November 19, 2004
Mylan sues Proctor&Gamble and Watson for antitrust violations in the generic drug market
From today's FDA Week:
"Generic drug company Mylan has again filed suit against Procter & Gamble and fellow generic company Watson Pharmaceuticals, this time citing antitrust violations. The new suit alleges that P&G and Watson conspired to keep Mylan from using its 180-day market exclusivity for the generic drug Macrobid. The lawsuit filed in the U.S. District Court for the Northern District of West Virginia also blames FDA for stifling generic competition by nullifying the benefits of a 180-day exclusivity award granted to the first generic on the market.
"Mylan is asking the judge to find that the agency violated the Federal Food, Drug and Cosmetic Act and the Administrative Procedure Act. Mylan also wants the judge to stop P&G from marketing its drug and pay treble damages for losses."
A copy of the complaint is available y searching on the website insidehealthpolicy.com
New Working Paper From American Antitrust Institute
Overcharges: Legal and Economic Evidence
This 104-page paper by Professor Connor, an
economist at Purdue and an AAI Advisory Board member, surveys hundreds of
published social-science studies of private, hard-core cartels that contained
674 observations of long-run overcharges.The primary finding is that the
median cartel overcharge for all types of cartels over all time periods is
25%: 18% for domestic cartels, 32% for international cartels, and 28% for all
successful cartels. These findings suggest that U.S. and non-U.S. cartel
penalties ought to be increased.
November 17, 2004
California Proposition 64
By a vote of 59% to 41%, the citizens of California approved a proposition that would limit the ability to bring claims under the state's unfair competition law. The proposition went into effect November 3, the day after it was approved. The state AG summarizes the proposal as follows:
- Limits individual's right to sue by allowing private enforcement of unfair business competition laws only if that individual was actually injured by, and suffered financial/property loss because of, an unfair business practice.
- Requires private representative claims to comply with procedural requirements applicable to class action lawsuits.
- Authorizes only the California Attorney General or local government prosecutors to sue on behalf of general public to enforce unfair business competition laws.
- Limits use of monetary penalties recovered by Attorney General or local government prosecutors to enforcement of consumer protection laws
For more details, follow this link to this website from the League of Women Voters.
Two Interesting Presentations on the IP-Antitrust Interface
Ian Feinberg of Mayer, Brown, Rowe & Maw LLP published a useful overview of the IP-Antitrust interface that reviews the historical background to and the current treatment of tying arrangements and licensing. The overview is available at 806 PLI/Pat 1141 (October 2004).
Another valuable presentation, by Richard J. Hoskins of Schiff Hardin LLP and Zubin P. Khambatta (a 2L at University of Chicago Law School), provides an overview of antitrust and IP licensing. This overview is available at 806 PLI/Pat 449 .
Spitzer Insurance Probe Possibly Broadens
Today's Chicago Tribune reports that two senior underwriters at Zurich American Insurance Company pleaded guilty to criminal antitrust charges in New York Supreme Court. While testifying before a Senate subcommittee yesterday, Spitzer indicated that he might widen the probe to include consumer insurance transactions. As summarized in The Tribune: "Corruption in the insurance industry, Spitzer told the Senate Governmental Affairs subcommittee, extends beyond the practices of brokers and large corporate clients into areas of personal insurance for health, property casualty and workmen's compensation. "
November 16, 2004
Text and Pretext in Antitrust Law
If conservative jurists advocate strict constructionism, then why are they so willing to inject contemporary economic thinking into statutory antitrust laws? This is the provocative question raised by Professor Daniel Farber (of Boalt Hall) and Professor Brett McDonnell (of The University of Minnesota Law School) in an article recently posted onto the SSRN web site. The authors point out that some justices seem to toss their principles of statutory construction aside when interpreting the antitrust laws, favoring the application of economic principles of efficiency over an originalist reading of the statutes based on the common law.
While the authors, I think, are correct in arguing that wholesale endorsement of economic efficiency as the normative lynchpin for antitrust laws ignores the original concerns with "bigness" and inequitable distribution of wealth that informed the drafters of the antitrust laws, the drafters of the Sherman Act as well as common law judge-making in the area of unfair competition were informed by economic analysis. It should not be surprising that as the methods of economic analysis evolved so did the methods of reading the texts of the antitrust laws. That point aside, the authors do an excellent job of challenging the thought process of the strict constructionists among us.
The Continuing Credit Card Wars
Both The Wall Street Journal and The Globe and Mail reported today on Amex's suit against Visa and Mastercard, filed in Manhattan this week. Discover filed a similar suit against the two companies last month. Both suits follow upon the Supreme Court's decision in October to uphold a lower court ruling that struck down, under the antitrust laws, Visa and Mastercard's policy of prohibiting member banks from issuing competitor's credit cards. The ruling from the Second Circuit required Visa and Mastercard to allow banks to offer other credit cards. David Boies, counsel for American Express, described the credit card companies as operating a cartel designed to reduce AmEx's profitability.
November 15, 2004
Company fined $2M for Hart-Scott-Rodino violations
For more details on the judgment against Smithfield for failing to file pre-merger notifications, follow this link to the DoJ press release from last Wednesday.
IP Stifling Competition
Technology Daily reported on Friday, Nov. 12, on an announcement by officials at the Department of Justice and the FTC of continued study of the anti-competitive effects of intellectual property. Referring to an October DoJ report dealing with copyright piracy, the article mentions efforts by both agencies to collaborate on further study of the effects of copyright that builds on the FTC report of November 2003 that deal largely with the anti-competitive effects of patents. John Delacourt, chief antitrust counsel for the FTC's office of policy planning, is quoted in the article as follows: "At its most basic level, an intellectual property right is a specialized restraint of trade. It will confer a significant competitive advantage."
Antitrust law in China
The Xinhua News Agency reports today:
"China's long-awaited anti-trust law is expected to come into being in the near future, revealed Ning Wanglu, a senior fair-trade official with the State Administration for Industry and Commerce (SAIC), at an international seminar held here on November 10 on fair competition and the market economy. In 1993, China promulgated a law against unfair competition, which has served as a basic package of rules for the nation to maintain the normal order of market competition. Though there are clauses and articles in other existing laws, which concern policies for competition, no exclusive law against monopolistic competition has yet been hammered out.
"Ning said that a great quantity of unfair trade activities on the Chinese mainland are closely related to monopoly, particularly administrative monopoly with the characteristics of localism. As China is opening itself wider to the outside world, competition has been introduced into areas that had been state monopolies, to which access has also been given to private and foreign capital. To effectively maintain fairness in competition, it is imperative for China to promulgate its own anti-trust law.
"Legislators said that existing laws and regulations fail to meet requirements of the fast changing economy and society in China. The corresponding regulatory vacuum has led directly to the absence of law enforcement means, making it hard to stop new unfair trade activities on the Chinese market.
"Official statistics from SAIC show that China annually detected more than 600 cases of competition restriction in monopolized sectors on average, involving water and power supply, railroad transport, insurance, post and telecommunications, commercial banking and tobacco processing.
"Among the 500,000-workforce in law enforcement for the Administration nationwide, nearly 70,000 are devoted to fair trade."
Antitrust for wine connoisseurs
Douglas Glen Whitman, a research fellow at the Independent Institute, has just published Strange Brew, a study of state and federal regulations that restrict competition in the wine industry. The constitutionality of state restrictions on mail-order sales is the subject of Granholm v. Heald, a Supreme Court case this term examining whether such state restrictions violates the Commerce Clause.
Fordham Law School's 31st Annual Conference on International Antitrust Law and Policy
Held on October 7 and 8, the 31st annual meeting brought together leaders from over 100 economic regions. The theme this year was the need for international cooperation in the enforcement and harmonization of laws.