November Antitrust Bulletin

November 19, 2010

Department of Justice Targets Most Favored Nation Clauses

On Oct. 18, 2010, the U.S. Department of Justice, in a joint action with the Michigan attorney general, filed a civil antitrust action against Blue Cross Blue Shield of Michigan alleging that the insurer's use of most favored nation clauses has stifled competition and raised prices on healthcare services and insurance. Most favored nation clauses in agreements between insurers and healthcare providers guarantee that no rival can get a better rate than the insurer. Though this lawsuit involves the healthcare industry, it could have important implications for any business that uses most favored nation clauses.

Knowledge of Price Discrimination in Shipping Policy May Trigger Liability

A federal district court recently ruled that a manufacturer's shipping policy—in which the manufacturer shipped to one distributor, but refused to ship to a competitor of that distributor—is actionable under the Robinson-Patman Act. In Gorlick Distribution Centers, LLC v. Car Sound Exhaust System, Inc., evidence that the favored distributor knew about the shipping policy and the competitor's net price was higher because of the refusal to ship was sufficient to survive a motion for summary judgment. This case serves as a warning that different shipping terms may constitute cognizable price discrimination.

Class Actions on the Rise in Canada

Although class actions are relatively new to Canada, cross-border claims are becoming more common. The significant procedural differences between U.S. and Canadian courts can have significant implications for litigants involved in parallel cases in the two countries. For example, Canada does not have a federal court system or multidistrict litigation mechanism, and class certification standards may differ. Accordingly, careful case management is essential.

United Kingdom Antitrust Agencies to Merge

On Oct. 14, 2010, the U.K. government announced a proposal to combine the Office of Fair Trading’s competition functions and the Competition Commission in one agency devoted to competition and markets. The new agency would be responsible for merger regulation, market investigations, cartel and antitrust cases, as well as a number of functions concerning regulated utilities. Additional information is available in our England & Wales Competition Law Newsletter.

For more information, please contact the lawyers in the Antitrust & Trade Regulation Department at McGuireWoods.

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