June Antitrust Bulletin

June 17, 2010

Law Extends Civil Leniency for Antitrust Cooperators

On June 9, 2010, President Obama signed into law a 10-year extension of the civil leniency provisions of the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (ACPERA). The new law extends the sunset date for ACPERA to June 22, 2020.

ACPERA protects individuals and companies that self-report criminal violations of the Sherman Act to the Department of Justice’s Antitrust Division from the treble damages and joint-and-several liability ordinarily imposed in private antitrust litigation. ACPERA’s protections are designed to promote participation in the Antitrust Division’s leniency program and to encourage leniency applicants to cooperate with private plaintiffs.

Under the leniency program, the first member of an antitrust cartel to report the anticompetitive conduct and cooperate with the government – and otherwise meet the requirements of the program – is granted amnesty from criminal prosecution. ACPERA provides an additional incentive for such cooperators. In exchange for cooperation with private plaintiffs, the civil liability of leniency applicants is limited to single damages attributable only to the leniency applicant’s own sales to plaintiffs, while other co-conspirators remain jointly and severally liable for all damages, including treble damages.

Supreme Court Blocks NFL’s Attempt to Sidestep Antitrust Law

On May 24, 2010, the Supreme Court unanimously ruled in American Needle, Inc. v. National Football League that the NFL is not exempt from antitrust laws and a dispute over NFL-licensed apparel can proceed. Though recognizing that some coordination is needed to run the sports league, the Court held that the NFL is not a single entity but rather a consortium of 32 separately owned teams that compete with one another for fans, ticket sales and players, and “in the market for intellectual property” (including the trademarks licensed for sportswear).

Workshops Signal Increased Focus on Competition in Agriculture Markets

On May 21, 2010, the U.S. Departments of Justice and Agriculture held their second joint public workshop on competition and regulation in the agriculture sector, and Agriculture Secretary Tom Vilsack announced the formation of a task force to bolster enforcement of the Packers and Stockyards Act, which regulates the business of packers and poultry dealers and prohibits them from engaging in unfair, discriminatory or deceptive practices and other specified conduct. This workshop focused on issues in the poultry industry. An earlier workshop was concentrated on grain farming and hog production. Three additional workshops are scheduled this year.

Proposed Revisions to Horizontal Merger Guidelines Issued

On April 20, 2010, the U.S. Department of Justice and the Federal Trade Commission issued proposed revised Horizontal Merger Guidelines intended to inform companies and lawyers how the federal agencies evaluate the likely competitive impact of mergers. The proposed guidelines clarify guidelines issued by the two agencies in 1992 and last revised in 1997. The period for public comments closed June 4, 2010.

European Commission Revises Competition Rules for Goods/Services Distribution

On April 20, 2010, the European Commission announced the adoption of a new block exemption regulation for agreements between manufacturers and distributors and other downstream purchasers for the sale of products and services. In order to benefit from the block exemption, neither the manufacturer nor purchaser (in the purchasing market) may have a market share in excess of 30%, and the agreement must not contain any “hardcore” restrictions of competition, such as fixing resale prices or re creating barriers to the EU’s single market. The new guidelines specifically address online sales. Additional information is available in our March 2010 EU/UK Competition Law Newsletter.