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Division Update Spring 2014

Competition Advocacy Update

Effective law enforcement is core to the mission of the Antitrust Division. But so is competition advocacy—to government entities, private firms and organizations, and the general public. While the Division’s competition advocacy program covers a wide array of topics, over the last year it has focused on two areas: the intersection between intellectual property (IP) rights and competition law and the importance of competition in evolving communications markets.

IP Rights

The relationship between IP rights and competition law remains a central focus for the Division. IP rights influence innovation in industries vital to U.S. consumers. The Division seeks to ensure that those rights—especially those conferred by patents—work complementarily with antitrust law and policy to promote competition and innovation. We engage with federal agencies, industry representatives, and other groups on key issues like standards-setting activities and patent assertion entities. For several years, the Division has worked with standards-setting organizations to help them develop IP licensing policies that minimize the potential for anticompetitive abuse of patents incorporated in standards. See, e.g., Renata Hesse, Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice, The Art of Persuasion: Competition Advocacy at the Intersection of Antitrust and Intellectual Property 4–6 (November 8, 2013).

The Division also assists policy makers and judicial bodies in addressing important IP-antitrust issues. In this spirit, in January 2013, the Department of Justice and the U.S. Patent and Trademark Office (PTO) released a joint Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments. This statement addressed how federal district courts and the U.S. International Trade Commission resolve cases involving standards-essential patents which owners have committed to licensing on fair, reasonable, and nondiscriminatory (F/RAND) terms. In August 2013, the U.S. Trade Representative relied on the policy statement in disapproving an International Trade Commission exclusion order barring the importation of certain Apple Inc. products into the United States. The Trade Representative echoed concerns in the policy statement about the potential harms from owners of F/RAND-encumbered, standards-essential patents gaining undue leverage and engaging in hold-up.

The Division participates in multinational fora, such as the World Intellectual Property Organization (WIPO), the Organisation for Economic Co-operation and Development (OECD), and the Asian-Pacific Economic Cooperation, to promote the application of sound antitrust principles to complaints involving IP rights. For example, in conjunction with the Federal Trade Commission and the PTO, the Division recently completed a WIPO survey explaining how the competitive effects of joint research-and-development agreements are analyzed under U.S. law.

Telecommunications Markets

The Division also advocates actively for competition in the telecommunications sector. The Division works with the Federal Communications Commission (FCC) to foster competitive communications markets and the lower prices and innovation they produce. In 2013, the Division filed comments in an FCC proceeding regarding mobile spectrum holdings. The comments urged that rules for spectrum auctions ensure that smaller nationwide networks have the opportunity to acquire low-frequency spectrum and thereby improve the competitive dynamics among nationwide carriers and benefit consumers.

Similarly, in February 2014, the Division filed comments concerning the FCC’s review of its media ownership rules, especially its attribution rules, which define the financial and other interests that are deemed comparable to ownership and can trigger the FCC’s broadcast ownership limits. The comments discussed a variety of “sharing” agreements, including joint sales agreements (JSAs), shared services agreements, and local news service agreements, explaining that such arrangements can confer influence or control of one broadcast competitor over another and that a failure to account for the effects of these arrangements can create opportunities to circumvent FCC ownership limits. The Division argued that attribution is appropriate for JSAs and similar agreements and that, even where a sharing agreement does not create an attributable interest under the FCC’s bright-line rules, the FCC should scrutinize agreements on a case-by-case basis.

The Division will continue its competition advocacy over the coming years, in these sectors and others. The Division’s tools include speeches, public comments, congressional and other types of testimony, amicus briefs, and closing statements. Advocacy complements the Division’s enforcement program, increasing awareness of the antitrust laws and making it less likely that firms will violate these laws. It also helps ensure that new laws and regulations are not anticompetitive and that government entities take competition into account in performing their missions. In all these ways, the Division’s competition-advocacy program protects and promotes competition for the benefit of American consumers.

Highlights

Bridgestone Corp. Agrees to Plead Guilty and to Pay $425 Million Criminal Fine for Price Fixing on Auto Parts Installed in U.S. Cars

US Airways and American Airlines Required to Divest Facilities at Seven Key Airports to Enhance System-Wide Competition and Settle Merger Challenge Offering More Choice and More Competitive Airfares for Consumers

Court Rules Apple Inc. Violated Antitrust Laws by Conspiring to Raise E-Book Prices; Proposed Remedy Provides for Court-Appointed External Monitor, Antiretaliatory Measures and Prohibits Apple from Engaging in Future Anticompetitive Conduct

Court Finds Bazaarvoice Inc.’s Acquisition of PowerReviews Inc. Violates Antitrust Laws; Proposed Remedy Requires Selling Off All PowerReviews Assets, Provides Syndication Services to the Divestiture Buyer and Removes Trade-Secret Restrictions

Division’s Efforts to Combat Real Estate Foreclosure Auction Fraud Yields 72 Guilty Pleas to Date—45 in Northern California, 11 in Southern Alabama, 2 in North Carolina, 3 in Northern Georgia, and 11 in Eastern California—and 2 Trial Convictions

Anheuser-Busch InBev and Grupo Modelo Required to Divest Piedras Negras Brewery, Perpetual Licenses to Modelo Beer Brands and Other Assets to Maintain Competition in Beer Industry Nationwide

Nine Auto Parts Manufacturers Agree to Plead Guilty and to Pay More Than $740 Million in Criminal Fines for Fixing Prices on Auto Parts Sold to U.S. Car Manufacturers and Installed in U.S. Cars; Two Executives Agree to Plead Guilty

Former Project Manager Sentenced to Serve 14 Years in Prison for Role in Bid Rigging/Fraud Schemes Involving Two EPA Superfund Sites in NJ

Former Sea Star Line President Sentenced to Serve Five Years in Prison for Role in Price-Fixing Conspiracy Involving Coastal Freight Services; Longest Ever Sentence for a Sherman Act Violation

Contacts

See our Contact Information page to contact certain offices or individuals in the Division.