The Federal Trade Commission will host three days of public hearings to examine how evolving technology will shape and change the habits, opportunities and challenges of consumers and businesses in the coming decade. The event will bring together experts from business, government and technology sectors, consumer advocates, academicians, and law enforcement officials to examine emerging technologies and to explore technologies that are currently evolving.
On July 31, the U.S. District Court for the Northern District of Georgia barred a purported former preacher, his two sons, and his companies from selling a healthcare business opportunity promising consumers millions of dollars if they participated in an alleged network of Medicaid providers. In fact, according to the Federal Trade Commission (“FTC”) complaint, the defendants’ business model required participants to break numerous state and federal laws.
On July 28, the FCC issued a public notice in which its Wireless Telecommunications Bureau (“Bureau”) identifies 168 applicants found to be qualified to bid in the upcoming auction of Advanced Wireless Services licenses in the 1710-1755 MHz and 2110-2155 MHz bands (“AWS-1”) (Auction No. 66). Bidding in Auction No. 66 is scheduled to begin on Wednesday, August 9, 2006.
Canadian telemarketers settled Federal Trade Commission (“FTC”) charges on July 26 that they fraudulently marketed and sold credit card loss protection and healthcare discount plans to U.S. consumers in violation of federal law. Their telemarketing boiler rooms were shut down, and they will pay $200,000 in consumer redress as part of the settlement.
On July 21, China International Marine, Inc. and Netherlands-based Burg Industries stated that their merger announced in February, which would have created one of the world’s largest container makers, would be scrapped. This merger, valued at approximately $104 million, would have effectively combined the two companies under a single holding company.
China International said that the decision to terminate the deal was made after “judging the process for European Union regulators to review the transaction.” However, Burg Industries CEO Cees Van der Burg reportedly held that the EC notified China International and Burg to terminate the deal out of concerns that the proposed joint venture would become a monopoly in the market for the manufacture of tank containers for liquid cargos.
The EC investigation, launched in March, marked the first EC antitrust investigation into a Chinese company. The Chinese National Development and Reform Commission had already given its approval to the deal in April after the proposed merger was given a nod by the Chinese Ministry of Commerce.
On July 26, Oji, Japan's largest paper manufacturer said it would go ahead with a tender offer for sixth-ranked Hokuetsu in a deal that could exceed $1.4 billion, a rare attempt at a hostile takeover in a society where deals are generally more cautious and consensus-led. An Oji-Hokuetsu merger would create the world's fifth-largest paper manufacturer. In a move to prevent Oji Paper Co.'s hostile takeover bid, Nippon Paper Industries Co. started purchasing large amounts of Hokuetsu Paper Mills Ltd.’s shares.
On July 25, the Federal Trade Commission (“FTC” or “Commission”) told the Subcommittee on Housing and Community Opportunity of the House Financial Services Committee that changes in the real estate industry, which increasingly incorporate the Internet into their business models, give consumers “the choice to save potentially thousands of dollars in commissions in exchange for taking on more work.” Maureen Ohlhausen, Director of the FTC’s Office of Policy Planning told the Committee that the Commission has a long history of preventing unfair methods of competition and ensuring that real estate markets remain competitive.
On July 18, the FTC announced that it reached a settlement that would allow Linde AG’s acquisition of the BOC Group to proceed. As is typical in merger reviews, the FTC staff focused on specific product overlaps to determine what assets needed to be divested to resolve the antitrust concerns. The Commission approved the merger so long as the companies divest two groups of assets: (1) liquid oxygen and liquid nitrogen and (2) bulk refined helium. The divestitures are required to satisfy the FTC that competition will not be harmed following the transaction. That being said, an up front buyer was required for one set of assets, while an upfront buyer was not required for the other. The consent order states that Linde will have to find FTC-approved buyer for the liquid oxygen and liquid nitrogen assets within six months, however, the FTC required Linde to divest the bulk refined helium assets to an upfront buyer, Nippon Sanso.
On July 18, Britain’s House of Lords overturned the Court of Appeal’s decision in Inntrepreneur Pub Company and others v Crehan, the first case in which a UK court awarded damages for harm suffered as a result of a competition law infringement. As a result, there is now no longer any UK law precedent in which damages for loss suffered as a result of an infringement of competition law have been awarded.
On July 18, Jacques Barrot, the European Commission’s (“Commission” or “EC”) Vice-President in charge of transport, announced the Commission’s intention to improve legislation in relation to the single market for aviation. While the Commission believes that the liberalization of the airline industry brought considerable benefits to consumers, such as reduced air fares, increased routes and greater access to remote regions, it notes that there is room to improve price transparency and the consistent application of legislation.
On July 17, the Commission published its second Interim Report in relation to the retail banking part of its sectoral inquiry into the financial services sector in the Community. The first Interim Report dealt with the payment cards and the second Report covers Current Accounts and Related Services.
Competitors, Regulators, and Law Enforcement Officials Seek Halt Sale of Verizon’s Puerto Rico Telecom Assets
Also on July 14, several parties asked the FCC to deny license transfers related to the proposed sale of Verizon Communications, Inc.'s (“Verizon”) Puerto Rico telecom assets – including the incumbent local exchange carrier and its second largest wireless service operator – to America Movil S.A. de C.V. (“American Movil”). Competitors are concerned that the new operators will block the development of competition, regulators in Puerto Rico are dubious of the proposed deal's public-interest claims, and law enforcement officials want more time to examine national security and other questions.
On July 14, a federal judge said he wants to examine internal FCC documents regarding two large recent telephone company mergers to see if the Justice Department protected market competition in approving the buyouts. U.S. District Court Judge Emmet G. Sullivan's review concerns the now-completed mergers of SBC Communications Inc. (“SBC”) with AT&T Corp. (“AT&T”) and Verizon Communications Inc. (“Verizon”) with MCI Inc. (“MCI”).
On July 13, the FCC approved the sale of substantially all of the cable systems and assets of Adelphia Communications Corporation (“Adelphia”) to Time Warner Inc. (“Time Warner”) and Comcast Corporation (“Comcast”), the exchange of certain cable systems and assets between affiliates or subsidiaries of Time Warner and Comcast, and the redemption of Comcast’s interests in Time Warner Cable and Time Warner Entertainment Company.
On July 13, 2006, the European Court of First Instance (“CFI”) reversed a July 18, 2004 decision by the European Commission allowing a merger between music groups Sony and BMG.
This decision was reached in the wake of an application made by the Independent Music Publishers and Labels Association (“Impala”), an international association representing the interests of 2,500 independent music production companies, on December 3, 2004, after the Commission reversed an earlier decision stating that a combination would increase concentration and was incompatible with European Community law.
On July 12, 2006 the European Commission (EC) imposed a fine of €280.5 million ($350.6 million) on Microsoft due to Microsoft’s failure to comply with measures outlined in the EC’s infringement decision of March 2004. This penalty marks the first time that the EC used its powers under Article 24 of Regulation 1/2003 to fine a company for a failure to comply with an Article 81 or 82 decision.
On July 11, Smith & Nephew's Endoscopy division acquired San Antonio-based OsteoBiologics Inc. Smith & Nephew officials say they will pay $72.3 million in cash for OBI, which is a private company. OBI sells bioabsorbable bone graft substitutes in Europe to repair cartilage defects in the knee, and offers the substances in the United States that are used to strengthen bones. The company reported sales revenue in 2005 of $3.3 million. Smith & Nephew is a worldwide seller of medical devices in endoscopy, orthopedic reconstruction, and advanced wound management.
On July 10, the Federal Trade Commission and the Department of Justice’s Antitrust Division announced that the third in a series of planned joint public hearings designed to examine the antitrust implications of single-firm conduct under the antitrust laws will take place on July 18, 2006, in Washington, DC. As previously announced, these public hearings will examine whether and when specific types of single-firm conduct may violate Section 2 of the Sherman Act by harming competition and consumer welfare and when they are pro-competitive or benign.
On July 7, the Federal Trade Commission (“FTC”) challenged Hologic Inc.’s 2005 purchase of Fischer Imaging Corporation’s breast cancer screening and diagnosis business. Hologic closed its $32 million transaction without reporting it to the FTC because Hologic’s acquisition of Fischer’s assets was not reportable under the Hart-Scott-Rodino Premerger Notification Act (“HSR Act”), as it was valued at less than the current $56.7 million filing threshold. Accordingly, the FTC did not have an opportunity to investigate the deal before the parties consummated the transaction.
On July 7, the Federal Trade Commission announced its decision to challenge Hologic Inc.’s 2005 purchase of the breast cancer screening and diagnosis business of Fischer Imaging Corporation. In its complaint, the FTC alleged that Hologic’s acquisition of Fischer’s prone stereotactic breast biopsy systems (“SBBSs”) business harmed American consumers by eliminating its only significant competitor for the sale of SBBSs in the United States.