Surely, Google doesn’t want to go through what so many dominant companies in the U.S. have had to suffer – government antitrust scrutiny, in the form of merger/joint venture challenges and even, God forbid, a Microsoft-like monopolization suit.  For better or worse, intensive antitrust scrutiny is the price of success in the U.S., and while it can’t be avoided altogether, perhaps it can be minimized.  Or so Google hopes.

To that end, Google has made available a webinar entitled “Google, Competition and Openness.” Consumerwatchdog.org is not buying it, and their “anonymous mark-up” of the document (giving it a grade of “F”), is embedded from Scribd.com, below.

Anonymous Analysis of Google Charm Offensive

All of the news articles I’m seeing about how aggressive the newly appointed antitrust enforcers may be puts me in a mind to reminisce.

When I graduated law school in 1979 I went off to what was then called Howrey & Simon, at that time the self-proclaimed antitrust heavyweight of D.C., and maybe the entire country. We certainly believed this to be true, and maybe it was. Back then there was no American Lawyer, and no one was really keeping score.

At Howrey it was all antitrust all the time. The firm was involved in massive trials in distant locations – a four month trial in Houston, requiring the rental of suites of condos and an entourage that would challenge a U.S. President and staffed like the U.S. army — was not uncommon; in fact, cases like that were taken for granted. And, according my “law of antitrust litigation” (which is: all antitrust cases must be tried twice, < appeal, > appeal), some of these trials were “seconds. ” The funny thing is, no one seemed to give this state of affairs a second thought -it was just assumed that this was the normal course of events, and as long as Jimmy Carter was in the White House, all was well for antitrust lawyers.

This changed as quickly as the April weather in New England when Ronald Reagan took office – in fact, hiring at the DoJ Antitrust Division pretty much froze in November 1980 (I know, because I was interviewing there) If memory serves me right, many lawyers who were hired by the Antitrust Division during the interregnum between election day and inauguration day had their offers rescinded as soon as Reagan took office. Fortunately for me, I dodged that particular bullet – by then, I was headed back to Boston.

A long winter, an era of “anti antitrust,” had began. Government prosecutions — the lifeblood of many private actions — were shut down and new case filings became scarce. A firm like Howrey wasn’t able to ride the coattails of a government criminal action, or defend against either government cases or civil spinoffs, and the firm entered a period when it was “reinvent or die.” Howrey did reinvent itself, and thrives to this day, but a Dark Age of Antitrust had begun, and it was to last for twelve long years, while Reagan, and then George Bush, were in office.

This was a truly terrible time for U.S. antitrust hawks, but like the desert creatures that are able to hibernate for seemingly impossibly long periods of time waiting for rain, rain eventually did come, and the believers in aggressive antitrust enforcement rose to meet a new spring. Or so they hoped. The Clinton administration did revive antitrust (to Microsoft’s dismay, to mention one victim), but somehow it never got fully back on its feet in the eight years the democrats gave it. It takes a long time to recover from a 12 year dry spell, and eight years just wasn’t long enough. And, truth be told, Bill Clinton wasn’t as much of an antitrust hawk as some might have expected.  Times were good, and no one wanted to rock the boat too much.  And, antitrust economists had to grapple with the implications of the powerful network effects being created in the software and Internet industries.

Yes, there was some action, but nothing like the ’70s.

George Bush’s eight years in office put a quick stop to whatever momentum antitrust enforcement had picked up during the Clinton years. Price fixing prosecutions galore, sure, but not very much of the real thing: Section 2 cases, merger challenges, novel legal and economic theories that lawyers and economists could really sink their teeth into and spend a career arguing over.

So, now that Barak Obama is in office, what will the future hold? One never knows, and although history may rhyme, it never repeats. Google may prove to be a poor substitute for AT&T.  However, you can be sure that a new generation of anitrust lawyers has a careful eye on the Obama administraiton, waiting for a sign – a sign that their time has come. Again.

A new administration often means a new approach to federal agency enforcement of the antitrust laws.  And, a shift from Republican to Democrat often means more aggressive enforcement by the DOJ and FTC.  The business and legal communities want to know, what can we expect?

James W. Lowe and Thomas Mueller of Wilmer Hale attempt to answer some of these questions in their article Whither US Antitrust?, published in the March 2009 issue of the Global Competition Review.

Take a book: Innovation for the 21st Century, Harnessing the Power of Intellectual Property and Antitrust Law, by Michael A. Carrier.  Invite several IP and antitrust luminaries to comment on the book.  The result: a  “Blog Symposium” on the book organized by Truth on the Market.  The Symposium is described as follows:

The format will be as follows.Today we’ll have posts from Crane, Manne, Weiser, and Wright on aspects of Innovation for the 21^st Century which focus on competition policy.Tomorrow, Professors Frischmann, Kieff, and Crouch will focus on the intellectual property related proposals.Professor Carrier will have the opportunity to respond to the posts Tuesday evening or Wednesday.And of course, we hope that both participants and our normal group of high quality commentators will find some time to mix it up in the comments.The participants have been given broad leeway to discuss general themes in Carrier’s work or hone in on specific policy proposals.

With the formalities out of the way, you can expect the first of Monday’s posts to start in the early morning and then we’ll add throughout the day with posts from Crane, Manne, and Wright.

The bloggers, with links to their bios are:  Dan Crane (University of Chicago/ Cardozo), Geoff Manne (TOTM/LECG), Phil Weiser (Colorado), Dennis Crouch (Patently-O/Missouri), Brett Frischmann (Cornell/ Loyola), F. Scott Kieff (Wash U./ Hoover/ and on his way to GW), the author and the moderator, Josh Wright (George Mason).

Keep in mind that it wasn’t too long ago that the question “whether law profs could blog” without sacrificing all academic credibility and being pelted with rotten eggs by their more conservative colleagues was up in the air.

Click here to read the first entry and proceed from there.

Gary Reback, famed antitrust/IP lawyer and long-time thorn in the side of Microsoft, has written a book entitled “Free The Market!”.  The book will be released in mid-April and is available on preorder at Amazon now.

Based on a few excerpts on Reback’s web site it looks like this will be an anecdotal, “in-the-trenches” book (as opposed to theoretical/academic) that should be well worth reading for those interested in the antitrust/IP wars of the last two decades. Reback was truly in the center of most of the big cases during these years, and I hope his book captures the legal issues, strategies and behind-the-scenes events that he witnessed.

[Update: the FTC did file a reply brief.  Link here]

All the briefs are in on the FTC petition for cert in its antitrust case against Rambus, (unless the FTC decides to file a reply brief, which is unlikely to change things much). I’ve added the Rambus opposition to the Rambus Group page on scribd.com, here. Now its time for the antitrust community to hold its breath and see whether the Court takes the case. Some knowledgeable commentators have opined that FTC/Rambus case has the best chance of any antitrust case obtaining review this year, but that plus a dime will get you …. well, nothing I guess. If the petition is allowed, it will be very exciting times for antitrust and standards setting law and policy wonks.

In federal court in Boston the Gatehouse Media v. New York Times case (described in these two (1, 2) earlier posts) has settled, as I suspected it would. The settlement agreement (or a preliminary agreement which is binding in the event a “definitive agreement” is not reached), is on scribd.com, here. It appears that this agreement was not intended to be made public (at least not yet), but apparently someone leaked it, so it’s public now.

As I read this, Gatehouse prevailed, hands down over the NYT/Boston.com. Gatehouse will erect “technical solutions” to prevent Boston.com from copying the Gatehouse original content, and Boston.com will respect those “solutions.” If a “solution” proves ineffective, Gatehouse will notify Boston.com, and Boston.com will back off right away. Why the parties went about it in this manner (which implicates DMCA-like anti-circumvention) I’m not sure, but I appears to accomplish the same result as if the NYT/Boston.com simply said “we won’t copy your ledes.”

From what I can seek, Boston.com/yourtown has already dropped its ledes and links to the Gatehouse sites, at least based on a quick sampling.

[postscript: here is a link to the report of Gatehouse's copyright expert, Douglas Lichtman, Professor of Law, UCLA. The report is an analysis of the case under copyright fair use principles, and a rebuttal of the NYT/Boston.com's unclean hands argument]

You would think that in a capitalist economy the right of one business to to say to another “I don’t want to deal with you” would be close to sacrosanct.  And, you would be right, with qualified exceptions in cases where the party refusing to deal has monopoly power.  Even then, the Supreme Court has narrowed the “duty to deal” to  fact situations so limited that antitrust liability can be avoided with careful planning.

The two leading Supreme Court cases in this area of the law are Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U. S. 585, 601 (1985) and Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004).  Post-Trinko, the consensus of the courts is that “refusal to deal” claims are viable only where there was no voluntary prior course of dealing between the parties, where the monopolist’s  conduct increased its short term profits, or where the refusal to deal is used to monopolize an adjacent market.

“Refusal to deal” cases involving Internet companies have been rare, but in a recent decision the 9th Circuit held that exclusionary conduct by MySpace.com, directed at another social networking site, Vidilife.com, did not constitute monopolization under the federal antitrust laws.

Both MySpace.com and Vidilife.com are “social networking” websites.  MySpace is very well known, Vidilife site much less so.

Vidilife.com, owned by LiveUniverse, Inc., allows users to post videos on its site.  Some of those users embedded their videos in their MySpace web pages (a comon practice on social networking sites).  MySpace deleted the videos and references to Vidilife.com. LiveUniverse sued in federal district court in California, charging MySpace with attempted monopolization and monopolization under the federal antitrust laws.

The district court found that MySpace.com’s actions did not constitute an illegal “refusal to deal,” and the 9th Circuit upheld this ruling.  At the heart of the 9th Circuit’s ruling is the fact that LiveUniverse did not (and could not) allege a prior course of dealing between the two companies or that MySpace was forsaking short-term profits, as required by Trinko.  In addition, the court held that LiveUniverse had failed to adequately allege causal antitrust injury.

There is some back story to this case.  LiveUniverse’s CEO, Brad Greenspan, is the the former CEO of eUniverse/Intermix–the company that sold MySpace to News Corp in 2005 for a half-billion dollars.  Apparently, there is some bad blood between Greenspan and MySpace.com left over from that transaction, suggesting that MySpace.com may have been acting from personal motives.  If so, it was an expensive exercise in ego gratification for both companies.

• District Court Decision(pdf)
• 9th Circuit Decision(scribd) (nonprecedential decision)

The amici briefs of “Twenty Scholars,” Hynix, Micron and Nvidia, the CCIA and the American Antitrust Institute have been added to the Rambus group page on scribd.com.

Click here for a recent post discussing this appeal.

When old engineers (and old lawyers) sit around decades from now reminiscing about patent and antitrust law in the late 1990s and early 2000s, the name of Rambus is sure to come up.  The topic will not be the Rambus DRAM (or RDRAM) chip technologies, but rather the massive volume of litigation that Rambus set off as result of its alleged “patent hold-up” actions and its patent enforcement efforts.

Rambus, the lawyers on either side of its many cases, the courts, antitrust experts and economists, and of course investors in Rambus’ stock (a particularly loyal and attentive group), have debated the pros and cons and nuances of these lawsuits for years, and during this season (late 2008) an important and timely Rambus case is taking a run at the Supreme Court.

The FTC adminstrative action against Rambus, which bothAndy Updegrove and Ihave written about at length in the past, involves somewhat arcane issues of single-firm conduct under Section 2 of the Sherman Act. However, the case also exists at a level that doesn’t require a degree in law and economics to understand – Rambus is accused of of withholding from an important standards-setting organization (SSO)  the fact that it had pending patent applications, resulting in adoption of the Rambus technology as a standard, following which Rambus used it patents to “hold up” the industry for unreasonable royalties.

What a wonderful blend of issues for lawyers and economists to dive into: patent law, antitrust law, conspiracies to deceive, very large sums of money (in the form of royalties potentially owed to Rambus by industry players), and all of this during the technology and stock market vortex of the 1990s and 2000s. Is it any wonder that Rambus’ litigation has attracted so much attention?

In context, the Federal Trade Commission case has been just one of many fronts on which Rambus has been forced to battle.  As discussed here, the Federal Trade Commission found that Rambus’ actions toward the SSO was deceptive and violated the antitrust laws by enabling Rambus to gain monopoly power. The Court of Appeals for the D.C. Circuit reversed the FTC early this year on highly technical legal grounds that involved what some observers thought was a misapplication of the antitrust laws. However, no matter which side you’re on, it’s difficult to deny that the case raises legal issues that could benefit from clarification by the Supreme Court.  Now, the FTC has asked the Supreme Court to review the case.

Persuading the Supreme Court to review a case is harder than getting into Harvard.  In its most recent term the Court decided about 70 cases, out of over 7,000 appealed. However, like admissions at Harvard, the odds aren’t quite so bad once you eliminate the cases that had no chance of review and shouldn’t have been appealed in the first place – in effect “Hail Mary” appeals.

Many people are hopeful that the FTC/Rambus case will be accepted by the Court.  The FTC/Rambus case certainly falls within the “first in class, perfect SAT scores” category, to stretch the analogy.  This is a rare opportunity, these advocates believe, for the Court to clarify the law of “single firm” monopoly conduct. And, the standards setting industry believes that the case presents critical issues necessary to the health of standards setting, an area of domestic and international cooperation whose importance is hard to overstate.  On the opposite side of the case, Rambus advocates argue that Rambus is the victim of a government witch hunt that lacks any merit, and conclude that the D.C. Circuit was correct to reverse the FTC and set matters straight.

I’ve set up an FTC v. Rambus certiorari petition group page on scribed.com to collect filings on this appeal. The first step for the FTC, of course, is to persuade the USSC to take the case. At present, the  Rambus group pageholds the D.C. Circuit decision, the FTC’s cert petition, and the amici briefs that have been filed to date.

In addition to the petition of various companies urging the Court to take the case (Hewlett Packard, Cisco, Sun and Oracle), the Rambus group page holds the petition filed by our firm last week, which was written by Andy Updegrove. The SSO petition was written on behalf of 19 standards setting organizations representing over 13,000 members, and it emphasizes the practical importance of this appeal – its importance to the “law of SSOs”, for lack of a better term.

A pdf copy of the SSO petition is here, and a copy on scribed.com is embedded below.

Will the Court take this case?  We should know soon. I’ll continue to add amici petitions and, of course, Rambus’s opposition to the request for Supreme Court review, which will be forthcoming soon, to the Rambus group page, as they appear.

Advanced Media, et al., Amicus Brief in FTC v. Rambus

Whole Foods, in the wake of the D.C. Circuit’s decision reinstating (in a manner of speaking) the FTC’s challenge to the Whole Foods – Wild Oats merger, has filed a most unusual lawsuit in the federal district court in the District of Columbia. Whole Foods is seeking to terminate the FTC’s administrative proceedings investigating the merger. The stated grounds are violation of the Due Process Clause and the Administrative Procedure Act (the APA).

Here is a link to the complaint (scribd.com).

This lawsuit is unusual, to say the least. The essence of Whole Foods complaint seems to be that the FTC has prejudged the case and set an unreasonably aggressive discovery schedule. I’m not aware of any grounds for this legal theory at this stage of an administrative proceeding, but I’m sure that Whole Foods’ lawyers have done their homework, and that these claims have some legal merit. Stay tuned.