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Ten Simple Rules That Everyone Should Know About Antitrust Law David Simon May 2, 2005

Ten Simple Rules That Everyone Should Know About Antitrust Law David Simon May 2, 2005. #10 DO NOT DISCUSS PRICES, PLANNED PRICE INCREASES OR CUSTOMER ORDERS WITH COMPETITORS. Price fixing is per se illegal. Bid rigging is per se illegal. Allocation of customers is per se illegal.

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Ten Simple Rules That Everyone Should Know About Antitrust Law David Simon May 2, 2005

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  1. Ten Simple Rules That Everyone Should Know About Antitrust LawDavid Simon May 2, 2005

  2. #10 DO NOT DISCUSS PRICES, PLANNED PRICE INCREASES OR CUSTOMER ORDERS WITH COMPETITORS. • Price fixing is per se illegal. • Bid rigging is per se illegal. • Allocation of customers is per se illegal.

  3. #9 AGREEMENTS NOT TO COMPETE CAN BE ILLEGAL EVEN IF THEY ARE NOT TRADITIONAL PRICE FIXING OR BID RIGGING AGREEMENTS. • Agreements not to compete as to inputs or quality • Agreements not to compete as to services offered • Agreements not to offer certain products to certain customers

  4. #8 ON THE ANTITRUST WHEEL OF FORTUNE, BOTH HUB AND SPOKE ARE BLAMED FOR THE FLAT. • Hub can have a vertical relationship with each supplier. • Hub can be an “agent” or trade association to which the competitors belong.

  5. #7 THE THREE WORST WORDS AN ANTITRUST DEFENDANT CAN HEAR: “PACK YOUR TOOTHBRUSH.” • DOJ Antitrust Division Obtained More than $450 million in fines from 11 companies in 2004 • At least 20 individuals were indicted on price fixing charges • Congress significantly increased penalties in 2004 to up to $100 million fine for a corporation and up to $1 million fine plus 10 years in prison for an individual

  6. #6 WHEN IT COMES TO RELATIONSHIPS, THE ANTITRUST LAWS VIEW VERTICAL AS GOOD AND HORIZONTAL AS BAD. • Something of an exaggeration, but horizontal relationships are viewed suspiciously by antitrust authorities and need to be reviewed carefully. • Many joint ventures can be pro-competitive • Some ventures may require firewalls or the use of third parties for review of sensitive data

  7. #5 YOU SHOULD BE NERVOUS ABOUT TRADE ASSOCIATION MEETINGS AND ACTIVITIES. • Trade associations can create a number of pro-competitive benefits. • “Friendly” settings create opportunities for conversations on pricing, bids, and customers • Risk that a standard set by association blocks new entry

  8. #4 ROBINSON-PATMAN IS ALIVE, WELL AND LIVING IN LITTLE ROCK. • Your company does not select where it will be sued – plaintiffs select the courthouse. • The federal system of appellate courts can result in different legal standards in different parts of the country.

  9. #3 YOU SHOULD WONDER ABOUT HOW THOSE MEMOS YOU WRITE WILL BE UNDERSTOOD BY A JURY. • Antitrust trials are heard by juries • Jurors may not understand much of what the economists and lawyers say, but they can understand the “smoking gun” documents and draw their conclusions accordingly.

  10. #2 PROSECUTORS AND PLAINTIFFS’ LAWYERSLOVEE-MAILS. • Requests to produce all e-mails have become a routine part of criminal antitrust cases and civil litigation. • Subpoenas sent to others (i.e., recipients) • New cottage industry in electronic file retrieval

  11. #1 WHEN IN DOUBT, CHECK WITH AN EXPERT • Consult your company’s antitrust compliance policy for guidance • Consult counsel if you have any doubt

  12. Thank You David W. Simon Foley & Lardner LLP (414) 297-5519 dsimon@foley.com

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