Increasingly, China’s antitrust reviews of global transactions have resulted in long investigations delaying the closing of many deals. This article outlines the Chinese merger review process and summarizes some of China’s merger decisions.
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Believe it or not, but on September 25, 2012, the Democrats and Republicans got sued in United States District Court for the Central District of California. They are accused under the antitrust laws of monopolizing the market for televised presidential debates in the United States by controlling the field of candidates in the race for president and vice president.
At Georgetown Law’s 6th Annual Global Antitrust Enforcement Symposium on September 19, 2012, FTC Chairman Jon Leibowitz raised critical concerns about the recent anti-competitive practices of firms regarding the use of technology and IP patents.
Continue reading "FTC Calls Recent Patent Disputes “Anticompetitive"" »
On July 31, 2012, the Federal Trade Commission (Commission) issued a statement withdrawing the Commission’s nine-year-old Policy Statement on Monetary Equitable Remedies in Competition Cases (Policy Statement). The statement’s withdrawal was approved on a 4-1 split vote, with Commissioner Maureen K. Ohlhausen casting the lone no vote and issuing a dissenting opinion.
On July 16th, the Third Circuit Court of Appeals ruled that pharmaceutical “pay-for-delay” settlements whereby cash is paid from a patent holding company to a generic manufacturer that agrees not to enter a market as prima facie evidence of an antitrust violation. The Third Circuit rejects the more lenient standard adopted by the other Circuit Courts. With the circuit courts split on the issue, the issue is now ripe for Supreme Court review.
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On July 11, 2012, the Eleventh Circuit Court of Appeals affirmed the Federal Trade Commission’s (“FTC”) decision ordering Polypore International (“Polypore”) to divest all assets it acquired from Microporous Products in 2008.
Continue reading "11th Circuit Court of Appeals Upholds FTC Ruling in Battery Separator Case" »
On June 27th, 2012, the 7th Circuit established elements extending the reach of United States antitrust law to certain cases where foreign companies engage in anticompetitive conduct outside the United States. (Minn-Chem, Inc., et al., v. Agrium Inc., No. 10-1712, slip op. (7th Cir. June 27, 2012)).
Continue reading "Seventh Circuit Sets Forth Elements for a Claim to Meet FTAIA" »
In June 2009, the Federal Trade Commission (“FTC” or “the Commission”) authorized the staff to conduct an investigation to determine whether Church & Dwight was using exclusionary practices such as conditioning discounts or rebates to retailers on the percentage of shelf or display space dedicated to Trojan brand condoms and “other products” sold and distributed by Church & Dwight.
Continue reading "D.C. Circuit Gives FTC Broad Discovery Rights " »
In light of the Department of Justice’s attempt to block telecom giant, AT&T from acquiring T-Mobile, the Hudson Institute recently released a report discussing antitrust policy as it applies to the growth of innovation. See Irwin Stelzer, Antitrust Policy in an Age of Rapid Innovation, BRIEFING PAPER (Hudson Inst., Washington, D.C.) Oct. 2011.
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On September 23, 2011, the Seventh Circuit Court of Appeals dismissed a case brought by a group of corporations that filed an antitrust suit against the major players in the potash industry, ruling that plaintiffs failed to allege specific facts sufficient to plead a plausible “direct, substantial, and reasonably foreseeable” connection between the alleged foreign anticompetitive activity and the domestic potash market. As the Foreign Trade and Antitrust Improvements Act (“FTAIA” or “Act”) develops through case law, antitrust lawyers and academics hoped that this latest case, Minn-Chem Inc. v. Agrium Inc., would provide more guidance in interpreting the Act’s three-step test. However, it seems that this case spurred more questions than answers.
The FTAIA limits enforcement of U.S. antitrust laws in situations where there are no clear effects on U.S. consumers. The Act aims to regulate foreign trade or commerce with foreign nations via a three-step test: (1) Did the conduct involve U.S. import trade or import commerce? (2) If not, does the conduct involve trade with foreign nations? and (3) If the conduct involves trade with foreign nations, does it have a “direct, substantial, and reasonably foreseeable effect” on the U.S. market?
On June 14, 2011, the European Court of Justice decided that EU law allows third parties, who are suing cartel members for money damages, access to information and evidence gathered in criminal antitrust investigations. The decision may mean the end for leniency procedures, now that cartel members looking for a way out are faced with potential disclosure of the often incriminating information they provide the competition authorities.
Continue reading "When Private Enforcement Meets Leniency" »
On July 7, 2011, the FTC and DOJ (the “Agencies”) announced the final revisions to the Hart-Scott-Rodino (“HSR”) Premerger Notification Rules and the Premerger Notification and Report Form. The changes were made to reduce the filing burden and streamline the form parties must file when seeking antitrust clearance of proposed mergers and acquisitions under the HSR Act and the Premerger Notification Rules.
Continue reading "An Overview of the Amendments to the HSR Form" »
On December 6, 2010, the Supreme Court agreed to hear a class action appeal in the Wal-Mart Stores employment discrimination case, one claiming that the company discriminated against a huge number of current and former Wal-Mart women employees in both pay and promotion. This is the biggest employment discrimination case in U.S. history and seeks billions of dollars in back pay and promotions resulting from Wal-Mart’s ongoing discrimination against these women.
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On October 28, 2010, the Federal Trade Commission (“FTC”) and the State of Minnesota, Plaintiffs to the FTC v. Lundbeck, Inc. and Minnesota v. Lundbeck, Inc. filed a Joint Notice of Appeal at the United States Court of Appeals for the Eighth Circuit, from the August 31, 2010 judgment denying an injunction against Lundbeck's 2006 acquisition of Neoprofen, which allegedly competed with Lundbeck's Indocin for the treatment of a congenital heart defect in premature infants.
Continue reading "FTC and Minnesota Appeal the Lundbeck Decision" »
On October 18, 2010, the U.S. Department of Justice (“DOJ”) and the Michigan Attorney General challenged Blue Cross Blue Shield (“BCBS”) of Michigan in a civil antitrust action. The complaint alleges that “most-favored nation” (“MFN”) clauses in BCBS contracts with Michigan hospitals raises health-care costs for Michigan residents and employers and excludes other insurers from the Michigan health-care market. United States v. Blue Cross Blue Shield of Michigan, No. 2:10-cv-14155-DPH-MKM (Mich. E. Dist. Oct. 18, 2010).
Continue reading "DOJ Disfavors MFNs" »
The Federal Trade Commission (“FTC”) lost its challenge to Ovation Pharmaceutical Inc.’s (“Ovation Pharmaceutical” now Lundbeck Inc.) acquisition of the pediatric heart drugs Indocin and NeoProfen. While the FTC claimed that the combination was a merger to monopoly resulting in anticompetitive price increases, the Federal District Court in Minnesota decided that Lundbeck (formerly “Ovation Pharmaceutical”) did not violate federal or state antitrust laws when it combined Indocin IV and NeoProfen, the only two FDA-approved drugs for treatment of patent ductus arteriosus (“PDA”). The primary reason for Judge Joan N. Erikson’s decision was that she did not believe that the FTC established that the drugs were in the same product market. FTC v. Lundbeck, Inc., No. 08-6379 and Minnesota v. Lundbeck, Inc., No. 08-6381 (D. Minn. August 31, 2010).
Continue reading "FTC Loses Merger Trial Because Of Market Definition" »
On September 16, 2010, the United Kingdom’s Office of Fair Trading (“OFT”) and the Competition Commission (“CC”) published the final version of their new joint Merger Assessment Guidelines (“Guidelines”). The Guidelines expand and revise the previous guidance published separately by OFT and CC in various publications and attempt to clarify the 2002 Enterprise Act.
The Federal Trade Commission ("FTC") continues its emphasis on investigating and challenging small consummated transactions that were not initially reviewed. Corporate executives that enter into deals that raise competitive concerns must be aware that deals that appear to be done may not be. This is the case, even if the deal is not reportable under the Hart-Scott-Rodino rules.
Continue reading "No Deal is Ever Done" »
On April 29, 2010, a panel of three judges at the Second Circuit Court of Appeals gave hope to the opponents of pay-for-delay settlements, when the Court’s decision invited plaintiffs-appellants of Arkansas Carpenters Health and Welfare Fund v. Bayer AG to petition for an en banc rehearing of the case. On September 7, 2010, however, the Court denied Appellants’ petition without providing any reasoning.
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In the State of California v. Safeway, Inc. (“California v. Safeway”), the United States Court of Appeals for the Ninth Circuit answered the question of whether the non-statutory labor exemption excused a profit-sharing agreement that would ordinarily violate the antitrust laws. The Court found that the exemption did not excuse the agreement, because the functioning of the collective bargaining process did not require it. Instead, the agreement constituted “an economic weapon used by the employers in their efforts to prevail in a labor dispute.”
Continue reading "Ninth Circuit Limits Labor Exemption of Antitrust Laws" »
On July 12, 2010, the California Supreme Court addressed the issue of “whether under the Cartwright Act an antitrust defendant can defeat liability by asserting a pass-on defense.” Clayworth v. Pfizer, Inc., No. S166435, 2010 WL 2721021 (Cal. July 12, 2010). The Cartwright Act is California’s state antitrust law. Unlike federal law, which limits antitrust damage claims to “direct purchasers,” the Cartwright Act allows indirect purchasers as well to sue on antitrust claims. In a unanimous decision, the California Supreme Court held consistent with federal law that California law bars a pass-on defense in most circumstances, even though both direct and indirect purchasers may sue for treble damages.
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On August 19, 2010, the FTC and the DOJ issued the 2010 Horizontal Merger Guidelines, which are available on the FTC’s website at http://www.ftc.gov/os/2010/08/100819hmg.pdf. The five-step analytical process outlined in the 1992 Horizontal Merger Guidelines—market definition, competitive effects, entry, efficiencies, and failing firm defense—has been replaced with a more flexible approach to competitive effects analysis. That being said, each individual element still continues to play a role in the revised merger review process.
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On August 4, 2010, the Federal Trade Commission (“FTC”) entered into a settlement agreement with Intel Corp. resolving its administrative lawsuit alleging that Intel had abused its monopoly position in microprocessor chips to harm competition.
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On June 14, 2010, Federal Trade Commission Chairman, Jon Leibowitz, gave a speech to the American Medical Association in Chicago amid ongoing tension between the two groups with respect to antitrust regulation in the medical industry. In an effort to address the AMA’s concerns, and to bolster a more productive relationship between the organizations, Leibowitz offered an explanation of the FTC’s position on antitrust in the medical arena as well as some promising options for the future of healthcare regulation.
Continue reading "FTC Chairman Offers Olive Branch, Options to AMA" »
On June 15, 2010, Howard Shelanski, Deputy Director for Antitrust in the Bureau of Economics at the Federal Trade Commission, appeared before the House Committee on the Judiciary’s Subcommittee on Courts and Competition Policy and delivered a prepared statement on behalf of the Commission. In his appearance, Mr. Shelanski requested legislative action in light of the Supreme Court’s decisions in Verizon v. Trinko and Credit Suisse v. Billing . Both of these recent cases have implications for bringing antitrust actions in federal court in regulated industries.
Continue reading "FTC Seeks to Limit Trinko and Credit Suisse" »
On May 24, 2010, the much-anticipated sports antitrust case American Needle, Inc. v. NFL was decided by the Supreme Court. The Court reversed the Seventh Circuit Court of Appeals and held that the National Football League Properties’ (NFLP) exclusive licensing agreement with Reebok to produce headwear constitutes concerted action, and thus falls within the scope of § 1 of the Sherman Act, which outlaws any “contract, combination . . . or conspiracy, in restraint of trade.” The case was remanded to be tried under the Rule of Reason.
Continue reading "Supreme Court Sacks the NFL: No Antitrust Exemption for the League" »
On August 3, the Federal Trade Commission said it will continue to investigate the relationship between the boards of Apple, Inc. and Google, Inc. even after Google's CEO, Eric Schmidt, resigned from Apple's board earlier in the day.
On July 29, Thoratec reported that it had been informed by the FTC that the FTC would challenge its $282 million acquisition of Heartware. The parties decided to abandon the merger two days later.
Continue reading "FTC READY TO CHALLENGE THORATEC’S PROPOSED ACQUISITION OF HEARTWARE" »
On July 24, 2009, the Federal Trade Commission issued an administrative complaint challenging Carilion Clinic’s August 2008 acquisition of two outpatient clinics in the Roanoke, Virginia, area. Prior to the acquisition, the Center for Advanced Imaging ("CAI") and the Center for Surgical Excellence ("CSE") had strong reputations for offering high-quality care and convenient services at prices much lower than Carilion’s.
Continue reading "FTC CHALLENGES CONSUMMATED ACQUISITIONS" »
On July 6, a number of news sources reported that the DOJ has begun looking into whether large U.S. telecommunications companies such as AT&T Inc. and Verizon Communications Inc. are abusing their market power they have amassed in recent years.
Continue reading "DOJ REPORTEDLY REVIEWING TELECOMMUNICATIONS INDUSTRY" »
On May 3,2004, the Department of Justice's ("DOJ") Antitrust Division, at the request of the Federal Trade Commission ("FTC"), filed two civil suits against alleged violators of pre-merger notification filing requirements under the Hart-Scott-Rodino ("HSR") Act of 1976. The HSR Act imposes notification and waiting period requirements on individuals and companies over a certain size before they can consummate acquisitions of stock or assets valued at more than $50 million. The purpose of the HSR Act is to provide federal antitrust enforcement agencies an opportunity to investigate proposed transactions and determine whether the transactions would violate the antitrust laws. If the reviewing agency determines that a transaction violates the antitrust laws, it may seek to block that transaction before the waiting period expires. Therefore, the antitrust agencies take HSR violations very seriously, even ones where no competition overlaps exist. Indeed, a party is subject to a maximum civil penalty of $11,000 a day for each day it is in violation of the HSR Act.
Continue reading "HSR RULES MUST BE TAKEN SERIOUSLY" »
On May 11, 2009, Christine A. Varney, Assistant Attorney General in charge of the Department's Antitrust Division, delivered her first speech at an event sponsored by the Center for American Progress. The speech, entitled "Vigorous Antitrust Enforcement in this Challenging Era," confirms that the new administration intends be much more active role than the Bush administration in terms of antitrust enforcement. Her speech primarily focused on the Department's approach to enforcing Section 2 of the Sherman Act, which prohibits monopolization or attempts to monopolize.
Continue reading "ANTITRUST DIVISION WILL TAKE A MORE AGGRESSIVE APPROACH TO EXCLUSIONARY CONDUCT" »
On May 5, it was reported by various news sources that the Federal Trade Commission opened an investigation into whether an overlap of directors on the boards of Apple Inc. and Google Inc. violates the antitrust laws,
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On June 2, 2008 Chancellor William B. Chandler III of Delaware decided to unseal the complaint in a case brought by two pension fund shareholder groups against Yahoo and its Board of Directors. The plaintiffs accused the Yahoo Board of Directors, especially CEO Jerry Yang, of violating their fiduciary duties and enacting barriers such as a severance package for employees to thwart an acquisition by Microsoft.
Continue reading "DELAWARE JUDGE UNSEALS COMPLAINT AGAINST YAHOO’S BOARD OF DIRECTORS" »
In a recent judgment dated September 30, 2007, the Federal Supreme Court held that even after parties abandon their merger plans due to a prohibition decision by the German Federal Cartel Office ("BKartA"), German courts hold jurisdiction to rule on the question as to whether the BKartA was right to prohibit the proposed merger. The parties do, however, need to demonstrate a special interest in such a court review. The Federal Supreme Court acknowledged that such an interest arises in particular if the purchaser is likely to be confronted with similar arguments by the BKartA that led to the relevant prohibition when notifying potential future acquisitions.
In a ruling released on September 17, 2007, the Court of First Instance (the “Court”), the second highest court in Europe, reaffirmed the European Commission’s (“EC”) 2004 decision that Microsoft abused its market power by tying its digital media player to the Windows operating system. By bundling these products together, Microsoft undercut existing competition in the digital media player market and created an anticompetitive market structure. The Court upheld nearly all the key points the 2004 EC decision and, in doing so, delivered a stinging rebuke to Microsoft. The Court’s ruling stated that the EC’s standard of interoperability between the Windows operating system and alternative digital media players was well conceived and that there is no inconsistency between that degree of interoperability and the remedy imposed by the EC.
The Court also upheld the EC directive to share confidential computer code with Microsoft’s competitors, a ruling that contains possible ramifications on other companies that possess market dominance in various software markets. The Court went on to declare that the EUR 497 million ($690 million) fine levied against Microsoft shall stand as is.
On July, 25 President Bush signed a bill that will reinforce the review process of foreign acquisitions in the United States, and secure an open environment for foreign investment that is critical to the U.S. economy. The final law does not alter the review period of the first and second stages of the process, and the Committee on Foreign Investment in the United States ("CFIUS") is now allowed to impose fines or, in the most severe cases, reopen reviews for material noncompliance with a mitigation agreement. Under the new law, CFIUS is required to provide Congress with detailed reports after the completion of investigations and reviews, and to consider an expanded list of factors in its national security review. These factors include the risk of technology transfer to a country that is a threat to the United States and the risks associated with foreign investment in critical infrastructure. These are just some of the most significant changes made to the process.
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On June 26, 2007 the Japanese Government’s Advisory Panel on Basic Issues Regarding the Anti-Monopoly Act (“the Panel”) concluded its series of roundtable discussions. Since 2005, the Panel has met in order to discuss and update the Act Concerning Prohibition of Private Monopolization and Maintenance of Fair Trade. The Panel was directed by the Chief Cabinet Secretary and heard testimony from a wide range of experts and concerned citizens. The statement issued by the Panel, and summarized below, is the culmination of these meetings.
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Andre P. Barlow's most recent published article is now available on the Legal Times website. To read it, please visit: http://www.law.com/jsp/dc/PubArticleDC.jsp?id=1161075916475&hub=Commentary
Testifying on behalf of the Federal Trade Commission (“FTC”) before the U.S. Senate’s Special Committee on Aging, Commissioner Jon Leibowitz described the FTC’s work in the area of branded and generic pharmaceutical competition and discussed barriers that can lead to the delay of generic entry into the U.S. marketplace.
Continue reading "FTC Testifies on Barriers to the Entry of Generic Drugs" »
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.
Continue reading "Upfront Buyer and No Upfront Buyer Required in Linde/BOC" »
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.
Continue reading "FTC Continues to Challenge Consummated Mergers" »
On June 27, the U.S. Supreme Court agreed to hear arguments from Verizon Communications Inc., AT&T Inc., BellSouth Corp., and Qwest Communications International, Inc. in a case that may either help companies' efforts to fight off antitrust law suits, or promote consumers challenges to what appears to be illegal coordination of activities by competing companies in concentrated markets that keep prices high.
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On June 26, the United States Supreme Court declined to hear the Federal Trade Commission’s (“FTC”) appeal of the Eleventh Circuit’s decision that Schering-Plough Corp. (“Schering”) legally paid two generic drug competitors to stay out of the market as part of a settlement to patent litigation. In the past, the FTC has taken a consistently aggressive approach that a money payment from a branded drug company to a generic company that delays the entry of a generic version of a branded drug is illegal.
On April 14, the Justice Department’s Antitrust Division (“Antitrust Division”) announced a $1.8 million civil settlement against merger partners Qualcomm and Flarion Technologies alleging “gun-jumping” violations of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”). The action underscores the Antitrust Division’s resolve to vigorously scrutinize the conduct of merging parties prior to consummation of the transaction.
Continue reading "Jumping the HSR Gun Is Costly for Qualcomm" »
