Evidence of Tech Companies' Agreements Spawns §1 Cases

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By Joel Rosenblatt

Nov. 19 — Evidence produced against Apple Inc., Google Inc. and some Silicon Valley cohorts about an alleged conspiracy not to recruit each other's employees has sparked new lawsuits claiming other tech and entertainment companies engage in the same anticompetitive conduct.

The new complaints come as Apple, Google, Intel Corp. and Adobe Systems Inc. face a trial next April over the original lawsuit with potential damages of $9 billion because they failed to win approval to settle the claims for $324.5 million.

The litigation is “mushrooming,” Orly Lobel, a University of San Diego law professor, told Bloomberg News. “Once there's a visible test case, you look around to see where else it's happening, and the next cases are easier to put together.”

The Apple-Google case, in its novel application of traditional price-fixing claims to labor markets, is serving as a template for a new wave of group lawsuits, according to Lobel.

The newer cases are assigned to Judge Lucy H. Koh, of the U.S. District Court for the Northern District of California, who issued a critical ruling last year allowing the original one to advance as a class action. In August, she took the unusual step of rejecting the proposed settlement amount as too small, citing “ample evidence of an overarching conspiracy.”

Following a Justice Department investigation, Apple, Google, Intel, Adobe, Intuit Inc. and Pixar agreed in 2010 to end collusive fixing and suppression of compensation.

Walt Disney's Pixar and Lucasfilm Ltd., which agreed along with Intuit to settle the 2011 case for $20 million last year, are the only companies being sued again.

To contact the reporter on this story: Joel Rosenblatt in San Jose, Calif. at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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