USA – NEW YORK Trends and Developments Contributed by: Philip Iovieno, Kristen J. McAhren and Mark Singer, Cadwalader, Wickersham & Taft LLP
monopolisation under Section 2 of the Sherman Act. The biggest trend in the United States competition landscape has been the revival of interest and litiga - tion in the area of monopolisation, an area in which decisional precedent is often decades old – much of it having its origins in the 2nd Circuit. Despite this resur - gence, monopolisation MDLs remain relatively rare, and the 2nd Circuit courts are, therefore, exercising an outsized influence in this area. For example, in a decision generated from the Pay - ment Card Interchange Fee and Merchant Discount Antitrust Litigation MDL, the 2nd Circuit Court of Appeals distinguished digital platforms from tradi - tional value chains. In its analysis of digital platforms, it held that because a two-sided marketplace draws costs and generates revenue from both sets of users on each side of the platform, a court must consider the relationship and feedback effects of both sides of the platform for purposes of market definition and an analysis of power and harm. On appeal, the US Supreme Court, for the first time, issued a decision regarding digital market definition, endorsing the 2nd Circuit’s reasoning in Ohio v American Express and making it binding on the other circuits. The 2nd Circuit set the standard for all monopolisa - tion analysis in the United States decades ago. Its nationally adopted recent jurisprudence regarding digital markets is evidence that it continues not only to influence but to continue to set the standard for the decisional law in the area of monopolisation. Given its outsized role in resolving novel monopolisation claims in MDLs and its own dockets, this leadership is expected to continue. The 2nd Circuit Court of Appeals’ recent competition decisions The 2nd Circuit has recently issued several decisions in the area of antitrust law indicative of its approach to favouring detailed and real-world economic consid - erations over bright-line rules. These decisions bind the New York district courts under its jurisdiction and influence the other circuits. • In re Bystolic Antitrust Litigation – The 2nd Circuit, for the first time, interpreted the Supreme Court’s guidance for analysing allegations that patent
infringement settlements between branded and generic drug suppliers constitute anticompetitive agreements. The 2nd Circuit determined that it should consider whether the settlements reflected a fair value for goods and services in the first instance and then further ensure that on the merits, they were not made “to bring about anticompetitive harm.” • Drabinsky v Actors’ Equity Association – The 2nd Circuit, for the first time, interpreted the antitrust laws’ statutory exemptions for union activities to hold that an antitrust plaintiff suing a union bears the burden of pleading and proving that the exemptions do not apply. The 2nd Circuit extensively reviewed the legislative history of the exemptions to expressly reject the argument that the union should instead be required to plead and prove the exemption as an affirmative defence. The antitrust union activity exemption is rarely litigated and was last decided in 2008 by the 1st Circuit to the opposite result. • Giordano v Saks & Co. – In a case involving the hot-issue area of “no poach” agreements, the 2nd Circuit addressed the dismissal of a complaint brought by employees of New York retailer Saks Fifth Avenue. Certain luxury brands operate con - cessions in Saks’ retail stores, the terms of which prohibit the brands from hiring Saks’ employees at the brands’ stores, which compete with Saks. The 2nd Circuit examined the economic nature of the relationship between Saks and the brands as alleged and determined that because the restric - tion “primarily” concerned their vertical (buyer–sell - er) relationship and not their horizontal (competitor) relationship, it should not be treated as a “per se” unreasonable agreement among competitors for purposes of antitrust analysis. It then affirmed the lower court’s dismissal of the complaint for failure to allege facts to support that the brands’ agree - ments were unreasonable. • In re AMR Corporation – In a rare case in which private plaintiffs challenged a merger after it had happened, the 2nd Circuit affirmed the use of a burden-shifting framework at trial in which the mar - ket share of American Airlines after its acquisition of U.S. Airways served as prima facie evidence of a violation of the antitrust laws. American Airlines was allowed to rebut that presumption with other
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