Antitrust Law Daily Wrap Up, ANTITRUST NEWS: DAAGs discuss enforcement efforts at ABA Spring Meeting, (Apr 15, 2015)

By Jeffrey May, J.D.

The deputy assistant attorneys general at the Department of Justice Antitrust Division kicked off the American Bar Association Section of Antitrust Law Spring Meeting this morning, offering their thoughts on some of the past year’s enforcement and policy highlights. The panel also took the opportunity to announce the release of the 2015 edition of the Antitrust Division's annual newsletter, which provides details of these efforts.

Criminal enforcement. In the criminal enforcement area, Brent C. Snyder, Deputy Assistant Attorney General (DAAG) for criminal enforcement, touted the record $1.2 billion in criminal fines and penalties for fiscal year 2014. He also discussed recent appellate court decisions pertaining to a conspiracy to fix prices of thin-film transistor-liquid crystal display (TFT-LCD) panels that confirm the Antitrust Division's authority to pursue overseas cartel conduct under the “effects exception” to the Foreign Trade Antitrust Improvements Act (FTAIA).

In one of these decisions, the U.S. Court of Appeals in San Francisco upheld the conviction and sentence of Taiwanese electronics manufacturer AU Optronics (AUO). The case continues as it is the subject of a pending petition to the U.S. Supreme Court. In addition, a hearing is planned to determine whether AUO has violated the terms of its probation, which included a controversial provision appointing an independent compliance monitor for the company. The Antitrust Division is expected to participate in a hearing next month on AUO's compliance.

Snyder reassured attendees that the Antitrust Division would seek the imposition of compliance monitors as part of terms of probation only under limited circumstances. As examples, Snyder pointed to a company's refusal to accept responsibility or acknowledge guilt and to a company's decision to continue to employ officials in key positions responsible for pricing who were involved in the challenged conduct. Imposing a monitor on a company that pleads guilty, while possible, is unlikely, he noted.

Also noted was a decision of the U.S. Court of Appeals in Chicago, involving a private suit to recover overcharges paid by the foreign subsidiaries of U.S.-based cellphone maker Motorola Mobility as a result of the alleged TFT-LCD conspiracy. The Justice Department participated in oral argument in that case. While the appellate court extinguished most of Motorola Mobility’s case, the Justice Department avoided a narrow reading of the FTAIA that would have hampered its anti-cartel enforcement efforts.

Civil enforcement. On the merger front, the Antitrust Division has seen an increase in transactions and has responded with a dozen enforcement actions that resulted in structural relief. David I. Gelfand, DAAG for litigation, noted that parties are attempting more aggressive transactions. “Companies are trying to push the envelope,” he said, adding that the government was “pushing back.”

Gelfand discussed the recent settlement in the Antitrust Division's long-running challenge to a non-reportable, merger-to-monopoly in the “hop-on, hop-off” bus tour market in New York City. He said that the Justice Department was ready to go to trial to seek disgorgement and other relief, when the parties to the joint venture—Coach USA, Inc., CitySights LLC—agreed to relinquish bus stop authorizations to make it easier for rivals to meaningfully compete and to disgorge $7.5 million, under the terms of a proposed U.S. consent decree.

In the past year, the Justice Department secured its second largest civil penalty—$3.8 million—for an alleged gun-jumping violation by particleboard suppliers Flakeboard America Ltd. and SierraPine, according to Leslie C. Overton, DAAG for civil enforcement. The government's action and consent decree imposing the civil penalty among other relief followed Flakeboard's abandoned attempt to acquire the western U.S. operations of rival SierraPine.

In addition, the Department of Justice scored a victory in the federal district court in Brooklyn, New York, in its long-running challenge to American Express “anti-steering” rules that prevent merchants who accept American Express cards from steering customers to alternative credit card brands. The court ruled that the rules violated the Sherman Act. The court is considering a remedy, and American Express has said it will appeal the liability finding.

The Antitrust Division’s review of two decrees with performance rights organizations American Society of Composer, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) (2001-2 Trade Cases ¶73,474; 1996-1 Trade Cases ¶71,378) is the biggest civil, non-merger development of the past year, according to Renata B. Hesse, DAAG in charge of criminal and civil operations. In June 2014, the government announced that it was seeking public comment on whether the consent decrees should be modified to reflect changes in technology. The review is ongoing.

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