A View from Constantine Cannon’s London Office

By Yulia Tosheva and James Ashe-Taylor

The European Commission (“EC”) is taking aim at artificial restraints on cross-border online sales in the European Union with its launch of a formal investigation into e-commerce.

The antitrust investigation, which was opened on May 6, 2015, will focus on barriers to cross-border online trade in goods and services where e-commerce is most widespread such as electronics, clothing and shoes, as well as digital content.  The inquiry complements the EC’s wider Digital Single Market Strategy, which was adopted by the EC on May 6 as well.  The goal of the Digital Single Market is to ensure better access for consumers and businesses to digital goods and services across Europe, and create a level playing field for digital networks and innovative services.

The EC is concerned that online retailers may restrict cross-border online trade within the EU by deliberately creating technical and/or contractual barriers.  A recent report by the European Consumer Centres Network (ECC-net) showed that 32% of retailers cited contractual restrictions in their distribution agreements as the reason for refusing to supply services cross-border.  In another 2015 survey into wholesale and retail sales of goods and services in the EU, 19.1% of companies already active in cross-border e-commerce and 29% of companies that are not yet active, declared that suppliers’ restrictions affecting sales on online platforms either constituted or would constitute a problem for their businesses when selling online.

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

5 Big Banks Expected to Plead Guilty to Felony Charges, but Punishments May Be Tempered.  The U.S. Department of Justice is preparing to announce that Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies, according to sources.  Reportedly, the Justice Department is also preparing to resolve accusations of foreign currency misconduct at UBS.

Sports broadcast antitrust case may proceed as class action.  A federal judge ruled that television viewers may pursue a class-action lawsuit accusing Major League Baseball, the National Hockey League, Comcast Corp, DirecTV and other broadcasters of illegally restraining their ability to watch their favorite sports teams play.  U.S. District Judge Shira Scheindlin in Manhattan said the viewers suffered from “a dearth of choice in the market for baseball and hockey broadcasting,” and that it made sense for them to pursue their claims as a group.  The court also found, however, that damages could not be pursued on a classwide basis.

Sysco may face about $1 billion in costs if US Foods merger dies.  Sysco Corp. will be left with a bill of around $1 billion if the Federal Trade Commission kills its $3.5 billion merger with US Foods, regulatory filings show, underscoring the perils of doing deals that have a good chance of being blocked by antitrust regulators.  According to a Reuters analysis of Sysco’s filings, the mammoth U.S. food distributor has spent more than $400 million so far on a combination of integration planning, financing charges and on defending the transaction in court.

EU Regulators to Decide on GE, Alstom Deal by August 21.  European Union antitrust regulators have resumed their investigation into General Electric’s 12.4-billion-euro bid for Alstom’s energy unit after receiving requested data from the U.S. conglomerate.  According to the European Commission, it will decide by Aug. 21, 2015, whether to clear the deal, General Electric’s biggest acquisition.

A View from Constantine Cannon’s London Office

By Yulia Tosheva and James Ashe-Taylor

The UK Competition and Markets Authority (“CMA”) announced on Wednesday that it is closing its investigations into MasterCard’s and Visa’s multilateral interchange fees (“MIF”) on the grounds of administrative priorities.

The CMA reached its UK domestic decision in light of the approval by the Council of the European Union of the long-awaited Interchange Fee Regulation (“IFR”) on April 20, 2015.  The IFR will become effective 20 days after its publication in the Official Journal.

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

American Express told it cannot enforce anti-steering rules against merchants.  Merchants unhappy with the fees American Express charges them may steer customers toward less expensive cards without fearing retaliation from the credit card company, Judge Nicholas Garaufis ruled in federal court in Brooklyn.  The court issued a written ruling enjoining American Express from blocking restaurants, stores and other merchants from offering discounts for using lower-fee cards.  Judge Garaufis ruled in February that American Express’ rules for merchants against such activity, known as steering, “imposed actual, concrete harms on competition in the credit and charge card network services market.”  Constantine Cannon represented various merchants in commenting on the remedy adopted by the court.

Applied Materials and Tokyo Electron Call Off $10 Billion Merger.  Two of the world’s largest manufacturers of the machinery used to produce semiconductors, Applied Materials of the United States and Tokyo Electron of Japan, dropped a $10 billion deal to merge after the U.S. Department of Justice said that combining their businesses would restrict competition.  The companies failed to come up with a plan that could allay the federal regulators’ antitrust concerns about combining two of the three largest players in a sector crucial to the production of modern electronic devices, from smartphones to televisions.

U.S. Supreme Court weighs accepting ProMedica antitrust case.  The U.S. Supreme Court is considering hearing a Federal Trade Commission case on whether Ohio-based health system ProMedica violated antitrust laws when it acquired financially struggling St. Luke’s Hospital in Maumee, Ohio.  Some legal experts say it’s unlikely the high court will agree to hear ProMedica’s appeal of a lower court ruling ordering it to divest the hospital.   Constantine Cannon partner Matthew Cantor commented that he does not “see novel legal issues that the court is going to want to consider.”  The widely watched appeal comes as hospitals considering consolidation fret about antitrust regulators’ increasingly aggressive approach.

S.Korea antitrust body investigating Oracle for software bundling.  South Korea’s antitrust body is investigating U.S. database services provider Oracle for bundling its new software offerings into maintenance services contracts with customers.  Hwang Won-chul, a director of the Korea Fair Trade Commission, indicated that the antitrust regulator is investigating Oracle because its software bundling is seen  as limiting competition.

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

Europe Challenges Google, Seeing Violations of Its Antitrust Law.  The European Union has formally accused Google of abusing its dominance in web searches, bringing charges that could limit the giant American tech company’s moneymaking prowess.  These are the first antitrust charges asserted against Google after a years-long face-off between the company and European regulators.  The EU’s antitrust chief, Margrethe Vestager, also announced that the EU has opened a formal antitrust investigation into the company’s Android smartphone software.

U.S. Antitrust Lawyers Said Leaning Against Comcast Deal.  Staff attorneys at the Antitrust Division of the U.S. Department of Justice are close to recommending litigation to block Comcast’s bid to buy Time Warner Cable, according to reportedly knowledgeable sources.  Government attorneys who are investigating Comcast’s $45.2 billion proposal to create a nationwide cable giant are leaning against the merger out of concern that consumers would be harmed, and could be days away from recommending to senior officials that the division file a federal lawsuit challenging the deal.

Apple cooperation with antitrust monitor down ‘sharply’ – report.  Apple’s cooperation with a court-appointed monitor has “sharply declined” as he reviews the iPad maker’s antitrust compliance policies, the monitor has reported to U.S. District Judge Denise Cote in Manhattan.  Michael Bromwich, who became Apple’s monitor after it was found liable for conspiring to raise e-book prices, reported on Thursday that Apple objected to providing information and “inappropriately” attempted to limit his activities.