By Robert M. Cross

The scope of antitrust liability for competitors engaged in cooperative processes—such as setting benchmark interest rates—became murkier this week with a decision by the U.S. District Court for the Southern District of New York holding that manipulation of such a cooperative process could give rise to a viable price-fixing claim.

On Monday, Judge Jesse M. Furman held in Alaska Electrical Pension Fund v. Bank of America Corporation, 14-cv-07126(JMF) (S.D.N.Y. 2016), that a group of “otherwise-competing” entities who are engaged in a cooperative process in which they do not compete may still be subject to antitrust liability if they conspire “to manipulate prices (or components thereof).”  Id. at 16.[1]

Significantly, Judge Furman disagreed with the Southern District of New York’s previous holding in In re LIBOR-Based Financial Instruments Antitrust Litigation, 935 F. Supp. 2d 666 (S.D.N.Y. 2013) (“LIBOR I”), that engaging in a “cooperative endeavor” to manipulate prices insulates “otherwise-competing” entities from antirust liability.  Id. at 16.  These dueling decisions underscore the disagreements among jurists within the Southern District and contributes to the lack of clarity surrounding the scope of antitrust liability for actors who are normally competitors, but engage in cooperative, non-competitive, endeavors in which they allegedly manipulate prices.  Id. at 2.  The LIBOR I case is currently on appeal to the Second Circuit.  The Second Circuit’s ruling on that appeal may ultimately provide parties with more guidance on this complex issue.

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

EU stops Halliburton, Baker Hughes deal probe again, wants more info.  Oilfield services provider Halliburton Co.’s plan to acquire smaller rival Baker Hughes is facing additional delay after European Union antitrust regulators halted their investigation into the $35 billion deal for the second time.  According to the European Commission, the companies have yet to provide an important piece of information.  “Once the missing information is supplied by the parties, the clock is re-started and the deadline for the Commission’s decision is then adjusted accordingly,” Commission spokesman Ricardo Cardoso said in an email.

Judge Approves Sale of 2 Southern California Newspapers.  A federal bankruptcy judge has approved Digital First Media’s $52.3 million purchase of the Orange County Register and another Southern California newspaper after antitrust concerns scuttled plans for Tribune Publishing Co. to purchase the papers.  Freedom Communications decided to sell the Register and Press-Enterprise of Riverside to Digital First after another judge blocked a higher bid by the owner of the Los Angeles Times.  The transaction would give Denver-based Digital First, which publishes the Los Angeles Daily News, 11 daily newspapers and more than a dozen community weeklies in the greater Los Angeles area.

6th Circuit revives hospital antitrust action.  Four Ohio hospitals and a financial-management company participating in a joint operating agreement do not constitute a single entity immune to claims that they conspired to keep a fifth hospital out of their market, a divided federal appeals court has held.  The 2-1 decision by the Sixth Circuit Court of Appeals revived an antitrust lawsuit filed in 2012 by the Medical Center at Elizabeth Place against Premier Health Partners and its four member hospitals in the Dayton, Ohio area.

Judge dismisses ex-LA Clippers owner Sterling’s lawsuit vs NBA.  A federal judge has dismissed former Los Angeles Clippers owner Donald Sterling’s lawsuit accusing the National Basketball Association of violating antitrust laws in forcing him to sell the franchise in 2014.  U.S. District Judge Fernando Olguin in Los Angeles ruled that he was “skeptical that Sterling suffered any injury at all, let alone an antitrust injury,” given the record $2 billion price that former Microsoft Corp Chief Executive Steve Ballmer paid for the Clippers.  Sterling had sued in May 2014, after the league banned him for life following racist remarks he had made in a conversation recorded secretly by his girlfriend, V. Stiviano.

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

EU may investigate online content providers over cross-border trade.  European antitrust regulators are poised to investigate allegations that two out of three online content providers may be blocking consumers in another EU country from buying their products or services.  The findings by the European Commission came after a year-long investigation into barriers to cross-border trade in electronics, clothing, shoes and digital content in the 28-country bloc during which it surveyed more than 1,400 companies on their business practices.  The EU competition authority said 68 percent of providers of digital content, such as TV shows, films, music and sports, block consumers located in other EU countries, a practice known as geoblocking.

Freedom picks Digital First Media to buy O.C. Register, Tribune Publishing’s bid rejected.  Freedom Communications has chosen Digital First Media to buy its two newspapers because it no longer believes Tribune Publishing can close the deal, according to an attorney for the bankrupt company.  The Los Angeles Times owner had been the top bidder, but its $56-million cash offer to buy the Orange County Register and Riverside Press-Enterprise hit a roadblock late Friday when a U.S. District Court judge approved a temporary restraining order to stop the sale.   The U.S. Department of Justice sought a restraining order just hours after Tribune was named the top choice, citing antitrust concerns that the sale would harm competition and allow Tribune, which also owns the San Diego Union-Tribune, to raise prices to advertisers and subscribers in Orange and Riverside counties.

EU regulators say antitrust exemption for insurers not needed.  A six-year scheme which exempts insurers from antitrust rules under certain conditions is no longer necessary, European Union regulators said on Thursday, following a two-year review.  Adopted in April 2010, the insurance block exemption regulation sets out the conditions under which insurers can exchange information on specific risks without running foul of the EU’s strict competition rules.  The European Commission said the system may not be required any more as a study showed fewer than 50 institutionalized pools may be covered by the exemption.

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

EU Watchdog Could Expand Criteria to Initiate Merger Reviews.  European Union antitrust regulators are considering expanding the criteria that requires companies to seek merger approval in an effort to ensure deals involving start-ups producing key data or products do not slip through the net.  Under current rules, the European Commission only examines deals involving companies that exceed a minimum revenue threshold, meaning that some businesses have escaped scrutiny from the EU watchdog.  For example, Facebook’s $19 billion bid for mobile messaging start-up WhatsApp was not examined by the EU competition authority until the case was referred to it by national antitrust agencies two years ago.

Supreme Court Declines to Hear Apple’s Appeal in E-Book Pricing Case.  The Supreme Court has refused to review an appeals court’s determination that Apple conspired with book publishers to raise the prices of digital books.  The court’s order puts into effect a $450 million settlement that Apple had agreed to pay if it lost the case.  E-book buyers will receive $400 million in cash and credits, and lawyers involved in the case will get $50 million.

Merger ‘Tsunami’ Taxes Resources of U.S. Antitrust Regulators.  U.S. antitrust enforcers are dealing with a “tsunami” of high-value, complicated mergers that have stretched their resources, according to the heads of the U.S. Justice Department’s Antitrust Division and the Federal Trade Commission.  Some of the increased volume of mergers has been attributed to investors who have reacted to the improving economy.

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

Europe’s Antitrust Enforcer on Google, Apple and the Year Ahead.  Margrethe Vestager, the European Union’s competition commissioner, is expected to move ahead in the coming months in the antitrust case she filed against Google, in which she has accused the company of favoring some of its own services in search results over those of rivals.  The current charges, listed in a statement of objections, are just one in a number of competition-related headaches that the search engine may face this year in Europe.  Ms. Vestager is also investigating whether Apple received an unfair tax deal from Ireland, and Amazon from Luxembourg, that broke Europe’s state aid rules.

News Corp to Settle In-store Promotions Litigation for $280 Million.  News Corp has announced that it has agreed to pay $280 million to resolve claims that it monopolized the market for in-store promotions at more than 50,000 retail stores across the United States.  The settlement with Rupert Murdoch’s company abruptly ended a trial that had begun when jurors in Manhattan federal court heard opening arguments in what had been a $2 billion lawsuit.  As part of the settlement with the plaintiffs, who consist of consumer packaged goods companies including Dial Corp and Kraft Heinz Co, News Corp said it will pay $250 million to settle the case and another $30 million to resolve related claims.

Facebook Faces German Antitrust Investigation.  Facebook became the latest American technology company to face antitrust hurdles in Europe after the German competition authority opened an investigation into whether the company has abused its dominant position in social networking.  The move puts Facebook, which is used by many of Europe’s 500 million citizens, alongside other United States technology companies, like Google and Microsoft, which have also faced antitrust investigations into their activities across the region.  European officials have taken a tough stance on how American tech giants operate across the 28-member bloc, as many politicians here remain concerned that these companies often dominate many aspects of people’s digital lives, including social networking, online search and e-commerce.