Monday, June 17, 2013
Wednesday, June 12, 2013
Monday, April 29, 2013
For example, Plaintiffs allege that News America hacked into Floorgraphics’ password-protected computer system, made false disparaging statements about its competitors, improperly removed competitors’ ads, secured long-term deals with retailers and staggered the expiration dates to prevent any competitor from obtaining a critical mass of retailer contracts, overpaid for contracts with retailers to shut out its competitors, and unlawfully bundled in-store advertising with FSIs. Using these exclusionary tactics, News America allegedly obtained an 84% market share of the in-store advertising market by 2009. (Given the anti-competitive components of News America’s settlements of the competitor lawsuits, that share has presumably grown).
Thursday, December 27, 2012
- Hacking into Floographics' computers to obtain customer lists and other marketing materials to solicit its accounts and lock them into News long-term and exclusive contracts;
- Staggering the terms of the exclusive contracts so that in any given year a News competitor would not have any substantial opportunity to expand its competitive retail distribution network;
- Enforcing aggressively contractual shelf exclusivity by removing competitors' services and telling customers that their promotions with competitors would not appear;
- Using large cash guarantees unjustified by potential in-store promotional revenues to derail competitor contracts with retailers, a practice expressly designed to exclude competitors from these chains;
- Disparaging and misrepresenting competitors' in-store advertising compliance rates, which are important to consumer packaged goods companies when they select a vendor;
- Disparaging competitors' financial capacity and ability to pay the retail chains for necessary access; and
- Defacing competitors' in-store advertisements and then disparaging the quality ofthe defaced promotions to the retail chains.
- News America hacked into Floorgraphics password-protected computer accounts at least eleven times and viewed competitively sensitive customer information.
- News America's CEO Paul Carlucci admitted showing a film clip to sales staff from the movie The Untouchables, and admitted to using several mafia references. A video clip was played at trial of Mr. Carlucci telling employees that News had pushed "Valassis to what we call the brink of utter desperation," and that "Mr. Murdoch was saying now you have to really go after them."
- A News America executive admitted to bundling in-store advertising with FSIs, inflating prices to CPGs for in-store advertising if they did not also purchase FSIs from News America. A video clip was played of the sales executive describing "the game plan whereby we would use the in-store products to drive FSI volume and the FSI to drive in-store depending on which particular client." Several CPG representatives testified to being upset with the bundled pricing.
- News America executive Marty Garofalo, in a video clip of a sales summit that was played at trial, stated that News America intentionally sought out long-term exclusive contracts with retailers: "Our strategy is to secure long-term retail deals . . . . For instance, our current deal at Kroger is for seven years. Ahold agreement currently stands at eight years and we recently signed Safeway last year to a 10-year deal." Mr. Garofalo also stated that News America intentionally erected barriers to entry by potential competitors, stating in the same video clip that “we also staggered the deals to prevent a large percentage of our network from being vulnerable at any specific point in time. . . . [T]his method . . . means a competitor who wants to develop a critical mass for their network would have to dedicate a lot of money over a considerable period of time in order to break into the in-store game in any significant way.”
- A former News America employee, Robert Emmel, testified that News America engaged in a campaign to target retail accounts to take away from Floorgraphics, and overpaid for exclusive contracts with retailers. He also testified that they made false disparaging statements about in-store competitors Floorgraphics and Insignia.
Sunday, February 5, 2012
- Order Granting Discovery Sanctions (Feb. 2, 2012)
- Plaintiffs’ Motion for Sanctions and Discovery Against Delta (July 25, 2011)
- Delta’s Opposition to Plaintiffs’ Motion (Aug. 11, 2011)
- Plaintiffs’ Reply (Aug. 26, 2011)
- Plaintiffs’ Motion for Discovery Against AirTran (Aug. 5, 2011)
- AirTran’s Opposition to Plaintiffs’Motion (Aug. 23, 2011)
- Plaintiffs Reply (Aug. 30, 2011)
Sunday, October 9, 2011
Friday, August 12, 2011
In a recent report, the Government Accountability Office (“GAO”) found wide support for legislation to protect antitrust whistleblowers from retaliation.
Specifically, the report states that “all key stakeholders who had a position on the issue . . . generally supported the addition of a civil whistleblower protection provision for those who report criminal antitrust violations.” The GAO report explained that it is good public policy to protect those who take risks to expose illegalities, and that whistleblowers may be reluctant to report wrongdoing absent such protection.
Inspired by a whistleblower client who alleges that he was subjected to an industry-wide boycott, my firm and I have engaged in a pro bono lobbying effort seeking legislation to protect antitrust whistleblowers. After I participated in a roundtable discussion on the Hill, Congress mandated that the GAO conduct this study of our proposal for antitrust whistleblower protection.
We also proposed that affirmative rewards be offered to antitrust whistleblowers, similar to the qui tam provisions of the False Claims Act, but based on any criminal fines collected by the Antitrust Division. The GAO report was less supportive of this proposal, stating that DOJ and certain other stakeholders were against the proposal. DOJ expressed concern that a reward provision could jeopardize existing DOJ criminal cases because the possibility of a reward may hinder the informant’s credibility, many of which are already assisted by a leniency applicant. Such a concern could be overcome, however, if the reward were contingent on the whistleblower providing corroborating evidence, such as documentation of the collusion.
DOJ also cited concerns about false reporting by whistleblowers, but criminal penalties already exist to discourage making false statements to the government, and rewards would only be provided if the claims had merit and resulted in criminal fines.
While there does not appear to be sufficient support for antitrust whistleblower rewards at this point, England and South Korea have an antitrust whistleblower rewards program, and their programs may prove instructive in assessing the effectiveness of such a rewards program.
Meanwhile, there is a clear consensus in favor of anti-retaliation protections for antitrust whistleblowers, and we hope that Congress will include such provisions when they reauthorize ACPERA.