On May 31, the Monsanto Company and Delta & Pine Land Company (“DPL”) were required to divest a significant seed company, multiple cottonseed lines, and other valuable assets in order to proceed with their $1.5 billion merger. Monsanto was also required to change certain license agreements as a condition for proceeding with its acquisition of DPL. The DOJ said that the transaction, as originally proposed, would have caused higher prices to U.S. farmers for traited cottonseed and would have blocked or delayed development of traits for cottonseed that would compete with Monsanto. Traited cottonseed is seed that has been genetically modified to include highly desirable characteristics, such as resistance to insects or tolerance to herbicides.
On May 31, the FTC asserts that public agencies can help reduce the incidence and impact of identity theft. The FTC, in a discussion with the Ohio Privacy and Public Records Access Study Committee in Columbus, also affirms that government agencies should limit the amount of information they collect, restrict access to the information, and implement procedures to respond to data breaches.
FTC Chairman Deborah Platt Majoras Participated in Sixth Annual International Competition Network Conference in Moscow, Russia
On May 24, FTC Chairman Deborah Platt Majoras participated in the sixth annual International Competition Network (“ICN”) Conference in Moscow, Russia, from May 30-June 1, 2007. Senior government antitrust officials, private sector antitrust experts from around the world, and representatives from intergovernmental organizations met to discuss competition issues.
On May 23, Bureau of Economics Director Michael A. Salinger described the FTC’s initiatives to protect competitive markets in the production, distribution, and sale of gasoline through the agency’s comprehensive merger program on behalf of the FTC before the U.S. Congress’ Joint Economic Committee.
Although the FTC does not regulate energy market sectors, the agency plays a key role in maintaining competition and protecting consumers in energy markets. The FTC has been very involved regarding mergers in the oil industry that could harm competition. It examines any merger and any course of conduct in the industry that has the potential to decrease competition and thus harm consumers of gasoline and other petroleum products.
On May 22, Commissioner William E. Kovacic detailed the FTC’s varied initiatives to protect competitive markets in the production, distribution, and sale of gasoline and other petroleum products before the U.S. House of Representatives Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce.
The petroleum industry plays a crucial role in our economy. Indeed, few issues are more important to American consumers and businesses than the decisions being made about current and future energy production and use. Not only do changes in gasoline prices affect consumers directly, but the price and availability of gasoline also influence many other economic sectors. This is why this industry is so carefully scrutinized, more than others, by the FTC.
On May 22, the DOJ filed a civil antitrust lawsuit that required the Daily Gazette Company and MediaNews to undo their transaction and restore the competition that existed before May 2004, alleging that the Daily Gazette Company violated the antitrust laws when it acquired the Daily Mail newspaper from MediaNews. Daily Gazette Company is a privately-held corporation based in Charleston, West Virginia. MediaNews Group is based in Denver and is the fourth largest newspaper company in the United States.
Texas Hedge Fund Manager Will Pay Civil Penalty for Violating Antitrust Premerger Notification Requirements
On May 21, Mr. James D. Dondero, a Texas hedge fund manager, entered a settlement with the DOJ where he agreed to pay $250,000 for alleged charges of violating premerger reporting requirements.
According to the complaint, Mr. Dondero acquired stock of Motient Corp. (“Motient”), based in Reston, Virgina, where he served on the board of directors in February 2005, before complying with the antitrust premerger notification and waiting period requirements of the HSR Act. As a result of exercising the options, Dondero and the investment fund that he controlled, Highland Capital Management L.P. (“Highland”), held voting securities of Motient valued in excess of the $50 million HSR reporting threshold.
On May 15, the FTC banned Elliot Krasnow from ever promoting or selling franchises or business opportunities ever again. Along with his company Netvertise, Inc, Krasnow returned $160,000 to consumers after the FTC charged that they used bogus earnings claims to lure franchisees into buying their Web services businesses, and failed to tell customers that the owner was under a previous FTC order for deceptively promoting rare coins.
On May 8, the DOJ reached a settlement with Allied Waste Industries Inc., the second largest non-hazardous solid waste management company in the United States, with annual revenues of $6 billion. Allied agreed to pay $125,000 for its alleged violations of a 2000 consent decree entered in connection with Allied’s acquisition of Browning-Ferris Industries Inc. (“BFI”). The $125,000 payment to the United States includes reimbursement to the government for the cost of its investigation into Allied’s alleged violations.
U.S. Department of Justice and Federal Trade Commission Issue Report on Competition in the Real Estate Brokerage Industry
On May 8, the DOJ and the FTC issued a joint report, “Competition in the Real Estate Brokerage Industry,” to inform consumers and others involved in the industry about important competition issues involving residential real estate, including the impact of the Internet, the competitive structure of the real estate brokerage industry, and obstacles to a more competitive environment.
On May 8, the FTC banned a scammer from telemarketing and from selling any type of business program in the future. Richard C. Neiswonger, who boasted that consumers could earn a six-figure income if they purchased and used his $10,000 asset protection service business program, had previously been previously charged with falsely claiming that consumers would make a substantial income. Neiswonger had failed to disclose that his company’s references were paid for favorable reviews. An FTC order entered in 1997 barred those deceptive practices, but the scammer has violated the order by using the same deceptive business practices in his most recent scheme. In addition, he failed to disclose significant facts to consumers, especially his time spent in federal prison for money laundering and wire fraud – a violation of the FTC order.
Statement of the Department of Justice Antitrust Division on its Decision to Close Its Investigation of Smithfield Inc.’sAcquisition of Premium Standard Farms Inc.
On May 4, after an investigation, the Antitrust Division determined that Smithfield’s proposed acquisition of Premium Standard Farms was not likely to harm competition, consumers or farmers.
The Division’s investigation of the merger of these pork packers and processors focused on fresh and processed pork, the purchase of hogs from farmers, and the purchase of services from farmers who raise hogs owned by the merging parties. Based on the evidence obtained during its extensive investigation, the Division found that the merged firm would continue to face significant competition in the sale of fresh and processed pork from its national competitors Tyson, Swift, Excel/Cargill, Hormel and Seaboard Foods. Additionally, farmers who sell hogs or hog-raising services to the merged firm would have competitive alternatives that would deter the merged firm from lowering prices paid to the farmers. Although the Antitrust Division did not take any action, the long investigation indicates that the Antitrust Division will spend time investigating these deals.
On May 2, FTC Commissioner Jon Leibowitz testified on behalf of the FTC before the U.S. House Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce regarding anticompetitive patent settlements in the U.S. pharmaceutical industry. Leibowitz alleged that recent court cases have made it more difficult to bring antitrust cases to stop exclusion payment settlements between brand manufacturers and their generic competitors.
Department of Justice Files Amended Complaint in Antitrust Case Following Rinker Board of Directors’ Approval of Cemex Takeover Bid
On May 2, the DOJ filed an amended complaint in U.S. District Court in Washington, D.C., naming Rinker Group Limited as a defendant in the DOJ antitrust lawsuit against Cemex S.A.B. de C.V because the Rinker Board of Directors approved Cemex’s cash tender offer for Rinker.
Cemex and Rinker were required to preserve the assets to be divested under the consent decree and to hold their assets separate until the divestitures were completed as stated in the filed amended hold separate stipulation and proposed order.