price fixing Archives - Page 5 of 11

price fixing

Best Buy Wins and Loses LCD Price Fixing Trial

by Emily Townsend | Sep 9, 2013 | Cartel Enforcement

On September 3, 2013, a California federal jury unanimously found HannStar Display Corp. liable for conspiring to fix prices on liquid crystal display (LCD) panels. However, the jury found co-defendant Toshiba Corporation not liable. The jury awarded plaintiff Best Buy Company $7.47 million in direct damages. The case is In re: TFT-LCD (Flat Panel) Antitrust Litigation (3:07-md-01827) located in the U.S. District Court for the Northern District of California.

Best Buy accused Toshiba and HannStar of conspiring with other firms to fix prices for LCD panels. Prior to and during trial, HannStar admitted participating in meetings where major electronics makers agreed to fix panel prices. The lawsuit stemmed from an investigation by the U.S. Department of Justice which resulted in guilty plea agreements for HannStar and other Japanese, Taiwanese and Korean firms, not including Toshiba.

Plaintiff’s experts argued that the defendants owed Best Buy up to $770 million. Defense experts calculated damages significantly lower and the jury agreed with those estimates. However, even though the jury awarded damages, Best Buy may not be able to collect based on the jury’s decision that HannStar’s conduct did not have a direct, substantial and reasonably foreseeable effect on trade or commerce in the United States as required by the Foreign Trade Antitrust Improvements Act.

Judge Refuses to Suspend Previous Apple, Inc. Ruling; Considers Limiting E-Book Negotiations

by Young Cynn | Aug 12, 2013 | IP Antitrust

by Young Cynn

On Friday, August 9, 2013, Judge Denise Cote of the U.S. District Court for the Southern District of New York denied Apple’s request to suspend pending appeal a previous ruling that it had violated antitrust laws by conspiring with publishers to raise the price of e-books.

Judge Cote also proposed a remedy which includes a two year prohibition on any contracts which would restrict Apple’s ability to discount e-books. Apple would then be required to negotiate with publishers on a staggered timeline. Judge Cote also stated that she would prefer Apple to instate a “vigorous” in-house antitrust compliance program, rather than follow the Justice Department’s proposal to hire a full-time internal compliance officer alongside court monitoring for 10 years. “I don’t want to do more than is necessary here,” said Judge Cote, recognizing the risk of disrupting innovation.

Judge Cote remained concerned about the “continuing danger of collusion,” especially given publishers’ recent protests of the Justice Department’s proposed remedies. Publishers claimed a proposed ban on Apple’s agency agreements would also punish them, even though they had already settled with the U.S. government on the condition that they could continue to use the agency model.

The case continues to move forward to a trial for damages while Apple intends to appeal the July ruling on liability.

Egg Producer Agrees to Pay $28 Million to Settle Price-Fixing Claims

by Emily Townsend | Jul 26, 2013 | Agriculture, Private Litigation

by Nicole Castle

On July 23, 2013, Cal-Maine Foods Inc., the largest producer of fresh shell eggs in the U.S., announced that it had agreed to pay $28 million to settlement the direct purchaser claims brought by plaintiffs in In re Processed Egg Products Antitrust Litigation, 08-cv-2002 (E.D. Pa.). The direct purchaser plaintiffs alleged that Cal-Maine Foods and the other defendants engaged in a long-running scheme to limit egg supply in an effort to raise prices.

Cal-Maine Foods will be the third defendant to settle with the direct purchasers in this case. Defendants Sparboe Farms Inc. and Moark LLC previously settled the direct purchaser claims.

Cal-Maine Chairman, President, and CEO Dolph Baker said in a statement on Tuesday:

We remain confident that our conduct has at all times been lawful, appropriate and fair to our customers. The largest retailers and egg buyers in the country, including many of our customers, in fact, were fully aware of, and explicitly supported, the industry-wide animal welfare guidelines challenged in this litigation. And, the USDA was fully aware of, and explicitly supported, these animal welfare guidelines as well as all the other conduct the plaintiffs challenged. We were able to negotiate a settlement which would eliminate most of our exposure in the antitrust litigation against the Company for an amount that we believe is in the best interest of the shareholders, employees, customers and consumers. It significantly reduces the distraction, expense, exposure and inconvenience of protracted litigation and potentially multiple appeals, and allows us to focus on executing the long-term strategy of our business.

The terms of the settlement are subject to approval by the court following notice to all class members. The parties expect to file for preliminary approval of the settlement next week. The settlement does not affect the class actions filed on behalf of the indirect purchasers. Cal-Maine has stated that it intends to continue to defend the remaining cases and believes that it has strong defenses.

Judge Finds that Apple Conspired to Raise E-book Prices

by Emily Townsend | Jul 12, 2013 | DOJ Developments, Monopolization/Abuse of Dominance

by James Camden

On July 10, 2013, Judge Denise Cote of the Southern District of New York issued a 160-page opinion holding that Apple conspired with five book publishers to raise e-book prices and eliminate retail price competition in violation of Section 1 of the Sherman Act and several relevant state statutes. United States v. Apple Inc., case number 12-civ-2826 (DLC). The five publishers – Hatchett, HarperCollins, Macmillan, Penguin and Simon & Schuester – had all previously settled with the U.S. Department of Justice (DOJ).

The opinion stated that as Apple prepared to launch its iPad to the public and sought to concurrently enter the e-book market with its iBookstore, it met with the publishers and agreed to provide them with an “agency model” for e-book pricing that allowed the publishers to set the prices of the e-books themselves, subject to certain price caps. Apple’s agreements with the publishers also included Most Favored Nation provisions which ensured that Apple could match its competitors’ prices and also provided an incentive for the publishers to lobby Amazon and other retailers to change their wholesale business models to agency models. According to the court’s opinion, these agency model agreements caused e-book prices to increase, sometimes 50% or more for a specific title.

A separate trial for potential damages will be scheduled later. Apple said it will appeal the ruling.

Resale Pricing Policies Withstand State Scrutiny Again, but Suppliers Should Continue to Exercise Caution

by McDermott Will & Emery | May 14, 2012 | Distribution/Franchising

by Lawrence Fox, Joseph Winterscheid, Stephen Wu and Karne Newburn.

A recent New York state appeals court decision highlights the need for suppliers to continue exercising caution when adopting and implementing a resale price maintenance policy.

To read the full article, click here.

Potato Price-Fixing Case Survives Motion to Dismiss Holds That Pre-Production Agricultural Output Restrictions Are Not Exempt Under Capper-Volstead

by Emily Townsend | Dec 8, 2011 | Agriculture

by Gregory E. Heltzer and Nicole Castle

On December 2, 2011, a federal judge overseeing multidistrict litigation involving an alleged potato price-fixing conspiracy denied a motion to dismiss the antitrust conspiracy claims despite the potato grower cooperatives asserting that the concerted action was permissible under the Capper-Volstead Act. In Re: Fresh and Process Potatoes Antitrust Litigation, No. 10-2186 (D. Idaho).

In particular, the plaintiffs alleged that defendants increased the price of potatoes through reduction of potato planting acreages and by paying farmers to destroy existing stocks. Not only did the court deny the motion to dismiss on several grounds, but took the “extraordinary step” of providing an “advisory opinion” regarding an area of law with scant precedent. The court was willing to offer its opinion at this stage because there were no disputed facts on this legal issue, the parties had fully briefed and argued the matter, and in the court’s view providing this holding at this juncture was consistent with the “command of Rule 1” of the Federal Rules of Civil Procedure – the opinion would help secure the just, speedy and inexpensive determination of the proceeding.

The court’s “advisory opinion” held that pre-production agricultural output limitations among growers are not defensible agreements under the Capper-Volstead Act. The court explained that the plain language of the Capper-Volstead Act protects concerted action after production, that is, growers can collectively process, prepare for market, handle and market its products. According to the court, coordinating and reducing acreage for planting are not defensible because these actions come before production.

The court later opined that the distinction between pre-production output limitation agreements and post-production marketing decisions to withhold product from markets comports with underlying antitrust theory because if prices rise, “farmers will produce more and consumers will not be overcharged.” The court explained that this is a “safety-valve against private abuse that ameliorates the adverse consumer impact of the Capper-Volstead exemption” and that this safeguard is not in play if cooperatives can enforce pre-production limitations.

This decision offers new law and should lead cooperatives to revisit any production curtailment agreements and consider whether any such programs comport with this court’s interpretation of the Capper Volstead Act.

Potash Price-Fixing Case Opinion Vacated and to be Reheard En Banc

by Emily Townsend | Dec 7, 2011 | Cartel Enforcement

by Nicole Castle

On December 2, 2011, the Seventh Circuit Court of Appeals granted plaintiffs’ petition for rehearing en banc and vacated the opinion issued by a Seventh Circuit panel in Minn-Chem, Inc. v. Agrium Inc., No. 10-1712. The Seventh Circuit panel had issued an order on September 23, 2011, directing the district court to dismiss a class-action price-fixing complaint against global producers of potash, a mineral used primarily in agricultural fertilizer.

The plaintiffs alleged a global price-fixing cartel among Canadian, Russian and Belarusian producers of potash, alleging that they fixed potash prices in Brazil, China and India, and the inflated prices in these overseas markets in turn influenced the price of potash sold in the United States. The defendants moved to dismiss the complaint under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, arguing first that the district court lacked subject-matter jurisdiction under the Foreign Trade Antitrust Improvements Act (FTAIA), 15 U.S.C. § 6a, and alternatively, that the complaint did not satisfy the pleading requirements of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009). The district court denied the motion to dismiss and the defendants appealed.

On September 23, 2011, the Seventh Circuit panel reversed the district court and remanded with instruction that the district court dismiss the complaint. The Seventh Circuit panel held that the complaint failed to satisfy either of the import-related exceptions to the FTAIA. According to the panel, defendants’ anticompetitive conduct did not “involve” U.S. imports and did not “directly affect” the price of U.S. imports. The panel used the “plausibility” standard of Twombly and Iqbal to determine whether plaintiffs had adequately pled that the anticompetitive conduct fell within one of the FTAIA’s exceptions. However, the Seventh Circuit panel did not reach the question of broader sufficiency of the complaint under Twombly and Iqbal.

Plaintiffs then filed the current petition for rehearing en banc. In their petition, plaintiffs argued that the panel’s opinion conflicted with the Seventh Circuit’s decision in In re Text Messaging Antitrust Litigation, 630 F.3d 622 (7th Cir. 2010). Plaintiffs also argued that the panel misinterpreted the import-commerce exception in determining whether plaintiffs alleged sufficient anticompetitive conduct that “involved” U.S. import commerce. According to plaintiffs, the panel’s decision regarding the import-commerce exception conflicted with the Third Circuit’s decision in Animal Sci. Prods., Inc. v. China Minmetals Corp., No. 10-2288, 2011 WL 3606995 (3d Cir. Aug. 17, 2011).

Interplay Between Antitrust and Criminal Law in Europe

by Emily Townsend | Jun 24, 2011 | Cartel Enforcement, EC Developments, German Developments

by Veronica Pinotti and Martino Sforza

In Europe, the interplay between antitrust and criminal law at the national level may vary significantly by jurisdiction. Some European Union member states, such as the United Kingdom, Ireland, and Romania, have criminalized competition law. Other jurisdictions, such as Germany and Italy, do not envisage criminal penalties for anticompetitive practices; however, such conduct may sometimes qualify as a separate criminal offense. The following cases, across Europe, show that there appears to be a general trend towards more effective enforcement against serious antitrust violations – including by means of criminal penalties against individuals – and not only in the countries with criminal competition laws.

To read the full article, please visit: https://mwe.com/info/pubs/pinotti0611.pdf

Criminalization of Antitrust Law in Europe: Greek Court Imposes Criminal Sanctions on Managers in Cartel Case

by Emily Townsend | Apr 13, 2011 | Cartel Enforcement

by Philipp Werner

Following a 2007 cartel decision of the Greek competition authority imposing a total fine of EUR 48.3m on seven companies for information sharing, price fixing and retail price maintenance, a Greek court handed down a criminal judgment yesterday (12 April 2011), imposing fines of 9,000 euros on each of the three managers of one of the firms. The case was brought by the public prosecutor.

While the amount of the fines is relatively low, this appears to be the first such criminal conviction in Greece. It shows that the criminalisation of antitrust laws in Europe gains ground.

The Greek law applicable at the time of the infringement made provision only for pecuniary sanction but has changed since and now includes the possibility of prison sentences.

Coastal Water Freight Transportation Company Pleads Guilty and Pays $45 Million Fine for Price-Fixing

by Emily Townsend | Feb 24, 2011 | Cartel Enforcement

by Nicole L. Castle

Today the Department of Justice announced that Horizon Lines LLC agreed to plead guilty and pay a $45 million fine for its involvement in price fixing coastal water freight services between the continental U.S. and Puerto Rico. This plea is the result of an ongoing federal antitrust investigation into price fixing and bid rigging in the coastal water freight transportation industry. As a result of the investigation, five former executives have been charged and sentenced to serve prison time.

For additional information, please visit: https://www.justice.gov/atr/public/press_releases/2011/267605.htm