Court Expands Extraterritorial Scope of U.S. Antitrust
On June 27, 2012, a federal appeals court issued an opinion that reversed prior precedent,
extended the reach of federal antitrust law to foreign commerce in
certain cases, and revived a class action brought by U.S.
purchasers alleging that potash producers had operated a cartel
outside the United States that had influenced the price of potash
in the United States. Potash is a mineral used primarily in
fertilizer. The world market for potash is highly concentrated and
U.S. customers account for a high percentage of sales. In part of
its opinion the court interpreted an import-related exception to
the Foreign Trade Antitrust Improvements Act (FTAIA) - foreign
trade or commerce that has "direct, substantial, and
reasonably foreseeable" effects on U.S. domestic or import
commerce - holding that "for FTAIA purposes, the term
'direct' means only a 'reasonably proximate causal
nexus.'" In so holding, the court explicitly endorsed the
U.S. Department of Justice's more expansive view of the foreign
reach of federal antitrust law, which could give the Antitrust
Division increased leverage in negotiating fines and doing volume
of commerce calculations.
FTC Requirement of Full Divestiture in Acquisition of
On July 11, 2012, a federal appeals court upheld a decision by the Federal Trade
Commission (FTC) that Polypore's acquisition of its main rival,
Microporous Products, "was reasonably likely to substantially
lessen competition" in three relevant markets and that only
complete divestiture would restore competition in those markets.
Both companies produce battery separators. Polypore had argued that
the FTC erred by finding one market for the companies'
deep-cycle battery separators and including Microporous's
Austrian plant in the divestiture order. The court accepted the
FTC's market definition, recognized its "broad discretion
in the formulating of a remedy for unlawful practices," and
concluded that the FTC "did not err."
Supreme Court Ruling Confirms Jury's Role in
On June 21, 2012, the U.S. Supreme Court ruled that the Constitution's Sixth
Amendment right to a jury trial requires that the jury - rather
than the judge - find any facts necessary to increase the fine
imposed in a criminal case. The court used similar reasoning in a
2000 ruling that a jury must find any facts that increase the
length of a prison sentence. Both rulings apply to criminal
An interesting and growing debate in the antitrust arena is whether most favored nation ("MFN") pricing provisions are pro-competitive or anticompetitive. For many years, MFN provisions have been considered a fairly noncontroversial contract term included by purchasers in an attempt to assure that other buyers do not receive a more favorable price.
A well-attended program on antitrust treatment of "bundled pricing" and "loyalty discounts" at the American Bar Association Antitrust Section Spring Meeting highlighted the confusion generated by the antitrust law implications.
In remarks made this week at the International Competition Network annual conference, Federal Trade Commission (FTC) Chairwoman Edith Ramirez stated that health care will continue to be a top priority for the FTC.
An EU General Court (GC) judgment has considered the difficult issue of independent parallel behaviour by competitors under EU competition law, and in particular when this strays into a "concerted practice".
The U.S. Department of Justice ("DOJ") has reached a settlement with Anheuser-Busch InBev ("ABI") and Grupo Modelo S.A.B. de C.V. ("Modelo"), requiring ABI to divest Modelo’s entire U.S. business to Constellation Brands Inc. ("Constellation").
Microsoft v. Motorola is precedential only in the Western District of Washington, but at 207 thorough and well-reasoned pages, it provides a valuable roadmap and will likely be quite influential in future RAND cases in other U.S. and foreign jurisdictions.