The plaintiff in a federal class action filed in the U.S. District Court for the Eastern District of Washington is accusing leading credit reporting company Dun and Bradstreet (“D&B”) and Dun and Bradstreet Credibility Corporation (“DBCC”) of conspiring to use high pressure sales tactics to create a monopoly in the small business credit reporting market.

The complaint in O&R Construction, LLC v. Dun and Bradstreet Credibility Corporation alleges that thousands of small businesses were “deceived, misled and cheated” by D&B and DBCC in a “pay to play” scam that sold credit products in exchange for favorable credit ratings.

Plaintiff O&R Construction claims D&B and DBCC misled small businesses into believing there were problems with their D&B credit reports in order to defraud them into buying DBCC’s “CreditBuilder” line of products to improve their credit ratings.  Plaintiff alleges D&B and DBCC violated antitrust laws by conspiring to make the CreditBuilder products the only products available on the market that can address D&B’s small business credit reports.

Dun and Bradstreet has been a credit reporting agency for over 150 years.  The company has used its database of business credit information to develop a product that small businesses can use to monitor and improve their credit rating.  The complaint alleges that D&B spun off DBCC to sell the credit monitoring products and gave DBCC an exclusive license to use the small business data.  O&R argues that the 2010 agreement granting DBCC an exclusive license to D&B’s credit database has prevented new companies from competing in the market.

According to the complaint, D&B and DBCC have used fraudulent sales tactics, including scaring business owners by falsely telling them they faced several credit inquiries because their ratings were low.  However, unless the small businesses purchased DBCC’s CreditBuilder to monitor their credit, they could not find out who had made the inquiries and improve their rating.  The complaint also alleges that D&B would downgrade a business’s credit rating if it cancelled its CreditBuilder service.

O&R, which provides remodeling services mostly for government contracts, relies on D&B to provide accurate credit reports so that it can work with vendors.  O&R alleges that Home Depot, for example, decreased O&R’s line of credit after D&B downgraded O&R’s credit rating, which followed O&R’s cancellation of the CreditBuilder service.

“Defendants are colluding to negligently, recklessly or intentionally falsify information in small business credit reports,” O&R alleges.

New York City tourists could see lower prices for “hop-on, hop-off” bus tours if the U.S. government and the State of New York succeed in an antitrust suit filed in the U.S. District Court for the Southern District of New York that seeks to break up a joint venture that has allegedly monopolized the market.

The U.S. Attorney General and New York State Attorney General are suing in U.S. v. Twin America LLC to obtain equitable relief against bus companies Coach USA and CitySights, and their joint venture, Twin America, LLC.

Coach and CitySights operate several tour routes in New York City that allow tourists to stop at popular attractions, like Times Square or the Empire State Building, as well as in neighborhoods, like Chinatown or Soho.  Coach and CitySights provide a flexible way for visitors to explore New York because they allow riders to get off and spend as much time as they want at an attraction before boarding the next bus driving along the route.

According to the complaint, the two companies viciously competed against each other for almost four years.  CitySights began operations in 2005, and through several public advertising campaigns, grew quickly as a business.  As CitySights expanded, Coach saw its profits and market share decrease.

After three years of matching and attempting to outdo each other’s deals, Coach allegedly approached CitySights and proposed a joint venture to provide greater “pricing flexibility” for both companies.  Without first seeking approval for the joint venture from the federal Surface Transportation Board, the companies formed Twin America in 2009.  They continued operations as two separate companies, however, so the “competition could be kept at bay.”

The complaint alleges that the joint venture is an effective merger to monopoly that controls 99 percent of the market for hop-on, hop-off bus tours in New York City.  The complaint also alleges that the joint venture has resulted in actual anticompetitive effects, including a 10 percent price increase adopted by both companies.  The most popular tour went from $49 per person to $54.

SESAC, the performance rights organization formerly known as the Society of European Stage Authors & Composers, is facing a second antitrust lawsuit brought by broadcast groups after the Radio Music License Committee (“RMLC”) filed a complaint in the U.S. District Court for the Eastern District of Pennsylvania alleging that SESAC’s blanket fees for songs are anticompetitive.           

SESAC is one of three performance rights organizations that work with songwriters and musicians to give the media and consumers the ability to use copyrighted music through licenses.  RMLC is a radio trade group comprised of thousands of radio stations in the United States.

According to RMLC’s complaint, SESAC has allegedly used its for-profit status to establish a monopoly.  Not only are the other two performing rights organizations, BMI and ASCAP, non-profit organizations, but their fees are regulated pursuant to consent decrees with the U.S. Department of Justice (“DOJ”).

RMLS alleges that SESAC has used higher royalty fees to entice the most popular and profitable artists to join their repertory.  The SESAC repertory includes songs from music legends such as Bob Dylan, Neil Diamond and Rush as well as current pop hits by Enrique Iglesias and Usher.

RMLC alleges that broadcasters cannot avoid using SESAC songs.  According to RMLC, its stations are forced to purchase SESAC licenses at high prices due to the organization’s practice of charging blanket fees rather than licensing a few songs, artists’ collections or songs in one musical genre.

The complaint also accuses SESAC of conspiring to eliminate competition by entering into exclusive agreements with each of the 23,000 artists in their repertory, which prevent SESAC affiliates from licensing their music to RMLC members directly.

In contrast, the consent decrees entered in antitrust suits brought by the DOJ bar BMI and ASCAP from mandating blanket fees or entering into exclusive agreements with the artists.  

RMLC isn’t the first group to allege that SESAC’s licensing fees are exorbitant and anticompetitive.  A similar antitrust action filed in 2009 by a group of local television stations is pending in the U.S. District Court for the Southern District of New York.

Taiwanese manufacturers of aftermarket auto parts will have to continue litigating an antitrust class action as a result of the denial of their motion to dismiss the second amended complaint in Fond Du Lac Bumper Exchange Inc. v. Jui Li Enterprise Co. Ltd. et al.

Judge Lynn Adelman of the U.S. District Court for the Eastern District of Wisconsin rejected the arguments of defendants Taiwan Kai Yih Industrial Co., Ltd., Gordon Auto Body Parts, Auto Parts Industrial, Ltd., Jui Li Enterprise Company, Ltd., TYG Products, L.P. and Cornerstone Auto Parts, LLC that the plaintiffs failed to properly state a claim.

The defendant companies are not the original manufacturer of the car parts.  Instead, they make or distribute aftermarket, or AM, auto parts, which are less expensive versions of the original.  Consumers often use AM parts for replacements and repairs.

The defendants’ motion to dismiss argued that because the plaintiffs are indirect purchasers, and buy the parts from retailers at the least expensive price, they failed to prove antitrust injury.

Judge Adelman disagreed, noting that “[s]ince AM parts travel down the chain of distribution substantially unchanged, the price charged by the manufacturer will largely determine the price paid by the end user.”  The court also concluded that if the plaintiffs’ allegation that the companies conspired to control 95 percent of the AM parts market is correct, that would increase the likelihood that higher prices would get passed on to the consumer.

The court found that the second amended complaint had sufficient allegations that the companies made an agreement in 2003 to stop competing with each other and to set market prices.

The plaintiffs’ allegations were buttressed by public comments made by the companies’ executives stating the group had created a monopoly with high profits.  For example, an executive from TYG Products said his company “does not compete with its major rivals—all from Taiwan, but has been trying to form a strategic alliance to jointly develop the world’s largest single market.”

The court also refused to dismiss claims under antitrust and consumer protection laws in eight states: Arkansas, Florida, Minnesota, New Mexico, Tennessee, California, Massachusetts and Vermont.

The Internet Corporation for Assigned Names and Numbers (ICANN) and ICM Registry, the sole operator of the .XXX domain name registry, are going to have to continue litigating antitrust claims brought by adult filmmaker Digital Playground Inc. and Manwin Licensing International SARL.

Judge Phillip S. Gutierrez of the U.S. District Court for the Northern District of California is permitting plaintiffs in Manwin Licensing International S.A.R.L., et al. v. ICM Registry, LLC, et al. to proceed with their antitrust claims after granting in part and denying in part defendants’ motion to dismiss the complaint.

Plaintiffs allege that ICANN – the nonprofit organization responsible for management of Internet domain names – awarded ICM registry contracts without competition, and that ICM charges above-market .XXX prices, imposes other anticompetitive .XXX sales restrictions and has used its ICANN contract to block other adult-oriented top-level domains from operating.

ICANN had argued that it does not engage in commercial activity since it is a nonprofit organization.  The court disagreed, finding that ICM’s payment of money to ICANN for a grant of sole authority to operate .XXX domain names was “‘quintessential’ commercial activity and it falls within the broad scope of the Sherman Act.”  The Court also found that plaintiffs had adequately pled other elements of a Sherman Act claim, including a relevant market, antitrust injury and anticompetitive and predatory conduct.

The court did, however, dismiss two causes of action, conspiracy to attempt to monopolize and attempted monopolization.  Judge Gutierrez found the complaint failed to include all the product substitutions when defining the affirmative registration market that was allegedly the subject of the attempted monopolization.  

For instance, ICM and ICANN agreed to limit new adult domains, but they did not conspire to limit the adult entertainment industry across all domains. Judge Gutierrez even used Manwin-owned YouPorn.com to show that adult websites still have the option of using other top-level domains.

Plaintiffs have until September 9 to file an amended complaint.