Department of Justice Targets Most Favored Nation Clauses
On Oct. 18, 2010, the U.S. Department of Justice, in a joint
action with the Michigan attorney general, filed a civil antitrust action against Blue Cross Blue
Shield of Michigan alleging that the insurer's use of most
favored nation clauses has stifled competition and raised prices on
healthcare services and insurance. Most favored nation clauses in
agreements between insurers and healthcare providers guarantee that
no rival can get a better rate than the insurer. Though this
lawsuit involves the healthcare industry, it could have important
implications for any business that uses most favored nation
Knowledge of Price Discrimination in Shipping Policy May
A federal district court recently ruled that a
manufacturer's shipping policy—in which the
manufacturer shipped to one distributor, but refused to ship to a
competitor of that distributor—is actionable under the
Robinson-Patman Act. In Gorlick Distribution Centers, LLC v. Car Sound
Exhaust System, Inc., evidence that the favored
distributor knew about the shipping policy and the competitor's
net price was higher because of the refusal to ship was sufficient
to survive a motion for summary judgment. This case serves as a
warning that different shipping terms may constitute cognizable
Class Actions on the Rise in Canada
Although class actions are relatively new to Canada,
cross-border claims are becoming more common. The significant
procedural differences between U.S. and Canadian courts can have
significant implications for litigants involved in parallel cases
in the two countries. For example, Canada does not have a federal
court system or multidistrict litigation mechanism, and class
certification standards may differ. Accordingly, careful case
management is essential.
United Kingdom Antitrust Agencies to Merge
On Oct. 14, 2010, the U.K. government announced a proposal to
combine the Office of Fair Trading's competition functions and
the Competition Commission in one agency devoted to competition and
markets. The new agency would be responsible for merger regulation,
market investigations, cartel and antitrust cases, as well as a
number of functions concerning regulated utilities. Additional
information is available in our
England & Wales Competition Law Newsletter.
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Hospitals considering future acquisitions of physician groups, and those that the Federal Trade Commission may view as having failed to make good on promises to improve care without hiking prices, better take notice.