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THE LATEST: Another E-Commerce Retailer Pleads Guilty in DOJ Investigation of Online Promotional Products Industry

On August 14, 2017, we reported on an online retailer’s guilty plea for conspiring to fix the prices of “customized promotional products” such as silicone wristbands and lanyards, and the ongoing US Department of Justice (DOJ) investigation into the online promotional products industry. On August 22, 2017, DOJ announced two more guilty pleas in the investigation, announcing that e-commerce company Custom Wristbands Inc. and its owner and CEO Christopher Angeles had pled guilty to violating the Sherman Act, 15 USC § 1. WHAT HAPPENED: According to an Information filed in the US District Court for the Southern District of Texas by DOJ and the US Attorney’s Office for the Southern District of Texas, Defendant Angeles and his co-conspirators engaged in a conspiracy from at least as early as June 2014 through at least June 2016 to “suppress and eliminate competition by fixing and maintaining prices of customized promotional products, including wristbands, sold in...

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THE LATEST: DOJ Price-Fixing Probe Demonstrates That Deal Risk Is Not the Only Antitrust Concern Merging Parties Should Keep in Mind

Bumble Bee Foods, and two of its senior vice presidents, have recently pled guilty to US Department of Justice (DOJ) charges that they engaged in a conspiracy to fix prices of shelf-stable tuna fish sold in the United States from 2011 to 2013. Bumble Bee agreed to pay a $25 million criminal fine that can increase to $81.5 million under certain conditions, and the company’s two senior vice presidents pled guilty and agreed to pay criminal fines as well. The investigation appears to have been prompted by information that the DOJ uncovered during its investigation of Thai Union Group’s (owner of Chicken of the Sea) proposed acquisition of Bumble Bee, which was abandoned after DOJ concerns. WHAT HAPPENED: On December 19, 2014, Thai Union Group, the largest global producer of shelf-stable tuna, announced that it had agreed to acquire Bumble Bee Foods for $1.5 billion. A year later, on December 3, 2015, the DOJ announced that the parties had abandoned the...

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Former Toyoda Gosei Executive Pleads Guilty to Price-Fixing, Bid-Rigging

On January 6, 2015, Makoto Horie of Toyoda Gosei North America pled guilty to the United States Department of Justice (DOJ) for conspiring to fix the prices of automotive hoses sold to U.S. companies.  Mr. Horie was sales general manager for Toyoda Gosei in Japan.  He will serve one year and one day in a U.S. prison and pay a $20,000 criminal fine for participating in the conspiracy between March 2007 and September 2010. Toyoda Gosei pled guilty in September 2014 to price-fixing and bid-rigging for automotive hoses, airbags and steering wheels.  Unlike Toyoda Gosei’s plea agreement, Mr. Horie’s Information did not allege any wrongdoing related to automotive airbags or steering wheels.  Including Mr. Horie and his former employer, 29 individuals and 32 companies have now admitted guilt to the DOJ.  These individuals and entities have agreed to pay over $2.4 billion in fines. Mr. Horie’s plea agreement is subject to approval by the United States District Court...

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Summary Judgment Affirmed by Sixth Circuit in Broker Commission Price-Fixing Litigation

On November 13, 2014, the Sixth Circuit Court of Appeals upheld the dismissal of price-fixing claims against two home brokerage service firms in Kentucky, McMahon Co. and HomeService of America, Inc.  Hyland, et al. v. HomeServices of America Inc., et al., case number 12-5947.  The plaintiffs, a class of Kentucky brokers, alleged that the defendants conspired to raise the price of broker commission fees in violation of Section 1 of the Sherman Act.  The plaintiffs supported their claims by alleging that public comments made by McMahon Co. regarding not cutting fees in the face of competition from internet brokers showed a unity of purpose amongst the defendants.  They also pointed to the fact that defendant companies typically set their listing commission fee at six percent.  The defendants, on the other hand, argued that the fee was not set through agreement between brokers and that commission fees could be negotiated for specific transactions.  The Western...

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Auction Rigger Enters Guilty Plea

A thirty-seventh individual pleaded guilty to participating in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California.  The guilty plea, entered on Monday, November 4, is yet another victory for the Department of Justice (DOJ) Antitrust Division in its ongoing investigations into a bid rigging and mail fraud conspiracy that took place from 2007 to 2011. According to the DOJ, the conspirators arranged winning bidders for specific public real estate foreclosure auctions in several California counties.  After acquiring the properties at sub-competitive prices, the conspirators then conducted a second, private auction only open to members of the bid rigging ring.  The difference in the private auction price and public auction price could then be used for payoffs to the conspiracy members.  Had the public auctions been competitive and free from bid rigging, however, that same money taken by the conspiracy...

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NCAA Argues For Dismissal of Athletes’ Latest Antitrust Complaint

by Megan Morley Last week, the NCAA asked the Northern District of California to throw out a suit initiated in 2009 on behalf of former and current NCAA athletes.  NCAA Student-Athlete Names & Likeness Licensing Litigation, case number 4:09-cv-01967.  The athletes claim that the NCAA, its member schools, video game creator Electronic Arts (“EA”), and the Collegiate Licensing Company (“CLC”) conspired not to compensate athletes for the use of their names, images, and likenesses in video games and television broadcasts.  Specifically, the third amended complaint alleges that the NCAA and its member schools agreed not to offer athletes licensing revenues and that EA and CLC agreed to follow the NCAA’s no compensation rule so as not to undermine the scheme.  As a result of this conspiracy, the athletes were deprived of compensation for defendants’ use of their names and likenesses and were excluded from entering the market for the licensing, use, and sale of...

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