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EU Commission Releases First Findings on Geo-Blocking in E-Commerce Sector Inquiry

On 18 March, the European Commission (Commission) published its initial findings on geo-blocking in the framework of its ongoing antitrust sector inquiry into e-commerce. The findings are based on responses to questionnaires sent to more than 1400 retailers and digital content providers from all 28 EU Member States in 2015. The questionnaires focused on geo-blocking practices in the sales of goods (clothing, shoes and accessories, consumer electronics, household appliances, computer games and software, toys and childcare articles, books, media carriers, cosmetic and healthcare products, sports, outdoor, house and garden equipment), and in the provision of digital content services (films, sports, TV programmes, music). The findings suggest that geo-blocking is a widespread practice. Where the sale of tangible goods is concerned, in most cases the decision to have geo-blocking in place is made unilaterally by the retailer.  In only 12 percent of the cases,...

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Maryland AG Challenges Resale Price Maintenance Agreement

On February 29, 2016, the Attorney General of Maryland filed a complaint alleging that Johnson & Johnson Vision Care, Inc. (Johnson & Johnson) violated the Maryland state antitrust law by entering into an agreement with a retailer regarding a resale price maintenance (RPM) policy. The complaint alleged that Johnson & Johnson initially instituted an RPM policy in response to objections from eye care professionals that they were losing business to discount retail stores, including Costco Wholesale Corporation (Costco), who were charging less than the eye care professionals to fill prescriptions for Johnson & Johnson’s contact lenses.  Once Johnson & Johnson implemented its RPM policy, which fixed minimum retail prices for all retailer sellers of its contact lenses, Costco complained to Johnson & Johnson that the policy prevented Costco from offering discounted pricing on the lenses that its customers had come to expect.  In response to...

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Court Declines To Certify Damages Class in Baseball Blackout Suit

On May 14, 2015, the Southern District of New York issued two opinions in Laumann v. Nat’l Hockey League, No. 12-cv-1817, excluding plaintiffs’ damages expert under Daubert and denying plaintiffs’ motion to certify a damages class. The court did, however, certify a class under Federal Rule of Civil Procedure 23(b)(2) for the purpose of pursuing injunctive relief. The case is part of a growing body of case law in which courts have considered Daubert motions at the class certification stage. The plaintiffs had sought to certify two classes of individuals who purchased “out-of-market” baseball or hockey packages, either online or through a television service provider. The plaintiffs in Laumann alleged that agreements between the defendants—sports leagues, regional television networks that produce each team’s games, and television service providers—violated Section 1. The challenged restraint was “territorial exclusivity,” the restriction on regional networks...

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Local Wholesaler-Retailer Dispute Has Federal Implications

On August 14, the U.S. District Court for the Southern District of Mississippi issued an opinion finding that state regulations bolstered one antitrust claim and hindered another in an ongoing dispute between a northern Mississippi convenience store chain, Major Mart, and an Anheuser-Busch InBev (ABI, a/k/a “Red Network”) distributor, Mitchell Distributing Company. In Mississippi, by statute, like those of many other states, beer manufacturers must designate exclusive sales territories for each brand.  Mitchell holds the exclusive right to sell ABI brands to retailers in the counties in which Major Mart operates its 11 convenience stores. The relationship between Mitchell and Major Mart started to break down in 2010, when Major Mart claimed that it was receiving inaccurate and confusing price information from Mitchell.  Major Mart asked Mitchell for compensation of lost profits due to the incorrect pricing information.  Mitchell denied the request, and Major...

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District Court Pares Down Price Discrimination Suit Against Chrysler

On July 11, 2014, the Northern District of California dismissed one of two federal antitrust claims brought against Chrysler Group LLC under the Robinson-Patman Act, 15 U.S. C. § 13, as well as several state statutory and common law claims.  Matthew Enterprise, Inc. v. Chrysler Group LLC, No. 13-cv-04236-BLF (N.D. Cal. July 11, 2014).  The plaintiff, a franchise car dealer and direct customer of the defendant, alleged that Chrysler committed anticompetitive price discrimination by offering volume discounts to new dealers on more favorable terms than those offered to established dealers like the plaintiff and by selectively offering the plaintiff’s competitors disguised price discounts in the form of below-market rent.  The court allowed the former claim to go forward but dismissed the latter for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). The court began by recounting the purposes behind the Robinson-Patman Act, as described by...

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Distribution in China – Legal Issues

Contact: Frank Schoneveld, Kevin Qian, John Huang and Winston Zhao McDermott Will & Emery is pleased to offer “Distribution in China – Legal Issues*,” a one-stop resource covering distribution in China, including: The business models and legal structures most commonly used for distribution in China Important issues to consider in the design of a distribution system for China, such as taxation, foreign exchange, antitrust, and specific rules applicable to retail and wholesale distribution activities Pre-contract matters of which negotiators of distribution agreements for China should be aware The main issues parties should take into account when drafting a distribution contract for use in China, including pricing and payments, exclusivity and territorial restrictions, product liability and intellectual property rights *This publication originally appeared as a four-part White Paper series. To read the full article, click...

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Distribution in China – Legal Issues, Part IV. Drafting the Distribution Contract

Contact: Frank Schoneveld, Kevin Qian, John Huang and Winston Zhao “Distribution in China – Legal Issues” is a four-part series.  Part I discussed the business models and legal structures most commonly used for distribution in China.  Part II looked at important issues to consider in the design of a distribution system for China, such as taxation, foreign exchange, antitrust, and specific rules applicable to retail and wholesale distribution activities.  Part III dealt with pre-contract matters of which negotiators of distribution agreements for China should be aware.  Part IV outlines the main issues parties should take into account when drafting a distribution contract for use in China.  These include pricing and payments, exclusivity and territorial restrictions, product liability and intellectual property rights. Read the full article here.

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Distribution in China – Legal Issues, Part III. Pre-Contract Matters

Contact: Frank Schoneveld, Kevin Qian, John Huang and Winston Zhao “Distribution in China – Legal Issues” is a four-part series.  Part I discussed the business models and legal structures most commonly used for distribution in China.  Part II looked at important issues to consider in the design of a distribution system for China, such as taxation, foreign exchange, antitrust, and specific rules applicable to retail and wholesale distribution activities.  Part III deals with pre-contract matters of which negotiators of distribution agreements for China should be aware.  Part IV will outline the main issues parties should take into account when drafting a distribution contract for use in China.  These include pricing and payments, exclusivity and territorial restrictions, product liability and intellectual property rights. To read the full article, click here.

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China Fines Liquor Producers Over US$70 million for Fixing Minimum Resale Prices

by Frank Schoneveld Last week one of China’s antitrust regulators, the National Development and Reform Commission (NDRC), imposed fines of RMB419 million (+/- US$72 million) on two of the most famous producers of Chinese liquor, Moutai and WuLiangye.  The fines were imposed for restricting the minimum price at which their distributors could resell the liquor. This was found to be illegal resale price maintenance. The fines are unprecedented in China and signal major new antitrust enforcement activity in the distribution of goods and in the alcoholic beverages sector in particular. The fines imposed are at the lower end of the possible range of fines between 1% and 10% of each company’s annual revenues.  It remains to be seen whether any of these companies’ customers or distributors will now start private actions in the Chinese courts to recover damages for breach of the antitrust rules.  So far there have been over 60 private...

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Distribution in China – Legal Issues, Part I. Business Models and Structures

For more information, please contact Frank Schoneveld, Kevin Qian, John Huang or Winston Zhao. “Distribution in China – Legal Issues” is a four-part series.  Part I discusses the business models and legal structures most commonly used for distribution in China.  Part II will look at important issues to consider in the design of a distribution system for China, such as taxation, foreign exchange, antitrust, and specific rules applicable to retail and wholesale distribution activities.  Part III will deal with pre-contract matters of which negotiators of distribution agreements for China should be aware.  Part IV will outline the main issues parties should take into account when drafting a distribution contract for use in China.  These include pricing and payments, exclusivity and territorial restrictions, product liability and intellectual property rights. To read the full article, click here.

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