The US Department of Justice (DOJ) recently sued former joint venture partners because they allegedly coordinated their competitive activities beyond the legitimate scope of their venture. This case illustrates several important points. First, companies who collaborate through joint ventures and similar arrangements need to be mindful that any legitimate collaborative activity does not “spill over” to restrain competition in other unrelated areas. Second, DOJ discovered the conduct during its review of documents produced in connection with a merger investigation. This is the most recent reminder of how broad ranging discovery in merger investigations can result in wholly unrelated conduct investigations and lawsuits. Third, one of the parties was a portfolio company of a private equity sponsor, highlighting how private investors can be targeted for antitrust violations. (more…)
Last week, a group of hotels and online travel companies moved to dismiss an amended class action complaint alleging that they engaged in a price-fixing conspiracy to control hotel room prices. Online Travel Company Hotel Booking Antitrust Litigation, case number 3:12-cv-03515. The companies, which include Travelocity and Hilton Worldwide, argued that the plaintiffs abandoned the principle elements of the conspiracy alleged in the initial complaint. First, plaintiffs no longer allege that individual agreements between a hotel and online travel companies violated antitrust laws. Second, plaintiffs admit that they have no basis to prove a horizontal conspiracy among the hotel defendants. According to the defendants, the plaintiffs’ case only relies on purported collusion between the online travel companies and hotels to implement similar distribution programs. These factual allegations, however, are not sufficient to bring an antitrust claim under the Supreme Court’s decision of Bell Atlantic Corp. v. Twombly, 550 U.S.544, 557 (2007), which requires “allegations plausibly suggesting (not merely consistent with) agreement.” The defendants contend that the plaintiffs’ allegations do not plausibly suggest that they entered individual distribution arrangements pursuant to a horizontal conspiracy at either the hotel or online travel company level. Rather, the defendants argue that the facts demonstrate each company’s independent interest in implementing these individual hotel-online travel company arrangements in response to the development of the internet as a distribution channel for travel purchases.
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