The 7th U.S. Circuit Court of Appeals in Chicago upheld a lower court’s dismissal of a class-action lawsuit against the four major national wireless carriers alleging they colluded to fix prices for text messaging services. The case is Aircraft Check Services Co. et al. v. Verizon Wireless et al. “It is of course difficult to prove illegal collusion without witnesses to an agreement” and there are none in this case, Judge Richard Posner wrote for the panel that heard the case. It is also reasonable to expect that competing firms will closely track the pricing and other market behavior of their competitors, he said Thursday. “The plaintiffs have presented circumstantial evidence consistent with an inference of collusion, but that evidence is equally consistent with independent parallel behavior,” Posner wrote. Lawyers need to be careful about invoking the term collusion without being precise, he said. “Tacit collusion, also known as conscious parallelism, does not violate section 1 of the Sherman Act,” he said. “Collusion is illegal only when based on agreement. Agreement can be proved by circumstantial evidence, and the plaintiffs were permitted to conduct and did conduct full pretrial discovery of such evidence. Yet their search failed to find sufficient evidence of express collusion to make a prima facie case.”
A one-count felony charge was filed Monday against David Topkins in the U.S. District Court of the Northern District of California in San Francisco, the Department of Justice said in a news release. Topkins, a former executive of an e-commerce seller of posters, prints and framed art, agreed to plead guilty for conspiring to fix the prices of posters sold online by adopting specific pricing algorithms, DOJ said. Topkins and his co-conspirators “fixed the prices of certain posters sold online through Amazon Marketplace from as early as September 2013 until in or about January 2014,” DOJ said. Topkins agreed to pay a $20,000 criminal fine and “cooperate with the department’s ongoing investigation,” DOJ said. The plea agreement is subject to court approval. “Today’s announcement represents the division’s first criminal prosecution against a conspiracy specifically targeting e-commerce,” said Assistant Attorney General Bill Baer of the Antitrust Division.
HDMI Licensing and InfoComm International settled their nasty six-month legal battle over the policing of HDMI trademarks, said documents filed in U.S. District Court in Las Vegas. InfoComm gave “safe haven” to exhibitors at last June’s InfoComm show that were “direct infringers” of HDMI trademarks by letting them market, promote and sell unlicensed HDMI products on the show floor, shielded from investigators, HDMI Licensing alleged in a September complaint (see 1409150044). InfoComm countersued a month later, accusing HDMI Licensing of “blatant extortion” for treating any company on the InfoComm show floor that used the "HDMI" acronym "as a common criminal" (see 1410170054). Court documents didn't disclose the terms of the settlement agreement, which took two deadline extensions and nearly five months to hammer out. InfoComm had barred HDMI Licensing from its show floor in June, HDMI’s complaint alleged in a claim that InfoComm didn’t dispute. Asked if the settlement means HDMI Licensing would be invited back in, "HDMI Licensing is welcome to attend InfoComm trade shows provided their behavior complies with the settlement agreement and the same show rules that apply to all event attendees," InfoComm spokeswoman Betsy Jaffe emailed us Friday. She wouldn't disclose the behavioral terms in the settlement agreement that HDMI Licensing must comply with, "other than to say we resolved our differences to our mutual satisfaction." In its counterclaim, InfoComm had alleged that HDMI Licensing representatives "bullied" exhibitors they accused of violating HDMI trademarks and "falsely represented the authority" to bar those exhibitors from future InfoComm trade shows if they didn't comply with HDMI's demands. HDMI Licensing representatives didn't comment. InfoComm 2015 opens June 13 in Orlando for a seven-day run.
U.S. District Court Judge Edward Chen rejected AT&T’s claim that the FTC couldn’t sue the wireless carrier to stop its throttling of unlimited data plans, ruling in San Francisco Tuesday that he would allow the FTC’s lawsuit to move forward. The FTC filed suit against AT&T Oct. 28, claiming AT&T throttled data transmissions more than 25 million times since October 2011 for 3.5 million of its customers subscribed to unlimited data plans. The FTC is seeking injunctive relief against AT&T and restitution for affected customers (see 1410280047). AT&T argued in January that the FTC couldn’t sue the carrier over throttling because it held common carrier status and was therefore outside the FTC’s jurisdiction. The FTC Act does exempt common carriers from the FTC’s jurisdiction, but the mobile data services at issue in the lawsuit weren’t considered a common carrier service when the FTC filed the suit, Chen said in his ruling. The FCC reclassified wireline broadband and mobile broadband as Communications Act Title II services Feb. 26 in its new net neutrality rules, with reclassification set to happen after the net neutrality order appears in the Federal Register (see 1502260043). Once the order “goes into effect, that will not deprive the FTC of any jurisdiction over past alleged misconduct as asserted in this pending action,” Chen said in his ruling. AT&T has also misinterpreted the common carrier exemption in the FTC Act to mean the FCC and FTC can’t overlap on common carrier regulations, when in fact “it appears that the more precise purpose was to prevent overlap between common carrier regulations,” Chen said. “Indeed, it is not uncommon for any particular activity of a business to be subject to multiple sets of regulations.” FTC Commissioners Terrell McSweeny and Joshua Wright expressed concerns in late March about Title II reclassification endangering the FTC’s jurisdiction over broadband providers (see 1503250059). The FTC looks “forward to proving that AT&T's marketing of its ‘unlimited’ data plans was unfair and deceptive and returning money to the millions of consumers who were harmed by AT&T's action,” Chairwoman Edith Ramirez said in a statement. AT&T said in a statement that “we’re obviously disappointed in, and disagree with, the decision and will seek to appeal it as soon as possible.”
Mississippi Attorney General Jim Hood filed an appeal Monday against the U.S. District Court in Jackson, Mississippi’s ruling granting Google a preliminary injunction against Hood (see 1503310023), he said in a statement Tuesday. “The law is clear that Google could have raised all of its defenses under federal law in state court,” but “we anticipated this judge's ruling,” he said. Judge Henry Wingate said in an order last week that Google didn’t have to “expose itself to civil or criminal liability before bringing a declaratory action to establish its rights under federal law.” “State Attorneys General should not have to go to federal court to prove their state law claims before being allowed to investigate or file in state court,” Hood said. “We believe the Fifth Circuit Court of Appeals will respect the separate sovereign authority of the states,” he said: “If Attorneys General are unable to enforce state drug and consumer laws simply because a company uses the internet, then this should be a wake-up call to all Americans that our children can simply type in 'buy drugs' and Google will guide them thru its auto-complete feature to the dark web where they can purchase everything from heroin to prescription birth control pills." Google didn’t comment.
A U.S. District Court in Jackson, Mississippi, reaffirmed granting Google a preliminary injunction against Mississippi Attorney General Jim Hood and denied his motion to dismiss the case (see 1503020060), said court documents. Google’s submitted evidence purported to show Hood’s “dissatisfaction with Google’s posting of certain content he finds objectionable, namely advertisements and videos originating from third parties” before the case, said Judge Henry Wingate. Hood publicized “inflammatory statements” against Google, he said. “Google claims that it responded to the Attorney General’s concerns by voluntarily making requested changes, on several occasions, but declining to accommodate the Attorney General’s expressed wishes on others, citing its right to free speech under the First Amendment.” Hood’s 79-page subpoena against Google soon followed (see 1412190045), he said. Google’s argument “has a home in federal court,” said Wingate. "Google is not required to expose itself to civil or criminal liability before bringing a declaratory action to establish its rights under federal law, particularly where the exercise of those rights have been threatened or violated.” Hood didn’t comment. He said after the initial ruling earlier this month that Friday’s order doesn’t “indicate how the court will ultimately rule on the merits of the case.” The docket is number 3:14-cv-00981.
Court appeals of the FCC net neutrality order by Alamo Broadband and USTelecom (see 1503230066) are premature, the agency wrote the U.S. Judicial Panel on Multidistrict Litigation Friday. The order doesn't take effect until it's published in the Federal Register, which hasn't happened, said the letter from Deputy Associate General Counsel Richard Welch. The FCC assumes the court that's randomly selected to consolidate both appeals will rule on whether they're premature, the letter said, and the agency plans to file a motion to dismiss both petitions as premature once the court is selected. The FCC’s attempt to justify the reclassification of broadband by pointing to industry investments in mobile voice under Communications Act Title II is “revisionist history” and “simply not borne out by the facts,” CTIA said in a blog post Friday. Wireless carriers’ investment has focused on the “heretofore unregulated market for mobile broadband networks” rather than the regulated voice market, the association said. In the past decade, carriers invested $260 billion in their networks, and another $90 billion purchasing spectrum at auctions, "primarily to handle mobile broadband traffic,” said the group. “Of course, the wireless industry will continue to invest, but the uncertainty generated by the FCC’s action means there will be less investment. And that’s no illusion.” Free Press disputed the argument, in a news release Friday. The group noted, among other things, that the annual growth rate in wireless capital spending between 1993 and 2002, before wireless was classified as a deregulated Title I service in 2007, was more than seven times higher than the annual rate in the following decade. The rate from that decade was seven times higher than the rate from 2003 to 2013, Free Press said.
Immersion said it agreed to a settlement and license agreement with HTC to resolve a patent infringement lawsuit it brought against the Chinese smartphone maker. The settlement preserves Immersion’s right to appeal the invalidity ruling affecting three of Immersion’s patents. The suit, filed in U.S. District Court in Wilmington, Delaware, was based on HTC’s uses of a simple form of haptic effects in its mobile devices, referred to as Basic Haptics. Under the settlement and license agreement, HTC will pay an undisclosed amount to compensate for prior shipments of its devices containing Basic Haptics and an additional undisclosed licensing fee to continue manufacturing and selling devices with Basic Haptics, said Immersion Monday. Immersion CEO Victor Viegas said the settlement won't have a material impact on 2015 financial results. Immersion announced similar settlements and licensing agreements (see 1211280083) with Google and Motorola in 2012. Immersion announced a multiyear licensing deal in 2013 with Samsung for Basic Haptics. HTC didn’t comment.
Consumer Watchdog hails the FTC’s deceptive advertising lawsuit against DirecTV (see 1503110042) and wants the FCC to require that DirecTV “cease its anti-consumer policies as a condition” of approving AT&T’s buy of it, the California nonprofit said Friday. Consumer Watchdog sued DirecTV on similar allegations in 2008 in a case that’s still pending in a California appellate court. Jessica Rich, director of the FTC's Bureau of Consumer Protection, has said the complaint against DirecTV “has nothing to do” with any regulatory “evaluation” of AT&T’s planned buy of DirecTV, “and I have no comment on how it might affect it.” U.S. Magistrate Judge Maria-Elena James in San Francisco has assigned the FTC’s complaint to the court’s “Alternative Dispute Resolution Multi-Option Program,” her March 12 scheduling order showed. The program's goal “is early, cost-effective and fair resolution of civil cases” through one of several “processes,” including arbitration or a settlement conference with a magistrate judge, the court’s website shows. James’ scheduling order sets a May 21 deadline for ADR process selection, to be followed by a June 11 initial case management conference.
TVfreedom.org weighed in with a statement Thursday backing the FTC in its allegations in a federal complaint that DirecTV engaged in deceptive advertising practices since 2007 (see 1503110042). “DirecTV's failure to clearly disclose the terms and prices customers would pay as part of contract agreements is unacceptable,” the group said. “It further demonstrates that greater regulatory oversight is needed to address these market failures. The FTC is right to step in.” TVfreedom.org and TV broadcasters have long supported “more transparent billing practices by all pay-TV companies,” hailing Sen. Claire McCaskill, D-Mo., for “spearheading efforts last year to shine a spotlight on this questionable behavior,” the group said. McCaskill tried unsuccessfully last year to organize a hearing on pay-TV billing practices when she chaired the Senate Consumer Protection Subcommittee (see 1412030047). McCaskill, now ranking member on the Senate Investigations Subcommittee, issued a statement of her own Wednesday, backing the FTC for "finally taking a swing for consumers." According to TVfreedom.org, Congress “has a unique opportunity to promote greater transparency and accountability in the video marketplace through its update of the Communications Act and help thwart the on-going consumer abuse by America's pay-TV industry. Promoting greater transparency and fairness to existing pay-TV business and billing practices is a vital and core consumer protection that should be incorporated into any proposed reform legislation." DirecTV has called the FTC’s allegations “flat-out wrong,” and vowed to “vigorously defend ourselves, for as long as it takes.” DirecTV spokesman Robert Mercer declined comment Thursday on the TVfreedom.org statement, as did NCTA spokesman Brian Dietz on the TVfreedom.org allegation that there's "on-going consumer abuse" in the pay-TV industry.