1. McGuireWoods | 1
CONFIDENTIAL
1
Hot Topics in
Antitrust
Compliance and
Enforcement
(US and the EU)

2. McGuireWoods | 2
CONFIDENTIAL
Presenters
Matthew Hall
Solicitor (England & Wales/Ireland)
Brussels
+32 2 629 4234
mhall@mcguirewoods.com
Bethany Gayle Lukitsch
Richmond
804.775.4711
blukitsch@mcguirewoods.com

3. McGuireWoods | 3
CONFIDENTIAL
Agenda
• Beyond the Smoke-Filled Room (EU)
• Price Signaling (US)
• Distribution and Online Selling (EU)
• Resale Price Maintenance (US)
• Antitrust Liability for Third Parties (EU)
• Class Action Litigation (US)
• Increased Risk of Private Litigation (EU)
• Brexit and Antitrust/Competition Law

4. McGuireWoods | 4
CONFIDENTIAL
Beyond the Smoke-Filled Room (EU)
• Recent investigations have shown authorities push the
limits of antitrust in the EU
• “Cartel” focus now goes beyond the “smoke-filled room”
and includes:
- pure information exchange
- collusion on different fora
- “unilateral” conduct, e.g. signalling
- collusion on non-price parameters
- facilitation
These are “next generation cartels”

5. McGuireWoods | 5
CONFIDENTIAL
Beyond the Smoke-Filled Room (EU)
European Court of Justice, Case C-74/14 ‘Eturas’ UAB and
Others, 21 January 2016:
• Information exchange over an e-commerce platform
(administrator messages)
• Presumed participation in a concerted practice if aware of the
message
• Unless:
- publicly distanced; or
- reported it to the regulator (whistleblowing); or
- adduced other evidence to rebut
Judgment available at:
http://curia.europa.eu/juris/document/document.jsf?text=&docid=173680&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=7604
56

6. McGuireWoods | 6
CONFIDENTIAL
Beyond the Smoke-Filled Room (EU)
European Commission, Case AT.39850 – Container Shipping,
7 July 2016:
• Regular announcements of intended future increases of prices
• Websites, press, etc.
• Amount of the increase in $/TEU, affected route and date
• 3-5 weeks before date
• Followed by similar announcements
• Sometimes postponed or modified, “possibly aligning them”

7. McGuireWoods | 7
CONFIDENTIAL
Beyond the Smoke-Filled Room (EU)
European Commission, Case AT.39850 – Container Shipping,
7 July 2016:
• Little value for customers
• Does not set out actual price
• “Limited committal value”
• Allows parties to explore intentions and to coordinate
• “May have enabled the parties to ‘test’ … whether they could
reasonably have implemented a price increase”
• “Reduced strategic uncertainty and diminished incentives to
compete”
Commission decision available at: http://ec.europa.eu/competition/antitrust/cases/dec_docs/39850/39850_3377_3.pdf

8. McGuireWoods | 8
CONFIDENTIAL
Beyond the Smoke-Filled Room (EU)
Key issues on pure information exchange:
• Generally looking at private arrangements involving actual or
potential competitors
• Direct or indirect, formal or informal
• No need for bilateral exchange
• Concerns arise where competitively sensitive and no legitimate
purpose
• Not only prices; if has any value in predicting future commercial
behaviour then there is a risk
Does the IE reduce strategic uncertainty around
future commercial policy?

9. McGuireWoods | 9
CONFIDENTIAL
Hot Topics in Price Signaling (US)
What is signaling?
Company’s unilateral statement on competitive topics, likely
to be heard by a competitor, but without an agreement.
Where/How?
Media, analyst meetings, industry conferences, websites,
annual reports, industry publications

10. McGuireWoods | 10
CONFIDENTIAL
Hot Topics in Price Signaling (US)
• U.S. Antitrust Laws prohibit invitations to collude
̶ Sherman Act Section 1 applies only if there’s an illegal
agreement
̶ But Section 5 of the FTC Act prohibits broadly “unfair
methods of competition” including invitations to
collude
• Though unilateral disclosures of pricing or other future
plans are generally permissible (or even encouraged as
beneficial)…some unilateral statements are
problematic to the extent they could be construed as an
invitation to collude and increase the risk that the
government could infer the existence of an agreement

11. McGuireWoods | 11
CONFIDENTIAL
Hot Topics in Price Signaling (US)
In the Matter of Valassis Communications, Inc. (2006)
• In 2006 the FTC settled charges that a producer of
coupon inserts for newspapers in Michigan
communicated “proposed terms of coordination” to its
single competitor
̶ Based on CEO’s statements on a quarterly call with analysts
̶ For example: “[W]e will quote all News America…customers
at the floor price which…will not go below $6 for a full page
[ad] and $3.90 for a half page [ad].”
• The FTC has said that these statements provided
information that wouldn’t ordinarily have been
disclosed and would not have been made “except in
the expectation” that the competitor was listening.

12. McGuireWoods | 12
CONFIDENTIAL
Hot Topics in Price Signaling (US)
In the Matter of U-Haul Int’l, Inc. (2010)
• In 2010, U-Haul settled FTC Act charges stemming
from communications directives given to its sales reps
and statements made by its Chairman on an earnings
call.
̶ U-Haul instructed sales reps to instruct dealers to “tell your
Budget/Penske rep that U-Haul[’s prices are] up and they
should be too.”
̶ U-Haul’s Chairman stated that the company was trying “to
show price leadership” and that Budget shouldn’t “throw the
money away. Price at cost at least.”
• The FTC alleged that U-Haul acted with the specific
intent to “facilitate collusion”

13. McGuireWoods | 13
CONFIDENTIAL
Hot Topics in Price Signaling (US)
In re Delta/AirTran Baggage Fee Antitrust Litig. (2010)
• Plaintiffs alleged that the airlines used earnings calls
and industry conferences to enter into a conspiracy that
led to the imposition of first-bag fee on checked bags
and capacity reductions.
“We have to do [capacity cuts] in conjunction with the other
carriers because certainly the capacity cuts that we can do on
our won, while they will help us, will not remedy the industry’s
woes.”
• Motion to dismiss denied. Class certified in July 2016.

14. McGuireWoods | 14
CONFIDENTIAL
14
Hot Topics in Price Signaling
Practice Tips (EU/US)
• Appreciate the risk
• Focus on your company
• Treat Q&A sessions/earnings calls with caution
̶ Don’t disclose specific pricing/capacity information
̶ Don’t speak of industry or market
̶ Don’t speculate on competitors’ actions
• Final decisions vs. future pricing
• Extra care in special situations – previous price wars, history of
public price statements

15. McGuireWoods | 15
CONFIDENTIAL
Hot Topics in Distribution and Online Selling (EU)
Numerous recent examples of regulatory investigations,
including:
• UK: Bathroom Fittings, Commercial Refrigeration, Pride Mobility
Products, Roma, Ping, OTAs, private motor insurance, Amazon
• Germany: Dornbracht, Gardena, Bosch Siemens, Adidas, ASICS,
online car selling, LEGO, Amazon, OTAs
• Germany online RPM: CIBA Vision, Recticel/Metzeler,
Garmin/United Navigation, Alessi, Phonak, Wala
• European Commission: Consumer Electronics, Amazon, Pay TV
Clear enforcement focus on online sales,
including of tangible goods

16. McGuireWoods | 16
CONFIDENTIAL
Hot Topics in Distribution and Online Selling (EU)
European Commission, Sep. 2016:
• “The [preliminary e-commerce sector inquiry] report should be a reason
for companies to review their current distribution contracts and bring
them in line with EU competition rules if they are not.”
• “The preliminary findings of the sector inquiry suggest that a number of
territorial restrictions may raise concerns regarding their compatibility
with EU competition rules.”
Basic EU vertical agreements framework remains in place,
but specific issues with online selling

17. McGuireWoods | 17
CONFIDENTIAL
Hot Topics in Distribution and Online Selling (EU)
Various restrictions of online sales are imposed by suppliers:
• Ban on Internet sales
• Ban on Internet advertising/marketing
• IMAP
• RPM
• Dual pricing
• Use of logo/brand
• Use of price comparison sites
• Use of third party platforms
• Retail MFN/price parity clauses
• Geo-blocking
• Other developing practices?
Fines can be and are imposed for “hardcore” restrictions.
Care is needed with all these restrictions

18. McGuireWoods | 18
CONFIDENTIAL
Hot Topics in Resale Price Maintenance (US)
• Resale price maintenance (“RPM”) — or “vertical price
fixing” — is an agreement between participants at
different levels of the market (e.g., an agreement between
a manufacturer and its retailer or distributor) setting the
prices at which products or services will be resold.
• The concern with RPM is that it could result in higher
prices than would otherwise be charged if
retailers/distributers were free to set prices themselves.
̶ Minimum RPM: agreements that set prices below which goods
cannot be resold.
̶ Maximum RPM: agreements that set prices above which goods
cannot be resold.

19. McGuireWoods | 19
CONFIDENTIAL
Hot Topics in Resale Price Maintenance (US)
Leegin Creative Leather Products v. PSKS, Inc.
• Prior to 2007, minimum RPM agreements were per se illegal
under federal antitrust law.
• In 2007, the Supreme Court held in Leegin that minimum RPM
agreements are subject to a rule of reason analysis, which
involves balancing the anticompetitive harms against the
procompetitive justifications.
• Efforts to repeal Leegin were unsuccessful.

20. McGuireWoods | 20
CONFIDENTIAL
Hot Topics in Resale Price Maintenance (US)
Aftermath of Leegin (State Law)
• States vary in their treatment of RPM following Leegin, for
example:
̶ Maryland – Adopted a law making RPM per se illegal.
̶ California – California law continues to be interpreted to mean that
minimum RPM is per se illegal. The California AG is active in this area.
̶ New York – New York AG has been vocal in stating that RPM should
remain per se illegal and has brought enforcement actions, but New York
courts have disagreed that RPM is per se illegal under New York law.
̶ Illinois – An enforcement action by the Illinois AG suggests that the AG
views RPM as per se illegal, but case law has held that RPM is subject to
the rule of reason under Illinois law.
• Landscape is still unclear – many states have not
addressed the issue and antitrust agencies have not given
much guidance

21. McGuireWoods | 21
CONFIDENTIAL
Hot Topics in Resale Price Maintenance (US)
Unilateral Pricing Policies (UPPs) or “Colgate” Policies
• In United States v. Colgate Co., the Supreme Court held that
the federal antitrust laws do not preclude a manufacturer from
adopting a unilateral policy in which it simply announces its
desired minimum price and declines to deal with any retailers
who refuse to sell the product at or above that minimum price.
• Implementation of such policies is a challenge because there is
a very fine line between what is coerced agreement and what is
unilateral conduct.

22. McGuireWoods | 22
CONFIDENTIAL
Hot Topics in Resale Price Maintenance (US)
Contact Lens Cases
• In 2014 Johnson & Johnson instituted a minimum RPM policy
for all resellers of contact lenses
• Costco sued J&J over the policy in 2015, alleging a violation of
the Leegin rule of reason holding
̶ J&J defended the policy by arguing that it was a UPP permissible
under Colgate
̶ Costco and J&J agreed to settle, after J&J amended the RPM
policy
• Dozens of other class actions were filed and consolidated in an
MDL in Florida
• Maryland AG sued J&J in February 2016

23. McGuireWoods | 23
CONFIDENTIAL
Antitrust Liability for Third Parties (EU)
“When appropriate, [antitrust/competition compliance] may
also mean providing training for … distributors, agents, and
contractors”
Speech by Brent Snyder, Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice, 9
September 2014, available at https://www.justice.gov/atr/file/517796/download
Applies equally in the EU; think carefully before employing
(or acting as) a third party

24. McGuireWoods | 24
CONFIDENTIAL
Antitrust Liability for Third Parties (EU)
A well-known concept but often not (sufficiently) focused on:
• Commercial agents
• Joint ventures/subsidiaries/minority shareholdings
• Employees
Compliance policy needs to cover use of agents, contractors
and other third party service providers

25. McGuireWoods | 25
CONFIDENTIAL
Antitrust Liability for Third Parties (EU)
European Court of Justice, Case C-542/14 VM Remonts and
Others, 21 July 2016:
• Concerns “controlled [third party] service providers”
• Liability may arise in three situations:
̶ employee in disguise
̶ company aware and intended to contribute by its own conduct
̶ company could reasonably have foreseen and was prepared to
accept the risks
Need to consider processes for vetting, selecting and
managing
Judgment available at:
http://curia.europa.eu/juris/document/document.jsf?text=&docid=181950&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=21
67345

26. McGuireWoods | 26
CONFIDENTIAL
Hot Topics in Class Action Litigation (US)
Representative Evidence
Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016)
• Although not an antitrust case, potentially important implications for
antitrust class actions
• A six-Justice majority of the Supreme Court refused to issue a broad
rule against using representative—including statistical—evidence to
establish class-wide injury or damages
• Instead, such evidence must be evaluated on a case-by-case basis,
whether individual or class action
• Key litigation points: no Daubert challenge of statistical evidence
expert; no bifurcation of liability and damages; Tyson lacked
records necessary to calculate individual damages; jury awarded
single verdict of $2.9 million in unpaid wages

27. McGuireWoods | 27
CONFIDENTIAL
Hot Topics in Class Action Litigation (US)
Representative Evidence
Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016)
• Case posed two related damages issues:
̶ How to distribute a lump-sum damages award among differently
situated class members without knowing how jury reached that sum?
̶ How to ensure that uninjured class members do not receive part of the
lump-sum award?
• The Supreme Court declined to address the question of whether, and
to what extent, a class may include uninjured members
• Chief Justice Roberts expressed doubt that the district court could
distribute damages without windfalls to uninjured class members
• The district court approved plaintiffs’ distribution model – found that
the jury instructions and the model proposed by their expert to
prevented uninjured class members from recovering

28. McGuireWoods | 28
CONFIDENTIAL
Hot Topics in Class Action Litigation (US)
International Comity
In re Vitamin C Antitrust Litigation (E.D.N.Y./2d Cir.)
• Litigation spans back more than a decade
• Plaintiff purchasers accused Chinese vitamin C
manufacturers of establishing a price-fixing cartel
• Defendants argued that their coordinated actions were
required by Chinese law
• In 2013, the district court case culminated in a rare
antitrust jury trial and a $147 million (trebled) damages
award

29. McGuireWoods | 29
CONFIDENTIAL
Hot Topics in Class Action Litigation (US)
International Comity
In re Vitamin C Antitrust Litigation (E.D.N.Y./2d Cir.)
• In September 2016, the Second Circuit vacated the district court
judgment, finding that the defendants’ 2008 motion to dismiss
should have been granted on the basis of international comity
• Second Circuit found there to be a “true conflict” between U.S.
law and Chinese law, requiring the district court to abstain from
exercising jurisdiction over the case
• The Chinese government (specifically, its Ministry of
Commerce) appeared as amicus curiae for the first time in
history, both in the district court and the Second Circuit
• Last month the Second Circuit declined rehearing and rehearing
en banc

30. McGuireWoods | 30
CONFIDENTIAL
Hot Topics in Class Action Litigation (US)
Pleading Standards
ATM Access Fee cases (D.D.C./D.C. Cir.)
• Plaintiffs alleged that credit card network rules about ATM fees
suppressed potential price competition by non-bank ATM
operators
• The district court dismissed for lack of standing, finding that the
plaintiffs’ complaint did not show injury or redressability
• In August 2015 the D.C. Circuit vacated the dismissal, finding
that:
̶ the plaintiffs’ theories of harm were susceptible to proof at trial,
and
̶ plaintiffs had adequately alleged concerted action among the
credit card networks and their member banks

31. McGuireWoods | 31
CONFIDENTIAL
Hot Topics in Class Action Litigation (US)
Pleading Standards
ATM Access Fee cases (D.D.C./D.C. Cir.)
• The Supreme Court granted certiorari to consider “[w]hether
allegations that members of a business association agreed to
adhere to the association’s rules and possess governance rights in
the association, without more, are sufficient to plead” a Section 1
conspiracy
• Oral argument was supposed to be held today before the
Supreme Court, but on November 17, the Court dismissed its
writs of certiorari as improvidently granted
• The Court found that the petitioners had relied on a different
argument in their merits briefing than the argument that
persuaded it to grant certiorari
• The cases will now continue in district court

32. McGuireWoods | 32
CONFIDENTIAL
Increased Risk of Private Litigation (EU)
Board-level issue; magnitude of EU private antitrust litigation
risk (and opportunities) is significant and increasing
• Follow-on claims
• Stand-alone claims
• Class actions
• UK fast-track
Currently mainly UK, NL and Germany, but…

33. McGuireWoods | 33
CONFIDENTIAL
Increased Risk of Private Litigation (EU)
EU Antitrust Damages Directive (EU/EEA)
• Implementation by 27 December 2016
• A framework to build on
• Major change for some countries
Huge potential for growth in litigation: “only 25% of EC
antitrust decisions over 2008-2012 followed by civil actions
for damages”

34. McGuireWoods | 34
CONFIDENTIAL
Increased Risk of Private Litigation (EU)
Key points:
• All 28 EU countries covered by the EU Antitrust Damages Directive
• Also applies to national law investigations
• In investigation/allegation situations, consider litigation risk early
• Claims from customers, suppliers, shareholders (?)
• Liability for third parties
• Private antitrust litigation can be used as a “sword” and as a “shield”
• UK leading the way:
̶ fast-track
̶ injunctions
̶ cost caps
̶ class actions
̶ follow-on and stand-alone

35. McGuireWoods | 35
CONFIDENTIAL
Brexit and Antitrust/Competition Law
• Reinforce the message that
antitrust/competition law continues to
apply in the UK
• Be careful having discussions with
competitors on the impact of Brexit
• Consider the post-Brexit options but
take care with joint lobbying
• Review trading agreements
• Consider litigation strategy
• Use legal advisers to ensure privilege
protection
• Consider State aid and EU funding
More information available at: https://www.mcguirewoods.com/Client-
Resources/Alerts/2016/7/Brexit-Preparing-for-the-Unknown.aspx and
https://www.mcguirewoods.com/Client-Resources/Alerts/2016/7/Competition-
Antitrust-Law-Brexit.aspx

36. McGuireWoods | 36
CONFIDENTIAL
Questions or Comments?
www.mcguirewoods.com