Antitrust Law Daily Wrap Up, WORTH NOTING—Other Antitrust and Trade Regulation developments, (Jan 31, 2025)

By WK Editorial Staff

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

ANTITRUST NEWS: In Caronte & Tourist SpA v. Autorità Garante della Concorrenza e del Mercato, a case arising out of an abuse of dominance investigation by the national competition authority of Italy of a ferry services, the European Court of Justice concluded on January 30 that Member States rules on the duration of pre-investigations in consumer and competition law proceedings rules must not render the implementation of European Union law practically impossible or excessively difficult.

ANTITRUST NEWS: The European Court of Justice, in a case involving assignment of competition law damages claims—ASG 2 Ausgleichsgesellschaft für die Sägeindustrie Nordrhein-Westfalen GmbH v. Land Nordrhein-Westfalen—concluded on January 30 that European Union competition law precludes an interpretation of national legislation preventing persons allegedly harmed by a competition law infringement from assigning their rights to compensation to a provider of legal services so that it may assert them, collectively, in a stand-alone action for damages, under certain circumstances.

ANTITRUST—9th Cir.: The Ninth Circuit upheld the dismissal of a restraint of trade claim filed by homeowners against several mortgage/lending business and various government actors. Homeowners who—seeking to avoid foreclosure—issued “bonds of discharge” to the “holder” of their mortgage failed to allege a conspiracy involving a mortgage/lending business and various government actors, including the U.S. Treasury Secretary. The plaintiffs advanced a discredited legal theory that they could pay off their mortgage with “discharge bonds” housed in the Treasury, yet the Treasury itself was allegedly impeding their ability to do so. The government’s alleged refusal to permit payment via fake tender was an exercise of normal governmental operations that was not subject to the Sherman Act. The conduct of U.S. government officials would be outside the scope of the Sherman Act (Yates v. The Money Source, Inc., Case No. 23-16005 (9th Cir Jan. 28, 2025)).

ANTITRUST NEWS: Canada’s Competition Bureau published a report titled Consultation on Artificial Intelligence and Competition: What We Heard following its consultation on artificial intelligence (AI) and competition. The report outlines key themes and considerations raised during the consultation, and notes four key takeaways: (1) There is rapidly evolving advancement in all parts of AI technology, and the advancements are introducing new market dynamics that can either promote or hinder competition; (2) Investment by large incumbent firms is an area to monitor, given these firms’ potential to leverage their market power to stifle competition and innovation; (3) AI can facilitate certain anti-competitive conduct. It remains to be seen whether existing antitrust laws are able to effectively address such practices; and (4) Respondents positively viewed the consultation exercise and the Bureau’s role in ensuring a competitive marketplace.

ANTITRUST NEWS: According to a new report released by the Computer & Communications Industry Association (CCIA), during an increasingly aggressive antitrust enforcement paradigm from mid-2021 through 2024, smaller startups have had fewer opportunities to be bought out. Since the U.S. is a global leader in Artificial Intelligence (AI), which plays a big role in about one third of recent VC investments, overly strict antitrust enforcement could harm future economic growth, weaken the U.S. in global competition, and harm U.S. national security. Trevor Wagener, CCIA’s Chief Economist and Director of the Research Center said “Overly aggressive antitrust enforcement effectively removed acquirers who previously accounted for 16% of bid value from competition for acquisitions, and other potential acquirers failed to step up to replace those lost funds.”

ANTITRUST NEWS: The American Antitrust Institute (AAI) has filed an amicus brief in Cornish-Adebiyi et al. v. Caesars Entertainment, Inc., et al., urging the Third Circuit to reverse the dismissal of a class action suit against six Atlantic City casino-hotels (Borgata, Caesars, Hard Rock, Harrahs, MGM, and Tropicana) and a revenue-management software company (Cendyn) for colluding to raise the prices of Atlantic City hotel rooms. Following the reasoning of the district court in Gibson v. Cendyn Group, the district court dismissed the complaint for failing to satisfy the concerted-action requirement under Section 1 of the Sherman Act, emphasizing that the hotels contracted with Cendyn at different times, did not share the information directly with each other, and did not commit to accepting the algorithm’s recommendations in all cases. In its brief, AAI argues that the district court’s formalistic analysis relied on plus factors that courts have traditionally used to identify human collusion, but which are not helpful in identifying algorithmic collusion. Such an approach effectively immunizes algorithmic price-fixing and threatens substantial consumer harm as AI becomes an increasingly common feature of our economy.

CONSUMER PROTECTION NEWS: New York Attorney General Letitia James warned businesses against price gouging of eggs and poultry amid a national bird flu outbreak. The bird flu has affected poultry and dairy farms across the country, causing shortages and driving up prices. New York’s price gouging statute prevents businesses from taking advantage of consumers by selling essential goods or services at an excessively higher price during market disruptions resulting from emergencies like the bird flu outbreak. In 2021, Attorney General James secured a settlement with one of the country’s largest producers and wholesalers of eggs, Hillandale Farms Corporation, for illegally price gouging eggs during the COVID-19 pandemic. Price gouging violations can carry penalties of up to $25,000 per violation.

CONSUMER PROTECTIN NEWS: The California Attorney General’s Office has reached a settlement with Amazon.com, Inc. resolving allegations under the California Unfair Competition Law arising from Amazon’s facilitation of sales into California of skin-lightening creams with high mercury levels. The California Department of Justice’s investigation identified several face creams that contained very high mercury levels—ranging from 121 to 16,000 parts per million, well in excess of the U.S. Food and Drug Administration’s maximum limit of 1 part per million. Following his investigation, the Attorney General asked Amazon to cease and desist from facilitating the sale of face creams identified as containing excessive mercury. Amazon, which does not manufacture these products, agreed to implement a sale-prevention protocol, or “suppression rule,” to prevent face creams with dangerous levels of mercury from being available for sale on its website. Amazon will pay nearly $600,000 in civil penalties, attorney fees, and costs to the Attorney General, and will agree to injunctive provisions aimed at preventing creams with high mercury levels from being sold through Amazon’s website into California. Amazon will pay additional penalties and fees to resolve the claims of the private enforcers.

Attorneys: Deanna-Kathleen Yates, pro se. Edward A. Treder (Barrett Daffin Frappier Treder & Weiss, LLP) for Midland Mortgage. Eric D. Houser (Houser & Allison, APC) for Fannie Mae, Mail Draw Assignments.

Companies: ASG 2 Ausgleichsgesellschaft für die Sägeindustrie Nordrhein-Westfalen GmbH; Caronte & Tourist SpA; The Money Source, Inc.; Midland Mortgage; Fannie Mae; Cenlar FSB; Mortgage Electronic Registration Systems, Inc.; Amazon.com, Inc.

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