Private Civil Antitrust Litigation

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Congress recently took two steps towards incentivizing private participation in federal cartel enforcement:  the permanent adoption of ACPERA, and enactment of the Criminal Antitrust Anti-Retaliation Act.  While now companies may have permanent incentives to self-report cartel activity, and whistleblowing employees may be better protected from employer retaliation, no surge in individual cartel reporting should be expected absent direct whistleblower financial incentives, such as found in other federal enforcement regimes.
Continue Reading Congress Misses Opportunity to Bolster Flagging Cartel Enforcement through Whistleblowers

* Reprinted with permission from Global Competition Review. The full version of GCR’s US Courts Annual Review, published in July 2020, is available here.

The United States Supreme Court’s single antitrust case of the 2019 term, Apple, Inc v. Pepper upheld the long-standing and often criticized direct purchaser rule in the realm of sales through iPhone apps and other online sales platforms. The direct purchaser rule, established through the Supreme Court’s decisions in Hanover Shoe v. United Shoe Machinery Co and Illinois Brick Co v. Illinois limited standing to “the overcharged direct purchaser, and not others in the chain of manufacture or distribution.” In Apple v. Pepper, the Court grappled with these concepts in the virtual retail space where the class plaintiffs alleged that Apple’s 30 percent fee on sales of iPhone applications through its App Store represents a monopoly overcharge that should be recoverable by purchasers of the apps. The Court considered whether the developers of iPhone applications, rather than the consumers were more directly harmed by Apple’s alleged monopoly.
Continue Reading U.S. Courts Annual Review: Supreme Court

Virtually all significant antitrust cases these days have an international component. Markets now are worldwide. Consequently, one of the most frequently litigated—and most important issues—is the extent of U.S. jurisdiction. Which sales are subject to trebling in a U.S. court? Which sales must be pursued elsewhere? Frequently, the key statute is the Foreign Trade Antitrust Improvements Act (FTAIA). The resulting litigation, unfortunately, has not resulted in clear rules or signposts. And, the cases are highly fact-specific. The facts matter.
Continue Reading Navigating Dangerous Shoals: The Murky but Critical Territorial Boundaries of U.S. Antitrust Jurisdiction

On January 3, 2020, Axon Enterprises Inc. filed a complaint against the Federal Trade Commission in the United States District Court for the District of Arizona challenging the constitutionality of the FTC’s administrative process.  Axon’s complaint marks the latest salvo in a decades-long critique of the disparity between FTC and Department of Justice merger enforcement procedures.
Continue Reading Axon Sues FTC Over Use of Administrative Adjudication in Merger Investigations

California’s below-cost pricing statute, the Unfair Practices Act (the “UPA”), is perhaps the broadest such statute in the nation, and far broader than comparable federal laws, which have been narrowed in recent decades almost to the vanishing point.  Indeed, the statute—which dates back to the Great Depression and the era of New Deal economics—could be interpreted as a bright line prohibition against pricing just about anything below cost to take business from a competitor.  See Bus. & Prof. Code § 17043.  And yet, at least by the hyperactive standards of contemporary commercial litigation, the statute has not been heavily employed or even spoken about, mainly collecting cobwebs in the dim corners of law libraries.
Continue Reading Why Aren’t There More California Below-Cost Pricing Cases? *

Over the last three decades, government antitrust enforcers and private plaintiffs in the United States have increasingly sought to apply U.S. antitrust laws to conduct by foreign businesses that is deemed to have effects on the U.S. economy. Many of these foreign businesses have been located in Asia:  since the 1990s there have been waves of U.S. criminal prosecutions and civil cases alleging anticompetitive conspiracies between Japanese, Korean, and Taiwanese sellers and manufacturers.  For most of this time, however, companies in mainland China—despite being the largest exporters of goods to the United States, first in Asia and now in the entire world—have rarely been targeted for U.S. antitrust enforcement.
Continue Reading Between a Rock and a Hard Place: Vitamin C and the Future of U.S. Antitrust Enforcement Against Chinese Companies *

On November 1, 2018, the Northern District of California updated its Procedural Guidance for Class Action Settlements, requiring increased disclosures for settlement preliminary and final approval, and more transparency in post-distribution accounting. Failure to follow the Guidance may result in delay or denial of settlement approval. This article highlights the most significant updated rules affecting class action settlements in the Northern District.
Continue Reading N.D. Cal. Releases Comprehensive Procedural Guidance for Class Action Settlements

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

In years past, the focus of private international antitrust disputes was the United States. Over a century of experience, treble damages, class actions and the American rule for attorneys’ fees – plus robust enforcement by the Antitrust Division – have combined to make the United States the natural hub for private cases. That is still true today, but to a lesser extent because emerging private remedies and processes have made European jurisdictions much more viable, and U.S. courts are taking an increasingly close look at the limits of their jurisdiction. The result is litigation increasing across newly empowered jurisdictions: sophisticated and well informed coordination, case management and overarching strategy now are critical.
Continue Reading Eyes Across the Atlantic: Coordination and Management of Global Private Antitrust Litigation*

Practitioners interested in the real world application of an attempt to monopolize claim under Section 2 of the Sherman Act, will find Savory Pie Guy a “good read” for the New Year.  Savory Pie Guy, LLC v. Comtec Industries, Ltd., No. 14-CV-7527, 2016 U.S. Dist. LEXIS 179317 (S.D.N.Y. December 28, 2016).  Since the passage of the Sherman Act in 1890, attempted monopolization as a distinct legal theory of liability has received scant attention.  It is usually bundled with a set of other but related antitrust theories of liability, including concerted activities in restraint of trade, and often tying and refusal to deal claims.  For most of its existence, the theory of attempted monopolization has been under-analyzed intellectually.  Savory Pie Guy provides a good and succinct analysis of the distinct elements of an attempt to monopolize claim, and their inter-relationship to the over-arching concept of “monopolization.”
Continue Reading Attempt to Monopolize Claim Fails Where Plaintiff Cannot Establish Approach to Monopoly Power in Properly Defined Relevant Market

The center of gravity when it comes to private litigation of international antitrust disputes is still in the United States, but two trends affecting the legal landscape in the U.S., U.K., and EU are shifting it across the Atlantic. In this article originally published in Competition – The Journal of the Antitrust and Unfair Competition Law Section of the State Bar of California (Vol. 25, No. 2, Fall 2016), we address these trends and further discuss their implications for lawyers handling major antitrust disputes that have global footprints. Much of the discussion will focus on cartel litigation because those cases often involve global issues and present the most obvious examples for our discussion.
Continue Reading The Rapidly Changing Landscape of Private Global Antitrust Litigation: Increasingly Serious Implications for U.S. Practitioners