Anthem Inc. to buy Cigna Corp. for over $54 billion.  If approved by antitrust regulators, the deal would create the largest health insurer in the country, covering 53 million lives.  The acquisition closely follows Aetna’s announcement, at the beginning of the month, that it would buy Humana for $37 billion.  Health insurers are seeking to justify this latest wave of industry consolidation on the ground that consolidation will lower healthcare costs.  Antitrust regulators have said that they will closely scrutinize the industry’s consolidation, and look at the impact of all the deals together and not in isolation.

Teva to buy Allergan for over $40 billion.  Israel’s Teva Pharmaceutical Industries has agreed to buy Allergan’s generic-drug business.  Allergan, known for its Botox anti-wrinkle treatment, became the third-largest generic-drug manufacturer when it acquired Actavis earlier this year.  The deal would enhance Teva’s position as the largest generic-drug manufacturer in the world, and is the latest and largest in a series of generic mergers within the past year.

Regulators approve AT&T’s acquisition of DirecTV.  After more than a year reviewing the deal, the Federal Communications Commission (FCC) has approved AT&T’s acquisition of DirecTV on the conditions that AT&T implement certain protections for rival video providers and pledge to expand high-speed Internet to schools and low-income Americans.  The Department of Justice, which reviews the competitive impact of telecommunications mergers in conjunction with the FCC, also approved the deal and found no significant competitive concerns.  Under the FCC order approving the transaction, AT&T must count its own affiliated video services in any data caps for wired broadband and must disclose to the FCC all web-traffic-exchange agreements.

A View from Constantine Cannon’s London Office

by Richard Pike

Those in need of some light relief before heading off on vacation could do worse than read the latest judgment in the never-ending saga that is the English air cargo litigation.  We on the European side of the Atlantic have been known to indulge in some schadenfreude about the antics of the lesser members of the US judiciary.  We don’t get to see judges pulling out guns in our courtrooms or using the sound of a flushing toilet to indicate their displeasure with submissions.  English judges are typically just a bit too staid to provide a good source of amusement.  But not any more.  Now we have the spectacle of the great “disappearing luggage” conspiracy.

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

Accusing Amazon of Antitrust Violations, Authors and Booksellers Demand Inquiry.  Five years after Amazon asked antitrust regulators to investigate leading publishers, groups representing thousands of authors, agents and independent booksellers are asking the United States Department of Justice to examine Amazon for antitrust violations.  The Authors Guild, the American Booksellers Association, the Association of Authors’ Representatives and Authors United said in letters and statements to the Justice Department that “Amazon has used its dominance in ways that we believe harm the interests of America’s readers, impoverish the book industry as a whole, damage the careers of (and generate fear among) many authors, and impede the free flow of ideas in our society.”

U.S. consumer groups oppose Teva bid for generic drug rival Mylan.  A proposed merger of the two largest U.S. generic drug makers is drawing fire from Consumers Union and seven other groups, who are asking antitrust enforcers to stop Teva Pharmaceutical Industries Ltd’s proposal to purchase Mylan NV, saying it would lead to higher prices and more drug shortages.  Although there is no deal yet, the groups are concerned about recent takeover efforts. In their letter to Federal Trade Commission Chairwoman Edith Ramirez, the groups urged the FTC to look at more than just overlapping drugs made by both companies, to determine if a merger of drug makers is legal.

BRF, Vantage file antitrust suit against Willis-Knighton.  Biomedical Research Foundation and Louisiana insurer Vantage Health Plan are predicting “catastrophic” consequences to health care in northern Louisiana if Willis-Knighton Health System is allowed to strengthen what BRF and Vantage say is already a monopoly.  BRF and Vantage have filed an antitrust lawsuit in federal court to block what they allege is an anticompetitive scheme by Willis-Knighton Health System to steal commercially insured patients in Louisiana.

A View from Constantine Cannon’s London Office

By Richard Pike and Yulia Tosheva

The European Commission (“EC”) announced yesterday it has opened two antitrust investigations into possible abusive behavior by the U.S. technology company Qualcomm, the world’s largest supplier of baseband chipsets.

Investigation into rebates

The first investigation will examine whether Qualcomm abused its dominant market position by offering rebates and other financial incentives to customers on condition that they buy baseband chipsets exclusively from Qualcomm.

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By Seth D. Greenstein

The European Court of Justice ruled today that the owner of a standard-essential patent abuses its dominant position when it seeks an injunction in an action for patent infringement against an infringer that has expressed genuine willingness to license the patents on fair, reasonable, and nondiscriminatory (“FRAND”) terms.

In Case C-170/13, Huawei Technologies Co. Ltd. v. ZTE Corp. (July 16, 2015), the Court of Justice held that such an abuse of a dominant position violates Article 102 of the Treaty on the Functioning of the European Union.  This is the first definitive statement by the European Court on an issue that has received close attention in United States courts and from the U.S. Department of Justice (“DOJ”).  Its opinion provides some of the most definitive guidance on negotiations of FRAND licenses and lawful licensing conduct – and stakes out perhaps the most aggressive posture on the consequences of a patent owner’s failure to follow that guidance.

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