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

MasterCard Faces Antitrust Charges in E.U.  European antitrust officials have filed formal charges against MasterCard, accusing the company of harming consumers and retailers by setting artificially high fees for credit card transactions in Europe.  The European Commission said MasterCard had prevented some retailers from processing transactions in countries with lower fees. The commission also said that MasterCard’s fees were unfair to tourists traveling in Europe.

FTC exploring Apple rules for streaming music rivals in App Store.  U.S. government antitrust regulators are investigating claims that Apple’s treatment of rival streaming music apps is illegal under antitrust law, according to industry sources.  Apple recently launched a new music streaming service, Apple Music.  It also provides the App Store platform for competing streaming services including Jango, Spotify, Rhapsody and others.

States line up to scrutinize Aetna’s $33 Billion Humana deal.  U.S. insurance regulators and state attorneys general are lining up to examine Aetna Inc’s proposed $33 billion takeover of rival Humana Inc. for potential harm to consumers, complicating what was already expected to be a tough review by federal antitrust authorities.  Insurance commissioners in 18 states including Texas, Kentucky and Florida will study merger documents provided by Humana to determine whether the deal will harm competition and lead to higher insurance premiums or diminished access to healthcare providers.  Moreover, while the U.S. Department of Justice is taking the lead on scrutinizing the transaction, at least three state attorneys general – in Florida, Mississippi and Massachusetts – have stated they will look at the proposed acquisition as well.

By Allison F. Sheedy

Sysco Corp. announced yesterday that it is abandoning its plans to acquire food service rival US Foods Inc., following last week’s setback to the deal in federal court.

In an opinion that closely tracked the FTC/DOJ Merger Guidelines, Judge Amit Mehta of the U.S. District Court for the District of Columbia granted the Federal Trade Commission a preliminary injunction to halt the proposed merger of nation’s two largest distributors of food and related supplies to restaurants and other foodservice establishments.  Sysco’s announcement that it was abandoning its plans to acquire its rival is no surprise, given the substantial hurdle imposed on the deal by the FTC’s victory in court.

The 18-month-old proposed deal encountered regulatory scrutiny from the start.  Last February, Sysco and US Foods proposed a divestiture of 11 US Foods distribution facilities to a smaller competing foodservice company, Performance Food Group (“PFG”), as a “fix-it-first” remedy designed to allay the FTC’s concerns.  The FTC was not swayed, however, and decided to sue Sysco and Us Foods to block the deal.

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

U.S. Asks If Comcast, Time Warner Cable Restricted Video Deals.  Federal regulators vetting Comcast Corp.’s proposal to buy Time Warner Cable Inc. want to know if the cable giants tried to restrict Walt Disney Co. and other entertainment providers from offering programs to rival online video outlets.  Among other avenues of inquiry, the FCC has asked eight media companies, including CBS Corp. and Discovery Communications Inc., to describe any limits to online distribution imposed by the two largest U.S. cable providers.

F.C.C. Approves Net Neutrality Rules, Classifying Broadband Internet Service as a Utility.  The Federal Communications Commission voted to regulate broadband Internet service as a public utility, a milestone in regulating high-speed Internet service.  The new rules seek to ensure that no content is blocked and that the Internet is not divided into pay-to-play fast lanes for Internet and media companies that can afford it and slow lanes for everyone else.

FTC Puts Conditions on Novartis AG’s Proposed Acquisition of GlaxoSmithKline’s Oncology Drugs.  Global pharmaceutical company Novartis AG has agreed to a proposed FTC consent decree that will require it to divest all assets related to its BRAF and MEK inhibitor drugs, currently in development, to Boulder, Colorado-based Array BioPharma to settle charges that Novartis’s $16 billion acquisition of GlaxoSmithKline’s portfolio of cancer-treatment drugs would likely be anticompetitive.  The FTC investigation is notable for its substantial cooperation with antitrust enforcers in Australia, Canada, and the European Union.

Ninth Circuit Refuses to Rewind Netflix Win.  The U.S. Court of Appeals for the Ninth Circuit has agreed Netflix shouldn’t be on the hook for allegedly colluding with Wal-Mart Stores Inc. to divvy up the market for online DVD rentals.  The Ninth Circuit affirmed the dismissal of a lawsuit alleging that Netflix and Walmart ran afoul of antitrust laws in their 2005 deal that transferred customers of Walmart’s DVD-rental subscription service to Netflix in return for Netflix’s agreement to promote Walmart’s DVD sales business.

A View from Constantine Cannon’s London Office

By Irene Fraile

A recent lively discussion with European Commission competition officials indicates that antitrust enforcement is continuing to evolve to deal with the thorny issues raised by so-called “reverse-payment” or “pay-for-delay” patent litigation settlements designed to delay the sale of generic drugs.

On January 29, 2015, Brussels Matters (which hosts informal discussions with senior EU officials) hosted the first pan-EU discussion with officials from the European Commission’s Directorate General for Competition (“DG COMP”) after the Commission’s Lundbeck decision, which imposed hefty fines for entering into pay-for-delay agreements that violated EU antitrust rules that prohibit anticompetitive agreements.

In that June 19, 2013, decision, the Commission imposed a fine of 93.8 million euros on the Danish pharmaceutical company Lundbeck and fines totalling 52.2 million euros on several producers of generic medicines for delaying generic market entry of the drug Citalopram.  This was the first EU infringement decision concerning pay-for-delay agreements.

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By David Golden

The Antitrust Division of the U.S. Department of Justice announced on Monday that it would not challenge recent revisions to the Patent Policy of the Institute of Electrical and Electronics Engineers Standards Association (“IEEE-SA”)—giving the green light to new Wi-Fi standards that computers, smartphones and tablets will follow in connecting to the Internet.

The Antitrust Division’s decision removes one of the last barriers to the implementation of the revised Patent Policy, which governs the licensing of patents essential to IEEE standards, such as the ubiquitous Wi-Fi networking protocols.  The changes could lead to cheaper devices for consumers.

We blogged about the IEEE-SA’s preliminary adoption of the changes earlier this year, following a Federal Circuit decision that required trial courts to consider a standard-setting organization’s patent-licensing policy when calculating patent royalty rates and damages.  The IEEE-SA submitted its revised policy to the government under the Antitrust Division’s Business Review  program.

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