The European Commission has received a split decision in two appeals of multi-million euro fines it imposed for anticompetitive conduct in beer and acrylic glass markets.

The European General Court has annulled the European Commission’s 31.66 million euro antitrust fine assessed against beer brewer Koninklijke Grolsch NV.  In case T-234/07, Koninklijke Grolsch v. Commission, the European General Court focused on the imputed liability to Koninklijke Grolsch for actions of its subsidiary, Grolsche Bierbrouwerij Nederland BV.

This appeal stems from a 2004 case in which the Commission found a cartel among the Netherlands’ four largest beer brewers.  The Commission determined that Koninklijke Grolsch NV, Heineken NV (jointly and severally liable with its subsidiary Heineken Nederland BV), Bavaria NV and InBev NV divided the Dutch market and coordinated on prices, price increases, and various commercial conditions.

The conduct resulted in fines totaling 273.78 million euros (including 219.28 million to Heineken and 22.85 million euros to Bavaria).  InBev was not fined as it was granted full leniency for participating in the investigation.  The three penalized companies appealed.

In June 2011, the European General Court reduced the fines assessed to Heineken and Bavaria by a total of  23.42 million euros  after finding there was a lack of evidence on the coordination of commercial terms.

On the remaining appeal, the European General Court ruled in favor of Koninklijke Grolsch stating that the Commission failed to demonstrate why Koninklijke Grolsch, which had not directly participated in the alleged cartel, should be liable.  There is a rebuttable presumption in EU law that a parent company exercises decisive influence over the conduct of a wholly owned subsidiary.  However, in the case at hand, the Commission did not discuss the economic, legal, and organizational links between Grolsche Bierbrouwerij Nederland and Koninklijke Grolsch.  Thus there was insufficient evidence to attribute liability to Koninklijke Grolsch NV.

The European Commission fared better in T-216/06, Lucite International and Lucite International UK v. Commission. In this case, Lucite International, a division of Mitsubishi Rayon Co. appealed a 25 million-euro fine from the Commission for colluding on acrylic glass prices.

Lucite claimed its fine should be reduced due to attenuating circumstances.  Lucite alleged its participation was limited to lower-level employees acquired after its 1999 purchase of Imperial Chemicals Industries plc (ICI).  Further, a commercial policy put in place by Lucite after the acquisition of ICI worked to undermine the cartel.  The European General Court disagreed, and ruled that Lucite failed to show “the Commission erred in its assessment of attenuating circumstances.”

A federal judge in Massachusetts has dismissed a putative class action that claimed that U-Haul International Inc. and its parent company, Amerco engaged in a truck rental price-fixing scheme.

The plaintiff in Liu v. Amerco alleged that U-Haul and Amerco engaged in an unfair or deceptive act in violation of Massachusetts law, and caused prices for truck rentals to rise, by inviting competitor Avis Budget Group Inc. to collude on prices

In dismissing the class action, Judge George A. O’Toole of the U.S. District Court of Massachusetts held that the complaint did not adequately assert an injury to the named plaintiff, who alleged she paid more for truck rentals as a result of the defendants’ alleged invitation to fix prices.

Judge O’Toole held that an allegation of illegal conduct increasing market prices is not enough, and that an actual showing of specific harm to the plaintiff is required.  According to the court, such a showing could be based on information on the rates paid by class members for one-way truck rentals as well as available competitor rates.

This lawsuit followed a 2010 settlement between U-Haul and the FTC based on allegations that U-Haul invited competitors to join a conspiracy which, if carried out, would have resulted in higher prices.  The settlement enjoined U-Haul from colluding or inviting collusion for a 20-year period.

After more than four years of litigation, AstraZeneca has agreed to pay $2.5 million to settle State of Idaho v. Alpharma USPD Inc. et al., an action brought by the Idaho attorney general alleging that the pharmaceutical company violated the Idaho Consumer Protection Act by inflating the average wholesale price of its drugs.

The Idaho attorney general brought the lawsuit against various pharmaceutical companies, alleging that the companies falsely reported the average wholesale price of their drugs.  As Idaho Medicaid sets reimbursement rates based primarily on the reported average wholesale price of various drugs, these inflated prices caused Idaho Medicaid to pay higher reimbursements than it would have had the true price of the drugs been reported.  

Idaho Attorney General Lawrence Wasden stated that, “where published prices are false or misleading, the taxpayers are significantly harmed by excessive Medicaid reimbursements.” 

According to Wasden, the attorney general’s investigation “revealed that the reported average wholesale price often is not related to the actual wholesale price paid for the drug.”  Indeed, the attorney general found that the average wholesale price of AstraZeneca’s heartburn drug Prilosec was inflated by 26 percent.

Wasden confirmed that the $2.5 million payment will be used to reimburse taxpayers for these overcharges.  Approximately $1.5 million will go to the state’s Cooperative Welfare Fund and will be applied as a credit against the federal government’s next payment to Idaho Medicaid, over $620,000 will be deposited in the state’s General Fund and $50,000 will go toward reimbursing the attorney general for investigative and legal costs. 

The AstraZeneca settlement follows settlements by other defendants to the lawsuit, including Teva Pharmaceuticals, Barr Laboratories, Inc., and Sandoz, Inc.  The claims against the remaining defendants, including Johnson & Johnson and Merck, are slated for trial starting later this year.

The U.S. District Court for the Eastern District of Pennsylvania has denied a motion in the In re Fasteners Antitrust Litigation class action to dismiss antitrust claims alleging that YKK and other fastener manufacturers engaged in price fixing.

Defendants sought dismissal of the claims on grounds of statute of limitations and lack of evidence.

The class action was filed in May 2010, by apparel manufacturers who alleged that YKK, Scovill Fasteners, Coats, and the Prym Group conspired to fix prices and allocate customers in the market for fasteners, a category which includes zippers, buttons, snaps, and hooks. From the early 1990’s through 2007, defendants allegedly participated in meetings to discuss prices, divide markets, and share business information.

U.S. apparel manufacturers began alleging illegal activity by the fastener manufacturers after a 2007 announcement by the European Commission fining the defendants for cartelizing the European and worldwide markets.  This finding caused over 35 suits to be filed in U.S. District Courts between 2007 and 2010.  The individual suits were consolidated into the class action.

Plaintiffs allege that the defendants concealed their conspiracy and due diligence would not have led class members to its discovery.  The class contends that there should be an equitable tolling of the statute of limitations until 2007, when they were made aware of the cartel by the European Commission’s announcement.

While the District Court did not grant the motion to dismiss based on the statute of limitations, the claims could still fail on that ground if a determination on the merits results in a denial of equitable tolling.  The District Court also found that the class sufficiently pled the existence of a conspiracy and antitrust injury.

A class action complaint in the U.S. District Court for the Northern District of California alleges that Apple and five major publishers engaged in a price-fixing conspiracy to block competition from Amazon’s e-reader, the Kindle.

The complaint in Petru et al. v. Apple, Inc. et al. alleges that prior to the launch of Apple’s iPad, Apple, HarperCollins, Penguin, Simon & Schuster, Macmillan, and Hachette Book Group violated federal and California state antitrust laws by conspiring to fix the prices of electronic books (e-books).

The plaintiffs contend that Apple was threatened by the popularity of Amazon’s Kindle and the potential that it would edge out Apple products in the market for mobile digital media devices.

According to the complaint, Apple wanted to protect its e-books from the price competition of Amazon, Sony and other e-book distributers that were selling e-books for $9.99.  The complaint claims that Apple sought to engineer an increase in Amazon’s prices in order to allow Apple’s iPad to better compete in the market for e-readers.

Plaintiffs allege that Apple orchestrated an agreement among publishers to sell e-books through an agency model.  This type of arrangement allowed publishers, not distributers, to set prices.  The agency model allegedly eliminated price competition among distributers.  According to the complaint, this model caused prices for e-books to rise by 30 to 50%, while the prices of hardcopy books remained constant in a competitive market.

If the class is certified, it will include purchasers of e-books from the five publisher defendants after the adoption of the agency model.