By Allison F. Sheedy

A long-running antitrust battle of the bands between a Baltimore-D.C. area regional concert promoter and venue operator and the concert colossus Live Nation got the hook in the U.S. District Court of the District of Maryland last week when Judge J. Frederick Motz ruled that the plaintiffs had not presented evidence that Live Nation had violated the antitrust laws.

Although the court found that “Live Nation is undisputedly large, and utilizes its size and global reach to sign artists to exclusive contracts and steer them to perform in venues that it owns,” the court concluded that such conduct was not anticompetitive, and thus did not violate the antitrust laws.  The court’s conclusion was driven in main part by its view that the plaintiffs’ alleged antitrust markets did not harmonize with the evidence proffered on motions for summary judgment.

The lawsuit started in 2009 when Plaintiffs It’s My Party, Inc. and It’s My Amphitheater, Inc. (the “Indie Rock Plaintiffs”), which operate D.C.’s famed 9:30 Club and the Merriweather Post Pavilion, accused Live Nation of monopolizing a nationwide market for concert promotion and illegally tying promotion services to the use of Live Nation concert venues.  The complaint alleged separate product markets for concert promotion and for the operation of concert venues.  Not incidentally, at that time, Live Nation’s acquisition by Ticket Master was being investigated by antitrust regulators.

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By Allison F. Sheedy

The Supreme Court sided with the FTC yesterday in North Carolina State Board of Dental Examiners v. Federal Trade Commission, a much anticipated decision that sets limits on state-action immunity from federal antitrust laws.

In a six-to-three decision authored by Justice Kennedy, the Court held that when a nonsovereign actor, such as a state regulatory board, is controlled by active market participants, state-action immunity will apply only where the challenged restraint is actively supervised by the State itself.

Under the state-action doctrine—also known as Parker immunity (from the seminal 1943 state-action case, Parker v. Brown)—state and municipal authorities are immune from federal antitrust law when regulating conduct pursuant to a clearly expressed state policy.  Private actors may also be immune from antitrust liability when they act at the direction of a State, pursuant to a State’s clearly articulated, and affirmatively expressed, policy to displace competition with a regulatory regime.  Attempting to balance state sovereignty, principles of federalism and the federal commitment to robust competition, Parker immunity recognizes that the federal antitrust laws should not impose an impermissible burden on the States’ own powers to regulate.  This doctrine, however, is not unbounded.

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Here are some of the developments in antitrust news this past week that we found interesting and are following.

American Express Violated Antitrust Laws, Judge Rules.  In a 150-page opinion, Judge Nicholas G. Garaufis of the U. S. District Court for the Eastern District of New York ruled that American Express’s practice of prohibiting any merchant that accepts its cards from encouraging customers to pay with lower-cost cards violates the U.S. antitrust laws.  Constantine Cannon partner Jeffrey I. Shinder, who represented three retailers — Ikea, Sears and Crate & Barrel — that testified against American express in the case, predicted that the decision would give merchants greater clout to negotiate more favorable agreements with American Express, including cheaper fees.

Google wins US antitrust lawsuit.  Judge Beth Labson Freeman of the U.S. District Court of the Northern District of California dismissed an antitrust lawsuit that accused Google of forcing device manufacturers that use its Android operating system to include a bundle of the company’s apps and make its search engine the default option.  Although Judge Freeman found that “there are no facts alleged to indicate that defendant’s conduct has prevented consumers from freely choosing among search products or prevented competitors from innovating,” she also gave the plaintiffs a chance to correct this pleading deficiency by giving them three weeks to amend their antitrust complaint.

In Russia, Yandex Files Antitrust Complaint Against Google Over Search On Android Devices.  Just as Google wins one antitrust battle in the U.S., a similar fight breaks out in Russia.  Internet search giant Yandex, which has been called the “Google of Russia,” has filed a request with Russia’s antimonopoly regulator to investigate whether Google has violated Russia’s antitrust laws.  Yandex is complaining about Google’s Android operating system and how Google bundles its search engine as the default on all Android devices.

By Allison F. Sheedy

The U.S. Federal Trade Commission announced yesterday that it is challenging the merger of the nation’s two largest food distributors, US Foods, Inc. and Sysco Corporation.

By a split vote, the FTC decided to file an administrative complaint and to authorize its staff  to go to federal court to seek a temporary restraining order and a preliminary injunction to prevent the parties from consummating the merger, pending the administrative proceeding.

The two Republican appointees on the FTC voted against the action.  The decision of the three Democratic appointees to challenge the merger was hardly unexpected.  The two foodservice giants had been in discussions with the FTC for more than a year trying to convince the consumer protection watchdog that their proposed deal would not pose competitive problems.

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A View from Constantine Cannon’s London Office

By Yulia Tosheva and James Ashe-Taylor

China’s imposition of a nearly $1 billion fine on Qualcomm, the world’s largest supplier of smartphone chips, is noteworthy not just because it is a record-breaking antitrust fine for China, but also because it serves as a warning for international companies that antitrust enforcement now spans the globe.

As reported on February 9, 2015, China’s National Development and Reform Commission (NDRC) reached a long-awaited settlement with Qualcomm, following a 14-month antitrust investigation into Qualcomm’s patent licensing practices.

The San-Diego based chipmaker, which makes about half of its global revenue in China, agreed to pay a record fine of $975 million, the highest penalty ever imposed in Chinese antitrust enforcement history. The size of Qualcomm’s fine is larger than the total amount of antimonopoly fines imposed by the NDRC in 2014.

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