The case pending before the regional court in Düsseldorf concerns a thirty-year cartel of cement companies, and is being brought on behalf of 29 of the largest customers by Cartel Damage Claims (CDC). CDC is a Belgian claims consolidator, which is seeking over 100 million Euros in the action.

The  Düsseldorf court of appeals ruled yesterday that the collective action brought by the claims consolidator is admissible, upholding the ruling of the regional court. No leave to appeal was granted. The ruling means that the substantive case will go forward. The press release in German can be found here.

By a 3-0 vote (Commissioner Rosch not participating), the under-strength Federal Trade Commission on Friday approved a complaint challenging the proposed acquisition by Inova Health System Foundation of Prince William Health System, Inc. and authorized the staff to seek a temporary restraining order and preliminary injunction in federal district court to block the deal pending a full administrative trial on the merits. The action in federal district court will be brought jointly with the Attorney General of the Commonwealth of Virginia.

The press release quotes Jeffrey Schmidt, Director of the Bureau of Competition:

“There is no question that Northern Virginia residents have benefitted from the robust competition between Inova and Prince William Hospital through better services and lower prices. If Inova acquires Prince William Health System, this vital competition will be lost, health care prices will increase, and many residents will be forced to accept reduced health care coverage or no coverage at all.”

The Federal Trade Commission has also designated Commissioner J. Thomas Rosch as the Administrative Law Judge (ALJ) in the administrative trial on the merits challenging the proposed acquisition by Inova Health System Foundation of Prince William Health System, Inc. The vote was 3-0 (Rosch not participating), and further materials, including information on the background of the transaction, can be found here.

Here is the opinion. After a quick read, we’re convinced this is a big one and probably headed for the Supreme Court. The D.C. Circuit applies NYNEX, which puts into question several harm-through-deception theories for conduct in standards-setting organizations.

The oral argument for the appeal in FTC v. Whole Foods Market, Inc. (D.C. Cir. 07-5276) is scheduled for Wednesday, April 23rd, at 9:30. Whole Foods is the third case on the docket that morning. Judges: Tatel, Brown, and Kavanaugh.

See you there.

Here is a heads-up on what promises to be an interesting Conference coming up in May:

The Law and Economics of Innovation:

Patents and the Commercialization of Innovation

May 15, 2008, Arlington, VA

The George Mason/Microsoft Conference Series on the Law and Economics of Innovation will bring together leading academics to present and discuss new scholarship touching on diverse aspects of a key question affecting the technology industry and the process of innovation. Each conference will conclude with a roundtable discussion among top technology industry representatives and regulators to begin to assess the concrete implications of the scholarship for the development of innovative industries.

This second conference in the series will address the role of patents in the commercialization of innovation—an area of significant and enduring controversy. In particular, the conference will focus on three interrelated aspects of the debate over the law and economics of patents: The intersection of patents and antitrust, particularly in technology standards; the economics of the patent system and patent reform; and the proper understanding (and implications) of patents as property.

Presenters at this year’s conference include:

• Richard Epstein, University of Chicago Law School Keynote Address
• Scott Baker, University of North Carolina Law School
• Luigi Franzoni, University of Bologna Faculty of Economics
• Damien Geradin, Tilburg University Law & Economics, Howrey LLP and the College of Europe
• Scott Kieff, Washington University in St. Louis Law School and the Hoover Institution
• Bruce Kobayashi, George Mason University School of Law
• Michael Meurer, Boston University School of Law
• Adam Mossoff, George Mason University School of Law (Currently Michigan State University Law School)
• Greg Sidak, Criterion Economics
• Henry Smith, Yale Law School
• David Teece, Haas Business School (U.C. Berkeley) and LECG

Commenters/Moderators:

• Michael Carrier, Rutgers University School of Law
• George Cary, Cleary Gottlieb Steen & Hamilton
• Eric Claeys, George Mason University School of Law
• John Golden, University of Texas Law School
• Roy Hoffinger, Qualcomm
• Geoffrey Manne, Microsoft and Lewis & Clark Law School
• Jason Mendelson, Foundry Group
• Dick Wilder, Microsoft
• Others, TBD

Participation is free of charge. Registration is required and lunch is included followed by closing reception.

 

For more information or to register, please go to http://innovationforum.gmu.edu/

 

For further information, contact Kristine at lawconf@gmu.edu.

Thomas Barnett, the Assistant Attorney General for Antitrust, gave a speech in Germany yesterday, during the celebration for 50 years of the German Competition Act. Did you know that the Germans had premerger notification before the U.S. did? Here is a taste from the speech:

Dr. Franz Bohm, a prominent German thinker and champion of the ARC, once observed that ‘a free market economy resembles a monarchy in that the consumer is the king.’ In substance, this sentiment closely mirrors the U.S. commitment to consumer welfare as the foundation of a free market.

With the adoption of the ARC, the newly-established BKA instantly became the preeminent model of an independent, court-like expert administrative body. The BKA’s first President, Dr. Eberhard Gunther, held his post for eighteen years — an extraordinarily long tenure — and set the BKA on a firm foundation. One of the great strengths of the German antitrust regime has been that the BKA is insulated from political considerations. Any ministerial overruling of its decisions on non-competition grounds is open and transparent, clearly exposing the trade-off between competition and other policies for healthy debate. This has surely been an important confidence-building measure for German consumers and businesses alike.

…
Germany has also played a leading role in the development of EuropeanCommunity competition law as a source of highly-qualified enforcementofficials, having provided the first Commissioner responsible forcompetition policy (Dr. Hans von der Groeben) and a stellar series ofDirectors-General for Competition (including Drs. Manfred Caspari, ClausEhlermann, and Alexander Schaub). And last, but not least, while we in theU.S. often think that we invented premerger notification, in fact theGerman merger notification regime was established in 1973, three yearsbefore our Hart-Scott-Rodino Act, and 16 years before the EC’s MergerControl Regulation.

Barnett then makes some remarks on unilateral conduct, and concludes:

Turning back to the occasion for our celebration today, I emphasizethat overall we have much in common. The BKA has long pursued anti-cartelenforcement, has become a firm proponent of serious economic analysis, andcontinues to expand the role and number of its economists.

The U.S. and German agencies face many common antitrust challengestoday, and we must continue to work closely together in the future.International cartels disrupt the efficient working of our economies, andwe need to expand our cooperation even further, coordinating our leniencyprograms and ensuring that our criminal and administrative approaches worktogether to achieve maximum deterrence. The role of private antitrustenforcement seems likely to grow in Germany, and the European Union as awhole, and European courts thus will have to address some of theprocedural, jurisdictional and comity issues that have already arisen inU.S. courts.

Reuters is running a story on what the presidential candidates’ positions on Antitrust might be. The gist is: to the extent we can guess, significant change is unlikely. Here is a taste:

Overall, none of the leading presidential candidates is considered an antitrust maverick although Democrats have had a reputation for being more aggressive than Republicans in challenging mergers.

This party difference may even be disappearing. “This is about incremental changes for the most part, not a revolution,” said Bert Foer, president of the American Antitrust Institute.

Of the leading presidential candidates, most is known about Hillary Clinton’s views on antitrust because of her work as a senator and her role in her husband’s presidency.

If she is elected, “there’ll be a return to the Clinton era of antitrust, which was actually more centrist,” said attorney Mike Keeley of Axinn, Veltrop and Harkrider LLP.

Seems that only John Edwards, as far as is possible to tell at this point, would take things in a different direction.

 

Of the Democrats, former Sen. John Edwards, who is struggling after defeats in Iowa and New Hampshire, was the “most likely to be aggressive on antitrust,” said Keeley. Edwards has campaigned on a populist, anti-corporate greed theme.

And a shout-out to our friend Mike Keeley.

It’s been a busy week for NY’s antitrust lawyers. NY submitted a brief today in D.C. District Court, in which NY and other states argue for a broader reading of the section of the Microsoft 2002 Final Judgement that requires Microsoft to disclose communications protocols “used to interoperate, or communicate, natively (i.e., without the addition of software code to the client operating system) with a Microsoft server operating system product.”

The brief’s conclusion:

In its Tunney Act ruling, this Court wrote that, in the absence of the Final Judgment’s forward-looking provisions – § III.D (covering API disclosure) and § III.E – “it is quite possible that the core of the decree would prove prematurely obsolete.” United States v. Microsoft Corp., 231 F. Supp. 2d 144, 192 (D.D.C. 2002). This is the very risk now faced. To date, the software produced by § III.E licenses has largely been complementary to Windows, rather than the middleware-like products that § III.E was intended to encourage.

Microsoft’s protracted inability to provide complete and accurate TDs has deprived § III.E of a fair test to demonstrate what it can accomplish. Accordingly, the expected forward-looking impact envisioned for § III.E has not materialized. At the same time, the five-year clock for the remaining parts of § III has ticked away. To permit § III’s provisions protecting access to the desktop and the OEM distribution channel to lapse before MCPP licensees have had the opportunity to develop innovative products with the benefits of complete and accurate TD would be tantamount to rendering these parts of the Final Judgment “prematurely obsolete.”

Here is the brief (pdf)

The New York Times reports that NY AG Cuomo has issued a subpoena against Intel. The allegations are that Intel is monopolizing the market for x86 chips—not novel, perhaps, but always good for antitrust news. 

“Protecting fair and open competition in the microprocessor market is critical to New York, the United States, and the world,” Mr. Cuomo said in a statement. “Monopolistic practices are a serious concern particularly for New Yorkers who are navigating an information-intensive economy.” 

The NY Times goes on to describe AMD’s efforts to use antitrust law to defend itself from what it sees as Intel’s monopolization:

Advanced Micro Devices has waged what is in essence a global antitrust campaign against Intel. A.M.D. has already filed civil lawsuits or complaints against Intel in Europe, Japan and South Korea; in 2005, it filed a civil suit against Intel in federal district court in Delaware, a case that is still going on and has already produced hundreds of millions of pages of documents. All told, the legal battle between A.M.D. and Intel is one of the largest antitrust matters pending before American and foreign regulators.   

A spokesperson for Intel is quoted as saying: “We believe our business practices are lawful. … We also believe that the microprocessor market is a competitive market, and is behaving just as one would expect a competitive market to behave.”That is an interesting thing to say because I don’t believe anyone disputes that the microprocessor market is a 90-10 duopoly. Which doesn’t imply anticompetitive conduct on the part of Intel, of course, but it does make me wonder to what extent such a duopoly would be expected to behave like a “competitive market.” Here is the NY AG’s press release. 

The Apple iTunes Store is offering a new service, called iTunes U. There are lectures, recorded at various universities, inlcuding Duke, UC Berkeley, MIT, Penn, Yale and several others. There are lectures on economics, for example, or on Law & Society (I picked up a couple of lectures on Max Weber). The general slant in law-related offerings seems to be broader topics with political and historical implications. But there are several topics that are technical enough. It pays to spend some time browsing, since it isn’t easy to access the content by topic. Also, and I hope that this can be fixed, the lectures are listed alphabetically and it is not always easy to tell the order in which the lectures were given. I am listening to a course on economics by Prof. Gordon Rausser (UC Berkeley) at the gym these days. There are also links to course webpages and course materials. And the lectures are all free.

The sound files of the Oyez Project are also available through iTunes—they let you listen to Supreme Court oral arguments. The 2006 term is up, and older recordings, sorted by subject matter are added regularly.

Lexis-Nexis and Westlaw may be facing some disruptive price competition. Along with a new Creative Commons license, an archive of federal case law will be released into the public domain:

CC-0 is a brand new Creative Commons license, whose official launch is expected in December, that signals the absence of any copyright or related rights associated with a work. The creation of CC-0 is heralded by the release into the public domain of a free archive of federal case law, including all Courts of Appeals decisions from 1950 to the present and all Supreme Court decisions since 1754, through Carl Malamud’s Public.Resource.Org.

HT to O’Reilly Radar, where you can find the full story.

As Securities Law360 reports, Wal-Mart is putting a moratorium on legal fees:

On Thursday, the retail behemoth’s associate general counsel Miguel Rivera Sr. issued a memo to the company’s outside counsel network bemoaning the meteoric rise of starting salaries for first-year associates — currently at $160,000 for most top New York firms — and the impact he said it had on the firms’ billing rates. He cited the recent break with the $1,000-per-hour barrier for senior partners. “Until further notice, we will only consider reasonable, individual requests for rate increases for those attorneys in your firm who are performing at an exceptional level and whose experience and knowledge is adding substantial value toward meeting Wal-Mart’s legal objectives,” Rivera wrote.

I used to not believe alarmist stories about Wal-Mart’s terrifying buying power. But I might have to reconsider…

… said NBC Universal’s CEO, Jeff Zucker. As the Financial Times reports,

Jeff Zucker, NBC Universal’s chief executive, yesterday warned that Apple’s iTunes digital media store was undermining the ability of traditional media companies to sell their content online at profitable rates, and he urged them to take a stand. “We know that Apple has destroyed the music business – in terms of pricing – and if we don’t take control, they’ll do the same thing on the video side,” Mr Zucker said at a breakfast hosted by Syracuse’s Newhouse School of Communications.

The article also points out that

Mr Zucker also suggested Apple had rejected requests to share revenue from its sales of iPod devices, which are far more profitable than the digital media store. During his remarks, Mr Zucker emphasised that conventional media companies were struggling to develop economic models for new forms of digital distribution, and trying to ensure that a dollar of traditional revenue was not reduced to mere pennies in an online world.

It will be interesting to see how the digital distribution will play out, and to what extent the conventional media companies will be able to adapt. It is easy to see that antitrust laws may be implicated along the way as the industry transitions.

The New York Antitrust Bureau is looking to fill its Director of Economics position, as well as an attorney staff-level position. Here are the postings:

Director of Economics at the New York State Office of the Attorney General (Position located in New York City): The New York State Attorney General’s Office is interviewing to hire a Director of Economics to assist in investigations, litigation and the development of policy on behalf of the State’s citizens. The position offers a unique opportunity to work on applied economic projects with an elite group of law enforcement and policy practitioners at one of the most creative and dynamic public agencies in the country. In view of the Antitrust Bureau’s ongoing need for economic advice, the position is part of that Bureau. However, the Director of Economics will work on projects with other parts of the Attorney General’s Office. An ideal candidate will have a Ph.D in economics or finance, and experience using one or more statistical applications. Yearly compensation is $85,000 to $100,000, commensurate with qualifications and experience. Please submit a cover letter including your resume/cv and references to jay.himes@oag.state.ny.us, or contact New York State Office of the Attorney General, Division of Legal Recruiting, 120 Broadway, New York, NY 10271.

Antitrust Bureau Attorney Position at the New York State Office of the Attorney General (Position located in New York City): 2+ years antitrust/litigation experience. Applicants should have strong investigative, writing, analytic, research and communications skills, as well as experience in antitrust or other complex itigation. Commitment to public service is essential. The New ork Antitrust Bureau handles criminal and civil matters involving price-fixing, bid-rigging, and vertical restraints of trade, monopolization, and mergers under both federal and New York state law. The Bureau works closely with other State antitrust enforcers on matters of national impact, and with the United States Department of Justice and the Federal Trade Commission. Bureau members can be expected to participate in all phases of antitrust matters, from investigation to case filing, discovery, motion practice, trial and appeal, and settlement. Salary commensurate with qualifications and xperience. Please submit a cover letter including your resume/cv nd references to jay.himes@oag.state.ny.us, or contact New York State Office of the Attorney General, Division of Legal Recruiting, 120 Broadway, New York, NY 10271.

The beer rule applies—if you take the job, you owe us a beer.

The New York Times reports that Microsoft is playing it close to the chest.

Chief Executive Steve Ballmer, visiting France to promote innovation, declined to say whether the software maker would contest the ruling to its last level, the European Court of Justice. … Asked by The Associated Press whether Microsoft would appeal, he refused to say. He also declined all comment after his first appointment with Prime Minister Francois Fillon. ”Innovation is a topic that is fraught with many stereotypes and misunderstandings,” he told members of France’s National Assembly. ”It’s only through sustained investment and innovation that companies and countries will become leading engines of economic growth and success,” he said. ”Innovation is about generating ideas and fully exploiting them to drive value or profit.”

The antitrust laws, both in the US and the EU, of course have something to say about “fully exploiting” ideas, at least for those who have a monopoly power.