When I was a boy, I was always puzzled but fearful of labels that I saw on pillows that read in bold print “Do Not Remove—Under Penalty of Law.” I was pretty sure that the cops wouldn’t know if I removed a label, but what if my parents ratted me out? And, as a Catholic School lad, I had to worry about the sin implications. If it was against the law, was it also a sin? A venial sin? (six to twelve months in purgatory). Or, a mortal sin? (eternal damnation—which seemed a little harsh just for removing a label). In any event, being fairly cautious, I never did remove a pillow label, though I may have committed a few more serious offenses in my youth.

These thoughts crossed my mind the other day I when I read about an ongoing case in the Second Circuit, In the Matter of a Warrant to Search a Certain Email Account Controlled and Maintained by Microsoft Corp., Case number 14-2985. Microsoft is challenging a district court order that it produce documents located overseas that were sought by a validly executed search warrant. Microsoft claims the documents are out of the reach of the government while settled law seems to be that, at least as it relates to subpoenas, the documents are producible. The magistrate and district court judge ordered that the documents be produced and Microsoft is currently pressing its appeal in the Second Circuit.

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On Thursday February 26^th I enjoyed a day long Symposium on Section 5 of the Federal Trade Commission Act hosted by BakerHostetler and organized and moderated by my friend and former colleague Carl Hittinger. The conference focused on the history of Section 5, its current scope and where it may be headed. There was particular discussion about whether the FTC should have guidelines to explain and limit the application of Section 5.

While I found the entire conference interesting, of particular interest to me was the discussion of “invitation to collude” cases, which is a way of saying to a competitor “Would you like to form a cartel with me?” Section 5 broadly prohibits “[un]fair methods of competition” and “unfair or deceptive acts or practices.” One way Section 5 has been used by the FTC has been to charge invitations to collude cases.

An invitation to collude case can arise when one competitor (or a group of competitors) reaches out to another competitor to invite the competitor to agree to fix prices.  An invitation to collude investigation/case arises usually when there is some specificity in the offer—much like contract analysis. General grousing about prices in an industry, while extremely foolish and may draw an investigation, is not likely to result in a formal charge. And, in US v. Foley, 598 F. 2d 1343 (4^th Cir. 1979)  a realtor hosted a dinner for seven other realtors and announced he didn’t care what others did, he was raising his commission. Some discussion ensued from which a jury concluded that an agreement has been reached.  The realtors were indicted and convicted.

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On January 29, 2015 I attended a program hosted by the Heritage Foundation: Obama Administration Antitrust Policy: A Report Card. The program was free and held in the Allison Auditorium. The program had three panels that focused on 1) the FTC; 2) the DOJ, and 3) Antitrust Abroad.   The panels were outstanding and included speakers who were either current or former senior members of the FTC or the Antitrust Division.

The consensus of the speakers was that it is too early to give an overall Antitrust grade to the Obama administration. It can take years to conduct a proper retrospective of how decisions and priorities have played out. Overall, however, there were a number of “high marks” or “good job” given by each of the panels. The DOJ, however was given one failing grade for (my words) “Plays Well With Others.”  Typically when a new administration takes over, new management speaks well of their predecessors, even though they may have a different approach in some areas. This happened with the Bush to Obama transition at the FTC. It did not at the DOJ. Several panelists noted Obama administration DOJ officials were uncharacteristically critical of their immediate predecessors with remarks such as the “antitrust is open for business”[1] and comments made when, in May 2009, the new administration withdrew the September 2008 Section 2 report on monopolization.

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I came across a very informative post by Richard Wolfram, Esq. about antitrust standing the LIBOR civil damages litigation.  I thought it would be of interest to Cartel Capers readers, in case you haven’t seen it elsewhere.  Mr. Wolfram kindly agreed to let me repost this.

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In re LIBOR: ‘More Light, Please!’—Questions and Observations As the Decision Dismissing Antitrust Claims for Lack of Antitrust Injury Now Faces Appellate Review
Posted: 28 Jan 2015 10:01 AM PST
by Richard Wolfram, Esq.

(An in-depth article on In re LIBOR and antitrust injury is available here under this title. The following is a preview of my article).

(N.B.: In a coincidence of timing, on Jan. 28, 2015, the date of this posting and publication of the linked article, Judge Lorna Schofield of the federal district court for the Southern District of New York, in a case alleging a conspiracy to manipulate the benchmark rates in the $5.3 trillion/day foreign exchange market, denied the defendants’ motions to dismiss and expressly rejected the test used by the court in In re LIBOR for determining antitrust injury, discussed below. In re Foreign Exchange Benchmark Rates Antitrust Litigation (S.D.N.Y. 1/28/15).)

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