On May 5th, Crowell & Moring’s Retail Law partnered with the Association of Corporate Counsel (ACC) to host the first webcast of a 3-part retail law series: “Recovery Opportunities for Retailers: Turning A Retail Law Department Into A Profit Center in Retail Leasing, Global Sourcing and Antitrust Litigation.” The webcast was moderated by
On Thursday, May 5th at 11am PST / 2pm EST, Crowell & Moring’s Retail Law practice will partner with the Association of Corporate Counsel (ACC) to host the first webcast of a 3-part retail law series. The topic of the first webcast is “Recovery Opportunities for Retailers: Turning A Retail Law Department Into …
‘resale price maintenance’, antitrust…
Continue Reading Robust State Enforcement of Minimum Resale Price Maintenance May Require New Approaches to Pricing
The California Supreme Court has let stand an appellate court ruling that allows for broad interpretation of California state predatory pricing law. Significantly, the case holds that proof of recoupment is not required to prevail in predatory pricing cases. This broad interpretation means that it will be easier to bring predatory pricing cases against California retailers and merchants.
On November 1, a number of large U.S. retailers, including Target, Sears, Kmart, RadioShack, Newegg, and the former CompUSA, filed an antitrust lawsuit in federal court in the Northern District of California, alleging that they were injured as a result of a global price-fixing conspiracy by the major manufacturers of Liquid Crystal Display (LCD) panels. The complaint was filed on behalf of the plaintiffs by Crowell & Moring. The complaint asserts that, from January 1996 to December 2006, the LCD panel makers conspired to raise panel prices which, in turn, increased the prices U.S. retailers paid for finished goods containing such panels.
Simon Property Group recently made news by bidding to make two big acquisitions. In December, it agreed to pay $2.33 billion (including debt) to acquire Prime Outlets from Lightstone Group. More recently, it bid $10 billion to acquire its biggest rival, General Growth Properties, which is currently in bankruptcy proceedings. Simon’s moves have attracted the attention of the FTC, which has already reached out to retailers for input on the potential mergers.
What you need to know: In analyzing potential mergers, the FTC focuses on the impact of the transaction on customers; fewer competitors may mean less competition and higher prices. In the case of the potential Simon acquisitions, the FTC will be interested in the impact on tenants, including whether the proposed mergers will affect the options available to tenants and rents charged. As part of its inquiry, the FTC is likely to reach out to key retail tenants that may be affected by the mergers. In fact, the FTC has already contacted key retailers that may be affected by the Prime Outlets merger. The FTC will likely ask retailers what alternatives they have to the relevant shopping centers, whether retailers are concerned about the proposed transactions, and whether the merging parties have market power (i.e., the power to raise rents directly, or through reducing landlord support for tenant improvements).
Case: Leegin Creative Leather Products, Inc. v. PSKS, Inc., DBA Kay’s Kloset, No. 06-480 (U.S. Sup. Ct. 6/28/07)
The One Sentence Summary: Reversing 96 years of antitrust precedent that made minimum resale price agreements between manufacturers and retailers per se illegal, U.S. Supreme Court held in 5-4 decision that vertical price restraints are to be…