The Brattle Group has been involved in many of the major cases involving alleged price fixing and other forms of collusion over the past twenty years. These include litigation involving auto parts, air cargo, raw milk, DRAMs, SRAMs, cardboard boxes, vitamins, silicon alloys, carbon fiber, pharmaceuticals, carpet, and airfares.
Our work has spanned a wide range of issues that arise in these types of cases, including:
- Assessing whether the alleged conspiracy increased prices or decreased competition;
- Valuing the magnitude of these effects and providing analyses used in connection with settlement negotiations or as testimony regarding damages;
- Examining and responding to evidence put forth by opposing experts and counsel; and
- Evaluating class certification issues.
For pharmaceutical companies rebutting price fixing claims, members of The Brattle Group performed a comprehensive analysis of industry profitability. This analysis included critiquing claims regarding pharmaceutical development costs, risks, and returns. A complex drug research simulation model was also developed, refined, and completed.
Several producers of vitamins were accused of conspiring to fix prices. Economists at The Brattle Group identified flaws in the damages analyses put forth by some of the plaintiffs’ experts, including in the econometric analysis used to estimate “but-for” prices.
For a class of direct purchasers of Dynamic Random Access Memory (DRAM), and in a separate proceeding for a class of direct purchasers of Static Random Access Memory (SRAM), members of The Brattle Group estimated class-wide damages from the alleged price elevation in each case and provided expert testimony. In both cases the experts used an econometric model of product-level transaction data that controlled for hundreds of separate categories of products. We also provided an extensive critique of the testimony provided by opposing experts.
For a producer of silicon and silicon alloys, members of The Brattle Group assessed allegations of price fixing. The engagement included a review of market structure and the behavior of market participants, as well as an econometric analysis of market prices. Particular attention was paid to issues of product market definition, the impact of changes in imports and production costs on market pricing, and the effect of changing contracting practices in the industry.
For a leading automobile manufacturer, Brattle economists estimated collusive overcharges and the volume of commerce affected by collusion among suppliers of specified auto parts and components.
Brattle economists and an academic affiliate have been engaged by a group of defendants in class actions brought by direct and indirect purchasers of technology components for use in electronic devices in the United States. Brattle is conducting an analysis of the class certification issues and any potential damages surrounding allegations of price-fixing by the technology component manufacturers.
Brattle economists, including Professor Daniel McFadden, have been retained by plaintiffs to assess the effects of market allocation and ownership restrictions for a particular line of insurance in the United States. A consortium of insurers covers a significant fraction of U.S. consumers who receive private insurance in the United States. The member insurers, through their association, license their trademark by requiring members to sell insurance only in their exclusive service areas (ESAs). In this case, currently before the Federal Court, plaintiffs allege that because this arrangement prevents entry by one member of the consortium into the territory of another, it has stifled competition and as a result increased premiums paid by consumers.
Brattle economists were retained in a matter involving a program to restrict supply, which was sponsored by an agricultural cooperative, the National Milk Producers Federation, and other defendants. The “Herd Retirement Program” paid farmers to slaughter their milk herds and leave the market for a period of time. Brattle worked on behalf of a class of indirect purchasers to perform an econometric analysis to estimate the effect of the alleged anticompetitive conduct on the spread between prices and the federally mandated price floors set by the USDA (referred to as “over order premium”). A pass-through analysis was also performed to estimate the impact on retail prices for milk products on a state-by-state basis. The matter settled in 2016 for $52 million.
For a class of direct purchasers of Dynamic Random Access Memory (DRAM), and in a separate proceeding for a class of direct purchasers of Static Random Access Memory (SRAM), members of The Brattle Group estimated class-wide damages from alleged collusive price elevation and provided expert testimony. Brattle supported a testifying expert in an analysis of liability through class certification and the merits phase. We also provided testimony on the econometric estimation of class-wide damages in the two cases. In both cases, the experts used an econometric model of product-level transaction data that controlled hundreds of separate categories of products. Additionally, we provided an extensive critique of the testimony provided by opposing experts. Both matters settled before trial after expert reports were filed and deposition testimony was given.
For a producer of corrugated fiberboard products facing price-fixing and market-allocation claims by a class of purchasers, members of The Brattle Group analyzed and critiqued the damages claims of the plaintiffs’ expert. Our analysis demonstrated that plausible modifications of the expert’s damages model significantly lowered damages estimates. Our assessment also pointed out flaws in the theoretical underpinnings of the model, the variables used to describe market pricing behavior, and the execution of the statistical estimation of the model.
Brattle economists advised a large European energy company and a large financial institution throughout investigations of competition conducted by the UK Competition and Markets Authority (CMA) during 2014 to 2016. We worked in partnership with the client and their legal counsel in responding to CMA assessments of competition, including assessments of unilateral and coordinated market power; reviewing companies’ pricing strategies; reviewing analysis of consumer switching behavior and gains from switching; and, for energy, responding to the CMA’s assessments of costs and profitability in generation and supply comprising detailed margin analysis.
Brattle assisted a global investment bank in connection with an EC investigation of alleged collusion to manipulate foreign exchange benchmarks during 2008-2012. We provided guidance on the appropriate basis for calculation of fines.
A Brattle economist empirically analyzed the effects of an alleged agreement between firms in the parcel-tanker shipping industry to determine if the agreement resulted in an undue lessening or prevention of competition. This work was done on behalf of one of the shippers, and resulted in the Competition Bureau closing its investigation without taking any action against the client.
Advised a global investment bank on the alleged manipulation of the LIBOR benchmark in private litigation brought in the UK Commercial Court. The claimant alleged that the bank manipulated the benchmark LIBOR rate in order to increase payments to the bank from the LIBOR-linked loan and swap arrangements sold to the claimant. The investigation involved detailed economic analysis of causes of movements in the LIBOR benchmark, the extent of possible coordination between LIBOR rate-setters, and the relationship between LIBOR and key macroeconomic variables over the period of the loan and swap arrangements and the key re-set dates.
Advised Visa Europe in connection with an EU Article 101 investigation into the determination of the multilateral interchange fee for credit and debit card payments in Europe. The analysis involved design and implementation of consumer and merchant surveys of the cost of cash and card transactions throughout the EU; analysis of the benefits of cards for consumers and merchants; and economic analysis of consumers’ response to credit card surcharges. The analysis was used to estimate an efficient level of card interchange fees and evaluation of the effects on consumer behavior of the introduction of payment card surcharges.
Complex business and legal matters require intellectually honest and analytically rigorous solutions that are thoughtfully developed and clearly communicated. We apply economic and finance principles with uncompromising quality to achieve clarity in the face of complexity. Independent analysis, responsive execution, and compelling presentation. That’s Brattle. That’s the Power of Economics.