Restrictive Agreements

This Practice Note surveys the relevant US antitrust law and discusses current issues surrounding its application to customer loyalty programs including bundling, rebates or exclusive dealing arrangements.

On 2 December 2011, the US Department of Justice (DOJ) announced that it had closed its investigation of the proposed acquisition by Google Inc. of Admeld Inc., an online display advertising service provider.  The DOJ concluded that the merger was not likely to substantially lessen competition in the sale of display advertising.

On 8 November 2011, the US Department of Justice (DOJ) announced that it will require New West Health Services Inc. to sell a majority of its commercial health insurance business to a third-party buyer and provide additional relief in a deal involving Blue Cross and Blue Shield of Montana Inc.  The divestiture is a required precursor for Blue Cross to proceed with an agreement with five of New West's six hospital owners, in which they will purchase health insurance exclusively from Blue Cross for six years.  DOJ's Antitrust Division and the Montana Attorney General's Office filed a civil suit in the US District Court for the District of Montana to block the proposed deal. At the same time, the DOJ filed the proposed settlement that would resolve their concerns.  The settlement must be approved by the District Court.

On 29 April 2011, the European Commission announced that it has opened two separate investigations into suspected breaches of Article 101 and/or Article 102 of the TFEU in the Credit Default Swaps market.

On 18 October 2010, the US Department of Justice (DOJ) and the State of Michigan filed a civil lawsuit against Blue Cross Blue Shield of Michigan (BCBSM) alleging that the health insurer's most favoured nations clauses have increased health care providers' prices to other health insurers and have insulated Blue Cross Blue Shield from competition, thereby unreasonably restraining trade in violation of section 1 of the Sherman Act.

On 20 July 2010, the US Department of Transportation (DOT) granted antitrust immunity to the Oneworld Alliance consisting of American Airlines and four international partners.  However, the DOT imposed several conditions to assuage competition concerns raised by the Department of Justice and competitor airlines.

On 29 March 2010, a federal judge denied the motions of Cephalon and several generic drugmakers to dismiss federal antitrust claims alleging that Cephalon's reverse payment settlements with generic drugmakers anti-competitively delayed generic drug entry.  The court rejected a per se analysis and noted that the proper standard for evaluating reverse payment settlements is whether the settlements grant rights beyond the scope of the patents. 

On 25 September 2009, the US Federal Trade Commission (FTC) and the US Department of Justice (DOJ) filed an amicus brief with the United States Supreme Court urging that it vacate the circuit court's decision in American Needle, Inc. v. National Football League and remand the case to the circuit court for additional analysis. The agencies' brief contends that Seventh Circuit Court of Appeals, which found for the National Football League (NFL), did not apply the correct legal standard to determine whether the conduct of the sports league constituted concerted action under the antitrust laws.

On 4 September 2009, the US Department of Justice (DOJ) announced that it had issued a business review letter stating that it would not challenge a proposal by two hospitals to enter into an exclusive joint purchasing agreement in connection with the purchase of certain medical and surgical supplies. The DOJ's review found that the joint purchasing arrangement falls within an antitrust safety zone and may yield volume discounts and potentially lead to lower costs and increased services for patients.

On 2 February 2009, the US Federal Trade Commission (FTC) announced that it filed a complaint in the US District Court for the Central District of California alleging that four drug companies violated US federal antitrust laws by providing and accepting monetary payments in exchange for delayed entry of generic versions of a branded medication, AndroGel. The complaint requests that the court enjoin the parties from enforcing these agreements and from engaging in similar conduct in the future.

The US District Court for the Northern District of California has dismissed several claims asserted by a South Korean firm against Flexsys and Azko Nobel alleging a conspiracy to restrain trade, foreclose markets, allocate customers, reduce supply, and monopolise trade. The district court held, among other things, that Korea Kumho Petrochemical Company (KKPC) failed to allege facts sufficient to demonstrate antitrust injury.

On 13 February 2008, the US Federal Trade Commission (FTC) announced that it has filed a complaint in the US District Court for the District of Columbia alleging that Cephalon, Inc. (Cephalon) violated US federal antitrust laws by providing monetary payments to four drug companies (Teva Pharmaceuticals USA, Ranbaxy Pharmaceuticals, Mylan Pharmaceuticals, and Barr Laboratories) in exchange for delayed entry of generic versions of its branded medication, Provigil (a prescription medication that treats excessive sleepiness arising from sleep apnea, narcolepsy, or shift-work sleep disorder). The complaint seeks a judgment that Cephalon violated the US antitrust laws and it also requests a permanent injunction to prevent Cephalon from enforcing the terms of these agreements and from engaging in similar conduct in the future.

On 23 January 2008, the US Federal Trade Commission (FTC) announced a proposed settlement with Negotiated Data Solutions LLC (N-Data) for allegedly engaging in unfair methods of competition and unfair acts or practices in violation of section 5 of the FTC Act. According to the FTC, the proposed settlement will protect consumers from higher prices and ensure competition by preventing N-Data from charging higher royalties for its technology.