Eleven consumers sued HP Friday over the company’s requirement that customers of certain of its printers use only HP-branded replacement ink cartridges, said an 80-count antitrust and consumer fraud class action (docket 1:24-cv-00164) in U.S. District Court for Northern Illinois in Chicago. HP required consumers who had bought its printers to use its cartridges, rather than buy ones from competitors, through firmware updates it distributed electronically to all registered owners of certain printers in late 2022 and early 2023, said the complaint. The firmware update “effectively disabled the printer if the user installed a replacement ink cartridge that was not HP-branded,” it said. During the same period, HP raised prices on its print cartridges, the complaint said, and “in effect,” created a “monopoly in the aftermarket for replacement cartridges, permitting it to raise prices without fear of being undercut by competitors.” A full HP-branded replacement ink cartridge set can cost $100 for many models, while competitors’ cartridges “may cost half as much,” it said. Among plaintiffs’ 80 claims are unjust enrichment and violations of numerous state consumer protection laws, the Sherman Act and the Computer Fraud and Abuse Act, the complaint said. They seek an injunction requiring HP to disable the firmware updates that precluded the use of non-HP-branded replacement ink cartridges; compensatory, statutory and punitive damages; prejudgment interest; and attorneys’ fees and legal costs, it said.
The FTC hailed Friday’s order signed by U.S. District Judge Edgardo Ramos for Southern New York in Manhattan granting the agency’s motion for a preliminary injunction that blocks Iqvia’s Propel Media buy (see 2307200024). The FTC “has satisfied its burden of demonstrating that a preliminary injunction of the proposed acquisition is in the public interest,” said Ramos’ order (docket 1:23-cv-06188). The agency also has shown that there’s “a reasonable probability that the proposed acquisition will substantially impair competition in the relevant market and that the equities weigh in favor of injunctive relief,” said the order. The injunction is pending the commission’s administrative proceeding seeking to permanently block the proposed deal. An administrative trial is scheduled to begin Jan. 18. “We are pleased with the federal court’s decision and look forward to continuing to fight to permanently enjoin this anticompetitive deal via the Commission’s administrative proceedings,” said Bureau of Competition Director Henry Liu in a statement Wednesday.
The seven AT&T and Verizon customers seeking to vacate T-Mobile’s 2020 Sprint buy on anticompetitive grounds don’t dispute that their case would have been dismissed for lack of antitrust standing if it had been filed in the 2nd or 11th circuits, said T-Mobile. It filed its reply Friday (docket 1:22-cv-03189) in U.S. District Court for Northern Illinois in Chicago in support of its motion to certify for interlocutory appeal to the 7th Circuit U.S. Court of Appeals the district court’s Nov. 2 denial of its motion to dismiss (see 2311290042). The plaintiffs also don’t dispute that if the district court grants certification and the 7th Circuit reverses, “this case will come to an immediate end, preserving substantial judicial and party resources and shielding nonparties from intrusive discovery,” said the brief. The plaintiffs “fail to identify any case, from any court, granting antitrust standing to consumers who are seeking to challenge the merger of a company with which they transact no business,” it said. As the amicus briefs from the U.S. Chamber of Commerce (see 2312070029) and CTIA (see 2312120052) underscore, this legally and practically significant litigation “presents a textbook case for interlocutory review,” it said. The plaintiffs nevertheless urge the court to deny certification, but they “fundamentally misunderstand the nature of a motion to dismiss,” it said. They also ignore the many cases in which the U.S. Supreme Court, the 7th Circuit and other courts across the country have held that plaintiffs “lack antitrust standing on a motion to dismiss,” it said. There’s “at least room for reasonable debate” whether the plaintiffs “have sufficiently alleged” that T-Mobile/Sprint was “the direct and proximate cause” of alleged injuries to consumers who are supposedly paying higher prices not to T-Mobile, but to AT&T and Verizon, said the reply. “Before the doors of discovery are swung open,” the 7th Circuit “should be afforded the opportunity to definitively resolve that debatable, and highly consequential, question,” it said.
The 5th U.S. Circuit Appeals Court’s Dec. 15 decision in Illumina v. FTC (docket 23-60167) “validates” U.S. District Judge Jacqueline Scott Corley’s July 11 denial of the FTC’s motion for a preliminary injunction to block Microsoft’s Activision Blizzard buy “in multiple respects,” Microsoft counsel Rakesh Kilaru of Wilkinson Stekloff wrote the 9th Circuit in a letter Wednesday (docket 23-15992). The FTC argues in its appeal of Corley’s denial that precedent in the 9th Circuit entitles the FTC to an injunction under Section 13(b) of the FTC Act if it shows serious questions as to the antitrust merits of the Microsoft/Activision transaction (see 2312070002). The 5th Circuit’s decision in Illumina vacated an FTC order “unwinding a vertical merger through an administrative proceeding,” Kilaru told the 9th Circuit. The 5th Circuit “specifically endorsed Judge Corley’s approach to addressing post-merger solutions to alleged competitive concerns, squarely rejecting the FTC’s arguments in this appeal,” he said. The Illumina decision also rejected the FTC’s argument that post-merger agreements are relevant only if they entirely neutralize and undo any lessening of competition, he said. Again citing Corley’s opinion, Illumina deemed this argument “irreconcilable” with Section 7 of the Clayton Act, finding instead that a post-merger agreement need only sufficiently mitigate the merger’s effect such that it’s no longer likely to substantially lessen competition, he said.
Google will pay $630 million in restitution to consumers who made purchases at Google Play between August 2016 and September 2023 to settle allegations it engaged in anticompetitive practices that forced higher prices on the public, according to a settlement agreement filed Monday (docket 3:21-cv-05227) in U.S. District Court for Northern California in San Francisco. Google will also pay $70 million to settle the sovereign claims asserted by the attorneys general of all 50 states, plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands, said the agreement. Google “disputes the claims” alleged in the litigation, “and believes it has strong defenses to these claims," said the agreement. The settlement isn’t “an admission of wrongdoing, fault, liability, or damage of any kind,” it said. The company also disputes that the plaintiffs’ claims have merit and that the plaintiffs or consumers should be “entitled to any relief,” it said. Google, for a period of at least five years, agrees to give developers that choose to sell in-app digital goods and services “the option to add an alternative in-app billing system alongside Google Play’s billing system” for their users, said the agreement. At checkout, users “will be able to choose which in-app billing system to use,” it said. “No company, no matter how large or powerful, is allowed to corner a market and use its influence to overcharge consumers and smother competition,” said New York AG Letitia James (D) in a statement Tuesday. “For too long, Google abused its market share to unfairly raise prices and block developers from selling products in other app stores,” she said. New York was on the litigation's leadership committee with California, North Carolina, Tennessee and Utah. “Google took advantage of Android phone customers by limiting consumer choice and capitalizing on commissions for in-app purchases, all while limiting alternative ways to download apps. Google’s anticompetitive behavior hurt consumers by limiting their options, inflating prices on in-app purchases, and creating an unfair marketplace designed to funnel ill-gotten profits back to the company,” said California Attorney General Rob Bonta (D). “Today we are taking an important step to put a stop to this anticompetitive conduct," he said.
U.S. District Judge Edward Davila for Northern California in San Jose entered judgment in favor of Meta and against the FTC under Federal Rule of Civil Procedure 58, said the judge’s signed order Wednesday (docket 5:22-cv-04325). The judgment stem from Davila's Jan. 31 denial of the FTC’s motion for a preliminary injunction to block Meta’s Within Unlimited buy (see 2302010003). He ordered the clerk to close the case file.
The plaintiffs’ opposition is due Dec. 14 to T-Mobile’s motion to certify for interlocutory appeal the court’s Nov. 2 order denying T-Mobile’s motion to dismiss the antitrust case brought by seven AT&T and Verizon customers over T-Mobile’s 2020 Sprint buy (see 2311290042), said a clerk’s docket entry Wednesday (docket 1:22-cv-03189) in U.S. District Court for Northern Illinois in Chicago. T-Mobile’s reply in support of the motion is due Dec. 22, said the clerk’s entry. The plaintiffs allege that the anticompetitive nature of the T-Mobile/Sprint transaction caused their own wireless rates to soar. In denying T-Mobile’s motion to dismiss, U.S. District Judge Thomas Durkin found that T-Mobile/Sprint likely “exacerbated the risk of price coordination” in the wireless market space, thereby reducing competition among all the carriers (see 2311030011). Durkin set a telephone status hearing in the case for Feb. 6 at 9 a.m. CST.
U.S. District Judge Thomas Durkin for Northern Illinois in Chicago ordered the parties in the litigation against T-Mobile’s 2020 Sprint buy to file a joint written report by Nov. 28 setting proposed discovery deadlines in the case going forward, said his docket entry notification Friday (docket 1:22-cv-03189). The judge on Thursday denied the joint T-Mobile-SoftBank motion to dismiss the antitrust complaint for failure to state a claim, finding that T-Mobile/Sprint likely reduced wireless competition (see 2311030011). He did grant SoftBank’s separate motion to dismiss for lack of jurisdiction and improper venue for its role in the 2020 transaction. Seven consumer plaintiffs, all AT&T or Verizon customers, seek to vacate T-Mobile/Sprint on grounds that the transaction caused their own wireless rates to soar.
U.S. District Judge Edgardo Ramos for Southern New York in Manhattan granted the FTC’s motion to strike defendants Iqvia and Propel Media’ s constitutional and equitable defenses with prejudice, said his signed opinion and order Tuesday (docket 1:23-cv-06188). The FTC argued that defenses asserted by Iqvia in the antitrust case should be dismissed on grounds that several raise constitutional challenges to the FTC’s powers that are “immaterial” and “impertinent” to the “narrow inquiry” that the court must undertake pursuant to the FTC Act in evaluating a claim for a preliminary injunction. The FTC seeks to enjoin Iqvia from completing its purchase of Propel Media (see 2310120051), saying the proposed acquisition would “substantially lessen competition by combining two of the top three providers of programmatic advertising targeted specifically at U.S.-based [healthcare professionals] on a one-to-one basis.” The court agreed with the FTC that the defenses are either “legally insufficient or inadequately pled and that the FTC would be prejudiced by their inclusion.” The state of the law in the Second Circuit is “well settled” that a laches defense is not available against the government when it is protecting the public interest, “and there can be no dispute that the FTC commenced this action to protect the public interest,” said the order. Defendants' asserted that the doctrine of equitable estoppel “binds the FTC to the claims, assertions, and admissions made by the U.S. Government about the digital advertising industry” in a suit pending against Google in the Eastern District of Virginia. But Ramos said that suit alleges that under sections 1 and 2 of the Sherman Act, Google is a monopolist in digital advertising and has significant market share as a demand-side platform. Equitable estoppel may apply where “(1) the party to be estopped makes a misrepresentation of fact to the other party with reason to believe that the other party will rely on it; (2) and the other party reasonably relies upon it; (3) to her detriment,” Ramos said, citing Kosakow v. New Rochelle Radiology Associates. But it is “well established” that “the Government may not be estopped on the same terms as any other litigant,” he said, and, citing Davila v. Lang, only “’in the most serious of circumstances’ when a party has reasonably and detrimentally relied on the government’s misrepresentation, and the government has engaged in affirmative misconduct.” Defendants here “do not provide any allegations making it plausible that they can satisfy the estoppel requirements -- even before accounting for the higher standard to invoke the defense against the government,” he said. Allowing the estoppel defense to remain “would prejudice the SEC by needlessly lengthening and complicating the discovery process and trial of this matter.”
The 9th U.S. Circuit Court of Appeals scheduled oral argument for Dec. 14 at 9 a.m. PST in San Francisco in appellant SaurikIT’s appeal of the district court’s dismissal of its antitrust claims against Apple on grounds that those claims were time-barred, said a text-only notice Tuesday (docket 22-16527). SaurikIT, parent of the Cydia app, brought its claims against Apple in 2020. It alleges that Apple’s requirement that all iOS app developers must agree not to distribute through any channel except the App Store, and to use only Apple’s in-app programming interface for payment processing, gives Apple a monopoly on both (see 2301130035).