Category Archives: Antitrust

Full House at the FTC

In April 2014, the fifth Commissioner for the Federal Trade Commission (FTC) was finally confirmed.  Here is the list of Commissioners and the links to their bios:

Julie Brill (Democrat, Female, April 2010 – September 2016)

Terrell McSweeny (Democrat, Female, April 2014 – September 2017)

Maureen Ohlhausen (Republican, Female, April 2012 – September 2018)

Chairwoman Edith Ramirez (Democrat, Female, April 2010 – September 2015)

Josh Wright (Republican, Male, January 2013 – September 2019)

You may notice that the terms vary in time.  At most, only three commissioners can be members of the same political party.  Generally, the Commissioners may serve a term of seven years.

The first five original Commissioners were appointed in 1917, 1918, 1919, 1920, and 1921 on a staggered basis.  Thus, any subsequent Commissioner adopted the same term period of its predecessor.

For example, if a Commissioner resigns mid-term, then his/her successor will not receive the full seven year appointment but instead they will only get the amount of time in their term that is left from the original appointment.  Specifically, you will see that Ramirez’s term ends in 2015, Brill’s term ends in 2016, McSweeny’s term ends in 2017, Ohlhausen’s term ends in 2018, and Wright’s term ends in 2019.  However, Wright was sworn in and appointed before McSweeny so Wright will serve a 6 year term while McSweeny will only serve a 3 year term.

If you want to see a graphical history of the FTC Commissioners, check out this chart.

Congratulations to the FTC Commissioners and their full house!

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Yahoo! to Purchase Tumblr for $1.1 Billion

Yesterday, Yahoo! announced its plans and its offer to buy Tumblr for $1.1 Billion.  The official press release is available here.

Tumblr, often called a blogging website, allows users to post quick and short updates.  Tumblr is very similar to Twitter, but without the constraints of the 140 character limit.  Also viewed as a social networking site, Tumblr does not have as many bells and whistles as Facebook.

The Yahoo! press release assured the public that:

Per the agreement and our [Yahoo!’s] promise not to screw it up, Tumblr will be independently operated as a separate business. David Karp will remain CEO. The product, service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators.

Marissa Mayer, Yahoo!’s Chief Executive Officer, explained that Yahoo!’s older audience and Tumblr’s younger audience will fit together and she stands firm with her business decision.  The Washington Post published more details about the acquisition and you can read about it here.

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Chairman Leibowitz Departs FTC

Today, the Federal Trade Commission (“FTC”) made an official announcement notifying the public that the current Chairman will be stepping down.  Having joined the FTC in September 2004, Jon Leibowitz will have his last day as Chairman on February 15, 2013.  Leibowitz’s official FTC bio is available here.

The Washington Post reports the new, potential Chairman candidates are Julie Brill, Edith Ramirez, Howard Shelanski, Leslie Overton, and Philip Weiser.

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Bid Rigging at Foreclosure Auctions in Alabama

Last month, the Department of Justice announced the prosecution and guilty pleas of two Alabama real estate investors and their company regarding bid rigging at foreclosure auctions.  The official press release is available here.  The DOJ explains:

[T]he Brannons and their company conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at a public auction, which typically takes place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.

The Brannons and their company were also charged with conspiring to use the U.S. mail to carry out a fraudulent scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators, and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties.

The initial timeline of the charges were from 2004 to 2007.

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Holiday Helping Roundup

It is that time of year again!  Time for the Holiday Helping Roundup!

–  The Supreme Judicial Court amended Mass. Rule of Prof’l Conduct 1.5(b) and 6.5 that deal with fee arrangements.  The original order is available here.  However, the Massachusetts Board of Bar Overseers published a helpful article further explaining the new rules which will take effect starting January 1, 2013.

–  Peter Madoff, the brother to the infamous Bernie Madoff, is sentenced to ten years in prison for crimes that lead to the failure to detect fraud in the massive Ponzi scheme that swindled millions and billions of dollars from unsuspecting investors.  According to a New York Times DealBook article, Peter Madoff admitted to “falsifying documents, lying to securities regulators and filing sham tax returns.”

–  The Daily Beast published an article about a 52 year old man convicted as a juvenile for a rape that occurred in 1976.  Carlton Franklin was 15 years old at the time of the crime.  The case was heard in a New Jersey family court, and the judge found Franklin killed Lena Triano by bludgeoning, raping, and stabbing her.  Franklin’s DNA matched the semen found in the victim’s underpants.  Franklin spent 17 years in prison for a robbery and kidnapping home invasion committed when he was 18 years old, but he has also been released from prison for 14 years, according to a New York Times article.  Franklin has yet to receive his sentencing by the family court judge.

–  The Department of Justice posted a press release concerning Mercer SME, a New Jersey company.  The company plead guilty for its bid rigging conspiracy involving the sale of municipal tax liens.  The press release states:

The conspirators agreed to coordinate their bids and allocate the tax liens amongst themselves, at the expense of distressed property owners,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program….

When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

–  Keep an eye out for the London Interbank Offered Rate (Libor) scandal.  The Department of Justice and U.S. prosecutors are going after UBS for manipulating LIBOR interest rates.  The company may enter a safe harbor if they identify others involved in the scheme.  Bloomberg published an article about the fraud and collusion.  In addition, the Huffington Post article states UBS settlement costs are currently at $1.5 billion.  The Huffington Post article goes further to say:

Authorities are loath to prosecute big banks criminally, Enrich writes, because they consider it a “death sentence” for the institutions.  Legal experts aren’t so sure that’s really the case, as they discussed recently on HuffPost Live. But prosecutors don’t dare take the chance, because toppling these behemoths might crush the financial system.

Read more about the charges and incoming guilty plea at the FBI and DOJ website here.

–  A Yelp reviewer is in the midst of a defamation suit after writing an online review about a contractor who worked on her home and allegedly stole her jewelry.  The contractor claims that the online review is false and that he was not paid.  The Yelp reviewer states that the quality of the contractor’s work was poor and that her review is truthful.  Read more about the defamation suit published by the ABA Journal here.

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European Commission Pursuing Microsoft for Non-Compliance with Browsers

On October 24th, 2012, the Competition arm of the European Commission announced that they are holding Microsoft accountable for non-compliance with browser choice commitments.  In layman’s terms this means that the European Commission is going after Microsoft.

In December 2009, the European Commission made Microsoft’s browser commitments legally binding.  The press release regarding the European Commission’s acceptance of Microsoft’s commitments to give users browser choice is available here.

In the current investigation and enforcement action, the European Commission holds that Microsoft failed to “comply with its commitments to offer users a choice screen enabling them to easily choose their preferred web browser.”  The first step in this process was the release of the European Commission’s Statement of Objections to Microsoft.  The press release detailing the Statement of Objections is available here.  Most notably, the press release emphasizes that Microsoft “failed to roll out the browser choice screen with its Windows 7 Service Pack 1, which was released in February 2011.  From February 2011 until July 2012, millions of Windows users in the EU may not have seen the choice screen.”  It will be interesting to see if this enforcement has an impact on Microsoft in the United States.

A video of the official European Commission press conference, with Joaquin Almunia making the statement, is available here.


Safety in Numbers

Novak Druce + Quigg LLP plans on merging with Connolly Bove Lodge & Hutz before January 2013 to create a larger intellectual property firm.  Novak Druce was originally founded by former Howrey lawyers in 2005.  The ABA Journal writes about the upcoming merger, and read more about the law firm change here.

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Louboutin Wins Trademark Protection, But Loses Injunction

Fashionistas and stylistas are familiar with the trendy, expensive, red soles and high heeled shoes designed by Christian Louboutin.  Earlier this week, the Second Circuit U.S. Court of Appeals in New York granted trademark protection to Louboutin’s red-soled, high heeled shoes.

Initially, Louboutin’s brand name filed a preliminary injunction against Yves Saint Laurent America Inc. (“YSL”) from selling shoes that are all red because the YSL shoes include an outer red sole which Louboutin alleges as their trademark.  In August 2011, Judge Marrero in the Southern District of New York denied Louboutin’s injunction.  On appeal, the preliminary injunction was again denied and the case was sent back to district court.

However, the Second Circuit judges clarified that Louboutin’s shoes are entitled to a limited trademark protection.  Specifically, the trademark protection applies to the “red lacquered outer sole that contrasts with the color of the rest of the shoe and not to shoes that are monochromatically red.”  Read the full Bloomberg Businessweek article by Don Jeffrey and Cotten Timberlake here.  Jeffrey and Timberlake quote the decision,

The district court’s conclusion that a single color can never serve as a trademark in the fashion industry was based on an incorrect understanding of the doctrine of aesthetic functionality,” U.S. Circuit Judge Jose Cabranes wrote in today’s decision. “We conclude that the trademark, as thus modified, is entitled to trademark protection.

Chad Bray of the Wall Street Journal expounds upon the decision by stating,

Louboutin may have lost the fight against Yves Saint Laurent’s monochromatic shoe, but won a much broader battle over the use of its iconic color, according to trademark experts.

The full article is available here.

Since the justices believe that granting broad rights to the color red harms competition in the fashion industry, the injunction was denied and YSL will continue to produce red shoes with red outer soles.

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Search Engine Land Submits Letter to FTC Regarding Disclosure Compliance

In early June, Search Engine Land writer, Danny Sullivan, submitted a letter to the Federal Trade Commission readdressing disclosure compliance of search engines.  The letter is available here.

Sullivan included strong language in his letter, such as:

The idea that a CEO could pen a letter about a competitor’s supposed lack of consumer transparency without a concern that his own company doesn’t follow your guidelines suggests that those guidelines either aren’t taken seriously by some in the search engine industry or aren’t considered applicable to them. I’d like the FTC review to address this.

When the guidelines were drafted, the concern was that consumers might not know what was paid for or not within search engines and assume everything was listed without payment being a factor, since that’s how search engines had historically operated. Compliance with paid placement listings generally seems good. But when it comes to paid inclusion, which was always the trickier issue, compliance seems to be poor.

The letter also included definitions of relevant actors within the search engine field.

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Confidentiality Claims in the European Commission

The European Commission has released new guidelines on filing confidentiality claims.  The documents listed on the European Commission Competition page provide further guidance on how to claim confidentiality and includes practical examples.

Access the new guidelines here.

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