What do Sarah Palin and Stephen King have in common?

The answer is not a punchline to a bad joke, it’s that both have books that are selling at 1950s prices, which a group of booksellers view as predatory and worthy of investigation by the U.S. Department of Justice.

The American Booksellers Association (ABA), a 109-year-old trade organization representing the nation’s locally owned independent booksellers, wrote a letter last week to the DOJ urging it to investigate the price war between Amazon.com, Walmart.com and Target.com, and requesting a meeting with officials as soon as possible.  As was widely reported, the three online retail giants began selling new hardcover bestsellers, including books from Stephen King, Sarah Palin, Barbara Kingsolver, John Grisham, and James Patterson, for between $8.98 and $9.00.

The booksellers allege that the retailers are selling the books at predatory prices – below cost – as loss leaders to attract shoppers who then purchase more costly items. click here for more »

While the antitrust class action is historically an American enforcement tool, the European Union is on the verge of pressing this powerful hammer into the hands of its member states.

Under a draft EU Directive, state bodies and nonprofit organizations appointed by national governments would be able to bring class actions in national courts against companies that fix prices or abuse their dominant market share.  Victims would automatically be included in the class action unless they opt out.  The draft Directive allows victims at least two years to take legal action to recover actual losses and lost profit after a final court ruling on a company’s liability.

European Competition Commissioner Neelie Kroes is expected to present the proposed Directive to fellow commissioners in the next few weeks.  If adopted as a Directive by the European Commission, EU Member States would be required to implement it or face heavy fines. click here for more »

The Chairmen of the House and Senate Judiciary Committees have joined forces to open a new – antitrust – front in the war for healthcare reform.  The two leading Democrats are seeking to boost healthcare reform with a partial repeal of an antitrust exemption that’s about as old as Democrats’ efforts to enact universal healthcare.

On September 17, 2009, Chairman John Conyers (D.-Mich.) of the House Judiciary Committee and Chairman Pat Leahy (D.-Vt.) of the Senate Judiciary Committee introduced legislation to repeal the McCarran-Ferguson Act’s exemption from the federal antitrust laws for health and medical malpractice insurers.  The Act dates back to 1945, the same year that President Harry Truman asked Congress to enact a national health insurance program.   click here for more »

Being a parent means great responsibilities – especially if you’re a corporate parent with subsidiaries active in the European Union.  As a result of the European Commission’s Akzo Nobel case, such corporate parents now face greater antitrust liability for the conduct of their 100%-owned subsidiaries.

On September 10, 2009, the European Court of Justice dismissed Akzo Nobel’s appeal of a 2007 judgment of the Court of First Instance.  The 2007 judgment confirmed a 2004 European Commission decision that fined Akzo Nobel subsidiaries for their participation in a cartel.  What makes this decision particularly noteworthy is that the subsidiaries’ parent company, Akzo Nobel, NV, was held jointly and severally liable on the basis of its 100% ownership of those subsidiaries. click here for more »

The Supreme Court’s decision in Pacific Bell Telephone Co. v. linkLine Communications, Inc., 129 S.Ct. 1109 (2009), suggests that the Court will apply predatory pricing analysis to all antitrust claims with an aspect of low pricing.

So it follows that bundled-discounting claims would likely receive the same treatment from the Court that price squeeze claims did.  A bundled discount is where a firm grants a discount on one product if customers also purchase a different, second product.  For example, the hot dog stand outside your office building gives you a discount on your hot dog if you also buy a soft drink.  And, of course, much bigger firms are using this approach too — it’s everywhere. click here for more »