3C’s: A Flurry of Activity by the CCI–India Update

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Today’s guest post by Avinash Amarnath reports on several actions by the Competition Commission  of India

India update 2015 Vol 3

Its been quite a busy fortnight for the Competition Commission of India (CCI) especially on the cartel front. The CCI has issued three substantive decisions (two infringement decisions and one decision finding no infringement after a detailed investigation) last week which I have analysed below.

Another chemist and druggist association penalised

In its ninth decision against various chemist and druggist trade associations in India, the Competition Commission of India (CCI) fined the Himachal Pradesh (a state in India) Chemist and Druggist Association 10% of its average turnover for imposing rules requiring:

  • a no-objection certificate from it before a pharmaceutical company could appoint a stockist in the state of Himachal Pradesh; and
  • requiring compulsory payment of ‘product information service’ charges by the pharmaceutical company before launching a drug in the state.

The CCI found that these rules cumulatively resulted in limiting supply in the market and restricted pharmaceutical companies’ ability to launch new drugs onto the market. The president of the trade association was fined 8% of his average income for his liability as an individual.

An interesting takeaway from this decision is the CCI’s analysis of whether pharmaceutical companies can also be found liable for forming an agreement with the trade association to deny stockistship and limit supplies for the want of a no-objection certificate from the trade association. The CCI found that agreements between pharmaceutical companies and the trade association would not qualify as horizontal agreements (falling under Section 3(3) of the Competition Act) or as vertical agreements (falling under Section 3(4) of the Competition Act) as they are neither engaged in identical or similar trade of goods or provision of services  nor operating at different stages or levels of the production chain. However, relying on a previous decision (Ramakant Kini v. Hirandandani Hospital and Ors, a discussion on which appeared in my first post on Cartel Capers), the CCI observed that such agreements could nonetheless be examined under the general prohibition on anti-competitive agreements (Section 3(1) of the Competition Act) and would be subject to a rule of reason analysis. However, in the instant case, the pharmaceutical companies were not found liable as there was no evidence to indicate an agreement between them and the trade association.

The full order of the CCI can be accessed here.

For the Rest of the CartelCapers Story, Click Here:

A Report Card: “Obama Administration Antitrust Policy:

Brief Summary of “Obama Administration Antitrust Policy: A Report Card” Program

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.

* * * * * Click Here for the Rest of the Story * * * * *

3C’s: LIBOR Guest Post from Richard Wolfram, Esq.

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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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3C’s: Antitrust Division Announces FY 2014 Criminal Fine Total

Antitrust Division Announces FY 2014 Criminal Fine Total

The Antitrust Division just issued a press release announcing that it collected $1.861 billion in criminal fines for its fiscal year that ended Sept. 30, 2014.  The highlights are that four companies paid fines in excess of $100 million (the Sherman Act maximum), led by the $425 million fine against Bridgestone Corp.   The full press release is below:

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FOR IMMEDIATE RELEASE AT
THURSDAY, JANUARY 22, 2015 (202) 514-2007
WWW.JUSTICE.GOV TTY (866) 544-5309

ANTITRUST DIVISION ANNOUNCES FISCAL YEAR TOTAL
IN CRIMINAL FINES COLLECTED

The Department of Justice collected $1.861 billion in criminal fines and penalties resulting from Antitrust Division prosecutions in the fiscal year that ended on Sept. 30, 2014.

* * * * *Click Here for the Rest of the Story* * * * * 

3C’s: India Update 2015, Volume 1.

India Update 2015, Volume 1.

Today’s post is the first in 2015 from my friend in India, Avinash Amarath.

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I wish all readers of Cartel Capers a very happy and prosperous new year. There are two items to report for the first India post of the New Year.

Film Distributor Trade Association fined for price fixing and collective boycott

In its last reported decisions of 2014, the Competition Commission of India (CCI), in two separate cases, fined the Film Distributors Association of Kerala (a state in India) 5% of its turnover (in each case) for indulging in price fixing and collective boycott respectively. The business chain for films in India broadly comprises producers, distributors and exhibitors (i.e. cinema halls and multiplexes).

* * * * *Click Here for the rest of the Story* * * * *

3C’s: EU Competition Policy Brief–The Damages Directive

EU Competition Policy Brief–The Damages Directive

Last week Cartel Capers featured a post from James Musgrove and Joshua Chad, What Fresh Hell Is This: The Canadian Cartel Class Action System.  I wanted to follow up that post with an update on collective redress in Europe. On November 26, 2104 the European Parliament adopted certain rules governing actions for damages under national law for infringement of the competition law provisions of the Member States and of the European Union. The “Damages Directive” was published on December 5, 2014 and EU countries need to implement it by December 27, 2016. The aim of the Directive is more efficient enforcement of the EU competition rules by making it easier for victims of antitrust violations to claim compensation. While larger companies already often obtain redress for price-fixing overcharges in Europe, the Directive aims to make recovery a realistic options for smaller companies and consumers.

For more information see the EU Competition Policy Brief—The Damages Directive, January 2015.

Thanks for reading.

3C’s: Banks Found Not to Have Colluded

Banks Found Not to Have Colluded

I have really enjoyed publishing this blog.  One of the downsides is the embarrassment of an occasional typo, a problem with margins or other technical issues, or like yesterday, when I forgot to include a headline.  But, the  headline above is not a typo.  Banks have been found not to have colluded.

In India, the Competition Commission of India (CCI) dismissed allegations that banks had colluded had to control and determine prices in the gold loan business (here).  It is welcome to see the reasoning of the CCI:  “It may be observed that parallel behaviour needs to be substantiated with the additional evidence or the plus factors to bring it into the ambit of prohibited anti-competitive agreements.”

* * * * * Click Here for the Rest of the Story * * * * *

3C’s- Motorola Mobility and the FTAIA–Update

Motorola Mobility’s Petition for En Banc Review

This news is a bit dated, but on December 17, 2014 Motorola Mobility petitioned the Seventh Circuit for an en banc hearing of its price-fixing damages case against AU Optronics and other liquid-crystal-display panel makers. On November 26, 2014 a three-judge panel affirmed, on different grounds, its vacated opinion dismissing Motorola Mobility’s suit. In an opinion written by Judge Posner, the panel held that purchases by made overseas by Motorola’s foreign subsidiaries of panels that were incorporated into products subsequently shipped into the United States did not meet the second prong of the FTAIA requirements, that the effect of anticompetitive conduct give rise to an antitrust cause of action. 15 U.S.C. Section 6(a)(2). “Whether or not Motorola was harmed indirectly, the immediate victims of the price-fixing were its foreign subsidiaries.” Motorola Mobility LLC v. AU Optronics Corp., 2014 WL 6678622 (7th Cir. 2014). In its petition for rehearing en banc, Motorola claims:

* * * * * Click Here For the Rest of the Story * * * * * 

The 3C’s: An Overview of Japanese Cartel Regulation

Today’s guest blog post is by Masayuki Atsumi of the Japanese law firm Mori Hamada & Matsumoto.  Mr. Atsumi was an attorney with the JFTC before private practice.

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Japan is one of the most important jurisdictions in Asia in relation to cartel enforcement, but not many written materials articulate the details of Japanese cartel regulation.  As my first contribution to this blog, I would like to briefly provide an overview of Japanese cartel regulation, with a focus mainly on procedural and practical aspects.

  1. Prohibition on cartel activities

The Japanese Anti-Monopoly Act (“AMA”) prohibits, among other things, “unreasonable restraint of trade” which includes collusive activities such as cartels or bid-rigging. A cartel violation is not per se illegal in Japan because the AMA requires that the Japan Fair Trade Commission (“JFTC”), the Japanese antitrust enforcement body, must prove a “substantive restraint on competition in the relevant market” in order to find a violation.

* * * * * Click Here for the Rest of the Story * * * * *

2014 Sherman Act Twombly Recap

A Recap of Sherman Act Twombly Decisions in 2014

My parter, Joan Marshall, and I wrote an article just published by Law 360 titled:  “In 2014 Plaintiffs Gained Some Ground Lost After Twombly.”  The article reviewed some key antitrust cases at the motion to dismiss stage and examined how the courts applied the “plausible” pleading standards announced in Twombly to various elements of the alleged offense.   (It is important to note that while Twombly involved and antitrust complaint, the Supreme Court announced a pleading standard that applied to all complaints.  The vast majority of post-Twombly cases do not involve antitrust pleadings).

Twombly motions and decisions are of course fact specific so its a bit of a stretch to say there is a trend.  The party who tells the best story consistent with Twombly and the underlying policy considerations will win.  But, after several appeals courts reminded lower courts that the standard at the motion to dismiss stage was “plausbility,” it seems plaintiffs chances have improved.   Reminders such as this certainly have helped plaintiffs:

First, at the pleading stage, the plaintiff is not required to allege facts showing that an unlawful agreement is more likely than lawful parallel conduct. * * *Second, in order to state a Section One claim, a plaintiff need not allege a fact pattern that “tends to exclude the possibility” of lawful, independent conduct.  Erie County, Ohio v. Morton Salt, 702 F.3d 860, 868-69 (6th Cir. 2012).

Law 360 is a subscription based service. If you don’t have access to Law 360 and would like to read our full article, please send me a note and I’d be happy to send it along.  robert.connolly@geyergorey.com

Thanks for reading.