Recent Developments in Antitrust and Unfair Competition Law

• Publication year: 2022
• Author: Edited by Malinda Lee

RECENT DEVELOPMENTS IN ANTITRUST AND UNFAIR COMPETITION LAW

Edited by Malinda Lee¹

PANELISTS:

• Thomas Greene, U.S. Department of Justice, Antitrust Division
• Colleen Huschke, San Diego District Attorney's Office, Consumer Protection
• Shana M. Wallace, Indiana University Maurer School of Law
• Moderator: Malinda Lee, California Department of Justice, Office of the Attorney General

I. INTRODUCTION & OVERVIEW

Professor Shana Wallace of Indiana University Maurer School of Law was the first of three speakers on this panel. She covered developments in substantive federal antitrust law and highlighted major Section 2, Section 1, and Section 7 cases from the past year. The highlights include cases covering refusals to deal, monopsonies and price-fixing in labor markets, and criminal no-poach actions recently brought by the government.

Thomas Greene of the U.S. Department of Justice, Antitrust Division, next covered developments in federal procedure. His case highlights covered significant developments on jurisdiction, standing, and class actions. Mr. Greene also discussed important legislative developments including the Criminal Antitrust Anti-Retaliation Act, the Competitive Health Insurance Reform Act, and a federal appellate procedure rule amendment.

Deputy Attorney Colleen Huschke of the San Diego District Attorney's Office, Consumer Protection Unit, closed out the panel presentation by covering developments in state antitrust and unfair competition law. Her overview of legislation included changes in the area of automatic renewals in recurring service contracts and debt collection. She also covered significant unfair competition law cases that touch on damages, commercial speech, and unfiled escrow fees.

II. MODERATOR MALINDA LEE'S OPENING REMARKS AND INTRODUCTION OF PANELISTS

MS. LEE: Good morning, and thank you for joining us. It is my privilege to welcome you all to the 2021

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GSI panel on recent developments in antitrust and unfair competition law.

My name is Malinda Lee, and I'm a Deputy Attorney General in the Health Care Rights and Access Section's Competition Unit in the California Attorney General's Office. I have the honor of moderating this panel of esteemed speakers: Shana Wallace, Thomas Greene, and Colleen Huschke.

I will begin with introductions.

Shana Wallace is a professor at the Indiana University Maurer School of Law. She teaches antitrust, civil procedure, and legal ethics. Prior to teaching, Shana practiced both criminal and civil antitrust law for over a decade with the Antitrust Division of the United States Department of Justice. At U.S. DOJ she represented the government in an appellate capacity in civil and criminal cases, served as an advisor to the directors of criminal and civil enforcement, and investigated mergers and anticompetitive conduct with the Telecommunications and Broadband Section. In 2016 she was recognized by the Attorney General for her contributions to the Apple E-Books litigation with the Distinguished Service Award. Professor Wallace also spent time as a deputy associate counsel in the White House and as a special assistant U.S. Attorney in the Eastern District of Virginia.

Thomas Greene is a trial attorney with the Antitrust Division of the U.S. Department of Justice. His practice includes both civil and criminal enforcement actions. He was previously Special Trial Counsel for the Federal Trade Commission's Bureau of Competition, where he led successful challenges to major health care mergers in Idaho and Illinois. Prior to the FTC, Tom served in the California Attorney General's Office, where he was the Chief of Antitrust. During his time in the office he also served as Chief of the Public Rights Division, the public protection arm of the AG's office, as well as the Chair of a Multistate Antitrust Task Force of the National Association of Attorneys General. He co-teaches the core antitrust course at UC Hastings and serves on the California Bar's Justice Gap Working Group. Tom has litigated a number of landmark cases and received a number of honors, including the Antitrust Lawyer of the Year Award awarded by CLA's Antitrust and Unfair Competition Law Section.

Colleen Huschke is a Deputy District Attorney in Consumer Protection in the San Diego District Attorney's Office. Colleen specializes in civil enforcement of consumer protection laws. Prior to joining the San Diego DA's office in 2016, she practiced civil litigation at Paul Hastings, where her practice focused on complex matters involving allegations of corporate wrongdoing, such as securities fraud, accounting improprieties, and failure to disclose material information.

I will now turn it over to Shana for her presentation on federal antitrust developments.

III. PANELIST PROFESSOR SHANA WALLACE'S PRESENTATION ON DEVELOPMENTS IN SUBSTANTIVE FEDERAL ANTITRUST LAW

MS. WALLACE: Thank you, Malinda, and also thank you to CLA for hosting this and inviting me. In addition to those that you've just heard from now, I just wanted to say thank you to the organizers including Rob McNary, Victoria Loeffler, and Elizabeth Pritzker, who are making this all happen. It's a pleasure to be back again this year.

So if you're a member of the antitrust bar, you know that there's just too much that's happened this year than can be covered in our update. My approach is to try and choose some cases that I think have contributed something interesting to the antitrust literature or litigation practice this year. I will highlight a significant Section 2, Section 1 (civil and criminal), and a Section 7 merger matter, and see if there's some sort of theme we could pick out here.

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A. SECTION 7-COMCAST V. VIAMEDIA

I wanted to start with Comcast v. Viamedia.² This was a case out of the Seventh Circuit.

The Seventh Circuit had reversed a district court decision, which dismissed a refusal-to-deal claim at the motion to dismiss stage, and granted summary judgment on a tying claim.

Comcast sought certiorari and after we had our GSI update last year, the Supreme Court actually issued its Call for the Views of the Solicitor General in December. That brief didn't come in for a while—there was an administration changeover—but eventually DOJ weighed in and counseled not to grant certiorari on the basis that the Seventh Circuit's fact-bound decision had correctly applied precedent.³ Interestingly, that precedent in large part featured Aspen Skiing,⁴ which has been sparingly relied upon in the lower courts after the Supreme Court, while not overruling Aspen Skiing, had indicated it should be considered "at or near the outer boundary" of Section 2.⁵

1. SUMMARY OF FACTS

Before I try to connect this case up to what I think could be some potentially interesting takeaways and maybe some follow-on litigation, I want to briefly outline the facts as they're a little bit complicated. The market actually involves competition at several levels, as described below,⁶ and the alleged anticompetitive conduct was effective at eliminating two of those levels of competition.

Comcast is a multichannel video programming distributor that offers cable services. Comcast also had a Division called Comcast Spotlight, which offered advertising services. First, you have some competition among Comcast and its two cable rivals in the geographic markets at issue here, RCN and WOW! Let's use Chicago as our particular market of focus. That level of competition thus involved competition in multichannel video programming—or cable TV—market.

Second, all cable providers use ad representation ("ad rep") services to help place and distribute advertising in their programming. Comcast, as mentioned, self-provisioned that service through Comcast Spotlight. RCN and WOW!, rather than using Comcast (their cable competitor) for services to market and sell advertising, used Viamedia, an outside company that provided ad rep services. Thus there was also competition between Viamedia and Comcast in the ad rep services market.

Finally, there was also competition among the cable providers for local advertising revenue, as distinguished from national and regional advertising. A substantial portion of cable advertising is regional or national in character and is placed through "interconnects"—cooperative ventures that were jointly established by cable companies to distribute national and regional advertising, but which are now controlled by Comcast. The remaining advertising spots, however, are sold to local businesses, and the cable companies will compete with one another in their pricing and placement of local ads.

Now Comcast, as we are probably familiar, over the last 20 years or so, has acquired hundreds and hundreds of local cable companies and in so doing, has taken control of these formerly cooperative interconnects. After doing that for a while, Comcast turned to RCN and WOW! and Viamedia and basically said, "If you want access to the interconnects and to national and regional advertising revenue, then you can't use Viamedia anymore. You have to essentially hire Comcast." RCN and WOW! held out for about a year, to a loss of millions of dollars (and Comcast lost millions of dollars in the process too), before they eventually gave in.

With Comcast now managing all of its cable competitors' advertising, competition was affected in the following ways. First, competition for local advertising disappeared because Comcast became the only cable company marketing local advertising spots. Second, there is obviously no more competition for ad rep services with the

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disappearance of Viamedia. And third, competition for cable services will be lessened because Comcast now controls and manages all of its competitors' advertising inventory, along with any competitively sensitive business information that would come with that, and the ability to profit off of its competitors' ad sales. So those are the competitive dynamics that fed into the case.

2. SUMMARY OF ISSUES

Having a refusal-to-deal claim as part of this case was an...