Antitrust Lawyer Blog tag:www.antitrustlawyerblog.com,2010://1 2010-01-14T21:35:22Z Movable Type 3.35 DOJ INVESTIGATING MONSANTO tag:www.antitrustlawyerblog.com,2010://1.495 2010-01-14T21:10:23Z 2010-01-14T21:35:22Z On January 14, the DOJ announced that it has opened a formal antitrust investigation of the soybean seed industry.... dbmadmin theantitrustlawblog.com On January 14, the DOJ announced that it has opened a formal antitrust investigation of the soybean seed industry.

]]> Monsanto announced that the DOJ's Antitrust Division sent it a civil investigative demand ("CID) for information on the company's soybean traits business after complaints that Monsanto was trying to limit access to push a new, pricier product instead.

Allegedly, seed dealers, Monsanto's rivals, and others have complained that Monsanto was creating conditions, through contracts with seed dealers and other means, that would unfairly push farmers to buy its new Roundup Ready 2 Yield soybeans and away from the first-generation, lower-priced Roundup Ready beans.

The investigation is noteworthy because the DOJ has stated previously that it would start scrutinizing the agricultural industry and this investigation confirms that the DOJ intends to scrutinize these markets.


Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

]]> FTC Approves Agrium's Purchase of CF tag:www.antitrustlawyerblog.com,2009://1.496 2009-12-23T21:18:52Z 2010-01-14T21:35:22Z On December 23, 2009, Agrium Inc. agreed to sell a range of assets as part of an agreement with the FTC that will allow Agrium to move forward with its acquisition of competitor CF Industries Holdings, Inc. The proposed consent... dbmadmin theantitrustlawblog.com On December 23, 2009, Agrium Inc. agreed to sell a range of assets as part of an agreement with the FTC that will allow Agrium to move forward with its acquisition of competitor CF Industries Holdings, Inc. The proposed consent order settles allegations that the acquisition would have eliminated competition in the market for anhydrous ammonia fertilizer, a product that farmers rely on to grow their crops.

]]> According to the FTC’s complaint, Agrium’s acquisition of CF would have eliminated competition between the two companies in the distribution and sale of anhydrous ammonia in three markets: the Pacific Northwest; East Dubuque, Illinois; and Marseilles, Illinois.

The FTC’s complaint alleges that each of these markets is highly concentrated and the proposed transaction would further increase concentration levels by reducing the number of significant competitors in the Pacific Northwest from two to one, and in the two areas in Illinois from three to two. The complaint further alleges that the proposed transaction likely would increase the prices for anhydrous ammonium fertilizer.

To prevent these price increases, the FTC’s consent order replaces the competition that otherwise would have been lost because of the deal and requires Agrium to:

divest CF’s Ritzville anhydrous ammonia terminal in the Pacific Northwest;
divest its Marseilles anhydrous ammonia terminal in Northern Illinois; and
rescind its rights to market anhydrous ammonia produced by Rentech at Rentech’s East Dubuque manufacturing plant.

According to the consent order, Agrium must divest the Ritzville and Marseilles terminals to Terra Industries, Inc. or another Commission-approved purchaser if Terra is later found to be an unacceptable buyer.

The consent order requires Agrium to maintain the assets to be divested and operate the Ritzville terminal independently until each of the divestitures is completed. The consent order also requires Agrium to provide necessary transition services to Terra or another Commission- approved acquirer. It also allows the FTC to appoint a trustee to divest any assets that Agrium does not sell in a timely manner and to seek civil penalties from Agrium if it fails to comply with the consent agreement. Finally, for 10 years, it requires Agrium to provide advance written notification to the Commission of any intent to acquire any interests or assets related to the distribution and sale of anhydrous ammonia.

The Commission vote approving the proposed consent order was 4-0.

a href="http://www.dbmlawgroup.com/index.php?option=com_content&task=view&id=26&Item
id=67">
Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

]]> FTC Sues Intel tag:www.antitrustlawyerblog.com,2009://1.493 2009-12-18T00:03:03Z 2009-12-18T01:04:11Z On December 16, 2009, the Federal Trade Commission ("FTC") filed an administrative complaint against Intel Corporation ("Intel") alleging that it has engaged in anticompetitive and unfair conduct in order to stifle competition and maintain its monopoly position.... dbmadmin theantitrustlawblog.com On December 16, 2009, the Federal Trade Commission ("FTC") filed an administrative complaint against Intel Corporation ("Intel") alleging that it has engaged in anticompetitive and unfair conduct in order to stifle competition and maintain its monopoly position.

]]> In the complaint, the FTC alleges a number of unfair methods of competition in violation of Section 5 of the FTC Act. The FTC alleges that when its monopoly was threatened, Intel resorted to “unfair methods of competition and unfair practices to block or slow the adoption of competitive products and maintain its monopoly to the detriment of consumers.” Some of the alleged conduct dating back to 1999 include: entering into anticompetitive arrangements with the largest computer manufacturers that were designed to limit or foreclose various original equipment manufacturers’ ("OEMs") use of competitors’ products; punishing OEMs who did not purchase “enough” of Intel’s products by threatening to increase (and actually increasing) prices, ending product and technology collaborations, shutting off supply, and reducing marketing support, while favoring OEMs that purchased all or nearly all of their requirements from Intel; offering market share or volume discounts to selective OEMs in an attempt to foreclose competition in the relevant central processing unit ("CPU") markets; using its position in complementary markets to protect against competitive threats in the relevant CPU markets; inducing suppliers of complementary software and hardware products to eliminate or limit their support of non-Intel CPU products; failing to disclose material information to consumers about the effects of Intel’s redesigned software on the performance of non-Intel CPUs; and pressuring independent software vendors to label their products as compatible with Intel products only, even though competing microprocessor products were compatible as well.

The FTC action is noteworthy because the Commission is attempting to invoke its full authority under Section 5 of the Federal Trade Commission Act ("FTC Act") to pursue anticompetitive conduct. Companies are now on notice that the FTC is willing to exercise its full authority under the broader Section 5 to reach conduct that the Sherman Act may not reach. In a joint statement from Chairman Leibowitz and Commissioner Rosch, they noted that because the courts have limited the reach of antitrust laws giving some anticompetitive conduct a free pass, it is more important than ever for the Commission to actively consider whether it may be appropriate to exercise its full authority under Section 5. While the FTC is clearly broading its authority, Leibowitz and Rosch also made clear that the FTC will enforce Section 5 responsibly as Section 5 is not without boundaries. That being said, the filing of this case demonstrates that the FTC is willing to aggressively go after companies for anticompetitive behavior that may not be reached by the antitrust laws.


Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

]]> DOJ CLEARS CISCO'S ACQUISITION OF STARENT tag:www.antitrustlawyerblog.com,2009://1.494 2009-12-16T20:53:10Z 2010-01-14T21:35:22Z On December 16, 2009, Cisco announced that the DOJ terminated the mandatory waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, with respect to Cisco's pending acquisition of Starent Networks.... dbmadmin theantitrustlawblog.com On December 16, 2009, Cisco announced that the DOJ terminated the mandatory waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, with respect to Cisco's pending acquisition of Starent Networks.

]]> The DOJ chose not to issue a second request to review Cisco’s acquisition of Starent eventhough the acquisition led to increased concentration in the CDMA radio access market for wireless phones. Some analysts characterized the deal as a 3-2 or that the combined firm would have more than 85% of the market.

There are very formidable competitors in this space such as Huawei Technologies, ZTE, Ericsson, NSN, Juniper Networks and Alcatel Lucent. In addition, smaller companies like Dragonwave and Ceragon Networks participate in some areas of this sector. And the entire wireless IP networking market is filled with start-ups. Moreover, Starent did not seem to have sufficient pricing power to concern regulators. That is, though the firm has a commanding 85% of the CDMA market, this is largely the result of supplying industry behemoth Verizon. But Verizon could turn to other providers if Starent’s product deteriorates or prices were to increase post-acquisition. In other words, Verizon has power in this circumstance. In the past, Verizon relied on Starent but there was some information suggesting that Verizon could use other vendors so it does not appear to be the case that Verizon is totally reliant on Starent. Verizon is the primary customer at issue in this investigation so Verizon’s thoughts on the deal are very important to the antitrust review. Verizon was in favor of the deal. Customers in general including Verizon supported the deal. There was also evidence that the telecoms are moving to 4G and away from CDMA so the CDMA market share is not important.

The decision is noteworthy because it demonstrates that the new administration is not simply investigating every merger that raises concentration levels and that the DOJ staff will still end an investigation early if enough facts demonstrate that no remedies would be required for approval.


Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

]]> Watson’s Acquisition of Arrow Requires Settlement tag:www.antitrustlawyerblog.com,2009://1.491 2009-12-02T19:05:18Z 2009-12-11T19:20:32Z On December 2, 2009, the FTC announced an order settling charges that Watson Pharmaceuticals, Inc.’s acquisition of Robin Hood Holdings Limited, owner of Arrow Pharmaceuticals, would have harmed consumers by eliminating future competition for important generic drugs used to treat... dbmadmin theantitrustlawblog.com On December 2, 2009, the FTC announced an order settling charges that Watson Pharmaceuticals, Inc.’s acquisition of Robin Hood Holdings Limited, owner of Arrow Pharmaceuticals, would have harmed consumers by eliminating future competition for important generic drugs used to treat Parkinson’s disease (cabergoline) and the side effects of chemotherapy (dronabinol).

]]> Under the order’s terms, Watson will sell its generic cabergoline product to Impax Laboratories Inc. and Arrow will spin off its subsidiary, Resolution Chemicals, which is currently developing generic dronabinol, to a new entity, Reso Holdings, within 10 days of the acquisition. Arrow also must sell the U.S. marketing rights for generic dronabinol to Impax.

According to the Commission’s complaint, Watson’s acquisition of Arrow, as originally proposed, would violate federal antitrust law because it would lessen competition in the U.S. markets for generic cabergoline tablets and generic dronabinol capsules. The complaint alleges that the acquisition would reduce the number of generic suppliers in the market, which could raise the prices that patients pay for these drugs.

Cabergoline, the generic name of Pfizer’s Dostinex, is a dopamine receptor agonist used to treat Parkinson’s disease and medical problems related to the overproduction of the hormone prolactin. The FTC alleged that the $44.8 million U.S. market for the generic version of the drug is highly concentrated, and Arrow is one of only three suppliers in the United States. Watson has U.S. Food and Drug Administration approval to sell generic cabergoline, and is poised to enter the market within the next two years. Its proposed acquisition of Arrow, therefore, would eliminate its incentive to enter the market as a fourth generic alternative.

Dronabinol, the generic name for Solvay Pharmaceutical’s Marinol, is used to treat nausea and vomiting caused by chemotherapy, as well as loss of appetite and weight loss in HIV patients. The $74.4 million U.S. market for generic dronabinol is also highly concentrated, with only Watson and Par Pharmaceuticals currently supplying the drug. Arrow’s subsidiary, Resolution, is one of a limited number of companies developing a generic dronabinol product, and is planning to enter the market within two years. Thus, Watson’s proposed acquisition of Arrow would eliminate one of a limited number of potential competitors.

The FTC’s proposed consent order remedies the anticompetitive effects of the acquisition in both markets. It requires Watson to divest its generic cabergoline product to Impax. The order also requires Arrow to spin-off its wholly-owned subsidiary, Resolution Chemicals, to a new entity, Reso Holdings, which will be owned in part by Resolution’s current management. Resolution’s managers are the original developers of Arrow’s generic dronabinol product and have been involved with all aspects of generic dronabinol development. As Reso Holdings will not have sales and marketing capabilities, however, the order also requires Arrow to sell the U.S. marketing rights for generic dronabinol to Impax. The FTC stated that the combined divestitures preserve competition in the generic dronabinol market by allowing Resolution to continue dronabinol development as Reso Holdings and providing a capable marketing partner once generic dronabinol receives all necessary regulatory approvals.

The order is noteworthy because it demonstrates that the FTC continues to scrutinize generic merger deals. The Commission’s order requires the firms to sell assets related to the two drugs to FTC-approved buyers and to ensure the acquirers have the means to compete effectively in the future. Generic drug competition is very important at the FTC. Indeed, the Commission vote approving the proposed consent order was 3-0, with Commissioner Harbour recused.

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com

]]> FTC Allows SCI’s Acquisition of Palm Mortuary With Divestitures tag:www.antitrustlawyerblog.com,2009://1.492 2009-11-25T19:30:03Z 2009-12-11T19:38:51Z On November 25, 2009, the FTC announced that it approved SCI's acquisition of Palm Mortuary, Inc. ("Palm") as long as it sold a cemetery and funeral home in Las Vegas.... dbmadmin theantitrustlawblog.com On November 25, 2009, the FTC announced that it approved SCI's acquisition of Palm Mortuary, Inc. ("Palm") as long as it sold a cemetery and funeral home in Las Vegas.

]]> The FTC alleged that Las Vegas has a highly concentrated market for cemetery services, which includes burial plots, opening and closing of graves, memorials, burial vaults, mausoleum spaces, and cemetery maintenance. According to the FTC’s complaint, SCI’s proposed acquisition of Palm would have reduced the number of significant competitors from three to two, and SCI would have controlled 76 percent of the market for funeral services.

The complaint alleges that the transaction would have increased the likelihood that the combined firm could raise prices either unilaterally or through coordinated interaction with its only remaining competitor. Entry of a new competitor in the area is not likely to counteract the alleged anticompetitive effects of the acquisition, due in part to the limited amount of land in Las Vegas that is suitable for cemeteries.

The FTC’s consent order is designed to remedy the anticompetitive effects of the proposed acquisition by requiring SCI to divest Davis Memorial Park, currently its only cemetery in the Las Vegas area, as well as the funeral home on the same property. SCI also will be required to divest the rights to the Davis trade name and the pre-need service contracts associated with the Davis facility as well as another funeral home it owns in the Las Vegas area.

The divestiture must be made to an FTC-approved buyer, and completed within 90 days after SCI acquires Palm. If the FTC finds that the purchaser or manner of the proposed divestiture is unacceptable, SCI must immediately rescind the offer and divest the assets to another FTC-approved buyer within six months from when the order becomes final. The proposed order requires SCI to give prior notice to the Commission before acquiring any interest or assets related to the provision of cemetery services in the Las Vegas area for the next 10 years.

The Commission vote approving the proposed consent order was 4-0.

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com

]]> MICHIGAN REALTORS' GROUP REDUCED COMPETITION BY RESTRICTING ACCESS TO ITS MULTIPLE LISTING SERVICE tag:www.antitrustlawyerblog.com,2009://1.490 2009-11-02T21:19:09Z 2009-12-05T21:25:40Z On November 2, 2009, the Federal Trade Commission (“FTC”) released an opinion stating that the Realcomp II (“Realcomp”), a real estate multiple listing service (“MLS”) serving southeast Michigan, took part in anticompetitive practices by restricting some of its members access... dbmadmin theantitrustlawblog.com On November 2, 2009, the Federal Trade Commission (“FTC”) released an opinion stating that the Realcomp II (“Realcomp”), a real estate multiple listing service (“MLS”) serving southeast Michigan, took part in anticompetitive practices by restricting some of its members access to its database.

]]> An MLS is a database that includes members’ home listings information. Members are allowed to communicate amongst themselves as well as search through all of the home listings available in the area through the database. As such, access to a multiple listing service database is critical for any broker to service clients efficiently.

According to the FTC, Realcomp excluded listings of brokers who offered discounts. For example if a user was to search the public website for Realcomp, only listings of the full-service real estate brokers, who make up the majority of Realcomp’s membership, would show up. The FTC cited the Schumpeterian concept of “creative destruction” by stating that Realcomp was enabling its full-service real estate brokers to maintain their competitive advantage and disallowing newly innovated methods developed by members offering discounts which had the potential of “changing the [competitive] game.” According to the FTC, Realcomp’s actions hindered the competitive process and narrowed consumer choice.

The FTC’s final order requires Realcomp to stop its discriminating policies towards members offering innovative discounts within 30 days and inform its members of the changes within 90 days. It also requires Realcomp to place a statement of changes to its regulations and policies on its website.


Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com

]]> FTC ALLOWS SCHERING-PLOUGH TO ACQUIRE MERCK tag:www.antitrustlawyerblog.com,2009://1.455 2009-10-29T14:56:12Z 2009-10-30T15:49:46Z On October 28, 2009, the FTC approved Schering-Plough's $41.1 billion acquisition of Merck, on the condition that certain divestitures were made.... dbmadmin theantitrustlawblog.com On October 28, 2009, the FTC approved Schering-Plough's $41.1 billion acquisition of Merck, on the condition that certain divestitures were made.

]]> On March 8, 2009, Schering-Plough proposed to acquire Merck and rename the surviving entity Merck. According to the FTC’s complaint, Schering-Plough’s acquisition of Merck would have reduced competition in a range of animal health markets in which the companies compete. The companies are two of the leading animal health suppliers in the United States, and the proposed acquisition raises significant concerns in markets where Merck, through Merial, and Schering-Plough directly compete. The FTC’s complaint also alleges that the transaction raises competitive concerns regarding human drugs known as NK 1 receptor antagonists. Nausea and vomiting are common side effects of both chemotherapy and surgery. Merck’s Emend® is the first and only NK 1 receptor antagonist approved for human use to treat such side effects. Schering-Plough, however, was in the process of licencing its own NK 1 receptor antagonist, rolapitant, to a third party when the company’s acquisition of Merck was announced. The FTC concluded that the transaction would have reduced the combined firm’s incentives to launch rolapitant, delaying or eliminating a future entrant into the market for NK 1 receptor antagonist drugs for nausea and vomiting.

To remedy these concerns, Merck must sell its interest in Merial Limited, an animal health joint venture with Sanofi-Aventis S.A., and Schering-Plough must sell its assets related to significant drugs for nausea and vomiting in humans.

The consent order resolves the Commission’s concerns regarding the proposed transaction’s potential anticompetitive effects.


Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

]]> FTC SETTLES WITH PFIZER REGARDING ITS ACQUISITION OF WYETH tag:www.antitrustlawyerblog.com,2009://1.451 2009-10-14T19:31:40Z 2009-10-29T19:35:15Z On October 14, 2009, the Federal Trade Commission (“FTC”) settled with Pfizer Inc. regarding its proposed $68 billion acquisition of Wyeth.... dbmadmin theantitrustlawblog.com On October 14, 2009, the Federal Trade Commission (“FTC”) settled with Pfizer Inc. regarding its proposed $68 billion acquisition of Wyeth.

]]> According to the FTC, the proposed transaction would have reduced competition in several U.S. markets for the manufacture and sale of animal vaccines and animal pharmaceutical products. Veterinarians and other animal health product customers could have seen the prices of these goods increase. Furthermore, the FTC believes that the entry of new competitors in these markets would not be timely, likely, nor sufficient to offset the loss of competition.

The consent order requires Pfizer to sell approximately half of Wyeth’s Fort Dodge U.S. animal health business, including vaccines for cattle, dogs, and cats, and other pharmaceutical products used in treating cattle, dogs, cats, and horses, to Boehringer Ingelheim Vetmedica, Inc. (“Boehringer”), within 10 days of the acquisition. Pfizer is required to provide Boehringer with key services to help it compete after the consummation of the deal. In addition, the order requires Pfizer to return its exclusive distribution rights for a product to treat tapeworms in horses to Virbac S.A., the manufacturer of the product.

Throughout the course of the FTC’s investigation, staff communicated and cooperated with their counterparts in the European Commission’s Competition Directorate (“EC”), and the competition authorities in Canada, Australia, Mexico, New Zealand, and South Africa that also are reviewing, or already have reviewed, this proposed merger.


Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

]]> ICE PACKAGING COMPANY AND ITS EXECUTIVES PLEAD GUILTY TO CUSTOMER ALLOCATION CONSPIRACY tag:www.antitrustlawyerblog.com,2009://1.489 2009-10-13T21:16:53Z 2009-12-05T21:19:02Z On October 13, 2009, Arctic Glacier International (“AGI”) and three of its former executives, Frank Larson (former senior VP of operations), Keith Corbin (former VP of sales), and Gary Cooley (former VP of sales and marketing), pled guilty for their... dbmadmin theantitrustlawblog.com On October 13, 2009, Arctic Glacier International (“AGI”) and three of its former executives, Frank Larson (former senior VP of operations), Keith Corbin (former VP of sales), and Gary Cooley (former VP of sales and marketing), pled guilty for their role in a conspiracy to allocate customers of packaged-ice in the Detroit metropolitan area and southeastern Michigan. The company agreed to pay a criminal fine of $9 million.

]]> According to the Department of Justice (“DOJ), AGI took part in this anticompetitive behavior from 2001 to 2007. Specifically, Mr. Larson and Mr. Corbin were involved in the same conspiracy between March 1, 2005 and July 17, 2007. Mr. Cooley took part in the conspiracy between June 1, 2006 and July 17, 2007.

According to the charges, AGI and its former executives conspired with another ice packaging to company to allocate customers of packaged ice by exchanging information for the purpose of adhering to the agreed customer allocations and refraining from competing for the allocated customers.

AGI and its former executives have agreed to cooperate in the DOJ’s ongoing investigation.


Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

]]> DOJ REQUIRES DIVESTITURES IN AT&T’S ACQUISITION OF CENTENNIAL tag:www.antitrustlawyerblog.com,2009://1.450 2009-10-13T19:19:09Z 2009-10-29T19:31:13Z On October 13, 2009, the Department of Justice (“DOJ”) settled with AT&T Inc. (“AT&T”) regarding its $944 million acquisition of Centennial Communications Corp. (“Centennial”).... dbmadmin theantitrustlawblog.com On October 13, 2009, the Department of Justice (“DOJ”) settled with AT&T Inc. (“AT&T”) regarding its $944 million acquisition of Centennial Communications Corp. (“Centennial”).

]]> Specifically, AT&T is required to divest its assets in eight Cellular Marketing Areas (“CMA”), as defined by the Federal Communications Commission (“FCC”), in southwestern and central Louisiana and southwestern Mississippi in order for the transaction to be consummated. According to the DOJ, AT&T and Centennial are each other’s closest competitors in various markets. Therefore, the transaction would have reduced competition for mobile wireless telecommunications services in the eight CMAs.

The proposed transaction is still under review by the FCC.


Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

]]> FTC SETTLES REGARDING CARILION’S 2008 ACQUISITION OF TWO OUTPATIENT CLINICS IN VIRGINIA tag:www.antitrustlawyerblog.com,2009://1.449 2009-10-07T19:14:15Z 2009-10-29T19:18:08Z On October 7, 2009, the Federal Trade Commission (“FTC”) settled its litigation regarding Carilion Clinic's (“Carilion”) acquisition of two outpatient clinics.... dbmadmin theantitrustlawblog.com On October 7, 2009, the Federal Trade Commission (“FTC”) settled its litigation regarding Carilion Clinic's (“Carilion”) acquisition of two outpatient clinics.

]]> On July 24, 2009, the FTC issued an administrative complaint challenging Carilion’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.

According to the complaint, Carilion’s $20 million acquisition of CAI and CSE reduced the number of outpatient imaging and surgical services providers in the Roanoke area from three to two. Carilion now faces competition for outpatient imaging and surgical services from only one other provider, HCA, the other major hospital system in the Roanoke area.

The consent order requires Carilion to sell the Center for Advanced Imaging and the Center for Surgical Excellence to an FTC-approved buyer within three months. The order also allows for FTC-approved buyer to replace the competition eliminated by the acquisition through the following provisions: prohibiting Carilion, for the first six months, from soliciting for employment any physician or physician practice that has referred patients to the CAI since January 1, 2008 enabling the new owner to develop and reestablish its referral base; prohibiting Carilion, for one year, from making any change that would restrict its own doctors who have referred patients to the CAI from continuing to do so; requiring Carilion to preserve the viability, marketability, and competitiveness of the two clinics’ assets prior to divestiture; requiring Carilion to offer financial incentives to the staff of both clinics to remain during and after their sale to the FTC-approved buyer; and prohibiting Carilion from using or disclosing competitively sensitive information and permitting the FTC to appoint a monitor to ensure Carilion’s compliance with the terms of the order.

The successful challenge is noteworthy for several reasons. First, the challenge reiterates that the FTC is serious about enforcing the antitrust laws against small mergers that do not meet the HSR thresholds. Second, it demonstrates that completed deals that slip beneath the FTC’s radar screen initially are fair game even if the FTC learns about them later. Third, the fact that a deal is not HSR reportable does not mean that no antitrust issues exist with the combination. Fourth, the Commission can and will challenge a consummated deal if it determines that the deal is anticompetitive. Fifth, the FTC has a particular interest in post-acquisition competitive effects of consummated mergers.

Therefore, parties to a consummated deal that raise significant antitrust issues and avoided HSR scrutiny, for whatever reason, should proceed with reasonable caution and closely monitor post-acquisition conduct. Moreover, corporate and private counsel should be aware of the likely consequences and the risks of consummating transactions that raise significant competitive issues. The risks may include: defending against costly and lengthy government investigations; reorganizing to the government’s demands of possible divestitures even after integration has taken place; and disgorging profits gained form the alleged anticompetitive merger.


Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

]]> DOJ WILL NOT CHALLENGE LTL FREIGHT TRANSPORTATION COMPANIES’ JOINT VENTURE tag:www.antitrustlawyerblog.com,2009://1.454 2009-09-30T14:51:11Z 2009-10-30T15:49:46Z On September 8, 2009, the Department of Justice announced that it would not challenge the formation of a Reliance Network, a joint venture between seven regional less-than-truckload (“LTL”) freight transportation companies, based on the representations made by the applicants.... dbmadmin theantitrustlawblog.com On September 8, 2009, the Department of Justice announced that it would not challenge the formation of a Reliance Network, a joint venture between seven regional less-than-truckload (“LTL”) freight transportation companies, based on the representations made by the applicants.

]]> The Reliance Network is comprised of: Averitt Express Inc.; DATS Trucking Inc.; Lakeville Motor Express Inc.; Land Air Express of New England; Pitt Ohio Express; Canadian Freightways; and Epic Express. These companies would like to collectively bid and engage in other collaborative activity as part of their nationwide LTL truck transportation services joint venture. According to their representations to the DOJ, the carriers would account for less than 20 percent of the LTL freight transportation business in these regional markets, and far less than 20 percent of a nationwide LTL freight transportation market. Furthermore, they represented that they would achieve shipping efficiencies combine information technology, operations, sales and marketing efforts, and administration.

According to the DOJ, the proposed joint venture will not likely reduce competition in regional LTL truck transportation markets and could enhance competition in the long haul LTL market.



Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

]]> FTC SETTLES WITH K+S REGARDING ITS ACQUISITION OF MORTON INTERNATIONAL tag:www.antitrustlawyerblog.com,2009://1.488 2009-09-26T02:15:39Z 2009-11-13T02:16:20Z On September 25, 2009, the FTC settled with K+S Aktiengesellschaft (“K+S”) regarding its $1.68 billion proposed acquisition of Morton International, Inc. (“Morton”). The proposed merger would have combined K+S’s subsidiary, International Salt Company LLC (“ISCO”) with Morton. According to the... dbmadmin theantitrustlawblog.com On September 25, 2009, the FTC settled with K+S Aktiengesellschaft (“K+S”) regarding its $1.68 billion proposed acquisition of Morton International, Inc. (“Morton”).

The proposed merger would have combined K+S’s subsidiary, International Salt Company LLC (“ISCO”) with Morton. According to the FTC, the combined company would have enjoyed a 70% market share of the bulk de-icing salt market in Maine and Connecticut. There is no practical substitute for de-icing salt and it is unlikely that other salt providers would enter the markets. The transaction could have substantially increased the prices of de-icing salt.

]]> The FTC consent order requires ISCO to sell its bulk de-icing assets in Maine and Connecticut to Eastern Salt Company, Inc. and Granite State Minerals, Inc., respectively. According to the FTC, the consent order will restore competition in production and sales of bulk de-icing salts in the two sates.

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com

]]> U.S. ANTITRUST AGENCIES TO EXPLORE CHANGES TO HORIZONTAL MERGER GUIDELINES tag:www.antitrustlawyerblog.com,2009://1.447 2009-09-22T16:22:27Z 2009-09-22T17:30:56Z On September 22, the Department of Justice ("DOJ") and the Federal Trade Commission ("FTC") announced that they will solicit public comment and hold joint public workshops to explore the possibility of updating the Horizontal Merger Guidelines that are used by... dbmadmin theantitrustlawblog.com On September 22, the Department of Justice ("DOJ") and the Federal Trade Commission ("FTC") announced that they will solicit public comment and hold joint public workshops to explore the possibility of updating the Horizontal Merger Guidelines that are used by both agencies to evaluate the potential competitive effects of mergers and acquisitions.

]]> The Merger Guidelines describe the analytical framework and specific standards normally used by the agencies in analyzing mergers. The Guidelines are intended to reduce the uncertainty associated with enforcement of the antitrust laws in the merger area. The last significant revision of the Guidelins was in 1992, however, the agencies issued a detailed Commentary on the Guidelines in 2006.

The goal of the workshops will be to determine whether the Guidelines need to be updated. In other words, do the Guidelines accurately reflect the current practice of merger review? Do the Guidelines take into account legal and economic developments that have occurred since 1992? Topics to be discussed include: the overall method of analysis used by the agencies; the use of more direct forms of evidence of competitive effects; market definition; market shares and market concentration; unilateral effects, especially in markets with differentiated products; price discrimination; geographic market definition; the relevance of large buyers; the distinction between uncommitted and committed entry; the distinction between efficiencies involving fixed and marginal cost savings; the non-price effects of mergers, especially the effects of mergers on innovation; and remedies.

The agencies will issue a set of questions about the current Guidelines and possible revisions. Following receipt of public comments and original research addressing those questions or other issues related to the Guidelines, the agencies will host a series of five workshops. The workshops, which are open to the public and press, will take place in December 2009 and January 2010. The first workshop will be held in Washington, D.C., on Dec. 3, 2009, followed by workshops in Chicago, New York City and San Francisco. A final workshop also will be held in Washington, D.C. The dates and times for the other workshops have not been set yet.


Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com

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