Articles

August 21, 2014

Berkshire Hathaway Agrees to Pay $896,000 Maximum Civil Penalty for HSR Violation

Berkshire Hathaway Agrees to Pay $896,000 Maximum Civil Penalty for HSR Violation

On August 20, 2014, the Federal Trade Commission (“FTC”) announced that Berkshire Hathaway Inc. (“Berkshire”) agreed to pay a civil penalty of $896,000, the maximum civil penalty that could have been imposed, for its alleged violation of the premerger notification and filing requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”) in connection with its 2013 acquisition of voting securities of USG Corporation, which was allegedly its second HSR violation after a promise to impose an HSR compliance program.

First HSR Mistake

June 15, 2014

D.C. Government Continues Fight Over Alleged Gas Price Fixing in the District of Columbia

by Doyle, Barlow & Mazard PLLC

On May 6, 2014, a gasoline price-fixing lawsuit brought by District of Columbia Attorney General Irving Nathan was thrown out of court by Judge Craig Iscoe, ruling the District of Columbia has no grounds to bring such an action.

The District of Columbia’s lawsuit challenged the exclusive dealing contracts (the so-called “jobbers”) that gas stations had with specific suppliers that are the norm in the District. As much as 60% of the gas stations in Washington, D.C. have the same supplier.

The District of Columbia argued that these exclusive supply arrangements violated the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”), which prohibits distributors from enforcing exclusive dealing contracts with gasoline retailers. However, Judge Iscoe dismissed the case because he found that the Attorney General’s office did not have the power to sue on this matter. Judge Iscoe found that only those who are directly affected by the alleged cartel have the right to sue.

June 2, 2014

Ardent Mills Merger Completes After Finding Upfront Buyer for Divestiture

by Doyle, Barlow & Mazard PLLC

On May 20, 2014, the Department of Justice (“DOJ”) announced that it will require Ardent Mills, a proposed merger of the wheat milling operations of the companies ConAgra, Cargill, and CHS, to divest four competitively significant mills to an upfront buyer before clearing the deal for approval.

These four mills are located in regions encompassing major metropolitan areas, such as Los Angeles, San Francisco/Oakland Bay, Dallas, and Minneapolis-St. Paul, and the DOJ believes the divestitures will retain competition for wheat millers in those regions after the merger, and result in lower prices to consumers for wheat flour and related products, such as bread, cakes, and crackers.

The merger was announced on March 5, 2013 by a joint press-release from ConAgra, Cargill and CHS. The merger will combine ConAgra Mills, a subsidiary of the food-giant ConAgra, and Horizontal Milling, a joint-venture of Cargill and CHS, to form the largest wheat milling company in the United States with a combine market share of 30%. While the merger was initially planned for the last quarter of 2013, regulatory hurdles and anti-trust concerns from both the DOJ as well as non-government organizations (“NGOs”) delayed it completion until May 29, 2014, shortly after the DOJ announcement of the divestiture requirements.

June 1, 2014

FTC Patent Rules Overcome PhRMA’s Challenge

by Doyle, Barlow & Mazard PLLC

On May 30, 2014, the federal district court of the District of Columbia, Judge Beryl Howell upheld the Federal Trade Commission’s (“FTC”) newly adopted HSR rule governing reporting of transfers of certain exclusive patent rights in the pharmaceutical industry.

The rule was adopted in November of 2013. The Pharmaceutical Research and Manufacturers of America (“PhRMA”) trade association filed suit to block the new rule, arguing that the FTC (1) lacked statutory authority to issue an industry-specific rule rather than a rule of general application; (2) failed to establish a rational basis for such an industry-specific rule; and (3) failed to comply with legally required procedures. On February 7, 2014, PhRMA filed summary judgment papers asking a federal judge in Washington, D.C. to vacate a FTC rule specifically requiring pharmaceutical companies to report certain transfers of exclusive patent licenses for antitrust approval. On cross motions for summary judgment, the court rejected PhRMA’s claims and upheld the rule.

Background

June 1, 2014

FTC Patent Report Rules Overcome Summary Judgment

by Doyle, Barlow & Mazard PLLC

On May 30, 2014, Judge Beryl Howell of the federal district court of the District of Columbia upheld the Federal Trade Commission’s (“FTC”) newly adopted HSR rule governing reporting of transfers of certain exclusive patent rights in the pharmaceutical industry.

The rule was adopted in November of 2013. The Pharmaceutical Research and Manufacturers of America (“PhRMA”) trade association filed suit to block the new rule, arguing that the FTC (1) lacked statutory authority to issue an industry-specific rule rather than a rule of general application; (2) failed to establish a rational basis for such an industry-specific rule; and, (3) failed to comply with legally required procedures. On February 7, 2014, the PhRMA filed summary judgment papers asking a federal judge in Washington, D.C. to vacate a FTC rule specifically requiring pharmaceutical companies to report certain transfers of exclusive patent licenses for antitrust approval. On cross motions for summary judgment, the court rejected PhRMA’s claims and upheld the rule.

Background

May 31, 2014

FTC Approves Combination of Men’s Wearhouse and Jos. A. Bank Without Conditions

by Doyle, Barlow & Mazard PLLC

On May 30, 2014, the Federal Trade Commission (“FTC”) approved the merger between Men’s Wearhouse and Jos. A. Bank, the two largest men’s wear companies without any conditions.

On January 28, 2014, the FTC issued a second to request to review the transaction. After approximately four months, the FTC determined that ample competition existed in the market for suits and tuxedo rentals.

In its analysis of the product markets likely to be affected by the merger as well as the state of the competitive landscape, the FTC noted that the two companies serve different market segments: Men’s Wearhouse targets the younger and trendier customer set, while Jos. A. Bank’s customers are older and more traditional. While both carry private brands, Men’s Wearhouse also offers brand-names in its stores. Jos. A. Bank, on the other hand, exclusively offers its private brands. This means the stores really are not competing directly against each other because they are selling different brands. In addition, the FTC found that there are also many competitors that sell suits within the same price and selection range as Men’s Wearhouse and Jos. A. Bank, such as Macy’s, Kohl’s, JC Penney’s, Nordstrom, and Brooks Brothers. In addition, the FTC staff found that in the tuxedo segment of the market, the two firms compete with numerous local and smaller firms. Overall, the FTC concluded, the merger is unlikely to harm customers.

April 19, 2014

MOFCOM Unveils Draft Guideline for Simple Merger Review

by Doyle, Barlow & Mazard PLLC

On April 18, 2014, China’s Ministry of Commerce (“MOFCOM”) unveiled the first tentative guideline for the simple merger review process:

Filing parties may submit a written petition for simple merger before the actual submission of the merger case.
The following documents, in both confidential and public versions, need to be included in the petition:

February 15, 2014

MOFCOM publishes long-awaited Interim Rule on Applicable Standards for Simple Merger Review Cases

by Doyle, Barlow & Mazard PLLC

On Feb. 13^th, 2014, the Chinese Ministry of Commerce (MOFCOM) unveiled its long-awaited Interim Rule on Applicable Standards for Simple Merger Review Cases. While many interested groups hailed this development as a positive step taken by the MOFCOM towards a comprehensive “fast-track” review procedure for simple cases which exists in the U.S. and in the EU, they recognize that much work still needs to be done based on the paucity of relevant information revealed by the current document.

The Interim Rule explains only the circumstances that define a simple case, but makes no mention of any special filing methods for simple cases or even how simple cases will be processed differently, if at all.

However, current competition lawyers in China, some of whom have engaged in consultations with the MOFCOM, suggest that the MOFCOM will exercise its discretions and internally process certain simple cases differently. This is due both to MOFCOM’s heavy workload making less time available to implement the simplified procedure, as well as possible dissent that still exist within the MOFCOM regarding the finer details of the simplified procedure. In the end, MOFCOM decided to publish the non-controversial Interim Rule to show its commitment instead of keeping silent altogether, while continue to fine tune the actual procedures internally, sources said.

February 11, 2014

Apple’s Fight Against its E-book Antitrust Monitor

by Doyle, Barlow & Mazard PLLC

On February 10, 2014, the Second Circuit Court of Appeals in New York dealt a blow to Apple in its efforts to have a court-appointed monitor removed from his position. The Second Circuit ruled that lawyer Michael Bromwich can continue to oversee the company’s antitrust compliance.

While Apple wanted to remove the monitor altogether for allegations he had overstepped his duties, Apple did win some small victories as the Second Circuit backed Apple by emphasizing the antitrust monitor must conduct his activities within the bounds of the powers provided by the court’s order.

Reportedly, even the Department of Justice agrees that Bromwich has limited duties and can not stretch his powers beyond the court’s order. Mr. Bromwich is not a prosecutor. Mr. Bromwich’s duties only reach so far as to hand over evidence to the DOJ of non-compliance should he come across any non-compliance with the company’s antitrust policy or antitrust compliance program.

January 9, 2014

DOJ Successfully Challenges Baazarvoice Consummated Deal in Court

by Doyle, Barlow & Mazard PLLC

On January 8, 2014, the Department of Justice (“DOJ”) won its court challenge to Bazaarvoice’s consummated $168 million acquisition of PowerReviews.

Background

Bazaarvoice creates and markets online product reviews and ratings platforms, which allow Internet retailers to embed such reviews on their websites. PowerReviews, which was a privately held corporation, engaged in the same business until the time of acquisition. The parties did not file an HSR Form with the government prior to the merger because the deal’s value was below the statutory reporting thresholds. After the merger closed, the DOJ began an investigation. The DOJ’s case relied on numerous hot documents that described the transaction in a way that indicated that the real reason for the deal was for Bazaarvoice to eliminate its closest competitor. On January 10, 2013, the DOJ filed suit to undo the consummated transaction.