The current press is buzzing with news about the recent increase in antitrust investigations involving foreign companies with operations in China, and reports of foreign companies being told to expect higher fines if they “put up a fight” during investigations. At the same time, the Chinese enforcement agencies have started to make their decisions public. Putting these developments in perspective, the take-away is that antitrust in China should be taken seriously, the enforcement agencies are still in the development stage, and some progress is being made in transparency of decision-making.
Continue Reading Antitrust Investigations in China: Putting Things in Perspective

The Federal District Court for the Central District of California, sitting in Santa Ana, recently dismissed antitrust claims in an action between competitors in a market described as the management and distribution of “photographs in rich media content for hotels.” As described in the first amended complaint, a hotel wishing to advertise or distribute visual or “rich content” through an online travel agency must use an intermediary, described as a “Global Distribution System” (“GDS”) or “Pegasus”. Plaintiff Pro Search alleges that defendant VFML violated Sections 1 and 2 of the Sherman Act by entering into exclusive dealing agreements with all of the GDS companies, as well as an exclusive dealing agreement with Pegasus. There are four GDS in the alleged geographic market. The contracts with GDS and Pegasus are alleged to constitute the “core of VFML’s monopoly.” Pro Search claims that it has been excluded from accessing the GDS and Pegasus, which are described as “essential intermediaries in the industry”. Pro Search alleges that VFML has a relevant market share of approximately 80%. The court dismissed the Sherman Act claims with leave to amend. Pro Search Plus, LLC v. VFM Leonardo, Inc., U.S.D.C., Central District of California, Case No. SACV 12-2102-JST (ANx), July 30, 2013.
Continue Reading Antitrust Exclusive Dealing Claims Given “Short-Shrift” in Dismissal. How Long Is Short? An Analysis in Search of Context

On August 7, 2013, the National Development and Reform Commission (“NDRC”) fined six powdered milk companies – five foreign and one Hong Kong-based – RMB668 million (approximately US$109 million) for engaging in anti-competitive practices and illegal price-fixing, the largest fine ever for an Anti-Monopoly Law (“AML”) violation in China.
Continue Reading China Hands Milk Producers the Largest Anti-Monopoly Violation Fine

The Ninth Circuit Court of Appeals recently issued an opinion on a rare legal issue: buyer liability for violations of the Robinson-Patman Act. Gorlick Distribution Centers, LLC v. Car Sound Exhaust System, Inc., No. 10-36083 (9th Cir. July 19, 2013). The Gorlick court relied extensively on the Supreme Court’s opinion in Automatic Canteen Co. of America v. Federal Trade Commission, 346 U.S. 61 (1953) (Frankfurter, J.), which will be discussed first in this article, in affirming the grant of summary judgment dismissing plaintiff’s Robinson-Patman Act price discrimination claim. The court of appeals also affirmed dismissal of plaintiff’s Sherman Act section 1 claim, which reframed essentially the same facts as a conspiracy.
Continue Reading Disfavored Purchaser Loses Robinson-Patman Act and Sherman Act Section 1 Claims Against Favored Buyer

On August 2, 2013, District Judge Edward J. Davila denied a motion to dismiss antitrust claims brought by consumers of NFL apparel against Reebok and the NFL in Dang v. San Francisco Forty Niners, Case No. 5:12-CV-5481 (N.D. Cal.). Plaintiff seeks to represent a class of NFL apparel purchasers who were allegedly overcharged as a result of an agreement that gave Reebok the exclusive right to make and sell NFL apparel. Defendants — Rebook, the NFL, the NFL teams, and an NFL licensing entity — argued that plaintiff lacked standing and failed to adequately plead a relevant market. Judge Davila denied defendants’ motion to dismiss. The Court held that NFL apparel and NFL apparel licenses could be relevant markets because the NFL logos may be what consumers really want, in which case non-NFL apparel would not be a reasonable substitute. The Court also held that Dang had sufficiently pleaded standing in both markets, because he was present and injured in the retail market, and his injury was inextricably intertwined with the licensing market. The decision has potentially broad implications for similar licensing agreements throughout the professional and collegiate sports world, at least at the pleading stage.
Continue Reading Dang v. San Francisco Forty Niners – Consumers can challenge Reebok’s exclusive NFL apparel deal based just on a market of garments bearing NFL team logos

On August 2, 2013, District Judge Edward J. Davila denied a motion to dismiss antitrust claims brought by consumers of NFL apparel against Reebok and the NFL in Dang v. San Francisco Forty Niners, Case No. 5:12-CV-5481 (N.D. Cal.). Plaintiff seeks to represent a class of NFL apparel purchasers who were allegedly overcharged as a result of an agreement that gave Reebok the exclusive right to make and sell NFL apparel. Defendants — Rebook, the NFL, the NFL teams, and an NFL licensing entity — argued that plaintiff lacked standing and failed to adequately plead a relevant market. Judge Davila denied defendants’ motion to dismiss. The Court held that NFL apparel and NFL apparel licenses could be relevant markets because the NFL logos may be what consumers really want, in which case non-NFL apparel would not be a reasonable substitute. The Court also held that Dang had sufficiently pleaded standing in both markets, because he was present and injured in the retail market, and his injury was inextricably intertwined with the licensing market. The decision has potentially broad implications for similar licensing agreements throughout the professional and collegiate sports world, at least at the pleading stage.
Continue Reading Dang v. San Francisco Forty Niners – Consumers can challenge Reebok’s exclusive NFL apparel deal based just on a market of garments bearing NFL team logos

On March 29, 2013, the Guangdong High People’s Court ruled that Tencent, Inc. (“Tencent”) did not violate China’s Anti-Monopoly Law (“AML”). In the first lawsuit of its kind, Beijing Qihoo Technology Co. Ltd. (“Qihoo”) sued Tencent under the AML, claiming Tencent was engaging in anti-competitive behavior. They sought ¥150 million in damages and an injunction against Tencent.
Continue Reading Qihoo 360 v. Tencent: A Landmark Decision under China’s Anti-Monopoly Law

On March 29, 2013, the Guangdong High People’s Court ruled that Tencent, Inc. (“Tencent”) did not violate China’s Anti-Monopoly Law (“AML”). In the first lawsuit of its kind, Beijing Qihoo Technology Co. Ltd. (“Qihoo”) sued Tencent under the AML, claiming Tencent was engaging in anti-competitive behavior. They sought ¥150 million in damages and an injunction against Tencent.
Continue Reading Qihoo 360 v. Tencent: A Landmark Decision under China’s Anti-Monopoly Law

*This article was featured in SCOTUSBlog.

The Supreme Court on June 20 continued its recent trend of strictly enforcing the terms of arbitration agreements, holding that a contractual waiver of class arbitration is enforceable under the Federal Arbitration Act (FAA) even if the cost of proving an individual claim in arbitration exceeds the potential recovery. The Court’s opinion likely makes such class action waivers ironclad in the absence of specific legislation to the contrary or evidence – such as unconscionability under state law – that would establish “grounds . . . for the revocation of any contract” under the FAA’s savings clause, 9 U.S.C. § 2.Continue Reading American Express Co. v. Italian Colors Restaurant: A class action waiver in an arbitration agreement will be strictly enforced under the Federal Arbitration Act