By Robert Schwartz

Although President Obama has endorsed a specific approach to “net neutrality” – the principle that Internet service providers should treat all data on the Internet equally – the debate over whether and how the Federal Communications Commission should enforce that principle is still raging, and may well be decided by whoever wins the battle over defining “Internet access.”

In politics, a basic rule is never to let the opposition define you.  So it is in public policy and regulation as well.  The term “broadband,” for example, makes sense only when compared to the old dial-up world based on thin copper telephone wires, where speeds are measured in K’s, not M’s or G’s.  Compared to the bandwidth devoted to multichannel home video by cable, satellite (“DBS”) or telco distributors, the bandwidth that these distributors make available to the Internet is puny indeed – a mere handful of channels out of the hundreds that they control.  Internet access is like a key mountain pass – whoever controls this turf is likely to emerge victorious.

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By Allison F. Sheedy

The biggest regulatory review of the year—the Federal Communications Commission’s examination of Comcast Corp.’s proposed acquisition of Time Warner, Inc.—has taken an interesting foray into analyzing competitive tactics, with the FCC’s invitation to media companies to confidentially raise concerns about Comcast’s use of most favored nation (“MFN”) provisions in its contracts to purchase content.

The Wall Street Journal reported yesterday that the FCC has invited companies, including Discovery Communications, to offer feedback about Comcast’s MFNs to aid its evaluation of the proposed take-over.  The FCC also publicly released a request for information to Comcast that included (among many other items) details about each agreement in which Comcast has used an MFN.

In a typical form, an MFN is a contractual promise obtained by a buyer from a seller that the seller will not give a better price to any other purchaser.  A buyer usually seeks an MFN clause as a form of protection to ensure that its competitors do not get cost or other advantages.

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By Ankur Kapoor and Rosa M. Morales

Nearly a year after the Supreme Court held in FTC v. Actavis that reverse-payment settlement agreements between branded and generic pharmaceutical companies are subject to antitrust scrutiny under the rule of reason, federal district courts are struggling with the thorny issue of whether plaintiffs need to show them the money.

More specifically, district courts remain confounded by what constitutes a “payment” for purposes of antitrust challenges to settlements of Hatch-Waxman pharmaceutical patent infringement litigation, and whether a monetary transfer from the patent holder to the alleged infringer, i.e., a “reverse payment,” is necessary to state an antitrust claim attacking the competitive effects of the settlement.  Before embarking on a rule-of-reason analysis in such cases, some district court judges seem reluctant or unwilling to say “go” before they see the green.

As discussed in a previous post – “Are Bright-Line Rules The Right Prescription For Reverse-Payment Cases?” – in January the U.S. District Court for the District of New Jersey dismissed the antitrust challenge to a reverse-payment settlement in In re Lamictal Direct Purchaser Antitrust Litigation because there was no cash payment from the patent holder to the would-be generic competitor, and narrowly interpreted Actavis as imposing a “bright-line” requirement of a cash payment.  The court therefore held that it was unnecessary to engage in the requisite full-blown rule-of-reason analysis to determine the settlement’s anticompetitive effects (if any).

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By Aymeric Dumas-Eymard

Visa has just closed a chapter of its antitrust woes in the European Union.

On February 26, 2014, the European Commission announced that it had rendered legally binding the commitments offered by Visa Europe to cap its yearly weighted average Multilateral Interchange Fees (MIFs) for consumer credit card transactions at a level of 0.3% of the value of the transaction.  The cap will apply with immediate effect to cross-border credit transactions within the EEA (i.e., where the issuer and the acquirer are in different EEA countries) and with a two-year delay to domestic credit card transactions in certain EEA countries.

Visa offered these commitments to resolve proceedings opened by the European Commission in 2008 with respect to both debit and credit card cards.  In 2010, the Commission accepted Visa’s commitment to cap its debit card MIFs at 0.20% of transaction value.  However the investigation continued with respect to credit card transactions.  The Commission issued a supplementary Statement of Objections in July 2012, setting forth its continuing concerns with Visa’s practices in the credit card space and, in particular, the level of its interchange fees.

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A View from Constantine Cannon’s London Office

By Irene Fraile and Ankur Kapoor

The European Union may be on the verge of embracing “umbrella liability”—a theory of liability that would significantly increase the exposure of members of anticompetitive cartels.

The European Court of Justice is being urged by one of its advocates general to hold that, under EU law, victims of cartels can seek damages from cartel members for higher prices paid to non-cartel members that were able to raise their prices under the pricing “umbrella” created by the cartel. If the Court of Justice endorses such umbrella liability, antitrust liability in the EU could diverge from the approach evolving in U.S. courts which have been reluctant to embrace umbrella liability. click here for more »