Antitrust Law Daily Wrap Up, WORTH NOTING—Other Antitrust and Trade Regulation developments, (Jun 15, 2018)

A periodic roundup of other items of interest to the Antitrust and Trade Regulation community:

ACQUISITIONS & MERGERS NEWS: In order to address potential competition concerns for telecom consumers in the Netherlands, the EC has opened an in-depth investigation into the proposed $228 million acquisition of Swedish telecommunications company Tele2 NL by T-Mobile NL, the EC announced. The merger would reduce the number of mobile network operators in the Netherlands from four to three and would create the third largest player on the Dutch market. The EC is concerned that the transaction would reduce the number of players and limit the merged entity's incentives to compete effectively with the remaining operators, which could lead to higher prices and less investment in mobile telecommunications networks. The reduction in the number of mobile network operators also may weaken competitive pressure and increase the likelihood that operators would coordinate their competitive behavior, and raise prices on the retail markets, the EC said. In addition to the four mobile network operators, there are also a number of mobile virtual network operators active in the market, which use the physical network of mobile network operators to offer mobile telecoms services to consumers. The EC is concerned that prospective and existing mobile virtual network operators may face more difficulties in obtaining favorable wholesale access terms from mobile network operators.

ACQUISITIONS & MERGERS NEWS: Wilhelm Wilhelmsen and Wilhelmsen Maritime Services AS (together, Wilhelmsen) and Resolute Fund II, L.P., Drew Marine Intermediate II B.V., and Drew Marine Group, Inc. have been granted a 30-day continuance of the FTC’s administrative hearing in its challenge to Wilhelmsen’s proposed $400 million acquisition of Drew Marine Group. The FTC’s complaint alleged that the transaction would violate the antitrust laws by significantly reducing competition in an important market for marine water-treatment chemicals and services used by global fleets. The defendants argued that a parallel action brought by the FTC in federal district court, seeking a preliminary injunction barring Respondents from consummating the proposed transaction pending disposition of this administrative proceeding, will likely obviate the need for an administrative hearing. The FTC’s complaint counsel responded that a continuance was not warranted and that in recent decisions, the Commission has found that the mere pendency of a collateral proceeding in federal district court does not constitute "good cause." The FTC determined that, because the administrative hearing here was currently scheduled to begin on July 24, 2018, which is two weeks after the start of the evidentiary hearing in In the Matter of Otto Bock HealthCare North America, Inc., Docket No. 9378, and both hearings were assigned to Chief Administrative Law Judge D. Michael Chappell, good cause was shown to reschedule the hearing date (In the Matter of Wilhelm Wilhelmsen, FTC Dkt. 9380).

ACQUISITIONS & MERGERS NEWS: The European Commission has approved unconditionally under the EU Merger Regulation the acquisition in the energy sector of Uniper by Fortum. The EC concluded that the transaction would raise no competition concerns in the European Economic Area. Commissioner Margrethe Vestager, in charge of competition policy, said: "Ensuring competition in European power markets is essential since electricity is a good that everyone uses. Fortum and Uniper are important players in the generation of electricity in the Nordic countries, in particular in Sweden. We can approve their proposed merger, in particular because of the high level of interconnectivity between different countries in the Nordic area and because there is significant spare generation capacity in Sweden. As a result, we found that competition will remain strong after the merger." The transaction is unlikely to hinder effective competition in the generation and supply of electricity; will not increase the risk of coordination in the generation and wholesale of electricity in Sweden; and will not materially decrease the liquidity of the financial electricity market in the Nordic countries or to raise trading prices, the EC determined.

ACQUISITIONS & MERGERS NEWS: The EC today approved unconditionally under the EU Merger Regulation the proposed acquisition of Sky plc by Comcast Corporation, a US based global media, technology and entertainment company. The merger raised no competition concerns in Europe. Under the proposed merger, Sky plc, the leading pay-TV operator in Austria, Germany, Ireland, Italy and the UK, would be acquired by Comcast, owner of Universal Pictures, one of the six major Hollywood film studios, as well as an operator of TV channels such as CNBC, Syfy or E!. The EC found that the proposed transaction would lead to only a limited increase in Sky's existing share of the markets for the acquisition of TV content, as well as in the market for the wholesale supply of TV channels in the relevant Member States. Comcast's offer to acquire Sky comes as a counter-bid to an offer by Twenty-First Century Fox. Twenty-First Century Fox and Comcast are competing against each other to take control over Sky. On April 7, 2017, the EC also cleared unconditionally Twenty-First Century Fox's offer for Sky.

ANTITRUST NEWS: On June 12, the American Antitrust Institute (AAI) filed an amicus brief in the long-running dispute between Oracle and Google regarding Google’s copying of 37 "application programming interfaces," or API packages in the source code of its Android Operating system asking the U.S. Court of Appeals for the Federal Circuit to grant rehearing to correct copyright rulings that threaten to undermine competition and innovation in markets that depend on computer software. In developing Android, Google copied the API packages from Java SE, a platform built on the Java open source programming language developed for desktop computers by Sun Microsystems, which was acquired by Oracle in 2010. After a jury found Google’s copying was fair use, Oracle appealed. The Federal Circuit reversed, ruling that Google had failed to establish fair use as a matter of law. The AAI brief contends that the "method of operation" exception and fair-use defense should be applied liberally to copyrights on software interfaces like the API declarations at issue. Also, the brief explains that the Federal Circuit panel ignored the issue of allowing copyright owners to hold up locked-in software developers by holding that achieving interoperability is irrelevant to copyrightability and by rejecting Google’s interoperability and compatibility arguments in support of its fair-use defense. Finally, the AAI argues that the panel’s fair-use ruling guts the ability of the doctrine to promote innovation and competition in software markets by holding that no matter how innovative new software may be, it does not qualify as "transformative" if there are no changes to the expressive content or message of the elements that are copied.

AGENCY NEWS: Lisa Phelan is retiring from government service. Today is her last day as Chief of the Washington Criminal I Section at the Department of Justice Antitrust Division. During her long career at the Justice Department, Phelan has been recognized for her accomplishments. She was the recipient of a presidential rank award and the attorney general’s award for distinguished service. A frequent speaker at antitrust conferences, Phelan delivered her final remarks as an agency official at the Chicago Forum on International Antitrust Issues on June 14.

RICO—6th Cir.: The federal district court in Detroit correctly denied a mortgage consumer’s attempt to amend his complaint against his mortgagee, past mortgage servicer, and current mortgage servicer by adding a claim for violation of the federal RICO law, the U.S. Court of Appeals in Cincinnati has ruled. The consumer’s (Sherman Hubbard’s) allegations of mail fraud and wire fraud contained only general assertions of statements made to him and "thousands of homeowners." At a minimum, Hubbard needed to allege the time, place, and content of the false statements he relied on; the fraudulent scheme; defendants’ fraudulent intent; and the injury that the fraud caused, the appellate court explained. Hubbard did not plausibly and specifically allege the commission of two or more predicate offenses, so his proposed amended complaint failed to state a RICO claim and the district court properly found that allowing him to amend his complaint would be futile (Hubbard v. Select Portfolio Servicing, Inc., June 7, 2018, Griffin, R.).

PRIVACY NEWS: The Senate Commerce, Science, and Transportation Committee’s subcommittee on consumer protection, product safety, insurance, and data security has scheduled a hearing for June 19, titled "Cambridge Analytica and Other Facebook Partners: Examining Data Privacy Risks." The subcommittee said, "The hearing is a follow-up to a joint full committee hearing with Facebook CEO Mark Zuckerberg, with a focus on the collection and use of social media data, the privacy concerns raised in the wake of the Cambridge Analytica/Facebook scandal, and potential steps to protect consumers." Witnesses have not yet been announced. The hearing is slated to begin at 2:30 p.m. in Room 253 of the Russell Senate Office Building.

LAW FIRM NEWS: One of the country’s leading antitrust lawyers, Richard Parker, is joining Gibson, Dunn & Crutcher LLP as a partner in the Washington, D.C. office. Parker has extensive experience representing clients in cases involving the federal antitrust agencies, and as an antitrust regulatory lawyer in major antitrust representations, including merger clearance cases, cartel matters, class actions, and government civil investigations. Parker joins the firm from O’Melveny & Myers where he served as co-chair of the Antitrust and Competition Practice. Previously, Parker served as the Senior Deputy Director and Director of the Bureau of Competition at the FTC. Parker received his J.D., Order of the Coif, from the UCLA School of Law, where he served as the Comment Editor of UCLA Law Review.

Attorneys: H. Dale Cubitt (Cubitt & Cubitt) for Sherman M. Hubbard. Christyn Monique Scott (Dykema Gossett PLLC) for Select Portfolio Servicing, Inc. and Deutsche Bank. Douglas E. Winter (Bryan Cave Leighton Paisner LLP) for Bank of America, NA. Richard Parker (Gibson, Dunn & Crutcher LLO).

Companies: Select Portfolio Servicing, Inc.; Deutsche Bank; Bank of America, NA; Facebook, Inc.; Wilhelmsen Maritime Services AS; Resolute Fund II, L.P.; Drew Marine Intermediate II B.V.; Drew Marine Group, Inc.; Uniper by Fortum; Sky plc; Comcast Corporation; Twenty-First Century Fox

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