The government of the United Kingdom is seeking comments on proposals designed to strengthen and streamline the UK’s competition regime.

The proposed reforms of British antitrust enforcement are contained in draft legislation that the UK has released for public comment.

The proposed measures are among the revisions being contemplated as part of an overhaul of both civil and criminal antitrust enforcement in the UK.  One of the major changes will be the birth of a new consolidated competition watchdog agency – the Competition and Markets Authority (the “CMA”), which be launched next month and take over antitrust enforcement in April 2014.

According to Competition Minister Jo Swinson, “These measures are part of wide-reaching reforms to improve the UK competition regime, making sure the new Competition and Markets Authority has the tools in place to operate efficiently and effectively from day one.”

The proposals would give the CMA the power to coordinate antitrust enforcement among the UK’s economic regulators.  This means that the CMA would have the power to decide which regulator should pursue which case, although the government expects that the various competition agencies would generally agree on which enforcer should handle which case.

Enforcement would also be strengthened by extending the power to grant search warrants to the Competition Appeal Tribunal.  Currently, antitrust enforcers can get such warrants only from the High Court and Court of Session.  The government expects that expanding the ability of competition authorities to search premises will help streamline civil and criminal procedures for dealing with antitrust and cartel cases.

Anheuser-Busch InBev (AB InBev), the world’s largest brewery, has convinced a federal judge in California to dismiss an antitrust complaint challenging its acquisition of Grupo Modelo, the largest brewer in Mexico.

The plaintiffs in Steven Edstrom et al. v. Anheuser-Busch InBev SA/NV are a group of nine beer consumers in the United States who are asking the U.S. District Court for the Northern District of California to block AB InBev’s acquisition of Grupo Modelo on the ground that “there is a significant threat” that AB InBev would fix prices in the United States following the acquisition.

Although AB InBev agreed to sell Grupo Modelo’s U.S. assets to settle an antitrust suit brought by the U.S. Department of Justice (the “DOJ”), the beer consumers alleged that Constellation Brands Inc., the purchaser of those assets ,would act as AB InBev’s “puppet.”

Judge Maxine Chesney ruled that “the second amended complaint, however, lacked any factual allegations supporting a claim, and relies, instead solely on conclusory allegations.”

In 2012, AB InBev, which had owned 50 percent of Grupo Modelo, agreed to purchase the other 50 percent equity interest from Grupo Modelo’s other owners.  The DOJ blocked this merger because taking Modelo out of the competitive landscape would allegedly make it easier for other companies to act in coordinated leader-follower pricing strategies in the future.  AB InBev settled that suit by agreeing that it would sell Grupo Modelo’s U.S. assets to Constellation, which would also be given perpetual rights to Grupo Modelo’s brands.

Despite the settlement of the DOJ action, the beer consumers in the Steven Edstrom action alleged that Constellation would be controlled by AB InBev, which would lead to price fixing. The court found these allegations unconvincing, however, because the plaintiffs failed to show how the firewall provisions – which limited the companies’ access to each other’s confidential pricing information – were not adequate to prevent any price coordination.

The court dismissed plaintiffs’ antitrust claims under the federal Clayton, Sherman and Tunney Acts, as well as claims under unspecified state laws.

The court granted plaintiffs leave to file an amended complaint no later than October 11, 2013.

The U.S. Court of Appeals for the Ninth Circuit has affirmed the dismissal of a proposed class action alleging Apple Inc. violated antitrust laws in promoting the iPod and its iTunes Music Store.

The three-judge panel ruled that the monopolization claims of the plaintiff, consumer Stacie Somers, failed as a matter of law for several reasons.

The court found that Somers could not seek review of the district court’s order denying certification of a class of indirect purchasers of the iPod because she had abandoned her underlying individual monopolization claim alleging Apple had inflated iPod prices in violation of Section 2 of the Sherman Act.

The court found that Somers’ monopolization claim for damages based on a diminution in iPod value – a claim that had not been previously advanced by the plaintiff – was barred.  Somers’ damage theory was that Apple’s software updates deflated the value of her already-purchased iPod – not that she paid an inflated price for the product.  The court stated that allowing Somers to proceed on a theory that she was damaged by the deflated value of an already-purchased product “would lead to litigation on contradictory, duplicative theories of recovery necessitating ‘evidentiary complexities and uncertainties.’”

The court noted that, in contrast to Somers’ deflated value theory, the plaintiff in a related direct purchaser action is seeking damages based on the theory that the software upgrades inflated iPod prices.

The court also held that Somers failed to alleged sufficient facts to establish antitrust injury in support of her monopolization claim for damages from purchases of overpriced music downloads.

The U.S. Court of Appeals for the D.C. Circuit has rejected a district court’s certification of an antitrust class action in In re Rail Freight Fuel Surcharge Antitrust Litigation, becoming the third U.S. Court of Appeals in recent months to grapple with whether, and to what extent, class action plaintiffs must show that damages can be measured on a classwide basis under the Supreme Court’s March 2013 decision in Comcast Corp. v. Behrend.

While the D.C. Circuit reversed the D.C. district court’s certification of a class in the Rail Freight case, class action plaintiffs survived the heightened Comcast standard for showing classwide damages in decisions by the Seventh Circuit, in Butler v. Sears, Roebuck, & Co., and by the Sixth Circuit, in Whirlpool v. Glazer, in both of which class certification was upheld for claims involving washing machine defects.

These cases demonstrate how class action plaintiffs and defendants are navigating the new ground rules resulting from the Comcast decision.  In a recent article, Constantine Cannon’s Ankur Kapoor looked at how Comcast is affecting the battles over class certification in the federal courts.

In Comcast, the U.S. Supreme Court rejected certification in an antitrust class action against Comcast, the nation’s biggest cable provider.  The plaintiffs in that case argued that Comcast was monopolizing the Philadelphia market and illegally raising prices.  In a 5-4 decision, the Supreme Court rejected certification because the plaintiffs failed to offer an adequate method for establishing damages for millions of customers.  The court stated “it is clear that, under the proper standard for evaluating certification, respondents’ model falls far short of establishing that damages are capable of measurement on a classwide basis,” and therefore “individual damage calculations will inevitably overwhelm questions common to the class.”

In Rail Freight, the plaintiffs alleged that thousands of companies paid higher prices as a result of a price-fixing conspiracy by the four largest freight railroads companies in the United States.  The D.C Circuit reversed the district court’s certification of the class and remanded the case for reconsideration in light of Comcast.  The D.C. Circuit focused on whether the plaintiffs could satisfy the predominance requirement for class actions under Federal Rule of Civil Procedure 23 by showing, “through common evidence, injury in fact to all class members.” 

The court found that the plaintiff’s damages’ model detected injury in “legacy contracts” that were negotiated before any alleged conspiracy took place, and therefore the plaintiffs’ damage model identified “injury where none could exist.”  In rejecting class certification, the D.C. Circuit further stated that “certification is far from automatic…[A]s we see it, [Comcast] sharpens the defendants’ critique of the damages model as prone to false positives.”  The court added that it was “indisputably the role of the district court to scrutinize the evidence before granting certification ….”  In summary, the court stated:  “No damages model, no predominance, no class certification.” 

In Butler v. Sears, however, the Seventh Circuit found, in a decision authored by Judge Richard Posner, that class certification was appropriate under the Comcast standard.  In that case, the plaintiffs sought certification of two classes of consumers that purchased Sears washing machines.  The first class purchased washing machines that allegedly had a defective control unit that caused them to stop randomly.  The second class purchased machines that allegedly had a design defect that caused mold to build up.  The district court certified the control unit class, but rejected certification of the mold class.  On appeal, the Seventh Circuit approved certification for both classes.

The Supreme Court took up Butler and remanded the case back to the Seventh Circuit in light of Comcast.   On remand, the Seventh Circuit reaffirmed its prior ruling and preserved certification for both classes.  In clarifying the predominance standard of Rule 23, the court held that “Predominance is a question of efficiency.”  The court reasoned that “there is a single, central, common issue of liability: whether the Sears washing machine was defective.”  The court further stated that “it would drive a stake through the heart of the class action device, in cases in which damages were sought, to require that every member of the class have identical damages.”

In Whirlpool, a similar class action case to Butler, the Sixth Circuit also reached a similar result.  In that case, the plaintiffs also alleged a mold problem in washing machines purchased by a class of consumers.  The Supreme Court reversed the Sixth Circuit’s affirmance of class certification and remanded “for further consideration in light of Comcast.”  Like the Seventh Circuit in Butler, the Sixth Circuit reaffirmed certification after remand.

The Sixth Circuit held that the plaintiffs could pursue their class action because they shared “common questions” about the machines’ alleged design flaws.  The court stated that Rule 23 does not mandate that a plaintiff seeking class certification “prove that each element of a claim can be established by classwide proof.”  The court added, “what the rule does require is that common questions ‘predominate over any questions affecting only individual [class] members.’”

Prom dress retailer Peaches Boutique will have to litigate charges that it engaged in cut-throat dress-selling tactics in the Chicago area now that a federal judge has decided that competitor Hannah’s Boutique has adequately pleaded antitrust claims in Hannah’s Boutique Inc. v. Barbara Ann Surdej et al.

Judge Amy J. St. Eve of the U.S. District Court for the Northern District of Illinois denied Peaches’ motion to dismiss the complaint, which Peaches had argued failed to adequately plead any antitrust violation.

Hannah’s filed its complaint in April, claiming that it was stymied in its efforts to break into the Chicago area prom dress market as a result of Peaches’ hardball tactics, which allegedly included boycotts, spying and defamation.  According to the complaint, Peaches pressured designers not to do business with Hannah’s by threatening to end Peaches’ purchases from the designers.  Hannah’s also claims that Peaches’ owners slandered Hannah’s (which is owned by a Muslim) by asking designers’ sales representatives, “How can you sell to those Muslims; they barbecue goats.”  Peaches also allegedly falsely accused Hannah’s of selling knockoff dresses and selling below the designers’ discount prices.

Peaches moved to dismiss the complaint, arguing that it did not have a big enough share of the market to exert pressure on its competitors and suppliers.

However, Judge St. Eve found that Hannah’s allegations were sufficient to state antitrust claims.  “Indeed, Hannah’s has offered numerous specific allegations supporting its contention that defendants had sufficient market power to produce anti-competitive effects in the relevant market,” the court found. “Notably, Hannah’s provided allegations of anti-competitive conduct toward Hannah’s as well as toward other prom and homecoming dress retailers in the Chicago market.”