International Law

FTC Denied High Court Review of Standard-Setting Case

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The U.S. Supreme Court will not review a federal appellate court decision that set aside a Commission opinion finding that Rambus, Inc. had engaged in monopolistic conduct in violation of the FTC Act.

Left standing is a decision of the U.S. Court of Appeals in Washington, D.C. (2008-1 Trade Cases ¶76,121), holding that the FTC failed to demonstrate that Rambus Inc.'s actions before a standard-setting organization amounted to exclusionary conduct.

The appellate court also set aside the Commission's remedy order. According to the court, the agency did not prove that the developer of computer memory technologies unlawfully acquired its monopoly power in the relevant markets for four technologies that had been incorporated into industry standards for dynamic random access memory (DRAM) chips.

Agency Petition

The FTC had sought review pursuant to Sec. 16(a)(3) of the FTC Act. This provision permits the agency to represent itself before the high court if the Solicitor General declines to file a petition for certiorari. The Commission noted in its petition that it has exercised this authority on only three prior occasions.

The petition for review is FTC v. Rambus, Inc., Docket No. 08-694, filed November 24, 2008, denied February 23, 2009.

The FTC?s petition asked whether, in an action against a developer of computer memory technologies for engaging in monopolization by abusing the standard-setting process, (1) deceptive conduct that significantly contributes to a defendant's acquisition of monopoly power violates Sec. 2 of the Sherman Act, and (2) deceptive conduct that distorts the competitive process in a market, with the effect of avoiding the imposition of pricing constraints that would otherwise exist because of that process, is anticompetitive under Sec. 2 of the Sherman Act.

Horizontal Price Fixing

The Commission was on the right side of a denial of review, when the Supreme Court declined to consider a decision of the U.S. Court of Appeals in New Orleans (2008-1 Trade Cases ¶76,146), upholding an FTC opinion and order finding that an organization of independent physicians and physicians groups engaged in unlawful horizontal price fixing.

The petition for review is North Texas Specialty Physicians v. FTC, Docket No. 08-515, filed October 16, 2008, denied February 23, 2009.

In its petition, the organization of independent physicians and physicians groups asked (1) whether conduct that allegedly encourages physician price-fixing collusion, but undisputedly does not result in that collusion, violates Section 1 of the Sherman Act; (2) whether conduct that allegedly encourages physician price-fixing collusion, but undisputedly does not result in that collusion, can be an "obvious anticompetivie effect on customers and markets" so as to be the basis for an antitrust violation under a "quick-look" analysis as set forth in California Dental Ass'n v. FTC, 526 U.S. 756, 1999-1 Trade Cases, ¶72,529 (1999); and (3) whether a court must define a relevant market to find an antitrust violation under a "quick-look" analysis as set forth in California Dental Ass'n.

The February 23 order list appears here.

Full post as published by Trade Regulation Talk on February 23, 2009 (boomark / email).