Selective Distribution Systems and Bans on Sales of Luxury Products via Online Market Platforms: Initial Thoughts on the CJEU’s Coty Judgment

The Court of Justice of the European Union (CJEU) confirmed in a short judgment of 6 December 2017 that a prohibition imposed on authorized distributors from using third party platforms for the sale of their luxury products is in line with European competition law provided certain conditions are met. This judgment also ends an ongoing debate and confirms that selective distribution systems are indeed permissible if they are used to preserve and enhance the luxury image of a product. This outcome is not surprising to those familiar with the Court’s case law and is welcomed by companies running selective distribution networks to market their luxury products. However, the judgment is specific to the facts at hand and bans relating to online platforms will have to be reviewed on the basis of the merits of each case and of the products concerned. Continue Reading

An EC Communication on SEPs – Not More Not Less

A summary of the European Commission’s Policy Document on standard essential patents (SEPs).

After considerable preparations and consultation the European Commission has on 29 November 2017 issued a Communication [1] “setting out the EU approach to standard essential patents”. This Communication is part of the wider Europe’s Digital Single Market initiative. Notably, however, this long-awaited paper is not likely to change the current landscape of FRAND litigation and licensing, and intentionally does not address the most controversial issues of the current debate. Continue Reading

Antitrust Claims Against Telescope Manufacturer Ningbo Sunny Dismissed and Shot into Space

On September 28, 2017, Judge Edward Davila dismissed an antitrust complaint filed by Optronic Technologies, Inc. (dba Orion) against Ningbo Sunny Electronic Co., Ltd., Sunny Optics, Inc. and Meade Instruments Corp.  The case is Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd., Case No. 5:16-cv-06370-EJD (N.D. Cal.).  Defendants are represented by Leo Caseria and Mike Scarborough of Sheppard, Mullin, Richter & Hampton LLP.

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Makan Delrahim Confirmed as U.S. Assistant Attorney General for Antitrust Division

After a lengthy confirmation process, Makan Delrahim has been confirmed by the Senate to serve as the next U.S. Assistant Attorney General for the DOJ’s Antitrust Division. While President Donald Trump originally announced Delrahim’s nomination back on March 27, 2017, the confirmation process has been slowed due to paperwork issues and opposition by some lawmakers in Washington, D.C. over the past few months. Continue Reading

Takeaways from the Intel Judgment on the Legality of Exclusivity Rebates in the EU

According to the longstanding case law of the Court of Justice of the European Union (the “Court”), rebates which are conditional upon a purchaser buying all or most of its requirements from a dominant supplier (so called “exclusivity” or “loyalty” rebates) have been presumed to be abusive on the basis that they are by their very nature anticompetitive. The Intel judgment of 6 September 2017 marks a shift by the Court from this per se approach: for the first time, the Court suggests the need for an assessment of their anticompetitive effects on a case by case basis. Continue Reading

FTC Temporarily Halts Proposed DraftKings-FanDuel Merger

On June 20, 2017, the United States District Court for the District of Columbia issued a temporary restraining order blocking the daily fantasy sports (DFS) companies DraftKings and FanDuel from consummating their proposed merger until the Court rules on a motion for a preliminary injunction filed by the Federal Trade Commission (FTC). The FTC alleges that the merger would create a monopoly in violation of Section 7 of the Clayton Act in the purported DFS market. The TRO does not otherwise prevent DraftKings and FanDuel from individually continuing to host DFS competitions. Continue Reading

Exclusive Agreement Between Hospital and Insurance Plan Does Not Violate Section 1

The Seventh Circuit refused to revive an exclusive dealing claim by one hospital against its competitor because of an exclusivity agreement with an insurance plan. Judge Richard Posner wrote the short opinion strongly reiterating in the health insurance context the established principle that a competitor trying to attack vertical agreements under Section 1 of the Sherman Act will have an uphill struggle under the Rule of Reason. The case is Methodist Health Services Corp. v. OSF Healthcare System d/b/a Saint Francis Medical Center, No. 16-3791 (7th Cir. June 19, 2017). Continue Reading

EU Telecoms Regulation Based on Unilateral Market Power Would be Contrary to EU Law

The existing EU regulatory framework for electronic communications obliges the EU Member States to provide in their national laws for certain powers and responsibilities of national regulatory authorities (“NRA”), in particular related to the analysis of markets likely to be regulated ex-ante. The fundamental principle since 2003 is that only companies with significant market power (“SMP”) shall be made subject to ex-ante obligations. This is a carefully balanced regulatory system, taking into account the important goal of stimulating market entry, and thus promoting effective competition, while at the same time establishing adequate investment incentives for the network operators. Continue Reading

Is Antitrust Law a Viable Substitute for Net Neutrality?

In April 2017, FCC Chairman Ajit Pai issued a Notice of Proposed Order, Restoring Internet Freedom, seeking to reverse the FCC’s previous adoption of “net neutrality” principles in its March 2015 Open Internet Order. Net neutrality is the principle that internet service providers (“ISPs”) should treat all data equally, regardless of source. Continue Reading

Algorithms, Artificial Intelligence and Joint Conduct

Over the past few years, sophisticated pricing algorithms and artificial intelligence have attracted the attention of antitrust and competition enforcers. These new technologies interpret and respond to market conditions with far more precision, agility, and consistency than their human counterparts. As a result, they may require practitioners to develop new ways of thinking about joint conduct such as price-fixing conspiracies. But to what extent do these innovations really alter traditional antitrust analysis under Section 1 of the Sherman Act? In a recent article published in Competition Policy International’s Antitrust Chronicle, we analyze existing legal doctrines and principles to see if they can offer antitrust and competition practitioners any guidance before we jump into this “brave new world.” Continue Reading

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