A View from Constantine Cannon’s London Office

By Natalia Mikolajczyk and Richard Pike

Major container shipping companies are attempting to resolve the European Commission’s antitrust probe into their practice of publicly announcing price increases.

The two biggest players in the container shipping market, A.P. Moeller-Maersk A/S and Mediterranean Shipping Company, hope to end the proceedings without paying any fines, according to news reports.

Since 2009, container liner shipping companies have been publicly announcing their plans to increase prices, often through press releases available on company websites.  Between 2009 and 2013, carriers on the benchmark Asia-to-Europe route gave advance notice, via press release, of at least 34 rate increases.  These announcements, which were made several times a year, included information on the amount of the rate increase and the date of implementation.

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A View from Constantine Cannon’s London Office

By Michael Petrides

The European Commission’s Competition Commissioner, Joaquin Almunia, is strongly defending the EC from charges that its proposed settlement with Google concerning search engine practices would permit Google to expand its dominant market position.

Commissioner Alumina’s defense of the proposed settlement joins a debate with Matthias Döpfner, CEO of German publishing giant Axel Springer.

This blog commented in February on Google’s proposed commitments to settle its long-running antitrust case with the EC over its search engine practices. In the meantime, and before the commitments have been “market tested,” Döpfner has launched a scathing attack against the antitrust regulator.

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By Ankur Kapoor[1]

The Federal Trade Commission (“FTC”) and the Antitrust Division of the U.S. Department of Justice will attempt to unravel the antitrust pros and cons of bundled discounts and other conditional-pricing practices in a one-day public workshop on June 23, 2014.

Bundled discounts, which are discounts offered for the purchase of a “bundle” of goods or services, exist in many markets.  The undisputed heavyweight champion of bundled discounts is the fast-food value meal, for which you pay some five cents more to get the fries (how can you say no to that?).

Although most bundled discounts are good for competition because customers love a good deal, there are cases where bundled discounts can exclude competition and, on balance, harm consumers.  For example, when a company has a monopoly in one product market (say, broadband internet service), it can raise prices in that market and then offer a “discount” only to customers that also buy some other product in a competitive market (say, telephone service).  Because customers need the monopoly product and don’t want to turn down the “discount” on that product, they end up buying the second product from the monopolist as well, to the exclusion of other companies competing in the second product market.  Even if competitors may be able to compete in the first product market, that complicates but does not eliminate the anticompetitive potential of the bundled discount.

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By Marlene Koury

The U.S. Court of Appeals for the Sixth Circuit has upheld a Federal Trade Commission (“FTC”) order unwinding a merger of two Ohio hospitals that unsuccessfully sought to breathe life into a “weakened firm defense.”

In a unanimous opinion, a three-judge panel of the Sixth Circuit denied ProMedica’s petition to overturn a Federal Trade Commission ruling, which ordered ProMedica to divest itself of St. Luke’s after finding that the merger of two of the four hospital systems in Lucas county, Ohio, would adversely affect competition in violation of Section 7 of the Clayton Act.

ProMedica scooped up its rival St. Luke’s in a widely-publicized merger in 2010.  A year later, the FTC deemed the merger anticompetitive on the grounds that it would lead to higher prices for consumers and ordered ProMedica to divest St. Luke’s.  ProMedica then filed a petition asking the Sixth Circuit to review the FTC order. click here for more »

By Ankur Kapoor

The Antitrust Division of the U.S. Department of Justice (the “DOJ”) is highlighting the competitive benefits to the settlement of its challenge of the American Airlines-US Airways merger in the DOJ’s Response to Public Comments on the Proposed Final Judgment filed on Monday in the United States District Court for the District of Columbia.

The DOJ’s Response heralds the Proposed Final Judgment as “a major victory for American consumers” because “[i]t will enable Low Cost Carriers (‘LCCs’)” such as JetBlue, Southwest, and Virgin America “to fly millions of new passengers per year to destinations throughout the country” and because, by requiring divestiture of 104 slots at Ronald Reagan Washington National Airport to these three LCCs, it “fully addresses the harm that would have resulted from New American’s control of nearly 70% of the limited takeoff and landing slots” at Reagan National.

The DOJ’s Response also highlights that the proposed judgment requires divestiture of 34 slots to Southwest and Virgin America at New York LaGuardia International Airport and divestiture of fewer, other rights and interests at five other airports.  To support its claim of victory, the DOJ points to its conditioning the United-Continental merger in 2010 on the divestiture of 36 slots to Southwest at Newark Liberty International Airport and the fact that, since then, prices for certain nonstop routes from Newark have decreased substantially.

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