Antitrust Law Blog

Suppliers that attempt by agreement, threat, promise or like means, to influence upward or discourage the reduction of the price of products or services, are subject to criminal liability in Canada under Section 61(1)(a) of Canada's Competition Act (the "Act").¹ Last week, Labatt Brewing Company faced such liability after an inquiry by the Canadian Competition Bureau (the "Bureau") into the Quebec beer industry resulted in allegations that between March 2004 and April 2005, Labatt engaged in price maintenance in violation of Section 61(1)(a) of the Act. Following an agreement with the Attorney General of Canada, Labatt pleaded guilty to one charge of the offense.

The Second Circuit recently weighed in with its view of the legality of reverse payment settlements in Hatch Waxman patent litigation. In re Tamoxifen Citrate Antitrust Litigation, 2005 U.S. App. LEXIS 23653 (2d. Cir 2005). The Sixth Circuit previously found such payments to be per se illegal as analogous to market allocation agreements among competitors. In re Cardizem, 332 F.3d 896 (6th Cir. 2003). By contrast, the Eleventh Circuit rejected per se treatment if such settlements did not restrict competition beyond the exclusionary scope of the patent themselves. Valley Drug Co. et al. v. Geneva Pharmaceuticals, 344 F.3d. 1294 (2003). See also Schering Plough Corp. v. FTC, 402 F.3d. 1056 (11th Cir. 2005), cert. petition pending 2005 U.S. LEXIS 7855. In Tamoxifen, the Second Circuit largely aligned itself with the Eleventh Circuit and affirmed dismissal of the Complaint at the pleading stage for failure to state a claim for relief under Federal Rule 12(b). There was no discovery and no trial. The Court accepted the allegations of the Complaint as true and accurate but nonetheless found them insufficient. It affirmed a judgment dismissing the Complaint.

After a number of losses by the federal government in cases seeking to enjoin hospital mergers, the Federal Trade Commission ("FTC") has won at least a preliminary victory in its challenge of a hospital merger that was consummated almost six years ago. The FTC successfully challenged Evanston Northwestern Healthcare Corporation's ("ENH") acquisition of Highland Park Hospital ("Highland Park") through an administrative trial. Although the FTC Administrative Law Judge ("ALJ") Stephen J. McGuire ruled in favor of the FTC, lengthy appeals are expected. The decision has been appealed to the full Commission and then if the Commission sides in favor of the FTC, that decision would likely be appealed to the Seventh Circuit. Given that the FTC has prevailed at least at this initial stage of the litigation process, the FTC staff's confidence in challenging hospital mergers may increase slightly.

Blackboard Inc. ("Blackboard"), a Washington-based developer of online learning resources and Web-based academic forums, announced Wednesday, October 12, it would acquire smaller rival WebCT Inc. ('WebCT") of Lynnfield, Massachusetts, for $180 million. The deal will bring the top two competitors in the online learning space together under one platform, with a total of 3,700 institutional users. The transaction has been approved by the companies' boards and the companies expect the deal to close later this year or in early 2006.

On November 9, 2005, the UK's antitrust regulator, the Office of Fair Trading ("OFT") announced that it had issued a statement of objections to 50 of the UK's leading private schools which set out the OFT's provisional findings that the schools had infringed the Chapter I prohibition of the Competition Act 1998 (which is the UK's equivalent of Section 1 of the Sherman Act in the US) by entering into an agreement to exchange detailed information about their academic fees.