This week’s look at antitrust news features a group of liquid-crystal display panel manufacturers accused of conspiring to fix prices, the Federal Trade Commission’s antitrust investigation of Intel and the effects it will have on the computer industry, a milk-pricing investigation in New York, and the dismissal of Novell’s antitrust complaints against Microsoft.
Samsung/Sharp – Samsung, Sharp Must Face Class-Action Antitrust Suit (Update3) | Bloomberg News
After admitting guilt to price-fixing, an international group of flat-panel producing companies will now have to stand another court-ordered assault against their money vaults. Karen Gullo reports on this development from San Francisco:
Samsung Electronics Co., Sharp Corp. and other makers of liquid-crystal display panels must face group claims in an antitrust lawsuit by purchasers of televisions, computer monitors and laptops, a judge ruled.
U.S. District Judge Susan Y. Illston in San Francisco certified the case as a class action on behalf of direct purchasers who bought the flat-panel screens or goods containing them from 1999 to 2006, according to a court filing yesterday. Consumers in 22 states and the District of Columbia also can sue the companies as a group for damages, Illston ruled.
And, interestingly enough, it’s not just the end-users that are getting their day in court.
Dell Inc., the third-largest personal computer maker; Nokia Oyj, the world’s largest maker of mobile phones; and AT&T Inc. also sued LCD makers in federal court in San Francisco claiming they were victims of price-fixing by the manufacturers.
The amount of money the group collectively stands to lose is significant but by throwing themselves on the mercy of the court, and settling rather than fighting, Samsung, Epson, Sharp and other involved parties might come out with some of their loot still in hand.
Intel – FTC’s Intel Anti-Trust Case Proposes Huge Changes to the Computer Industry | The Portlander
Although the article is a bit dated, Peter S. Kastner detailed look at the FTC’s complaints against chip manufacturing giant, Intel, reveals some of the inner workings of exactly how many pounds of flesh the US government hopes to remove, and in what way. Kastner writes:
The U.S. Federal Trade Commission’s (FTC) antitrust and competitive complaint has already faded from the 24×7 news cycle. In an announcement December 16th entitled ‘FTC Challenges Intel’s Dominance of Worldwide Microprocessor Markets,’ the FTC stated it has sued Intel, charging that it has “illegally used its dominant market position for a decade to stifle competition and strengthen its monopoly.”
A close reading of the FTC’s contemplated relief for Intel’s alleged conduct shows the government mandating the most sweeping changes ever proposed as to how the Intel-compatible computer market works. No surprise that Intel would be hurt badly by these mandates and have to adjust. But these industry changes would also dramatically change the computer ecosystem, and the consequences would not be good for PC consumers.
Kastner correctly points out that should the FTC’s remedies be implemented, the result for chip makers and those who use their products (basically everyone these days) will be the reinvention of the digital wheel. There’s plenty of detailed analysis and some choice passages from the FTC’s proposed solution in the rest of Kastner’s piece. Click on, fearless, and constant, reader!
NY Dairy Farmers – Schumer, US antitrust official hear milk-pricing complaints from NY dairy farmers, consumers | StarTribune
Consolidation in the dairy industry has led some farmers to believe there are anticompetitive practices keeping them from getting their fair share of milk profits and New York’s Senator Charles Shumer plans to get to the bottom of things. His first move was to research the problem as the Associated Press’ Carolyn Thompson describes:
A report released by Schumer’s office in November found that the price paid to dairy farmers fell by almost half since January 2009. At the same time, the retail price of milk fell just 15 percent.
Others in the agriculture business are also lending credence to the claims by dairy farmers in New York that there is some malicious behavior afoot.
About 40 percent of what consumers pay for milk goes back to the farm where it was produced, said Jonathan Taylor of the New York Farm Bureau.
“Many in the dairy industry view this low farmer share in the retail price of milk as proof of anticompetitive behavior by dairy processors and manufacturers, which have undergone phenomenal consolidation over the past two decades,” he said. “Like David and Goliath, a family farm is at a distinct disadvantage in dealing with such businesses.”
Not even enough for grocery money get back into the hands of farmers such as the Maine family who “called 2009 ‘the worst year of our lives.'” Whether or not there are anticompetitive forces at work in the dairy business, one thing is sure: farmers are not making a living selling their milk while the people handling it and reselling it are. One company that buys milk from farmers for resale, Dean Foods, even reported “record profits” at a time when “dairy prices were in freefall across the country.”
Novell/Microsoft – Remaining Novell antitrust complaints against Microsoft dismissed | ZDNet
Although they recently scored a victory against software rival SCO, Novell didn’t fare quite so well in its bid to get the court system to force Microsoft to reveal interoperability secrets. After failing to gain a profitable market share against Microsoft’s Office Suite with their competing WordPerfect and Quattro Pro products, Novell decided to sue their way to happiness with less than satisfactory results. Mary Jo Foley provides much-needed clarity:
The U.S. District Court in Maryland dismissed the last two outstanding antitrust claims Novell filed against Microsoft in 2004 involving WordPerfect and Quattro Pro, two software products Novell owned between 1994 and 1996.
And here’s the beef:
Novell claimed Microsoft withheld interoperability information it needed to enable those products to run well on Windows. Microsoft tried to get Novell’s complaint dismissed, claiming that it was Novell’s “own mismanagement and poor business decisions” that tanked WordPerfect and Quattro Pro. Plus, Microsoft argued, since Novell sold WordPerfect to Corel now 12 years ago, their claims should be barred under the Statute of Limitations.
You can’t win them all, Novell. Sorry that your office productivity software products were so terrible that you couldn’t give them away but suing isn’t always the best way to get revenge.
Bristol-Myers Squibb Co. – Judge Tosses Antitrust Suit Vs. Bristol, Sanofi Over Plavix | Fox Business
A group of retails recently lost in their bid to prove “that a proposed patent-litigation settlement among drug makers in 2006 deprived pharmacies of inexpensive, generic copies of the blockbuster blood thinner Plavix.” Bristol-Myers Squibb didn’t see it that way and the judge agreed.
Kroger and the other plaintiffs, including Walgreen Co. (WAG: 37.72, 0.64, 1.73%), CVS Caremark Corp. (CVS: 36.23, -0.33, -0.9%) and some drug distributors, filed their antitrust lawsuit beginning in 2006, arguing the proposed Plavix patent settlement was anticompetitive. They said the deal closed off the possibility of a more favorable settlement, one that might have avoided a trial and resulted in the availability of generic Plavix well before the 2011 patent expiration.
But Sanofi, Bristol and Apotex argued that the antitrust suit should be dismissed because Kroger and the other plaintiffs lacked standing under antitrust law.
Judge Michael Watson of the U.S. District Court for the Southern District of Ohio lays out the end game in this significant trial with smiles for the victors and silence from the vanquished:
“Plaintiffs fail to demonstrate that the alleged antitrust violation was a necessary predicate of Plaintiffs’ injury and the asserted injury is speculative,” the judge wrote in a 49-page opinion released Friday.
A Bristol-Myers spokeswoman said Bristol and Sanofi are pleased with the decision. A Kroger spokeswoman and a lawyer for Kroger and other plaintiffs couldn’t be reached. An Apotex spokesman couldn’t be reached.
Bonus antitrust piece o’ the week: Lawyers Galore in FTC’s Intel Case by Jenna Greene at The Blog of Legal Times (or BLT for short)