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Uber Technologies Inc. held onto a victory against charges that it tried to monopolize the market for ride hailing in Philadelphia.
The U.S. Court of Appeals for the Third Circuit agreed with a lower court that taxi drivers and their trade association can’t bring an antitrust claim based on the harm Uber’s operations have caused to their competing businesses. The taxis fail to state either anticompetitive conduct or an injury under antitrust laws, the appeals court’s March 27 precedential opinion said.
Uber undisputedly caused serious problems for Philly taxicabs. When Uber entered the market, a medallion permitting a driver to legally pick up passengers in the city was worth more than $500,000, the taxi drivers’ complaint said.
Two years after Uber started letting passengers get a ride with a tap on their phone, a medallion was worth only $80,000 and taxi drivers were going under or winding up on Uber’s rolls instead, the complaint said.
But opening a new method of doing business and disrupting the old one is not an anticompetitive act, the court said.
The result isn’t surprising, Robert M. Langer, a partner at Wiggin and Dana LLP, told Bloomberg Law. If the price to consumers goes down, “without the hallmarks of predation” by a company pricing purposefully below cost, the antitrust laws are not triggered because competition is doing its job, said Langer, who has represented Uber in the past. “It’s intentionally difficult to prove those cases.”
The drivers argued that Uber’s entry to the market was illegal, purposefully skirting heavy regulation of the taxi industry and operating at big discounts to a taxi fare by ignoring the law.
That was anticompetitive, they said, and would result eventually in a monopoly for Uber as regulated taxis wither and disappear under the weight of regulations that Uber simply violates.
However, the court said that if prices dropped to customers, Uber’s conduct wasn’t anticompetitive just because it harmed competing businesses. Without proof of anticompetitive conduct, the antitrust law isn’t concerned about whether Uber violated taxi laws, Judge Marjorie O. Rendell said in the opinion. Joined by Judges Cheryl Ann Krause and Thomas L. Ambro, Rendell affirmed the district court’s dismissal.
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