BLOGS: Antitrust and Distribution Law Blog

Subscribe to the Antitrust and Distribution Law Blog by Email! (click)

Powered by Blogger
Add to Technorati Favorites

Tuesday, April 19, 2011, 3:50 PM

$35 Million Settlement For Baby Products Antitrust Litigation

So much for Leegin...

As we have mentioned previously in the blog, companies still face real risks with respect to resale price maintenance despite the Supreme Court's 2007 ruling that such policies are not per se illegal. See Leegin Creative Leather Products, Inc. v. PSKS, Inc., 127 S.Ct. 2705 (2007).

A recent $35 million class action settlement involving retail giant Babies R Us is one example of the continued risks. See McDonough v. Toys ‘R’ Us, et al., No. 2:06-cv-0242-AB (E.D. Pa.) and Elliott v. Toys ‘R’ Us, et al., No. 2:09-cv-06151-AB (E.D. Pa.).

In this case plaintiffs alleged that Babies R Us, a dominant retailer of baby products, coerced manufacturers of baby products to adopt resale price maintenance polices that insulated Babies R Us from price competition -- particularly internet retailers. Babies R Us allegedly threatened not to carry the manufacturer's products unless the manufacturers agreed to prevent internet retailers from discounting their products.

The court granted plaintiff's motion to certify the class in July 2009. The court recognized that vertical price restraints are analyzed under the rule of reason, under Leegin, but the court found that plaintiffs could prove their case under the rule of reason because the RPM policies were instituted at the request and direction of a dominant retailer -- rather than as a means for the manufacturers to more effectively compete against each other.

A $35 million settlement agreement was announced in January 2011.

There seem to be two big lessons from this case: (1) RPM policies need to come from the top down -- not from the bottom up; and (2) beware of email communications between manufacturers and retailers.

Make sure you follow your antitrust attorney's advice about the correct way to implement a RPM polices consistent with the Supreme Court's Colgate decision.

Black Friday For Online Poker?

American Lawyer reports that federal prosectures have inducted 11 people linked to some of the world's largest Web-based poker operations, such as PokerStars, Full Tilt Poker, and Absolute Poker. Forbes reports that the online poker industry generated $30 billion in betting per year with $1.4 billion in revenue.

The crackdown on online poker began when Congress enacted the Unlawful Internet Gambling Enforcement Act in 2006. And in 2009, federal prosecutors in New York seized $34 million in bank accounts associated with popular online poker sites.

Although this blog focuses on antitrust and distribution law, we have occassionally reported on these developments in the online poker industry. For more information about Womble Carlyle's Gaming Law Team, click here.

Websites Report FTC Crack Down On Advertisements That Look Like Fake News Stories While Linking To Advertisements That Look Like Fake News Stories

Fox News reports that the FTC is cracking down on websites falsely advertising acai berry weight-loss pills. The FTC says the websites are deceiving consumers by emulating real news organizations.

If you have not seen these ads, they look like investigative reporting and often contain tantalizing headlines such as "The HCA Diet Exposed: Miracle Diet or Scam" or "Acai Berry Diet UNCOVERED." For an example, click here.

Dow Jones has a similar story.

The funny thing about the Fox News story is that many of the advertisements on the Fox News website are written in a way that suggests they are news stories, instead of advertisements. For example, the headlines for the advertisements on the Fox News article read: "Is it a scam? We investigated work at home jobs and what we found may shock you!" and "Mom discovers $9 car insurance trick. Auto insurers are scared you will learn this too."

Not to be outdone, the Dow Jones article contains paid-advertising links to the very same Acai Berry websites that are being investigated by the FTC.

Tuesday, April 12, 2011, 1:49 PM

Event! Join NC Attorney General Roy Cooper & Womble Carlyle for the CLE Symposium for Top NC Legal Counsel on May 5

Womble Carlyle CLE Symposium for Top NC Legal Counsel
A full-day CLE event for in-house counsel
May 5, 2011 -- 8:30-4:30 p.m.
10 CLE Sessions, Lunch and Keynote Address by North Carolina Attorney General Roy Cooper

On May 5, Womble Carlyle will offer CLE sessions on such topics as:

  • political contributions/lobbying

  • data management

  • economic development

  • crisis/catastrophic event planning

  • employee defection/personnel departures

  • outsourcing agreements

  • intellectual property minefields

  • legal project management

  • the China market

  • ‘green’ strategies

Event information

Location: Proximity Hotel
704 Green Valley Road
Greensboro, NC 27408
(800) 379-8200
Reference this event when booking overnight stay to receive special rate.

RSVP: There is no fee to attend but seating is limited.
Please RSVP by Friday, April 22nd, using one of the following methods:
phone: (336) 433-5699

Click here for information on the ten panels that are being offered to top legal counsel in North Carolina.

Register today!

back to top