition rules.

The Final Report found that almost 50% of retailers track online prices of competitors, and 78% of them use software to monitor rivals’ prices, adjusting their own prices accordingly.

The EC is thus concerned that price monitoring may facilitate or strengthen collusion between retailers, by making the detection of deviations from the collusive agreement easier, while allowing them to counteract by adjusting their prices.

Continue reading →

The Antitrust Laws Do Not Allow Real Estate Agents to Jointly Fix or Set Prices or Commissions

June 19, 2017 | Bona Law PC

If you have sold or purchased a home recently, you might be under the impression that real estate commissions—the price to engage a real estate broker—are fixed or otherwise set by law in different geographic markets. They aren’t—to do so amounts to price-fixing, which is a per se violation of the antitrust laws.

Like any other competitor—professional or not—real estate brokers and agents must compete for customer business on price, quality, and everything else. If competing professionals were to join together to fix commissions at a set price, they would violate the antitrust laws. And since it would be a per se violation, there are potential criminal penalties.

In fact, the U.S. Department of Justice, Antitrust Division, is engaged in prosecuting some other real-estate participants for per se antitrust violations—bid rigging: Several Northern California real-estate investors have pled guilty for bid rigging public real estate foreclosure auctions. Similar bid rigging of foreclosure auctions apparently occurred in Georgia, as well. We wrote about these bid rigging investigations long ago when DOJ’s antitrust activity was in its early stages.

But let’s return to real estate brokers and commissions: It is true that in most geographic regions, you see commissions at around the same level, no matter who you hire as a real estate agent. That will sometimes happen in a market; there is a rate that is around the market rate and most will price around that rate. We wrote a prior article about this situation, where real estate commissions ended up at the same level, but not due to any agreement. This was not an antitrust violation.

For some reason, however, there is an impression with real estate commissions that there is a “standard” or “legal” rate that real estate agents must price. If you are a consumer in this industry, it is important that you know that this is absolutely incorrect. If your real estate broker tells you otherwise, have them read one of our most popular articles: Five Antitrust Concerns for Real Estate Professionals.

Then, go ahead and negotiate. That is your right. You don’t have a right to win the negotiation, but real estate agents don’t have a right to agree among each other on prices either.

If you are a competitor for real estate services, it is particularly important that you understand that you can’t fix prices with other agents. If you do, you might find yourself on the wrong side of an antitrust lawsuit—possibly even brought by Bona Law—as we receive a lot of calls and emails about these issues. Or, worse, you could receive a call from a Department of Justice lawyer that opened an investigation into you or your company.

My interest in this issue goes beyond my role running a boutique antitrust law firm: I am also a long time real estate investor and I have a California real estate license. To capitalize on that background, we recently started a new blog directed at real estate investors, called Titles & Deeds. If you want to learn more, you can read about our real estate blog here.

This, of course, leads us to Kansas. I bet you didn’t see that coming. Let me explain.

Are the Kansas Real Estate Commission and its Members About to Violate the Antitrust Laws?

On June 16, 2017, Andrew Finch, Acting Assistant Attorney General for DOJ, wrote a letter to the Kansas Real Estate Commission expressing concern about a regulation the Commission is considering that would make it easier to fix prices by forbidding real estate brokers from competing on price by offering gift cards or similar items.

Apparently, according to the DOJ law, Kansas state law forbids real estate brokers from offering rebates, but doesn’t define the term “rebates.” The Kansas state ban, of course, is highly anticompetitive. It directly restricts price competition and harms consumers in Kansas. The Kansas government has unfortunately chosen to protect profits in the real estate profession over the well-being of its citizens.

Continue reading →

The Antitrust Pleading Standard Is Shifting Back Toward the Plaintiff

June 10, 2017 | Bona Law PC

Author: Jarod Bona

In 2007, the Supreme Court issued a bombshell of a case called Bell Atlantic v. Twombly, which caused both antitrust lawyers and civil procedure law professors to rethink how they go about their work.

For those of you not obsessed with law or antitrust, Twombly changed the antitrust pleading standards in federal court from one of extreme permissibility to the current “plausibility” standard.

Courts quickly began applying Twombly beyond antitrust cases, and it now is THE case for motions to dismiss that argue that plaintiffs have not plead enough to move to the next stage of litigation.

When the Supreme Court decided Twombly, it created a surge of excitement, and federal courts began dismissing cases left and right because plaintiffs had not alleged sufficient facts to show a “plausible” claim to relief, under antitrust or other laws.

Since then, I don’t think I have seen any antitrust complaint that wasn’t followed by a motion to dismiss, usually citing Twombly. Notably, courts coupled this elevated standard with refusals to start discovery until after plaintiffs leaped the motion-to-dismiss hurdle.

I believe, however, that the antitrust-pleading-standard pendulum is beginning to shift back toward the plaintiff.

Update: On November 10, 2014, the United States Supreme Court in Johnson v. City of Shelby issued a new plaintiff-friendly pleading decision.

Update 2: You can read my new article on antitrust pleading standards here: “What is the Biggest Mistake that District Court Judges Make in Antitrust Cases?”

Update 3: Read this article from Luis Blanquez: What is the Twombly Motion to Dismiss Standard for Antitrust Cases? Comparing the Ninth and Second Circuits.

Continue reading →

California Federal Court Rejects Class Certification in Lithium Ion Batteries Antitrust Litigation

April 24, 2017 | Bona Law PC

If you are the antitrust lawyer for a defendant in a class action, defeating class certification is a major victory—usually a complete victory, pending appeal.

You can read a more complete description of the requirements for class certification in our article on the class action antitrust case of Comcast v. Behrend.

But before we talk about the North District of California’s class certification decision in In re Lithium Ion Batteries Antitrust Litigation, we will hit the highlights of the most common dispute in these type of cases.

Update: You can read our updated article on the court’s denial of plaintiffs’ renewed motion for class certification here.

It is also important that you know that, as of the date of this blog post, Bona Law represents a defendant in the In re Capacitors Antitrust Litigation, which also will involve a class certification motion from plaintiffs and similar issues. So please evaluate anything I write with that in mind.

In fact, even though we will represent businesses as either plaintiffs or defendants in competitor antitrust litigation, Bona Law will not—except in rare or unusual circumstances—represent a class action of plaintiffs in an antitrust action (at least as of now). We will, however, represent defendants in antitrust class-action cases, as I have many times over my career.

To learn more about how Bona Law handles the defense of complex antitrust class actions, including MDL cases, read here.

So, the bottom line, is that I come to these issues from the perspective of an antitrust attorney representing defendants in class action litigation. It is a good practice when reading anything to always understand the perspective of the writer, to understand biases, blind spots, or how their experiences can cloud their explanations. I do my best at The Antitrust Attorney Blog to provide useful information rather than propaganda or corporate double-speak, but I am human with all of the weaknesses and limitations that come with that.

If you want to read about how alleged anticompetitive conduct morphs into a significant antitrust class action, check out our prior blog post.

Common Class Certification Issues

Every case is different, of course, but here is what usually matters most at the class-certification stage of antitrust class-action litigation:

Plaintiffs will collect a lot of transactional data and other discovery from defendants. They will pass that on to their expert economists, who will submit a report that plaintiffs need to satisfy the elements of class certification—which is their burden. Defendants, of course, have their own expert who will attack plaintiffs’ experts and often present their own economic theories.

The primary issue in dispute is usually whether common issues predominate over individual issues—from Federal Rule of Civil Procedure, Rule 23(b)(3). And the most likely disputed issue that may be either common or individual is the impact or damages from the alleged anticompetitive conduct.

The Court is not tasked with determining the merits—including whether there was, in fact, an antitrust conspiracy—so the parties will often at this stage fight over whether if there were a conspiracy, the plaintiffs’ experts can establish a reliable methodology to show that there is a common impact to the many class members. Of course, issues of merits are usually entangled within the class-certification questions.

Another issue that is increasingly important in antitrust class actions is typicality—whether the named or representative class members are “typical” of the unrepresented members of the class.

This battle usually happens on two fronts during class certification: (1) motions to strike the plaintiffs’ expert economists’ testimony for lack of reliability or something similar; and (2) whether plaintiffs can satisfy the elements for class certification.

That, in fact, was where the parties fought in the papers for class certification of the Lithium Ion case.

Class Certification Decision for In re Lithium Ion Batteries Antitrust Litigation

The Lithium Ion Batteries case involves allegations by named class members of a multi-year, international price-fixing conspiracy among Japanese and Korean manufacturers (and their American subsidiaries) of lithium ion battery cells.

Continue reading →

How do I Know Whether My Company is Abusing its Dominant Position in the European Union?

April 3, 2017 | Bona Law PC

Author: Luis Blanquez

Luis Blanquez is an antitrust attorney at Bona Law with fifteen years of competition experience in different jurisdictions within the European Union such as Spain, France, Belgium and the UK.

You can read our article about the elements for monopolization under U.S. antitrust law here. We also wrote about monopolization on the Bona Law website.

Article 102 TFUE

In the European Union, the Directorate General for Competition of the European Commission (“the Commission”) together with the national competition authorities, directly enforces EU competition rules, Articles 101-109 of the Treaty on the Functioning of the European Union (TFEU).

Article 102 TFEU prohibits abusive conduct by companies that have a dominant position in a particular market.

Here is the language:

Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States. Such abuse may, in particular, consist in: (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

First, article 102 TFEU applies to “undertakings,” which is defined by EU case law as including every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed. (C-41/90 Höfner and Elsner v Macrotron [1991] ECR I-1979).

Natural persons, legal persons, and even states are included in the interpretation of undertakings. (So, as in the United States, governments in Europe might violate the competition laws).

Second, to qualify as an undertaking, the entity must be also engaged in an economic activity, i.e. offering goods and/or services within a relevant market.

Third, to fit within Article 102 TFUE’s prohibition, the conduct must have a minimum level of cross-border effect between member states within the EU.

The concept of dominance under EU antitrust rules

As explained above, article 102 TFEU prohibits abusive conduct by companies that have a dominant position in a particular market.

Continue reading →