Articles Posted in Antitrust Litigation

Protein Bars, Market Definition and Injunctions

January 26, 2026 | Bona Law PC

As an avid runner, I am always looking for the perfect protein bar. A great protein bar must find the balance between taste and texture on the one hand and nutritional value and low-caloric content on the other. Usually, a certain amount of fat is needed for a savory taste and smooth texture, but that also often increases the bar’s calorie count.

So, it was interesting to discover an antitrust case involving this particular dilemma. The case was Own Your Hunger LLC, Lighten Up Foods, and Defiant Foods LLC vs. Linus Technology, Inc., Epogee LLC, and Peter Rahal. The lawsuit was filed in the United States District Court for the Southern District of New York in June 2025 by three low-calorie food producers that use esterified propoxylated glycerol (“EPG”), a patented fat replacement vegetable-based ingredient that that reduces calories by 92% compared to an equal amount of ordinary animal fat ingredients. EPG is produced only by a company named Epogee, because it holds the exclusive patent for EPG. The three food-producer plaintiffs make and distribute nut butter spreads, sauces and chocolates, respectively.

The defendant is Linus Technology operating under the name David Protein, which produces and distributes protein bars, marketed under the name David Bars, which also contain EPG. On May 29, 2025, David Protein acquired Epogee. After being acquired, Epogee (now part of David Protein) notified the three plaintiffs that it would no longer accept new orders for EPG.

The plaintiffs sued under the Sherman Act, Clayton Act and New York State’s antitrust statute, The Donnelly Act, and sought a temporary restraining order and a preliminary injunction. They claimed the defendants violated those statutes by arranging for the acquisition of Epogee and using their control over EPG to create an artificial monopoly. Specifically, they claimed that Epogee maintained a reliable EPG supply for all qualified food manufacturers before the corporate transition, and that after David Protein acquired it, Epogee advised the plaintiffs that it would no longer fulfill new orders for EPG. Moreover, plaintiffs alleged that Epogee stockpiled EPG to ensure that plaintiffs had no access to EPG. Defendants argued that plaintiffs are solely responsible for their predicament because they failed to secure long-term supply contracts, unlike other Epogee customers who still receive supply.

Plaintiffs asked for a temporary restraining order and a preliminary injunction to stop the defendants from, among other things, limiting EPG access to its pre-existing customers, maintaining artificial supply shortages, creating artificial scarcity of EPG through inventory manipulation and concealing information about EPG availability.

The applicable antitrust statutes typically require the plaintiffs to define the relevant product and geographic markets in which the products compete, along with the alleged restraint of trade.

Courts generally define the relevant market as all products reasonably interchangeable by consumers for the same purposes. Interchangeability is the cross-elasticity of demand between the product itself and substitutes for it. Two products are reasonably interchangeable where there is cross-elasticity of demand – where consumers would respond to a slight increase in in the price of one product by substituting for the other.

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New Antitrust Cases and Statements of Interests About Algorithmic Collusion

June 9, 2024 | Bona Law PC

Author: Luis Blanquez

We recently wrote about the Federal Trade Commission’s blog post explaining how relying on a common algorithm to determine your pricing decisions might violate Section 1 of the Sherman Act.

The FTC has Algorithmic Price-Fixing in its Antitrust Crosshairs

It was just a matter of time until the first cases would hit the courts. That’s why during the last couple of years, we’ve seen four main federal antitrust cases alleging that algorithmic pricing might violate the antitrust laws. In three of them, the antitrust agencies also filed Statements of Interest (SOI), outlining the agencies’ opinion about what the legal principles applicable to claims of algorithmic price fixing should be.

Realpage, Inc. Software Antitrust Litigation

This multidistrict litigation in the Middle District of Tennessee involves unlawful price-fixing schemes against multifamily housing developers and managers, and student housing developers and managers, both organized by RealPage––a software algorithm company. RealPage developed software to collect property owners’ and managers’ data, used for pricing and inventory strategies, that later shared with its clients.

In January 2024, the Court: (i) denied the motion to dismiss the multifamily housing cases––the renters plausibly alleged an antitrust violation, but (ii) rejected claims alleging a horizontal price-fixing conspiracy among landlords, which would have been per se illegal. The Court, however, concluded that those same landlords vertically conspired with RealPage. The Court also dismissed the student housing plaintiffs’ complaint.

In parallel, the DOJ opened an investigation and filed a SOI. Among other things, the DOJ highlighted:

The fact that today software algorithms process more information more rapidly than humans and can be employed to fix prices. The technical capabilities of software can enhance competitors’ ability to optimize cartel gains, monitor real-time deviations, and minimize incentives to cheat.
Section 1 prohibits competitors from fixing prices by knowingly sharing their competitive information with, and then relying on pricing decisions from, a common human pricing agent who competitors know analyzes information from multiple competitors. The same prohibition applies where the common pricing agent is a common software algorithm.
Factual allegations in both complaints point to evidence of an invitation to act in concert followed by acceptance—evidence that is sufficient to plead concerted action. Among other things, RealPage required each user to submit real-time pricing and supply data to it, and RealPage’s marketing materials allegedly “touted” its use of “non-public data from other RealPage clients,” enabling them to “raise rents in concert”; as well as the algorithms’ ability to “facilitate collaboration among operations” and “track your competition’s rent with precision.”
The complaints then allege that the landlords “gave their adherence to the scheme and participated in it.” In particular, the landlords allegedly sent RealPage the non-public and competitively sensitive data (as RealPage proposed), and overwhelmingly priced their units in line with RealPage’s suggested prices (80-90%). Indeed, the complaints also contain ample allegations on how RealPage directly constrained the “deviations” from its suggested prices, including by enforcing and monitoring compliance with those prices, so the landlords effectively delegated aspects of their pricing decisions.
Relatedly, the multifamily plaintiffs allege that the landlords jointly delegated aspects of decision making on prices to RealPage. They allege that, by using RealPage’s pricing algorithms, each client defendant “agreed” to a common plan that involved “delegat[ing] their rental price and supply decisions to a common decision maker, RealPage.” Indeed, RealPage allegedly touted this feature—stating in a press release that it gives clients “the ability to ‘outsource daily pricing and ongoing revenue oversight,’” such that RealPage could “set prices” as though it “own[ed]” the clients’ properties “ourselves.’”
Jointly delegating any part of the decision-making process reflects concerted action. That the delegation is to a software algorithm, rather than a human, makes no difference to the legal analysis. Just as “surrender[ing] freedom of action. . . and agree[ing] to abide by the will of the association” can be enough for concerted action, so can be relying on a joint algorithm that generates prices based on shared competitively sensitive data.
The “per se” rule prohibiting price fixing applies to price fixing using algorithms. And the analysis is no different simply because a software algorithm is involved. The alleged scheme meets the legal criteria for “per se” unlawful price fixing. Although not every use of an algorithm to set price qualifies as a per se violation of Section 1 of the Sherman Act, it is per se unlawful when, as alleged here, competitors knowingly combine their sensitive, nonpublic pricing and supply information in an algorithm that they rely upon in making pricing decisions, with the knowledge and expectation that other competitors will do the same.

The District of Columbia Attorney General has also filed a similar action in the Superior Court of D.C., alleging violations of the D.C. Antitrust Act.

Duffy v. Yardi Systems, Inc.

In this case from the US District Court for the Western District of Washington, plaintiffs allege that competing landlords violated Section 1 of the Sherman Act, by unlawfully agreeing “to use Yardi’s pricing algorithms to artificially inflate” multifamily rental prices.

The Agencies also filed a SOI to explain the two legal principles applicable to claims of algorithmic price fixing. First, a competitors’ agreement to use an algorithm software with knowledge that other competitors are doing the same thing constitutes evidence of a contract, combination or conspiracy that may violate Section 1. Second, the fact that defendants deviate from the pricing algorithm’s recommendations––for instance, by just setting initial starting prices or by starting with prices lower than the ones the algorithm recommends—is not enough to get them “off the hook” for illegal price fixing (even if no information is directly shared between the parties).

The Agencies SOI’s focus was on the second point: Defendants retaining pricing discretion. The Agencies stress in the SOI that it is “per se” illegal for competing landlords to jointly delegate key aspects of their pricing to a common algorithm, even if the landlords retain some authority to deviate from the algorithm’s recommendations. Although full adherence to a price-fixing scheme may render it more effective, the effectiveness of the scheme is not a requirement for “per se” illegality. Consistent with black letter conspiracy law, the violation is the agreement, and unsuccessful price-fixing agreements are also per se illegal.

Casino-Hotel Operators Cases

Two new algorithmic pricing antitrust cases are also ongoing against casino hotel operators in Las Vegas and Atlantic City.

In Cornish-Adebiyi v. Caesar’s Entertainment, Inc., a case pending in the U.S. District Court for the District of New Jersey, plaintiffs allege a conspiracy against eight Atlantic City casino-hotel operators, and the Cendyn Group LLC, which is a provider of the algorithmic software platform, called “Rainmaker,” used to fix, raise, and stabilize the prices of casino-hotel guest rooms in Atlantic City. Rainmaker allegedly gathers real-time pricing and occupancy data to generate “optimal” room rates for each participating casino hotel, which the software then recommends to each casino hotel.

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Is it Possible to Win a Robinson Patman Act Case Now?

May 29, 2024 | Bona Law PC

Author: Steven Cernak

Some of us have been asserting for years that Robinson Patman, the federal price-discrimination antitrust law, is merely “forgotten but not gone.” That is, while there has been no FTC enforcement in decades, a few private lawsuits are filed every year and careful potential defendants still follow Robison Patman compliance programs. Recent statements suggesting a potential FTC revival seemed to jog the memories of practitioners that Robinson Patman remains on the books. Now, a lower court judgment by a dedicated group of plaintiffs and their lawyer provides more evidence that the law is anything but gone.

Clear Eyed Look at Robinson Patman

Very generally, Robinson Patman prohibits a seller of goods from offering lower prices or greater promotional allowances to one purchaser than to another competing purchaser. As we explain in other posts, there are many elements and defenses that make is difficult for a plaintiff to win. Court interpretations of those elements and defenses for the last few decades have only increased that difficulty. Still, one recent case shows that victory at the trial court level is possible.

In L.A. International Corp. v. Prestige Consumer Healthcare, Inc., Defendants manufacture and distribute Clear Eyes eye drops. The suit alleged that Defendants sold Clear Eyes at a lower price and with greater promotional allowances to Costco (specifically, Costco Business Centers that resell to retailers) than to Plaintiffs. Plaintiffs are several distributors that also buy and resell such products to retailers like local convenience stores. Interestingly, some of these same plaintiffs, and their counsel, have been involved in a long-running series of Robinson Patman cases alleging that the manufacturer of 5-Hour Energy also discriminated in favor of Costco.

Here, the case was filed in August 2018 and went to trial in December 2023. A jury found that Defendants had violated Section 2(a) (and a California unfair competition law) by offering a lower net price to Costco than to most of the Plaintiffs. The jury allocated about $700,000 in actual damages among several of the Plaintiffs. In May 2024, the judge found that Defendants also had violated Section 2(d) by offering greater promotional allowances to Costco and issued an injunction requiring Defendants to offer identical prices and proportionally equal promotional allowances to Plaintiffs going forward.

At the same time as his injunction ruling, the judge rejected Defendants’ arguments about several problems with the jury instructions. Specifically, the judge refused to reconsider the instructions laying out the overall standard that Plaintiffs had to meet as well as how a potential “functional discount” claim was to be evaluated. Unlike the lower court and Ninth Circuit in the 5-Hour Energy case, this judge seemed to have no problem supporting the jury’s verdict that most of the Plaintiffs actually competed with the Costco Business Centers.

So, in many ways, this case is unremarkable. A plaintiff presented evidence to a jury that, following a judge’s instructions mostly copied from ABA Model Instructions, found a Robinson Patman violation and set damages. The judge then followed that verdict and found another violation and provided injunctive relief. Yet, such cases and certainly such plaintiff verdicts are rare today. So, what are the takeaways for other potential plaintiffs or defendants?

Takeaways

First, maybe even more than all antitrust litigation, Robinson Patman litigation is time-consuming and fact intensive. The case took over 5 years to get to trial and the possibility of appeals still exists. The Plaintiffs are located in different parts of California plus Texas and New York. Each Plaintiff had to show at the local level that it competed with a specific Costco Business Center and that such competition was harmed by Defendants’ practices. Given the various elements and defenses and courts’ interpretations of Robinson Patman, no short cuts were possible.

Second, as we explained in prior posts and elsewhere, few courts have seen such a case in the last thirty years. Going back a couple decades further, the courts that did face such cases attempted to interpret Robinson Patman consistently with the rest of the antitrust laws under the then-new Chicago-School focus on competition and consumer welfare. As a result, there are plenty of defendant-friendly Robinson-Patman rulings, opinions, and dicta available.

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$1.8 Billion Antitrust Verdict Against Realtor Groups Provides Lessons for Brokerages, Realtor Associations, and Multiple Listing Services Nationwide

November 7, 2023 | Bona Law PC

Authors: Molly Donovan & Aaron Gott

A Missouri jury awarded a class of home sellers $1.8 billion dollars in finding that the National Association of Realtors (“NAR”) and some of the nation’s largest real estate brokerages “conspired to require home sellers to pay the broker representing the buyer of their homes in violation of federal antitrust law.”

At the center of the case was NAR’s rule requiring sellers to pay a non-negotiable commission awarded to the buyer’s broker at a transaction’s closing (“Mandatory Payment Rule”). The brokerages then compelled their agents to belong to the NAR and adhere to the NAR’s rules. The resulting lack of competition for buy-side commissions caused inflated prices that were forced upon home sellers. Every brokerage in the industry understood that every other brokerage was behaving in this same way.

In addition to inflated buy-side rates, the scheme was reinforced by other anticompetitive practices, including “steering”—where buyer brokers “steer” their clients toward homes attached to a non-negotiable buy-side commission—as opposed to homes for-sale-by owner where an automatic buy-side commission may not be offered.

Another resulting problem is that small brokerages looking to attract buyers have a tough time competing. Most importantly, there’s no opportunity to compete on price because the local NAR groups have locked prices in with the following of the major brokerages. Because of that rule—and other NAR rules—innovations with respect to process or pricing have been very difficult to achieve.

So, why has the scheme worked if it’s so bad for consumers and innovators? Because the NAR has near-exclusive control over the MLS or multiple-listing service.

The MLS is an essential database for listing homes because most homes sold in the United States are found there. If a broker does not belong to NAR and/or does not follow the NAR’s rules, it cannot access the MLS and, therefore, cannot effectively compete for selling or buying clients.

This is of antitrust concern in its own right. And certainly, the Mandatory Payment Rule is not the only rule in the industry that has—or could—draw antitrust scrutiny. Rules against buying/selling homes that are “coming soon,” for example, are also restraints of trade that could be a problem. So are rules that fix any of the terms or conditions of selling or buying a home.

Many predict the entire industry will change as a result of the Missouri verdict, the ongoing competition-law litigations and investigations, and the reality that today, home buyers can do their own legwork to find homes without needing a broker’s access or market knowledge. A buyer broker’s role can sometimes be relegated to accessing lock boxes, providing fill-and-sign access to standard forms, and collecting the check.

So what can a brokerage do now to anticipate the changes and guard against future antitrust concerns? Here is some high-level guidance that brokerages ought to consider:

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McDonald’s & Monopsony: The Seventh Circuit Vacates District Court’s Dismissal of a Per Se No-Poach Theory

September 14, 2023 | Bona Law PC

Author: Molly Donovan

In an opinion written by Judge Easterbrook, and a major win for per se no-poach claims, the Seventh Circuit has vacated a district court’s dismissal of a Sherman Act, Section 1 no-poach claim against McDonald’s. The case involves clauses that McDonald’s formerly included, as standard language, in its franchise agreements that “barred one franchise from soliciting another’s employee.” The plaintiff claims that she was unreasonably restrained from switching franchises to take a higher-paid job because of the anticompetitive provisions.

The at-issue contract language was broad, covering solicitation and hiring and not ending until six-months after employment ended: “During the term of this Franchise, Franchisee shall not employ or seek to employ any person who is at the time employed by McDonald’s, any of its subsidiaries, or by any person who is at the time operating a McDonald’s restaurant or otherwise induce, directly or indirectly, such person to leave such employment. This paragraph [] shall not be violated if such person has left the employ of any of the foregoing parties for a period in excess of six (6) months.”

The restraint had teeth: an initial violation gave McDonald’s the right not to consent to a transfer of the franchise. Additional breaches gave McDonald’s the right to terminate the franchise.

And plaintiffs also alleged that the restraint “promote[d] collusion among franchisees, because each knew the other had signed an agreement with the same provision” – so long as everybody at least tacitly cooperated by not poaching, franchisees could keep wages below-market.

Plaintiff alleged only per se and quick look theories of liability—not rule of reason.

In the district court, the defendants argued that, because the restraint originated with McDonald’s corporate (the parent company), the restraint was merely vertical—and thus, not per se illegal. The district court disagreed: the provisions restrain competition for employees among horizontal competitors notwithstanding that the company at the top of the chain originated the agreement.

But the district court dismissed the per se theory because it found that the alleged restraint was ancillary to the franchise agreements. The analysis was curious because, although the court said that a restraint is ancillary only if it promotes enterprise and productivity, the court found it sufficient that the franchise agreements, taken as a whole, promoted enterprise because each franchise agreement increased output (more customers served). The district court did not examine whether the restraint itself promoted competition.

The Seventh Circuit held that was an error. While an “agreement among competitors is not naked if it is ancillary to the success of a cooperative venture,” increased output does not “justif[y] detriments to workers.” The antitrust laws are concerned with monopsonies (in this case, the cartelized cost of labor).

And simply because a franchise agreement increases output, the no-poach agreement itself may not promote output or any another pro-competitive goal. The question is: “what was the no-poach clause doing?” To be deemed ancillary, the no-poach itself must serve a procompetitive objective (such as preventing freeriding on a franchisee’s investment in worker training). The court suggested that an agreement’s duration and scope also may be relevant to resolving that question.

In any event, the Seventh Circuit ruled the answer to that inquiry could not be resolved on the pleadings because economic analysis is required. And “[m]ore than that: the classification of a restraint as ancillary is a defense, and the complaint need not anticipate and plead around defenses.”

In the end, the Seventh Circuit vacated the district court’s decision and remanded for its further consideration in light of the appellate review.

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Ten Ways to Tell Whether You Have an Antitrust Claim

June 3, 2023 | Bona Law PC

Author: Jarod Bona

Law school exams are all about issue spotting. Sure, after you spot the issue, you must describe the elements and apply them correctly. But the important skill is, in fact, issue spotting. In the real world, you can look up a claim’s elements; in fact, you should do that anyway because the law can change (see, e.g., Leegin and resale price maintenance).

And outside of a law-school hypothetical, it usually isn’t that difficult to apply the law to the facts. Of course, what makes antitrust law interesting is that it evolves over time and its application to different circumstances often challenges your thinking. Sometimes, you may even want to ask your favorite economist for some help.

Anyway, if you aren’t an antitrust lawyer, it probably doesn’t make sense for you to advance deep into the learning curve to become an expert in antitrust and competition doctrine. It might be fun, but it is a big commitment to get to where you would need to be, so you should consider devoting your extra time instead to Bitcoin or deadlifting.

But you should learn enough about antitrust so you can spot the issues. This is important because you don’t want your company to violate the antitrust laws, which could lead to jail time, huge damage awards, and major costs and distractions. And as antitrust lawyers, we often counsel from this defensive position.

It is fun, however, to play antitrust from the offensive side of the ball. That is, you can utilize the antitrust laws to help your business. To do that, you need a rudimentary understanding of antitrust issues, so you know when to call us. Bona Law represents both plaintiffs and defendants in antitrust litigation of all sorts.

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Antitrust for Kids: Everyone’s an Expert (So Don’t Overuse Daubert)

June 2, 2023 | Bona Law PC

Author: Molly Donovan

Olive (named for the fruit) is in eighth grade. She’s a very good inventor. For the science fair, Olive developed a simple device that allows students, each morning, to pre-select lunch items, ensuring each student’s preference is available in the lunch line later that day. It’s a simple-looking machine that the school ended up placing in the lobby for actual student use.

And the kids loved it. Everyone pre-selected lunch. Why not?

Here’s the trouble: Olive was secretly in cohoots with a lunch vendor (her aunt Clementine—also named for the fruit) so that students could only pre-select items made in Clementine’s own kitchen! The device simply did not present other vendors’ items as options! The result: Clementine’s sales soared, her prices went unchecked and kids didn’t have the pre-selection choices they should have had.

You’d think they’d notice right away, but it took some time for the kids to catch on. Once it did become clear that pizza was missing and Clementine’s calzones dominated, the kids were mad.

Everybody complained to the principal: you’ve got Olive in exclusive control of this device that everybody wants to use, and she’s allegedly abused that power to grow her family’s own catering business.

Shameful, no?

So, here’s what happened. The principal (a former antitrust lawyer from an unnamed major firm) decided to use the problem in an educational exercise. She felt there was no serious dispute that, under the circumstances, Clementine should return the ill-gotten gains as a donation to the school. The only question: what amount?

EXPERTS! The principal—and she thought this was very smart—would have parent-economists make presentations at a school assembly: one team would argue, based on fancy charts and graphs, that the amount owed is big; the other team would argue, with equally fancy visuals, that the amount owed is nothing at all, or at best, pretty small. Then the kids would vote. Good idea, but…

Was there a hiccup? Yes. The principal made the mistake of letting the lawyer-parents get involved. For the assembly, the lawyers developed Daubert-style challenges—why one expert wasn’t sufficiently qualified or didn’t do a good enough job with her analysis to be allowed to present at all. Those challenges were supposed to last 10 minutes or so, with the remaining 20 minutes reserved for judging the analyses on their merits: Who is most convincing? What number should be THE number? That’s the important part, right?

But somehow the challenges—really meant to weed out only the unverifiable stuff—got completely out of hand. I mean, could someone with a PhD in economics really be unfit to talk about the dynamics of supply and demand in a lunch line? But the lawyer-parents ran with it.

So much time and energy was spent on the challenges, the principal had to bring it to a stop: no more Daubert. Everyone’s an expert. Let’s move to the important question at hand.

Moral of the Story: It was brought to us by Judge Gonzalez Rogers in the District Court for the Northern District of California in the In re Apple iPhone Antitrust Litigation. The court admonished the lawyers there for giving into the oft felt urge to overuse Daubert:

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Antitrust for Kids: If You Write A Bad Note, Live with It: Document Preservation in Antitrust Cases

April 11, 2023 | Bona Law PC

Author: Molly Donovan

Gordon was recognized as dominant in the 5th grade class. He had the greatest share of friends and ran the fastest. He was the smartest and won the most academic awards at the end of each school year. He was always chosen as the lead in every school play.

But one day, Gordon’s teacher accused him of cheating. Rather than playing fair, Gordon had excluded a new student, Samuel, from the playground races at school. Samuel showed real promise in track and field and Gordon hated to admit that he felt a bit threatened. Although he knew it was wrong, Gordon wrote a number of notes to classmates telling them to exclude Samuel from all playground races. His teacher, of course, found one of those notes.

That was bad enough, but Gordon went and made everything worse. For use during an upcoming parent-teacher conference, Gordon’s teacher instructed him to collect and keep all the notes he had written to friends demanding that they refuse to race against Samuel. Instead, Gordon shredded the notes and threw away the scraps! Then—and this is the real clincher—Gordon told his teacher, falsely, that he had preserved the notes as instructed.

Obviously, this all came out at the conference. There, the teacher argued that Gordon should be punished for throwing away the notes and lying about their being preserved. Gordon argued that punishment was not necessary—his conduct was not that bad since at least half the notes were to friends who had nothing to do with the boycott of Samuel anyway.

As you might expect, Gordon’s parents agreed with the teacher. The result: Gordon had to give back a significant portion of his monthly allowance and donate it to the school, and further punishment—publicly unknown—would wait until Gordon got home. Eeeek!

Could Gordon continue his dominance after all that? You’ll have to wait for a future Antitrust for Kids to find out.

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What are the Available Exemptions to Antitrust Liability?

February 10, 2023 | Bona Law PC

Author: Jarod Bona

Congress and the federal courts have—over time—created several exemptions or immunities to antitrust liability.

The US Supreme Court in National Society of Professional Engineers v. United States explained that “The Sherman Act reflects a legislative judgment that ultimately competition will produce not only lower prices, but also better goods and services.” 435 U.S. 679, 695 (1978). And “[t]he heart of our national economy long has been faith in the value of competition.” Id.

National Society of Professional Engineers holds, effectively, that those that think that they should not be subject to competition—for whatever reason—don’t get a free pass.

But there are several situations that do create limited exemptions to federal antitrust liability. Importantly, however, the US Supreme Court has repeatedly emphasized that courts should narrowly interpret these exemptions.

Here are the primary antitrust exemptions created by Congress and the federal courts:

State-Action Immunity. State-action immunity has come up a lot at Bona law. This exemption allows certain state and local government activity to avoid antitrust scrutiny. Lately, the US Supreme Court has narrowed the doctrine, including for state licensing boards that seek its protection when sued under the antitrust laws (North Carolina State Board of Dental Examiners v. Federal Trade Commission). Bona Law also advocates a market-participant exception to state-action immunity, but the courts are split on that issue. We expect that this exemption will continue to narrow over time.

Filed-Rate Doctrine. The filed-rate doctrine is a defense to an antitrust action that is premised on the regulatory rates filed with a federal administrative agency. In many regulated industries (like insurance, energy, shipping, etc.), businesses must, generally, file the rates that they offer to customers with federal agencies. The filed-rate doctrine eliminates antitrust liability for instances in which, to satisfy the antitrust elements, a judge or judge must question or second guess the level of these filed rates (i.e. that they included overcharges resulting from anticompetitive conduct). So a business filing rates with a regulator is not, by itself, sufficient to create an exemption from antitrust liability. There are nuances.

Business of Insurance. The McCarran-Ferguson Act exempts certain acts that are the business of insurance and regulated by one or more states from antitrust scrutiny. You can read more about the McCarran-Ferguson Act and its requirements here.

Baseball. That’s right—there is a baseball exemption to antitrust liability. This is a judge-made doctrine developed long ago. The other sports don’t have an antitrust exemption and the question of whether baseball should have one comes up periodically. If you want to learn more, you should read the five-part series on baseball and antitrust that Luke Hasskamp authored.

Agricultural Cooperatives. The Capper-Volstead Act provides a limited antitrust exemption to farm cooperatives. Under certain circumstances, this Congressional Act allows farmers to pool their output together and increase their bargaining power against buyers of agricultural products. You can read more about this in Aaron Gott’s article on the Capper-Volstead Act. And you can read about production restraints here.

The Noerr-Pennington doctrine. The Noerr-Pennington immunity—named after two US Supreme Court cases—is a limited antitrust exemption for certain actions by groups or individuals when the intent of that activity is to influence government actions. The Noerr-Pennington doctrine can apply to actions that seek to influence legislative, executive, or judicial conduct. There is, however, an important sham exception to Noerr-Pennington immunity that often comes up in litigation.

You can learn more about the Noerr-Pennington doctrine and antitrust liability here.

Statutory and Non-Statutory Labor Exemptions. The statutory labor exemption allows labor unions to organize and bargain collectively in limited circumstances, including requirements that the union act in its legitimate self-interest and that it not combine with non-labor groups. The non-statutory labor exemption arrives from court decisions that further exempt certain activities that make collective bargaining possible, like joint action by employers that is ancillary to the collective bargaining process.

Implied Immunity. Implied immunity occurs in the rare instances in which there is no express antitrust exemption, but the anticompetitive conduct falls into an area of such intense federal regulatory scrutiny that antitrust enforcement must yield to the pervasive federal regulatory scheme.

The typical area where this comes up is with the federal securities laws, which is a good example of pervasive federal regulation. The US Supreme Court case to read for this antitrust exemption is Credit Suisse Securities (USA) LLC v. Billing, from 2007.

Keep in mind that courts do not easily find implied immunity of the antitrust laws—there must be a “clear repugnancy” or “clear incompatibility” between the antitrust laws and the federal regulatory regime. A broad interpretation of this immunity could create massive antitrust loopholes because even a regulator with a heavy hand on an industry may not consider anticompetitive conduct as part of its command and control. And regulation itself creates barriers to entry in a market that is more likely to lead to less competition.

Export Trade Exemptions. A little-known exemption involves export trade by associations of competitors. This antitrust exemption arises primarily from the Webb-Pomerene Act and the Export Trading Company Act. These FTC and DOJ guidelines provide more information about this antitrust exemption.

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Antitrust Group Boycotts: My Competitors are Conspiring Against Me

January 14, 2023 | Bona Law PC

Author: Jarod Bona

Do you feel paranoid? Maybe everyone really is conspiring against you? If they are competitors with each other—that is, if they have a horizontal relationship—they may even be committing a per se antitrust violation.

A group boycott occurs when two or more persons or entities conspire to restrict the ability of someone to compete. This is sometimes called a concerted refusal to deal, which unlike a standard refusal to deal requires, not surprisingly, two or more people or entities. This antitrust claim fits into Section 1 of the Sherman Act, which requires a meeting of the minds, i.e an agreement or conspiracy.

A group boycott can create per se antitrust liability. But the per se rule is applied to group boycotts like it is applied to tying claims, which means only sometimes. By contrast, horizontal price-fixing, market allocation, and bid-rigging claims are almost always per se antitrust violations.

We receive a lot of questions about potential group boycott actions. This is probably the most frustrating type of antitrust conduct to experience as a victim. Companies often feel blocked from competing in their market. They might be the victim of marketplace bullying.

You can also read our Bona Law article on five questions you should ask about possible group boycotts.

Many antitrust violations, like price-fixing, tend to hurt a lot of people a little bit. A price-fixing scheme may increase prices ten percent, for example. Price-fixing victims feel the pain, but it is diffused pain among many. Typically either the government antitrust authorities or plaintiff class-action attorneys have the biggest incentive to pursue these claims.

Perpetrators of group-boycott activity, by contrast, usually direct their action toward one or very few victims. The harm is not diffused; it is concentrated. And it is often against a competitor that is just trying to establish itself in the market. The victim is often a company that seeks to disrupt the market, creating a threat to the established players. This is common. Of course, excluding or limiting competitors from a market may also create diffused harm among customers or sellers for those excluded competitors.

The defendants may act like bullies to try to keep that upstart competitor from gaining traction in the market. Sometimes trade associations lead the anticompetitive charge.

Group boycott activity often occurs when someone new enters a market with a different or better idea or way of doing business. The current competitors—who like things just the way they are—band together to use their joint power to keep the enterprising competitor from succeeding, i.e. stealing their customers and market share.

Sometimes group-boycott claims are further complicated when the established competitors—the bullies—use their relationships with government power to further suppress competition. Indeed, sometimes the competitors actually exercise governmental power.

This is what occurred in the NC Dental v. FTC case (discussed here, and here; our amicus brief is here): A group of dentists on the North Carolina State Board of Dental Examiners engaged in joint conduct, using their government power, to thwart teeth-whitening competition from non-dentists.

This, in my opinion, is the most disgusting of antitrust violations: a group of bullies engaging government power to knock out innovation and competition. And we, at least in the past, have watched the Federal Trade Commission take a pro-active role against such anticompetitive thuggery.

Group Boycotts and ESG

An increasingly prominent example of a group boycott that you should watch for are companies that coordinate their ESG policies such that they exclude competitors that decline to accept these rigid restrictions. You can see how this could develop: A group of companies in an industry decide that they want to win some PR points by announcing ESG policies, but quickly realize that this decision increases their own costs such that they can’t offer products or services that are of competitive quality and price with those in their industry that focus on the consumer. So they coordinate together and try to stop suppliers from dealing with this consumer-friendly company, or engage in other collective tactics to exclude this lower-priced competition. There is a good chance that these actions create antitrust liability for the coordinating ESG companies. And as the FTC recently reiterated, ESG does not create antitrust immunity.

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