ROUNDUP OF 2016 FEDERAL ANTITRUST AND PRIVACY COURT DECISIONS

By Thomas N. Dahdouh¹

2016 was marked by several significant defense victories in conduct cases—particularly in the realm of Sherman Act Section 2 monopolization cases. At the same time, the government’s winning streak in merger challenges continued unabated, although two of those wins required a trip to the appellate court. And for the second time in twenty years, the FTC was able to successfully block the merger of Office Depot and Staples. On the privacy front, the FTC issued an important decision in LabMD, and fallout continues from the Supreme Court’s decision in Spokeo. Below I describe the cases and offer some commentary on the opinions.

I. MARKET POWER DETERMINATIONS IN "TWO-SIDED" PRODUCT MARKETS: UNITED STATES V. AMERICAN EXPRESS CO.²

In 2010, the DOJ filed complaints against Visa, MasterCard, and American Express over rules they applied to their merchants.³ Visa and Mastercard settled with the DOJ; American Express took the matter to trial. At bottom, the American Express rules prohibited merchants from steering consumers to use non-American Express cards. The rules prevented merchants from offering incentives to use rival cards, indicating preference, and disclosing merchant fees to consumers. The DOJ claimed that the credit card companies’ rules effectively blocked merchants from rewarding lower-cost competitors with increased volume.⁴ Now, it should be noted that the DOJ did not challenge the rule on mischaracterization of American Express fees or the rule barring fees on Amex transactions. It should also be noted that the lower court had analyzed the credit card rules as vertical restraints under Section 1’s rule of reason , but also viewed these restraints as akin to Section 2 exclusionary practices because they hinder interbrand competition.⁵ The lower court found for the government.