European Court of Justice to Rule on Legality of Online Sales Bans

An appeal court in Frankfurt has asked the European Court of Justice to clarify the application of the competition rules to online sales. The Frankfurt court made its request in the context of a dispute between a leader in beauty products with an extensive portfolio of beauty brands and its German distributor. The supplier of beauty products operates a selective distribution system in Germany to manage how its products are sold and has taken its distributor to court for selling products over online platforms, such as Amazon.com and eBay. The Frankfurt court is seeking guidance from the European Court of Justice on whether a supplier can prohibit its distributor from selling its goods on online marketplaces, regardless of whether the distributor has met the criteria of the selective distribution system. This question is highly topical in the EU and particularly in Germany, where the German competition authority and the courts have recently taken divergent positions. The German competition authority has issued rulings prohibiting suppliers of branded goods from restricting internet sales by retailers and, in particular, over third party platforms such as eBay and Amazon.com. These rulings have been in contradiction with the stance taken by the German courts, such as the Higher Regional Court of Frankfurt, which recently decided that a branded manufacturer acted lawfully when banning its authorized retailers within its selective distribution system from selling its products on online marketplaces. According to the Higher Regional Court, a manufacturer has a legitimate interest in ensuring that its branded products are perceived as high-quality products sold with the requisite level of sales advice and a manufacturer is, therefore, free in principle to decide under which conditions its products are sold, provided that these conditions are necessary to meet its quality standards. It is expected that the European Court of Justice will issue its ruling on this issue within the next 15 months or so.

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China’s Anti-Unfair Competition Law Is Poised For An Update

Since 2010, China’s State Administration for Industry and Commerce (SAIC) and the State Council Legislative Affairs Office (SCLAO) have been revising China’s Anti-Unfair Competition Law of 1993 (AUCL). This February the SCLAO released a draft revision of the AUCL for public comment. In general, the AUCL is broad, covering unfair trade practices that relate to intellectual property rights, anti-corruption and antitrust. Click here for the unofficial translation of the draft revision of the AUCL. Various organizations such as the American Chamber of Commerce, Beijing and American Bar Association will be submitting comments on behalf of companies and law firms, as well as other interested parties. Continue Reading

A Quick Take on Justice Scalia’s Legacy on Antitrust Law

The late Justice Antonin Scalia was not the biggest fan of antitrust law. As he famously quipped during his Senate confirmation hearing: “In law school, I never understood [antitrust law]. I later found out, in reading the writings of those who now do understand it, that I should not have understood it because it did not make any sense then.” Continue Reading

Higher Filing Thresholds for HSR Act Premerger Notifications and Interlocking Directorates Announced

1. Higher Thresholds For HSR Filings

On January 21, 2016, the Federal Trade Commission announced revised, higher thresholds for premerger filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The filing thresholds are revised annually, based on the change in gross national product and will be effective thirty days after publication in the Federal Register. Publication is expected within one week, so the new thresholds will likely become effective in late February 2016. Acquisitions that have not closed by the effective date will be subject to the new thresholds. Continue Reading

Morton Salt Presumption Of Injury Under Robinson-Patman Act

Plaintiffs and appellants, the disfavored purchasers in a Robinson-Patman Act case, were twenty-eight retail pharmacies who alleged that the pharmaceutical manufacturer defendants had charged them higher prices than those charged since the early 1990s to the favored purchasers, who typically received discounts and rebates. The favored purchasers included HMOs and pharmacy benefit managers, who manage benefits for insurers and HMOs.  Plaintiffs claimed that the price differentials harmed their ability to compete, causing them to lose customers to the favored purchasers.  After years of discovery, the district court granted summary judgment and dismissed plaintiffs’ Robinson-Patman Act claims (15 U.S.C. sections 13(a), (d), and (f), 15 and 26) for failure to prove competitive or antitrust injury.  The court of appeals affirmed. Cash & Henderson Drugs, Inc. v. Johnson & Johnson, 799 F.3d 202 (2d Cir. 2015).[1] Continue Reading

Pricing Algorithms and the Digital “Smoke-Filled Room”

On December 3, 2015, the DOJ unsealed an indictment against Daniel William Aston and his company, Trod Ltd. (doing business as Buy 4 Less, Buy For Less, and Buy-For-Less-Online), for conspiring with third-party sellers to fix the prices of posters sold online via Amazon Marketplace. According to the indictment, Aston and his co-conspirators agreed to adopt specific pricing algorithms to coordinate changes in their respective prices. The DOJ claimed that because of this conduct, shoppers faced the same prices for the same products, regardless of what seller they chose. Continue Reading

Competition Agencies Urge Virginia to Reconsider Certificate of Need Requirements

In a joint statement issued by the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice (collectively, the “Agencies”) late last month, the Agencies suggested Virginia’s Certificate of Public Need Work Group (“Work Group”), currently convened, consider repealing or retrenching Virginia’s Certificate of Public Need (“COPN”) law.[1] Continue Reading

Ninth Circuit Holds That NCAA’s Amateurism Rules Violate Section 1 of the Sherman Act

In a decision handed down on September 30th, the Ninth Circuit affirmed in part and reversed in part the District Court’s ruling that the NCAA’s “amateurism” rules unlawfully restrained trade in the market for certain educational and athletic opportunities offered by the NCAA member schools in violation of Section 1 of the Sherman Act. O’Bannon v. NCAA, Case No. 14-16601, 2015 WL 5712106 (9th Cir. Sep. 30 2015).  While affirming most of the District Court’s rulings, the Appeals Court reversed the portion of the District Court’s ruling that enjoined the NCAA from prohibiting its member schools from offering deferred cash payments to student-athletes. Continue Reading

The European Commission’s New Pandora’s Box – Reopening Final Tax Rulings as a Form of “State Aid”

In Short

The European Commission (Commission) has adopted a decision on 21 October 2015 on the tax rulings – also referred to as “comfort letters” – granted by Luxembourg to Fiat Finance and Trade (FFT) and by The Netherlands to Starbucks. Rejecting the decisions of domestic authorities in Luxembourg and The Netherlands, the Commission concluded that these rulings artificially reduced the tax burdens for the two companies awarding them selective advantages, which constitute State aid. Continue Reading

Evolving Private Remedies for Competition Infringements in Europe: Class Actions in the U.K.

Winds of change are blowing through Europe’s national courts, beginning with a new antitrust damages Directive requiring changes in national laws to facilitate private enforcement of competition law. This step was a major change, and an equally significant development has taken place in the U.K., which will make it even more attractive to private enforcement.  As of 1 October, 2015, the U.K.’s long-anticipated opt-out class action procedure will be available. Continue Reading

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