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Sep16
Antitrust Liability

The following is not meant to be legal advice.

 

On September 4, 2007, several Courts of Appeal each decided antitrust cases relating to the limits of antitrust liability under Section 2 of the Sherman Act. Price-fixing and bid-rigging have constituted per se violations of the antitrust laws. 

 

In McKenzie-Willamette Hospital v. PeaceHealth, the Ninth Circuit gave a test for when bundled discounts violate Section 2 of the Sherman Act. The Ninth Circuit held that without a finding that a defendant's bundled discount made it impossible for an equally efficient competitor to compete in the market, there was no liability under Section 2.

The facts on PeaceHealth involved the market for primary and secondary acute-care hospital services in Lane County, Oregon. Plaintiff McKenzie owned a hospital that provided primary and secondary acute-care services. McKenzie alleged that PeaceHealth offered insurance companies 35 to 40 percent discounts on its tertiary services if the insurance companies made PeaceHealth their exclusive preferred provider of primary and secondary acute services. McKenzie alleged that this bundled discount was monopolization of the primary and secondary care services market in which McKenzie competed. Defendant PeaceHealth had three hospitals in the area that offered primary and secondary acute-care services, and specialized tertiary-care services that included neonatal and cardiovascular services.

 

In Broadcom v. Qualcomm, the Third Circuit held that a patent holder's deceptive conduct before a private standards-development organization may be against antitrust laws. The Third Circuit ruled that a patent holder's intentionally false promise to license essential proprietary technology is actionable anticompetitive conduct.

 

Broadcom alleged that Qualcomm, monopolized markets for cellular-telephone technology.  Broadcom alleged Qualcomm violated Sections 1 and 2 of the Sherman Act and Sections 3 and 7 of the Clayton Act. The Third Circuit's opinion spoke of the risks associated with deceptive conduct in the private standard-setting process.


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