New Legislation Would Provide Whistleblower Protections
for Reporting Criminal Antitrust Activity
On July 31, 2012, federal legislation that would provide
whistleblower protection for employees who report criminal
antitrust activity was introduced. The proposed Criminal
Antitrust Anti-Retaliation Act would amend the Antitrust Criminal
Penalty Enhancement and Reform Act (ACPERA) – which
reduced civil liability for successful leniency applicants and
significantly increased antitrust penalties – by
extending whistleblower protection to employees who report conduct
reasonably believed to be a violation of the antitrust laws to the
U.S. Department of Justice's (DOJ) Antitrust Division.
Such employees would be protected against retaliation by their
employers. The proposed legislation, which has been referred
to the Senate Judiciary Committee for consideration, creates
incentives for employees that could have an impact on corporate
compliance programs and the Antitrust Division's leniency
program, which offers immunity to a corporation or individual that
is the first to report criminal antitrust activity.
Disgorgement Remedy Approved in $4.8 Million Antitrust
Settlement against Morgan Stanley
On Aug. 7, 2012, a district court ordered disgorgement in a case described as
DOJ's "first attempt to obtain disgorgement from a
financial services firm that used derivative agreements to
facilitate anticompetitive behavior." DOJ had alleged
that Morgan Stanley engineered an electricity price-fixing scheme
between two electricity generators operating in New York City by
acting as a counterparty to agreements with each company and aiding
efforts to manipulate electricity prices. In approving the
settlement, the court noted that the $4.8 million settlement was a
"relatively mild sanction" in light of the "stark
allegations of manipulative conduct" against Morgan Stanley,
but concluded that judicial deference to DOJ's decision to
settle was appropriate and declined to "second-guess the
wisdom of [DOJ's] decision to pursue a disgorgement remedy
rather than restitution."
Changes to HSR Reporting Requirements for Pharmaceutical
Industry Transactions Proposed
On Aug. 13, 2012, the Federal Trade Commission (FTC) announced proposed changes to the premerger
notification rules that would require pharmaceutical companies to
report proposed acquisitions of exclusive patent rights. The
proposed changes clarify when a transfer of exclusive rights to a
patent in the pharmaceutical industry must be reported as an asset
acquisition under the Hart-Scott-Rodino (HSR) Act. Public comments on the proposed changes will be
accepted until Oct. 25, 2012.
On Sept. 10, 2012, the FTC and DOJ will hold a public workshop to address antitrust issues
relating to most-favored-nation clauses (MFNs). Among other
topics, the workshop will explore economic theories, legal
treatment and industry experiences with MFNs. MFNs have been
the subject of several recent antitrust enforcement actions.
In October 2010, DOJ filed a civil antitrust action against Blue Cross Blue Shield of
Michigan alleging that the insurer's use of MFNs had stifled
competition and raised prices on healthcare services and
insurance. In April 2012, DOJ filed a civil antitrust action against Apple Inc. and five publishers
alleging a conspiracy to fix the sales prices of e-books through
the use of distribution agreements with "unusual"
MFNs. Public comments may be filed until Oct. 10,
UK Court Awards Damages in Private Competition Suit
In a case that may encourage potential plaintiffs, a UK court
awarded exemplary (punitive) damages for a competition law
infringement in a private action between competing bus
operators. Additional information is available in our
August 2012 EU/UK Competition Law Newsletter
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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.