Released: November 28, 2006

What makes an antitrust case?

Source: Associated Press [USA Today]

The Supreme Court pressed both sides Monday in the opening arguments of a case that businesses of all stripes care deeply about: how hard should it be to get evidence that a company might be violating antitrust laws?

The case, Bell Atlantic v. Twombly, stems from the deregulation of the telecommunications industry in the 1980s and 1990s, with some experts citing it as the most important antitrust case to reach the Supreme Court in 20 years.

The case is being closely watched by numerous companies, including airlines, credit card issuers and trade associations representing the wireless communications and pharmaceutical industries, all of whom have submitted or signed onto friend-of-the-court briefs.

The plaintiff in this case is represented by Milberg Weiss, known for its class-action lawsuits alleging securities fraud against major corporations. The firm filed a lawsuit in 2003 on behalf of William Twombly and all individuals in the continental United States who bought local telephone and Internet service between February 1996 and the present.

The suit alleged that the incumbent local telephone companies, or regional Bells, illegally conspired to prevent competition by excluding new local phone companies from their territories and agreeing not to compete against each other in each other’s markets.

As part of the original court-ordered breakup of AT&T in 1982, seven regional telephone companies were created to provide local service. The 1996 Telecommunications Act allowed those regional Bells to offer long-distance calling, in addition to local service, in exchange for allowing competitors access to their networks.

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