U.S. v. Apple: Where Were the Lawyers?

July 12, 2013

All antitrust cases are tried twice – once before the appeal, and once after the appeal. anon __________________________ The district court decision in U.S. v. Apple presents about as clear a case of price fixing as one can imagine.  Apple participated in a conspiracy with five of the “Big Six” publishers (an incestuous group based entirely in Manhattan) to raise prices for e-books above the $9.99 price charged by Amazon. This was not subtle stuff—it was conduct worthy of the classic 19th century price fixers that led to enactment of the Sherman Antitrust Act in 1890. Secret meetings among competitors to figure out a way to stop the hated price-cutter (Amazon), a White Knight that facilitates the conspiracy to foil the price-cutter (Apple), and an industry with its feet deeply planted in tradition (book publishing) under assault from a new technology (e-book publishing). The only thing that makes this price-fixing conspiracy different from those in the 19th century is the massive email trail that the parties left, making the government’s courtroom proof that much easier. At least the classic price-fixers had the sense to keep up a pretense of secrecy, and not leave a trail of writings that would be their undoing in court. Despite loud criticism of the district court decision from some quarters (see, for example, Guilty of Competition, WSJ, subsc.), it’s difficult to imagine that this decision…

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Bringing an Antitrust Suit Alleging an Illegal “Agreement” is More Difficult Than You Think, But Not as Difficult as Massachusetts District Court Judge Stearns Made It

June 25, 2013

If you want to bring an antitrust suit based on an illegal agreement among competitors (say, a boycott), you face a possible Catch-22: you can’t get the evidence you need to prove an illegal agreement until you file the suit (and conduct discovery), but you can’t file an antitrust suit unless you are able to provide sufficient evidence of the agreement in your complaint. This is the problem the plaintiff faced in Evergreen Partnering Group v. Forrest, decided by the First Circuit on June 19th. Evergreen alleged that the defendants (a small group of companies that controlled the disposable plastics industry) refused in concert to deal with it—in other words, they boycotted Evergreen. Massachusetts federal district court judge Richard Stearns dismissed the case on the complaint, holding that Evergreen had failed to plead a viable claim of conspiracy to boycott. In other words, the complaint didn’t contain enough “facts” to establish, directly or through inference, that the defendants had entered into an agreement to boycott. For example, each of the defendants could have acted alone (unilaterally), and if so there would be no antitrust violation. Evergreen was caught in the antitrust pleading “Catch 22.” The First Circuit reversed, remanding the case to the district court for further proceedings. Interpreting the Supreme Court’s 2007 decision in Bell Atlantic v. Twombly (an antitrust case in which the Supreme Court issued an important decision…

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Google's Antitrust "Charm Offensive" and Consumer Watchdog.Org's Response

June 9, 2009

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.” is not buying it, and their “anonymous mark-up” of the document (giving it a grade of “F”), is embedded from, below. Anonymous Analysis of Google Charm Offensive

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Antitrust, Followed by Anti-Anitrust Followed by ….

May 19, 2009

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…

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Whither Antitrust?

April 6, 2009

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.

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A Blog Symposium, Hosted by Truth on the Market

April 1, 2009

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 21st 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…

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Free The Market! by Gary Reback

March 19, 2009

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.

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Judge Stearns: No Market Power, No Illegal Tying

March 8, 2009

U.S. District Court Judge Richard Stearns has issued a summary judgment decision dismissing AVX Corp.’s claims of an an antitrust violation by Cabot Corporation, based on allegations of illegal tying by Cabot. A tying arrangement is where a seller says, “I’ll sell you product A, but only if you also buy product B.”  Product B is said to be “tied” to product A, the “tying product.”  A little thought and common sense would cause even an economist to conclude that if the seller doesn’t have market power in product A, rather than be forced to buy product B a rationale buyer will look around for another seller, who can sell it product A without the “tie.”  In fact, this is just the conclusion the Supreme Court reached in the Illinois Tool case in 2006. In the AVX v. Cabot case Judge Stearns noted that “AVX offers no evidence that Cabot had a sufficiently dominant market position to ‘force’ it into a multi-year purchase agreement for a product that it did not want.”  The fact that AVX was unable to satisfy this element of an illegal tying arrangement doomed its antitrust claim. If this wasn’t enough, Judge Stearns also found that AVX was unable to produce reliable evidence of damages, another essential element of its claim. Based on Judge Stearns’ opinion, it appears that AVX missed the mark in this case…

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Rambus Files Its Opposition to Cert.; Gatehouse/New York Times Copyright Case Settles

January 28, 2009

[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, 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, 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/ Gatehouse will erect “technical solutions” to prevent from copying the Gatehouse original content, and…

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Ninth Circuit: Refusal to Allow Embedded Videos and Links in MySpace Not a Sherman Act Violation

January 19, 2009

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, directed at another social networking site,, did not constitute monopolization under the federal antitrust laws. Both and are “social networking” websites.  MySpace is very well known, Vidilife site much less so., owned by LiveUniverse, Inc., allows…

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FTC v. Rambus: the Issues in a Nutshell

January 19, 2009

I’d been planning to post a short summary of the legal issues in the FTC’s petition to the Supreme Court in the Rambus case, but I’ve noticed that Professor Michael A. Carrier of Rutgers University School of Law has done this, and done it brilliantly in a post published on the Patently-O Blog, so I stand down and defer to him: In December 2008, the Federal Trade Commission (FTC) filed a petition for certiorari in the Rambus case. There are two central issues in the petition. First, what is the standard of causation needed to connect deceptive conduct with the acquisition of monopoly power? And second, do higher prices in standard-setting organizations (SSOs) present competitive harm? . . . [continue reading]

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Additional Amici Briefs Added to Rambus Group Page in FTC v. Rambus

December 30, 2008

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 Click here for a recent post discussing this appeal.

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