February Antitrust Bulletin

February 5, 2014

Apple Fights External Antitrust Compliance Monitor’s Investigation

Tensions rose in United States of America v. Apple, Inc., et al., when Apple questioned a court-appointed monitor’s impartiality, prompting the DOJ to respond in a letter to U.S. District Court Judge Denise Cote that “Apple has chosen a campaign of character assassination over a culture of compliance.” Following allegations that Apple plotted with publishers to fix e-book prices, Judge Cote appointed an external compliance monitor to evaluate Apple’s internal antitrust compliance policies and procedures.

Soon after the appointment, Apple filed a motion to stay the duties of the monitor, arguing that the monitor’s investigation was hampering Apple’s business and putting confidential information at risk. Judge Cote denied Apple’s motion to stay, finding that the monitor’s extensive investigation, which included interviews with board members and executives, did not violate Apple’s rights. Apple appealed to the Second Circuit, attaining a short-term “administrative stay” until a full stay could be evaluated.

Judge Awards $544.8M in Attorneys’ Fees in Visa, MasterCard Litigation

In 2005, merchants filed suit against Visa, Inc., and MasterCard, Inc. alleging the companies conspired to fix credit card swipe fees. Eight years later, the parties in In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation reached a $5.7 billion settlement, one of the largest antitrust settlements in U.S. history. Class plaintiffs subsequently filed a motion for $570 million in attorneys’ fees, 10 percent of the settlement figure. In ruling on the motion, U.S. District Court Judge John Gleeson noted the case’s size, duration and complexity, as well as the fact that the plaintiffs were not merely piggybacking off an action brought by government regulators. Reasoning that “those risks could have meant the end of the litigation with no recovery for class members and no fee for counsel,” Judge Gleeson awarded $544.8 million in attorneys’ fees and $27 million in expenses.

DOJ Wins Challenge of Bazaarvoice’s Acquisition of Rival

Following a three-week trial in United States v. Bazaarvoice, Inc., U.S. District Court Judge William Orrick ruled that Bazaarvoice’s already-consummated merger with rival PowerReviews, Inc. limited competition in violation of federal antitrust law. Playing a key role in the Court’s ruling were highly contentious documents and emails discussing the merger, including an email from one of Bazaarvoice’s co-founders commenting that the proposed deal would provide “relief from [] price erosion.”

Judge Orrick is now challenged with fashioning a remedy given that the merger has already been consummated. The parties are considering mediation to find a suitable remedy. To aid in the process, Bazaarvoice has agreed to provide the DOJ additional information, including customer lists.

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