April Antitrust Bulletin

April 3, 2014

E-Book Consumers Win Class Certification Against Apple

On March 28, in In re: Electronic Books Antitrust Litigation, U.S. District Judge Denise Cote (S.D.N.Y.) granted class certification to a group of consumers accusing Apple Inc. of colluding with five major publishers to fix e-book prices. As previously reported, the court ruled in July that Apple colluded with major publishers beginning in 2010 in an effort to raise digital book prices. Each of the five major publishers had reached settlements with the DOJ prior to the original proceedings and the instant suit was filed after Judge Cote’s July ruling. In a follow-up ruling, Judge Cote granted plaintiffs’ motion for class certification, as well as their motion to at least partially exclude the opinions of Apple’s experts at trial. Judge Cote also denied Apple’s motion to exclude the opinions of plaintiffs’ expert, on whose opinion the plaintiffs’ damages model is based.

DOJ Undertakes Hiring Effort with New Budget

The DOJ has recently hired more than a dozen attorneys and economists and has plans to hire more junior staff attorneys in the coming months, thanks to the new budget. The Antitrust Division has faced three years of hiring restrictions, sequestration and a government shutdown, but the new budget allows the division to start hiring attorneys lost through attrition and a reorganization of the criminal program. Although the agency remains down personnel-wise from where it was before the hiring freeze, the new hiring includes lawyers in both the criminal and civil enforcement sections. The agency does not have a fixed number of attorneys and economists that it plans to hire in the short term, but intends to evaluate the hires based on the quality of applicants and its actual budget allotment.

U.S. DOJ Touts Victory Over Bazaarvoice Merger

As previously reported, the U.S. Department of Justice recently won a significant victory thwarting Bazaarvoice’s already-consummated merger with rival PowerReviews, Inc., when U.S. District Court Judge William Orrick (N.D. Cal.) ruled that the merger limited competition in violation of federal antitrust law. The DOJ is now reportedly touting that victory as a lesson that software-related acquisitions are subject to the same antitrust principles applied to those of a brick-and-mortar industry.

In January 2013, the DOJ challenged Bazaarvoice’s $168 million merger with PowerReviews, arguing that the merger was intended to eliminate pricing pressure from Bazaarvoice’s largest rival and that it was intended to create a dominant player capable of hiking prices in the product ratings platform industry. The court, finding that the merger eliminated Bazaarvoice’s only meaningful competitor, ordered that the DOJ is entitled to an order requiring that the merger be unwound but recognized that unwinding the merger after 18 months poses challenges. The parties continue to negotiate an appropriate order.

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