Antitrust Lawyer Blog

 Commentary on Current Developments

by

On June 23, the DOJ filed a petition asking the U.S. District Court for the District of Columbia to hold the American Bar Association (“ABA”) in civil contempt for violating multiple provisions of a 1996 antitrust consent decree. The consent decree prohibited the ABA from misusing the law school accreditation process. The DOJ also filed a proposed order and a stipulation in which the ABA acknowledges the violations alleged in the Division's petition and agrees to reimburse the United States $185,000 in fees and costs incurred in the Division's investigation.
The proposed order is subject to court approval. This action underscores the degree to which the Antitrust Division takes compliance with court decrees very seriously. In June 1995, the DOJ filed an antitrust lawsuit against the ABA in U.S. District Court for the District of Columbia. In its complaint, the DOJ alleged that the ABA allowed its law school accreditation process to be misused by law school personnel with a direct economic interest in the outcome of accreditation reviews, resulting in anticompetitive conduct. In 1996, the court entered an agreed-upon final judgment prohibiting the ABA from fixing faculty salaries and compensation, boycotting state-accredited law schools by restricting the ability of their students and graduates to enroll in ABA-approved schools, and boycotting for-profit law schools. The final judgment also established the framework of structural reforms and compliance obligations. According to the petition, and as acknowledged by the ABA, the ABA violated six structural and compliance provisions in the 1996 consent decree on one or more occasions. Those provisions included requirements that the ABA: (1) annually certify to the court and the United States that it has complied with the terms of the final judgment; (2) provide proposed changes to accreditation standards to the United States for review before such changes are acted on by the ABA's Council of the Section of Legal Education and Admissions to the Bar; (3) provide briefings to certain ABA staff and volunteers concerning the meaning and requirements of the decree; (4) obtain annual certifications from certain ABA staff and volunteers that they agree to abide by the decree and are not aware of any violations; (5) ensure that no more than half of the membership of the ABA's Standards Review Committee be comprised of law school faculty; and (6) include a university administrator who is not a law school dean or faculty member on the on-site evaluation teams.

by

On June 22, the DOJ announced that the $16 billion merger between Exelon Corp. and Public Service Enterprise Group Inc. can proceed as long as they divest six electricity generating plants, which in total provide more than 5,600 megawatts of generating capacity. The DOJ is making the companies shed two generating plants in Pennsylvania and four in New Jersey.
The plants to be divested are Cromby Generating Station and Eddystone Generating Station in Pennsylvania, and Hudson Generating Station, Linden Generating Station, Mercer Generating Station and Sewaren Generating Station in New Jersey. Additionally, the combined company cannot acquire any existing electricity plants in the future without first getting the agency's approval. Without the divestitures, the DOJ said that wholesale prices for electricity would increase, causing residential rates for millions of consumers in the mid-Atlantic region to rise. The companies said as a result of the divestiture of electrical plants, all of which are fossil fueled, all competitive issues have been resolved and there would be no need to shed any additional nuclear capacity or nuclear plants. The divestitures will be required only if the merger closes. The merger needs one remaining regulatory approval from the New Jersey Board of Public Utilities to proceed. The DOJ's investigation and analysis encompassed millions of pages of documents, including testimony and other evidence presented by the staff of the New Jersey Board of Public Utilities, the New Jersey Ratepayer Advocate and many other parties in the New Jersey proceedings.

by

On June 21, Federal Communications Commission chairman Kevin Martin said that the agency would likely act on the acquisition of Adelphia Communications Corp. (“Adelphia”) by Time Warner Inc. (“Time Warner”) and Comcast Corp. (“Comcast”) in mid-July. Martin indicated the mid-July action in comments to reporters following the agency's public meeting, stating “I think the commission will try to address it by the middle of July.” Time Warner and Comcast have agreed to buy bankrupt Adelphia's 5 million cable subscribers in a $16.9 billion transaction. The Federal Trade Commission approved the deal without conditions in January. The FCC has had the merger under review for 382 days, but only since June 1 has Martin had a 3-2 Republican majority. Opponents of the deal have called on the FCC to impose a host of conditions, including access to regional sports programming owned or controlled by Time Warner and Comcast.

by

The American Civil Liberties Union (“ACLU”), a group of small telecommunications companies, and Sprint Nextel Corp. (“Sprint”) have joined to oppose AT&T Inc.'s (“AT&T”) bid to acquire BellSouth Corp. (“BellSouth”). In its June 5th filings with the FCC, the ACLU said it wants the commission to hold up approval of the merger until the phone companies settle allegations that they had released customer information to the National Security Agency (“NSA”). Sprint and the telecom group, meanwhile, are looking to squash the deal completely, with the group citing “irreparable harms to competition” from a combination. AT&T dismissed the claims.
San Antonio-based AT&T, which is the No. 1 phone service provider in the United States, will further cement its top position after acquiring Atlanta-based BellSouth, which is the No. 3 player and dominates the Southeast region, in the $67 billion deal. AT&T will also take full control of Cingular Wireless, the largest wireless carrier by customer base. Sprint argued that the combination would mean that it would be more dependent on AT&T for connecting to its cell-phone towers. “Sprint Nextel has no alternative to BellSouth or AT&T for more than 99% of Sprint Nextel's PCS cell sites in the BellSouth and AT&T service areas,” the company said in its filing. In a separate filing, the telecom group, led by XO Holdings Inc., said the merger only creates a larger monopoly with a greater ability to thwart competition between rival providers, as well between AT&T and BellSouth. Other members in the group include Talk America Holdings Inc., Cbeyond Communications Inc. and privately held companies NuVox Communications Inc., Grande Communications Inc., Supra Telecom and Xspedius Communications. The ACLU, meanwhile, is seeking to end the alleged NSA spying program. AT&T, BellSouth and Verizon Communications Inc. have denied doing anything illegal in response to claims that they have been releasing customer information to the government. The ACLU claims that under existing law, the FCC cannot permit the pending merger between the two companies to proceed without first investigating the merits of the allegations.

by

A Southern California-based mortgage broker will pay $50,000 under a court order filed today on behalf of the Federal Trade Commission for allegedly calling tens of thousands of consumers who are on the National Do Not Call (DNC) Registry for telemarketers and for failing to pay the annual fee required to access the DNC Registry. In addition, the company and its officers are permanently barred from violating the DNC provisions of the Telemarketing Sales Rule (TSR) and from making illegal telemarketing calls in the future.

Although the defendants claimed they relied on service providers for their compliance with the DNC rules – specifically by buying “lead lists” of phone numbers from list brokers such as title companies – the FTC stated it was not enough for them to rely on the brokers' claims that the lists had been properly “scrubbed” against the DNC Registry. A “scrubbed” list is one that has had all telephone numbers that are on the DNC Registry removed from it no more than thirty days before calls are placed. Further, although the defendants paid the brokers for the phone lists, they did not properly pay for access to numbers on the Registry, leading them to illegally call thousands of registered consumers.

“The bottom line is that telemarketers are responsible for complying with the Do Not Call provisions of the Telemarketing Sales Rule, and cannot hide behind the claims of their service providers,” said Lydia B. Parnes, director of the FTC's Bureau of Consumer Protection. “If a telemarketer purchases a 'scrubbed' list, they better make sure that it is current and squeaky clean or else they may be violating the law and subject to penalties.”

Continue reading

by

The Federal Trade Commission today told a meeting of the Internet Corporation for Assigned Names and Numbers that access to the Whois databases is “critical to the agency's consumer protection laws, to other law enforcement agencies around the world, and to consumers.” Whois databases are online information directories that contain contact information about website operators. Access to the databases is in question because one of ICANN's advisory bodies recommended limiting access to Whois data to “technical purposes only.”

Commissioner Jon Leibowitz told the group that FTC attorneys and investigators have used the Whois databases for 10 years to conduct investigations of Internet scams. “Whois databases often are one of the first tools FTC investigators use to identify wrongdoers,” he said. In one case, the agency alleged scammers were using drive-by downloads to install spyware that barraged consumers with pop-up ads and caused some computers to crash. “Using Whois data, the FTC found the defendants, stopped their illegal conduct, and obtained a judgment for millions of dollars in consumer redress. It is uncertain whether the FTC would have been able to locate the defendants without the Whois data,” Leibowitz said.

In another case, the FTC cracked down on seven companies illegally exposing unwitting consumers to graphic sexual content in violation of federal laws that require warning labels on e-mail containing sexually-explicit content. “In these cases, accurate Whois information helped the FTC to identify the operators of Web sites that were promoted by the illegal spam messages,” the statement says.

Continue reading

by

Two Spanish banks entered the US banking market in June. Spain's second-largest bank, Banco Bilbao Vizcaya Argentaria (BBVA), purchased two Texas-based banks -Texas Regional Bancshares and State Regional Bancshares- supplementing a southern-California based bank that it had previously acquired. This deal will give BBVA access to the lucrative market for remittances from Latin American workers in Texas to Latin America. Meanwhile, Spain's largest bank, Banco Santander Central Hispano, has been steadily increasing its stake in Philadelphia-based Sovereign Bancorp, approaching 24.99% of outstanding shares. Several analysts have speculated that Santander will eventually make a bid for the bank as a way of expanding into the lucrative U.S. market.

Authored by

D. Sexton

Continue reading

by

Reports surfaced on June 19 that the Italian banking sector may be ripe for consolidation. This speculation began to emerge after Governor Mario Draghi of the Bank of Italy had signaled his intention to open up the Italian banking market to merger activity once the bank's merger veto had been transferred to Italian antitrust authorities. The Bank of Italy, however, still reserves the power to overturn mergers since it is still responsible for regulating the purchase of stakes in regional and national banks. The first domestic merger is expected to involve Banca Intesa and Capitalia; Italy's second and fifth-largest banks. There are also rumors of third-placed SanPaolo IMI and fourth-largest Banca Monte dei Paschi di Siena entering into a merger.

Authored by

D. Sexton

Continue reading

by

On June 20, the FCC approved without conditions Sprint Nextel Corp.'s (“Sprint Nextel”) acquisition of affiliate Nextel Partners, Inc., which sells Nextel services in 58 mid-sized and rural markets, in a deal worth $6.5 billion. The transaction gives Sprint Nextel the two-thirds stake in Nextel Partners it didn't already own. It is one of seven such transactions where Sprint Nextel is acquiring affiliates. Five of the remaining transactions have closed, while the acquisition of UbiquiTel, Inc., which has already gotten DOJ clearance, is still pending.

by

On June 20, the Federal Trade Commission and the Department of Justice's Antitrust Division announced that they are implementing an electronic filing system that allows merging parties to submit via the Internet premerger notification filings required by the Hart-Scott-Rodino Act. Electronic filings may be submitted quickly and easily, eliminating the time and expense entailed in duplicating and delivering documents.

The HSR Act and HSR Rules require the parties to certain mergers and acquisitions to file Notification and Report Forms (“HSR Forms”) with the FTC and the Antitrust Division in advance of those transactions. The reporting and waiting period requirements are intended to enable the enforcement agencies to determine whether a proposed merger or acquisition may violate the antitrust laws if consummated and, when appropriate, to seek a preliminary injunction in federal court to prevent consummation.

To date, parties have been required to submit to both the FTC and the Antitrust Division paper copies of their HSR Forms and documentary attachments (with the exception of certain documents, such as SEC filings, that can be provided via internet links). Under the new system, filers will now have three options:

Continue reading
Contact Information
1825 K St NW #950
Washington, DC 20006
Phone: (202) 589-1834 Email: info@dbmlawgroup.com

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Please do not include any confidential or sensitive information in a contact form, text message, or voicemail. The contact form sends information by non-encrypted email, which is not secure. Submitting a contact form, sending a text message, making a phone call, or leaving a voicemail does not create an attorney-client relationship.

Copyright © 2017 – 2024, Doyle, Barlow & Mazard PLLC
JUSTIA Law Firm Blog Design