In Duty Free Americas Inc. v. Estee Lauder Cos. Inc., Southern District of Florida Judge Robert N. Scola dismissed Duty Free Americas Inc. (DFA)’s suit accusing Estee Lauder Cos. Inc. (ELC) of attempting to force it out of the airport retail business and monopolize the beauty product market in duty-free stores. DFA, which operates duty-free stores in airports and features beauty products, claimed ELC had violated the Sherman Act by conspiring with DFA’s competitors to exclude it from the airport market by influencing airports’ bid process for such stores. In its complaint, DFA alleged that ELC interfered with the concession bid process at certain airports when it submitted a letter stating its preferences for certain stores.
NewarkELC’s letter only stated which duty-free operators are authorized to sell ELC’s products and then promoted these operators. The court added that a more plausible explanation for ELC’s decision to submit the letter to the Newark airport operators was to try to ensure that one of the duty-free operators with which it had a relationship would win the bid. And since the cost to ELC of writing a short, factual letter is small, but the benefit from having the winning bidder being able to sell its products is very large, one could reasonably assume that deciding to write the letter would be an easy business decision, according to the court. This chain of reasonable inferences shows that no conspiracy existed, Judge Scola said. According to the court, without its conclusory allegations, DFA’s complaint reveals allegations of parallel business conduct with little more. Because ELC’s alleged conduct is more likely explained by lawful, unchoreographed free-market behavior, there is no reasonable expectation that discovery will reveal evidence of an illegal agreement, the court held.
The court also dismissed DFA’s claim that ELC violated the Sherman Act by attempting to monopolize the relevant markets, defined as either cosmetics sold in duty-free stores in U.S. airports or skin care products sold in those same stores, calling the company’s allegations “less specific” and “more conclusory” and therefore “insufficient.”