A View from Constantine Cannon’s London Office

By Yulia Tosheva and Richard Pike

The European Commission (“EC”) today imposed fines totalling 49,154,000 euros on Express Interfracht, part of the Austrian railway company Österreichische Bundesbahnen, and Schenker, a subsidiary of the leading German railway operator Deutsche Bahn, in a cartel settlement.

Express Interfracht and Schenker agreed to pay fines of 31,798,000 million euros and 17,356,000 million euros, respectively.  Although Kuhne+Nagel also participated in the cartel, it received full immunity for revealing the conspiracy to the EC.

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

MasterCard Faces Antitrust Charges in E.U.  European antitrust officials have filed formal charges against MasterCard, accusing the company of harming consumers and retailers by setting artificially high fees for credit card transactions in Europe.  The European Commission said MasterCard had prevented some retailers from processing transactions in countries with lower fees. The commission also said that MasterCard’s fees were unfair to tourists traveling in Europe.

FTC exploring Apple rules for streaming music rivals in App Store.  U.S. government antitrust regulators are investigating claims that Apple’s treatment of rival streaming music apps is illegal under antitrust law, according to industry sources.  Apple recently launched a new music streaming service, Apple Music.  It also provides the App Store platform for competing streaming services including Jango, Spotify, Rhapsody and others.

States line up to scrutinize Aetna’s $33 Billion Humana deal.  U.S. insurance regulators and state attorneys general are lining up to examine Aetna Inc’s proposed $33 billion takeover of rival Humana Inc. for potential harm to consumers, complicating what was already expected to be a tough review by federal antitrust authorities.  Insurance commissioners in 18 states including Texas, Kentucky and Florida will study merger documents provided by Humana to determine whether the deal will harm competition and lead to higher insurance premiums or diminished access to healthcare providers.  Moreover, while the U.S. Department of Justice is taking the lead on scrutinizing the transaction, at least three state attorneys general – in Florida, Mississippi and Massachusetts – have stated they will look at the proposed acquisition as well.

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

Airlines Under Justice Dept. Investigation Over Possible Collusion.  Federal prosecutors are investigating possible collusion among airlines to limit seating, two years after the U.S. Department of Justice approved the latest in a wave of airline mergers, saying the combination would benefit consumers.  In letters sent to airlines, federal prosecutors have asked for documents from the last two years related to statements and decisions they have made about limiting capacity on flight routes.  By making it harder for passengers to find seats, airlines could restrain competition and increase fares.

Apple ‘assessing next steps’ after e-books antitrust ruling.  Apple is assessing its next steps after the decision of the U.S. Court of Appeals for the Second Circuit affirming the district court decision that the iPad maker conspired with five publishers to increase e-book prices.  In a statement issued after the appellate court handed down its 2-1 decision, the company maintained that it did not conspire to fix e-book prices, as the U.S. Department of Justice contends.

Study Suggests That Google Has Its Thumb on Scale in Search.  A study by top academics at Harvard and Columbia suggests that Google sometimes alters results to play up its own content.  The study, which was paid for by  Yelp, the online review website that is one of Google’s rivals, could renew calls for government regulators — in particular, the Federal Trade Commission — to reopen an investigation into Google for unfairly promoting its own services.  The study may also provide ammunition to antitrust regulators in Europe who have accused the company of antitrust violations.

By Rosa M. Morales

The Antitrust Division of the U.S. Department of Justice and the Michigan Attorney General’s Office are suing four Michigan hospital systems for allegedly engaging in antitrust violations by agreeing to refrain from advertising in each other’s territories, to the detriment of patient choice and health care benefits for patients and physicians alike.

The complaint in United States & Michigan v. Hillsdale Community Health Ctr. et. al, asks the U.S. District Court for the Eastern District of Michigan to find that the hospitals’ agreements to limit marketing for competing healthcare services in south-central Michigan were per se unlawful under Section 1 of the Sherman Act.  Each of the four hospital systems operates the “only general acute-care hospital or hospitals” in its county.

While three of the hospital systems being sued—Hillsdale Community Health Center (“Hillsdale”), Community Health Center of Branch County, Michigan (“Branch”), and ProMedica Health Center System Inc. (“ProMedica”)—have agreed to settle the charges, the fourth hospital— W.A. Foote Memorial Hospital d/b/a Allegiance Health (“Allegiance”)—has chosen to litigate.

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