June Antitrust Bulletin

June 2, 2015

Unique Robinson-Patman Suit Based on Different Package Sizes Allowed to Proceed

Two recent decisions by the U.S. District Court for the Western District of Wisconsin reached back decades for precedent to allow a novel price discrimination suit under the Robinson-Patman Act to proceed. Woodman’s Food Market, Inc., an employee-owned chain of 15 grocery stores in Wisconsin and Illinois, sued household products manufacturer Clorox, alleging that Clorox discriminated against Woodman’s by discontinuing its sale of “large pack” sizes of certain products to Woodman’s while continuing to sell those sizes to warehouse club retailers. Woodman’s complaint sought declaratory judgment and injunctive relief.

Clorox moved to dismiss. The court denied that motion earlier this year, relying on a pair of administrative decisions by the Federal Trade Commission (FTC) from 1956 and 1940, as well as the FTC’s Guides for Advertising Allowances and Other Merchandising Payments and Services (commonly known as the “Fred Meyer Guides”), for the proposition that special product packaging or package sizes fall within the scope of Sections 2(d) and (e) of the Robinson-Patman Act.

Clorox subsequently attempted to moot Woodman’s complaint by unilaterally ending all business dealings with Woodman’s, and again moved to dismiss the case, claiming that Woodman’s now lacks standing to bring the claim. In denying that motion, the court turned to the U.S. Supreme Court’s seminal decision in FTC v. Fred Meyer, Inc., 390 U.S. 341 (1968), concluding that Woodman’s potentially still could have standing as a “customer” and “purchaser” under the Robinson-Patman Act by purchasing Clorox’s products indirectly through wholesalers. The parties currently are briefing a motion by Clorox for interlocutory appeal of the court’s decisions to the U.S. Court of Appeals for the Seventh Circuit.

DOJ and FTC Tout Recent International Competition Network Guidance on Investigative Process

In parallel May 1 press releases, the U.S. Department of Justice Antitrust Division (DOJ) and FTC announced that the International Competition Network, an organization bringing together competition regulators and enforcers from 119 jurisdictions around the world, has adopted guidance on the investigative process in competition cases. The guidance is intended to promote fairness, effectiveness and predictability across jurisdictions in the use of investigative tools, the transparency of each jurisdiction’s policies and standards, the transparency and engagement of competition agencies during investigations, and the protection of confidential and privileged information disclosed in the course of investigations.

DOJ Auto Parts Investigation Nears 100 Charged Individuals and Corporations

On May 21, the DOJ announced criminal antitrust charges filed in the U.S. District Court for the Eastern District of Michigan against one current and one former executive of a Japanese manufacturer of spark plugs, standard oxygen sensors and air fuel ratio sensors. These charges follow a guilty plea by the manufacturer itself to related charges late last year, pursuant to which the manufacturer paid a $52.1 million criminal fine. According to the press release, the DOJ so far has charged 55 individuals in the ongoing investigation, and has secured guilty pleas or agreements to plead guilty from 35 corporations. Criminal fines from the investigation now total more than $2.5 billion.

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