May 13, 2005
National Association of Realtors Reconsiders
According to todays Wall Street Journal, in light of scrutiny from the Department of Justice, the NAR met to reconsider a rule restricting Internet advertising:
"Yesterday morning, a Realtors committee agreed to recommend to the organization's board an effort to revise the rule to allay the antitrust concerns. The board is to vote on that recommendation tomorrow. The rule, adopted two years ago, hasn't taken effect because of the department's inquiry into the effects on competition.
"The rule involves the Internet display of information from multiple-listing services, or MLS, which are local databases of homes available for sale. Under the rule, a brokerage firm that belongs to an MLS would have the right to bar other members of the service from putting on their Web sites listing information about the homes of that firm's clients. Under a particularly controversial provision, the listing firm could exclude some rivals from displaying the information while allowing others to do so.
"Ms. Janik said it is likely that the Realtors will offer to remove the provision for selective exclusion. In that case, an MLS member would have the choice of allowing all other members to display the information or blocking all of them from doing so. That would reduce firms' ability to retaliate against certain rivals while working with others."
(from "Realtors May Revise Web Policy to Head Off Antitrust Law Suit," by James R. Hagerty and John R. Wilke, Wall Street Journal, 5/13/05)
May 11, 2005
Now that I have caught your attention let me tell you about a pet peeve and a growing movement to address it. In 1979, former Ft Worth Congressman Jim Wright wrangled through Congress one of the most anti-competitive pieces of legislation imaginable. The infamous Wright Amendment, attached to a pending aviation bill, restricted the destination of flights out of Love Field, a Dallas airport (home to Southwest Airlines) that was supposed to shut down after the opening of Dallas-Ft Worth Airport in the mid 1970's. The legislation was defended then and is defended now as a means to foster the development of regional cooperative efforts like DFW. The practical effect is to reduce competition. While, truthfully, antitrust law would not correct this impediment to competition, it is time to rethink the legislation. For some more information, see Southwest's page as well as the following excerpt from yesterday's Wall Street Journal ("Southwest's Dallas Duel" by Susan Warren & Melanie Trottman):
"After more than a quarter century of living under the restrictions of an arcane federal law, Southwest Airlines has declared war on a statute that has stifled its growth at its hometown airport.
"Under the 1979 law, the only flights Southwest may schedule at its headquarters at Dallas Love Field are those to and from seven states. Since the law's enactment, Southwest has grown up to fly more passengers than any other U.S. carrier and is one of the few that is profitable. Still, anyone who wants to fly Southwest from Dallas to a location beyond a nearby state must first fly to a nearby city, wait at least an hour in the airport, then change planes. Southwest is forbidden to sell tickets to and from these faraway cities and can't even advertise such long-haul flights under the statute.
"The law, called the Wright Amendment after its sponsor, former Fort Worth congressman and House speaker Jim Wright, was designed to protect rival Dallas-Fort Worth International Airport, located about 11 miles away, from competition by carriers at Love Field. The law has protected AMR Corp.'s American Airlines, which is based in Fort Worth and has become DFW's dominant carrier and chief moneymaker. It also has pushed up fares to and from Dallas and kept Southwest from expanding in its hometown even as it has spread to 59 other cities, where it typically offers long-haul flights to many destinations and has prompted rivals to cut their fares."
Special Issue on UCL Post-Prop 64
Members of the California State Bar Section on Antitrust and Unfair Competition, take note: The Spring/Summer 2005 issue of Competition, the section's journal, focuses on the implications of Prop 64, the initiative passed last November which limited the rights of citizens to sue under California's unfair competition law. The issue, titled "Will You Still Need Me; Will You Still Plead Me, After Prop 64?," contains seven articles that raise such questions as: has Prop 64 federalized unfair competition claims and whether Prop 64 applies to pending cases (the answer seems to be no). The forward to the issue discusses the activities of the Trevor Law Group, a firm of several recent law grads, who brought countless private actions against Los Angeles area businesses under California's law.
For those who are not members, I could not find a link to the issue. But here's a link to the journal's website that might provide further information.
May 10, 2005
R. Hewitt Pate to Step Down Next Month
The Wall Street Journal reports this morning that R. Hewitt Pate intends to step down next month from his position as chief of the Antitrust Division of the Department of Justice. He has been chief since 2003 and a senior official in the division since 2001. Mr. Pate stated that he will not be participating in the pending SBC-ATT and Verizon-MCI mergers. Under Pate's watch, the DoJ's merger activity increased, most notably the challenge to the Oracle-Peoplesoft merger. Named as possible successors: Phillip Proger of Jones Day in Washington and Makan Delrahim, the antitrust division's appellate and international-policy chief.
DoJ Investigates National Association of Realtors
The Wall Street Journal reported yesterday that for the past eighteen months, the Department of Justice has been investigating the practices of the National Association of Realtors prohibiting the listing of properties on competitor's websites and various state laws that limit rebates and competition in commission rates. As today's Washington Post describes:
"The issue boils down to whether a listing agent can effectively claim ownership rights to a home listing, deciding where and when it can be displayed on the Internet, for the duration of the listing contract, which usually runs between 60 and 90 days.
The Post also reports that the DoJ filed a lawsuit against the State of Kentucky challenging a state law prohibiting rebates to customers by realtors.
Jessica Swesey reports on the story for Inman News (a subscription site), quoting this blogger as well as other antitrust specialists.
Ernest Gellhorn Passes Away May 7
Perhaps the leading luminary in antitrust and economic regulation, Ernest Gellhorn passed away Saturday in Washington, D.C. Professor Gellhorn had a incredibly distinguished career as dean at three major law schools and as a professor at Duke, Virginia, and most recently George Mason. I doubt that there is anyone active in the fields of antitrust and administrative law who has not read or been affected by Professor Gellhorn's scholarship and advocacy. More information can be found at this George Mason site.
May 9, 2005
Class Action Against West over Bar Review Classes
A class action of lawyers and law students filed a complaint on Friday in the Central District of California alleging antitrust violations by West Publishing and Kaplan. The complaint alleges, among other claims, that Bar/Bri, in partnership with Kaplan, monopolized the market for bar review services and engaged in such anti-competitive conduct as intimidating local bar review courses that competed with Bar/Bri, imposingemployment restrictions on faculty who taught for Bar/Bri, and using a scholarship program to lure students from taking a competitor's bar review course. The complaint seeks up to $ 300 million in damages (before trebling).
May 8, 2005
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