On December 29, the Federal Trade Commission announced its decision to challenge the conduct of several organizations representing more than 2,900 independent Chicago-area physicians for agreeing to fix prices and for refusing to deal with certain health plans except on collectively determined terms. The FTC’s complaint charges that the actions of Advocate Health Partners (“AHP”) and other related parties unreasonably restrained competition in violation of Section 5 of the FTC Act. The consent order settling the FTC’s charges prohibit the respondents from engaging in such anticompetitive conduct in the future.
The FCC finally approved AT&T Inc.’s (“AT&T) merger with BellSouth Corp. (“BellSouth”) late on December 29, with the telephone companies agreeing to several conditions, including a controversial network neutrality provision aimed at protecting Web players such as Microsoft and Google. AT&T was eager to close the $80 billion-plus deal for several months. FCC approval was the last hurdle facing the merger. AT&T was forced to yield on network neutrality because FCC Democrats Michael Copps and Jonathan Adelstein insisted on protecting Internet-based providers of data, video, and applications from potential anticompetitive harms. Because four FCC members voted – Republican Robert McDowell did not participate – Copps and Adelstein held a veto over the deal.
On December 28, the Commission announced its decision to challenge General Dynamics’ proposed $275 million acquisition of SNC Technologies, Inc. and SNC Technologies, Corp. (collectively, SNC). The FTC’s complaint alleged that the deal would undermine competition by bringing together two of only three competitors providing the U.S. military with melt-pour load, assemble, and pack (LAP) services used during the manufacture of ammunition for mortars and artillery.
On December 22, the Commission received a petition from Service Corporation International (SCI) and Alderwoods Group, Inc. seeking approval to divest to Keystone America, Inc., a wholly owned subsidiary of Keystone North America, Inc., the following companies and properties: 1) Hankins & Whittington-Dilworth Chapel, Charlotte, North Carolina; 2) Bush River Memorial Gardens, Columbia, South Carolina; 3) Elmwood Cemetery, Columbia, South Carolina; 4) Southland Memorial Gardens, West Columbia, South Carolina; 5) Caughman-Harman Funeral Home, Columbia, South Carolina; 6) Caughman-Harman Funeral Home, West Columbia, South Carolina; 7) Diuguid Funeral Service, Lynchburg, Virginia; 8) Diuguid Waterlick Chapel, Lynchburg, Virginia; 9) T.J. McGowan Sons Funeral Home, Garnersville, New York; 10) T.J. McGowan Sons Funeral Home, Haverstraw, New York; 11) Shaw & Sons Funeral Directors, Inc., Yakima, Washington; 12) Glen Haven Memorial Gardens, Macon, Georgia; and 13) Lambeth Troxler Funeral Home, Greensboro, North Carolina.
On December 21, the DOJ announced that in 2006 the Antitrust Division marked its second highest level of criminal fines obtained in Division history. The Division also experienced increases in merger filings and entered into more merger settlements than the previous two years combined. Further, the Division supported initiatives to improve the analysis of civil non-merger conduct, both in the United States and internationally, and participated in several U.S. Supreme Court cases important to the continuing refinement of the antitrust laws.
At the request of the Federal Trade Commission, on December 20, a federal court shut down a payment processing operation that allegedly helped fraudulent telemarketers take millions of dollars from consumers’ bank accounts. According to the FTC’s complaint, since at least January 2003 the operation has aided at least nine Canada-based, advance-fee credit card schemes that induce consumers to allow an electronic debit of several hundred dollars from their bank account in exchange for an unsecured credit card; but consumers never receive a credit card or, at best, they receive a “benefits package” containing relatively worthless items.
Local governments will have 90 days to act on cable-franchise applications filed by AT&T Inc., Verizon Communications and other entities with existing rights to access city-owned conduits, the FCC ruled in an action on December 20 that split the agency along partisan lines. With support from major phone firms, FCC chairman Kevin Martin championed franchise reform as his proclaimed antidote for rising nominal cable rates and for spurring deployment of high-speed Internet-access facilities across the country. Because cable incumbents were not granted similar 90-day guarantees, the National Cable & Telecommunications Association (“NCTA”) called the FCC vote a rejection of a “level playing field” among cable providers.
On December 20, the Commission received a petition from Service Corporation International (SCI) and Alderwoods Group, Inc. seeking approval to divest: 1) Conroe Memorial Park, Conroe, Texas; 2) Harper-Talasek Funeral Home, Killeen, Texas; 3) Palmer Mortuary, Sequin, Texas; 4) Trevino Funeral Home, Brownsville, Texas; 5) Darling-Mouser Funeral Home, Brownsville, Texas; 6) Elmwood Funeral Home, Abilene, Texas; 7) Elmwood Memorial Park, Abilene, Texas; 8) Sunset Memorial Home, Odessa, Texas; 9) Resthaven Gardens of Memory cemetery, Baton Rouge, Louisiana; 10) Resthaven Gardens of Memory funeral home, Baton Rouge, Louisiana; 11) Welsh Funeral Home, Gonzalez, Louisiana; 12) James F. Webb Funeral Home, Meridian, Mississippi; and 13) James F. Webb Funeral Home, Newton, Mississippi to Legacy Holdings.
On December 19, the Commission received a petition from Service Corporation International (SCI) and Alderwoods Group, Inc. seeking approval of a proposed divestiture related to SCI’s recent acquisition of Alderwoods. In the FTC’s consent agreement and order allowing the transaction to proceed with conditions, SCI and Alderwoods were required to divest a range of funeral home and cemetery services companies. Through this petition, the companies requested approval to divest: 1) Conejo Mountain Funeral Home, located at 2052 Howard Road, Camarillo, California (Southern Ventura County); and 2) Conjeo Mountain Memorial Park, located at the same address, to two wholly owned subsidiaries of Carriage Services, Inc.: Carriage Cemetery Services, Inc. (CCSI) and Cochrane’s Chapel of Roses, Inc. Under an agreement with SCI, CCSI will buy the cemetery assets and Cochrane’s will buy the funeral home assets.
On December 15, the Antitrust Division announced that it is amending its 2001 Merger Review Process Initiative in order to further streamline the merger investigation process to improve the efficiency of the Division's investigations while reducing the cost, time and burdens faced by parties to transactions that are reviewed by the Division.
To circumvent federal limits on radio ownership, investors trying to buy industry giant Clear Channel Communications Inc. (“Clear Channel”) plan to become passive owners in some radio stations they already own and divest others. According to their merger application submitted Friday, December 15, to the FCC, Thomas H. Lee Partners LP (“Lee”) and Bain Capital LLC (“Bain”) plan to insulate their interests in other radio companies in which they have a stake to avoid violating the agency’s limits on how many stations one company can own in a single market.
On December 14, operators who promised Spanish-speaking consumers “designer” merchandise but delivered knock-offs and outdated electronics will give up approximately $235,000 to settle FTC charges that their scam violated federal laws including the Do Not Call Rule. The telemarketers called Spanish-speaking customers, telling them they had been selected to get a valuable “prize,” such as a laptop or digital video camera.
FTC Challenges Terms of Johnson & Johnson’s Proposed Acquisition of Pfizer’s Consumer Healthcare Business To Protect Competition
On December 12, the Federal Trade Commission announced its decision to challenge the terms of Johnson & Johnson’s (J&J) proposed $16.6 billion acquisition of Pfizer Inc.’s (Pfizer) Consumer Healthcare business. The FTC’s complaint alleged that the transaction as originally proposed would reduce competition in the U.S. markets for over-the-counter (OTC) H-2 blockers used to prevent and relieve heartburn, OTC hydrocortisone anti-itch products, OTC night-time sleep aids, and OTC diaper rash treatments.
The Federal Trade Commission’s Bureau of Economics Director Michael Salinger testified on December 7 before the U.S. Senate Committee on the Judiciary about the FTC’s January 2006 closure of its investigation into the proposed acquisition by Comcast Corporation and Time Warner Cable Inc. (“TWC”) of the cable assets of Adephia Communications Corporation (“Adelphia”).