Part 2 Consent Orders Issued
Type of Matter
|American Cyanamid Company||C3739||5/12/97||Vertical Price Fixing||Agricultural Chemicals|
|American Home Products Corporation||C3740||5/16/97||Horizontal Merger||Canine and Feline Vaccines|
|Autodesk, Inc.||C3756||6/18/97||Horizontal Merger||Computer-Aided Design Software Engines|
|Baxter International Inc.||C3726||3/24/97||Horizontal Merger||Blood Plasma Products|
|Boeing Company, The||C3723||3/05/97||Horizontal Merger||Defense and Space Vehicles|
|Cadence Design Systems, Inc.||C3761||8/11/97||Horizontal Merger||"Routing" Software for Integrated Circuits|
|Ciba-Geigy Limited||C3728||3/28/97||Horizontal Merger||Research and Development in Gene Therapy Treatments,
Corn Herbicides, Flea-Control Products
|Class Rings, Inc.||C3701||12/20/96||Horizontal Merger||Commemorative Class Rings|
|Cooperative Computing, Inc.||C3757||6/20/97||Horizontal Merger||Electronic Automotive Parts Catalogs|
|CVS Corporation||C3762||8/13/97||Horizontal Merger||Drug Stores|
|Dwight's EnergyData, Inc.||C3759||7/28/97||Horizontal Merger||Gas and Oil Production Data|
|Fresenius AG||C3689||10/15/96||Horizontal Merger||Hemodialysis Concentrate|
|General Mills, Inc.||C3742||5/16/97||Horizontal Merger||Ready-to-Eat Cereals|
|Hale Products, Inc.||C3694||11/25/96||Exclusive Dealing||Fire Truck Pumps|
|J.C. Penney Company, Inc.||C3721
|2/28/97||Horizontal Merger||Drug Stores|
|Mahle GmbH||C3746||6/04/97||Horizontal Merger||Diesel Engine Pistons|
|Montana Associated Physicians, Inc.||C3704||1/13/97||Horizontal Restraints||Physician Services|
|NGC Corporation||C3697||12/12/96||Horizontal Merger||Natural Gas Fractionation|
|Phillips Petroleum Company||C3728||3/28/97||Horizontal Merger||Natural Gas Transportation|
|Tenet Healthcare Corporation||C3743||5/20/97||Horizontal Merger||Inpatient Hospital Services|
|Time Warner Inc.||C3709||2/03/97||Horizontal Merger||Cable Television|
|Waterous Company, Inc.||C3693||11/22/96||Exclusive Dealing||Fire Truck Pumps|
|Wesley-Jessen Corporation||C3700||1/03/97||Horizontal Merger||Contact Lenses|
American Cyanamid Company
American Cyanamid agreed to settle allegations that it had fixed the resale prices of its agricultural chemical products, violating the federal antitrust laws. According to the complaint issued with the consent order, American Cyanamid allegedly entered into agreements with its retail dealers offering substantial rebates if the dealers sold its chemicals at or above specific prices. The consent order prohibits American Cyanamid from entering into agreements that control prices and from conditioning the payment of rebates or other incentives on the resale prices its dealers charge for its products.
American Home Products Corporation
American Home Products agreed to settle charges that its $463 million acquisition of the animal health business of Solvay, S.A., would create a monopoly in the market for canine Lyme disease vaccines, canine coronavirus vaccines, and feline leukemia vaccines. The consent order, designed to preserve competition, requires American Home Products to divest Solvay's U.S. and Canadian rights to the three vaccines to Schering-Plough Corporation. To ensure that there is no break in the supply of Solvay's vaccines, the order requires American Home Products to manufacture and supply the vaccines to Schering-Plough until Schering-Plough obtains all necessary government certifications and approvals to manufacture and sell the vaccines.
Autodesk, Inc.; Softdesk, Inc.
Autodesk agreed to settle allegations that its acquisition of Softdesk would substantially lessen competition in the development and sale of computer-aided design (CAD) software engines. Autodesk develops and markets AutoCAD, a design engine for use in Windows-based personal computers. Prior to the acquisition, Softdesk sold its developmental-stage CAD engine, IntelliCADD, to Boomerang Technology, Inc. The consent order prohibits Autodesk or Softdesk from reacquiring IntelliCADD without prior Commission notice for 10 years. The order also requires that neither Autodesk nor Softdesk interfere with Boomerang's ability to recruit or hire Softdesk employees who worked on the development of IntelliCADD.
Baxter International Inc.
Baxter International agreed to settle antitrust concerns stemming from its proposed acquisition of Immuno International AG. According to the complaint issued with the consent order, the acquisition would create the world's largest manufacturer of human plasma products used to treat hemophilia and to control bleeding in surgical applications. The consent order requires Baxter to divest its Autoplex blood plasma product and to license Immuno's fibrin sealant to Commission-approved buyers.
The Boeing Company
Boeing agreed to settle allegations that its $3.025 billion acquisition of Rockwell International Corporation's aerospace and defense business would reduce competition in two markets: high-altitude-endurance unmanned air vehicles (UAVs) and space launch vehicles. In the first market, according to the complaint issued with the consent order, the acquisition would make Boeing a member of both teams competing to develop UAVs for the Department of Defense. Under terms of the consent order, Teledyne Ryan, the prime contractor of one team, could replace Boeing on that team, with no significant cost or risk to Teledyne Ryan, thereby protecting competition in the UAVs market. In the second market, Boeing would be positioned as both a competitor in the space launch vehicle business and a provider of propulsion systems for other competitors. To remedy the possibility that as a competitor and supplier, Boeing would have inappropriate access to competitively sensitive information, the consent order establishes two information firewalls: (1) preventing the flow of competitively sensitive information between Boeing's team and a division of Rockwell that currently provides wings to the other team, and (2) prohibiting Boeing from disclosing nonpublic information from any space launch vehicle manufacturer to its own launch vehicle division.
Cadence Design Systems, Inc.
Cadence agreed to settle allegations that its acquisition of Cooper & Chyan Technology, Inc., would substantially reduce competition for "routing" software used to automate the design of integrated circuits or microchips. According to the complaint accompanying the consent order, the merger would reduce Cadence's incentives to permit competing suppliers of routing tools to obtain access to its software infrastructure for layout environments, resulting in less innovation, higher prices, and reduced services. To ensure that independent software developers of commercial routing tools continue to compete with Cooper & Chyan's technology, the consent order requires Cadence to allow these developers to participate in Cadence's software interface programs.
Ciba-Geigy Limited; Ciba-Geigy Corporation; Chiron Corporation; Novartis AG; Sandoz Corporation; Sandoz Ltd.
Ciba-Geigy agreed to settle allegations that its $63 billion merger with Sandoz Corporation raised antitrust concerns in three markets affected by the proposed acquisition of Sandoz Ltd.: research and development in gene therapy products that are being targeted for life-threatening conditions such as hemophilia and cancer, corn herbicides, and flea-control products. In the gene therapy market, the order requires the licensing of certain intellectual properties to Rhone-Poulenc Rorer and other firms to permit continued competition in research, development, and commercialization for a broad range of future medical treatments. In addition, in one of the largest divestitures ever required under a consent order, Sandoz agreed to divest its U.S. and Canadian corn herbicide business to BASF Aktiengesellschaft within 10 days. The consent order also requires the divestiture of Sandoz's flea-control business to Central Garden and Pet Supply of Lafayette, California, within 30 days.
Class Rings, Inc.; Castle Harlan Partners II, L.P.; Town & Country Corporation
Three manufacturers of school class rings agreed to settle allegations that their proposed merger would have increased the likelihood of coordinated interaction and led to higher prices for commemorative rings. The consent order, designed to restore competition, prevents Class Rings from acquiring Town & Country's Gold Lance, Inc., division, which will remain as an independent competitor, and prohibits Town & Country from acquiring any interest in Castle Harlan or Class Rings. In addition, for 10 years, the order requires the three companies to obtain Commission approval before acquiring certain assets from one another.
Cooperative Computing, Inc.
Cooperative Computing agreed to settle concerns that its proposed acquisition of Triad Systems Corporation would substantially reduce competition in the development and sale of electronic parts catalogs used in the automotive parts aftermarket. The consent order requires Cooperative Computing to divest its electronic parts catalog and related assets to MacDonald Computer Services or another Commission-approved buyer.
CVS Corporation; Revco D.S., Inc.
CVS agreed to settle allegations that its acquisition of Revco would substantially reduce competition for the retail sale of pharmacy services to health insurance companies and other third-party payers in Virginia and in the Binghamton, New York, metropolitan area. The consent order requires CVS to divest 114 Revco stores in Virginia and 6 pharmacies in Binghamton. Under terms of the order, CVS agreed to divest the Revco stores in Virginia to Eckerd Corporation, a subsidiary of J.C. Penney Company, and the pharmacies in Binghamton to Medicine Shoppe International, Inc.
Dwight's EnergyData, Inc.; Geoquest International Holdings, Inc.; SoftSearch Holdings, Inc.
Dwight's EnergyData (a subsidiary of SoftSearch) agreed to license its gas and oil production data to a Commission-approved buyer to settle allegations that its acquisition of Petroleum Information Corporation (a subsidiary of Geoquest) could create a monopoly in the collection and sale of well history data to the oil and gas industry. The consent order also requires the two firms to notify the Commission before acquiring any interest in a provider of well history or production data.
Fresenius AG; Fresenius USA, Inc.
Fresenius AG and its U.S. subsidiary, Fresenius USA, agreed to settle allegations that their proposed acquisition of National Medical Care, Inc., would substantially reduce competition by combining two significant producers of a hemodialysis concentrate used in the treatment of patients with chronic kidney failure. The consent order requires Fresenius to divest a production facility in Lewisberry, Pennsylvania, to Di-Chem, Inc., or to another Commission-approved acquirer.
General Mills, Inc.
General Mills agreed to settle allegations that its acquisition of the branded ready-to-eat cereal and snack mix businesses of Ralcorp Holdings, Inc., would restrict the entry of new private-label products similar to the branded cereals. Under terms of the consent order, Ralcorp retains its private-label cereal business, composed of cereals identical to the Chex-brand cereals, as well as the right to transfer those private-label cereals to any other firm without the authorization or approval of General Mills. The consent order also prohibits General Mills from delaying production of the private-label Chex rival cereals.
Hale Products, Inc.
Hale agreed to settle allegations that it and Waterous Company, Inc. (see page 47) separately entered into exclusive dealing agreements requiring their respective customers to purchase fire-truck-mounted fire pumps. Together, Hale and Waterous account for about 90% or more of the market for truck-mounted fire pumps. According to the complaint issued with the consent order, these practices reduced competition between the two firms and made it more difficult for other firms to enter the market for truck-mounted fire pumps. The consent order prohibits Hale from engaging in any conduct that restrains fire truck manufacturers from purchasing mounted fire pumps from any other company.
J.C. Penney Company, Inc.; Thrift Drug, Inc.
J.C. Penney agreed to settle allegations that its acquisitions of Eckerd Corporation and 190 Rite Aid drug stores would substantially reduce drug store competition and raise prices for pharmacy services to health insurance companies and other third-party payers in certain areas of North Carolina and South Carolina. The consent order requires J.C. Penney to divest 34 Thrift drug stores in the Charlotte and Raleigh-Durham areas of North Carolina, all 110 Rite Aid drug stores in North Carolina, and all 17 Rite Aid drug stores in the Charleston, South Carolina, area to a Commission-approved buyer. The Commission approved divestiture of the stores to New Kerr Drug, Inc., in May 1997.
Mahle GmbH; Metal Leve, S.A.
Mahle, a German piston manufacturer, agreed to settle allegations that its acquisition of Metal Leve would create a monopoly in the manufacture and sale of articulated pistons used in truck engines for big highway rigs and in locomotive engines. The consent order requires Mahle to divest Metal Leve's two piston plants in South Carolina and a research and development center in Ann Arbor, Michigan. A consent judgment filed in the U.S. District Court for the District of Columbia requires Mahle to pay a record $5.6 million civil penalty for failing to notify the two federal antitrust agencies before consummating the acquisition. (See Mahle GmbH, page 54.)
Montana Associated Physicians, Inc.; Billings Physician Hospital Alliance, Inc.
Montana Associated Physicians and Billings Physician Hospital Alliance agreed to settle allegations that they engaged in agreements with member physicians to control the prices they would accept from health insurance companies and other third-party payers and engaged in a boycott to block the entry of a managed care plan. According to the complaint issued with the consent order, the physicians' acts reduced consumer choices for health care and increased the fees physicians charged for their services. The consent order prohibits the two organizations from entering into any agreements with physicians to refuse to deal with third-party payers and to fix or control the fees charged for any physician's services.
NGC agreed to settle allegations that its acquisition of certain natural gas transportation and processing assets of Chevron Corporation would substantially lessen competition by leaving only two companies operating four natural gas liquids fractionation plants in Mont Belvieu, Texas, and increasing the likelihood that NGC could unilaterally raise prices or engage in coordinated interaction. The consent order requires NGC to divest its 80% interest in the Mont Belvieu I natural gas liquids fractionation facility in Texas. The Commission approved NGC's sale of the assets to Koch Hydrocarbon Company, a division of Koch Industries, Inc.
Phillips Petroleum Company
Phillips agreed to divest 160 miles of its natural gas pipeline system in the Anadarko Basin area of Oklahoma to KN Gas Gathering, Inc., under a consent order settling antitrust concerns stemming from its acquisition of certain ANR Pipeline Company gas gathering assets.
Tenet Healthcare Corporation
Tenet agreed to settle allegations that its proposed acquisition of OrNda Healthcorp would reduce competition for inpatient hospital care in San Luis Obispo County, California. According to the complaint issued with the consent order, the acquisition would substantially lessen competition in the area for inpatient acute hospital services. The consent order requires Tenet to divest OrNda's French Hospital Medical Center and related assets in the county within six months to a Commission-approved acquirer.
Time Warner Inc.; Tele-Communications, Inc.; Turner Broadcasting System, Inc.
Time Warner agreed to restructure its proposal to acquire Turner Broadcasting to settle antitrust concerns that the merger would reduce competition in cable television programming and allow Time Warner to unilaterally raise prices. The consent order, among other things, requires Tele-Communications to either divest its interest in Time Warner or accept a limited nonvoting interest, requires the three companies to cancel long-term carriage agreements, reduces Time Warner's enhanced opportunities for bundling Time Warner and Turner programming, bars Time Warner from discriminating in price against rival cable systems, and requires Time Warner's cable interests to carry a rival television station to Turner's Cable News Network.
Waterous Company, Inc.
Waterous agreed to settle allegations that it and Hale Products, Inc. (see page 44) separately entered into exclusive dealing agreements requiring their respective customers to purchase fire-truck-mounted fire pumps. Together, Waterous and Hale account for about 90% or more of the market for truck-mounted fire pumps. According to the complaint issued with the consent order, these practices reduced competition between the two firms and made it more difficult for other firms to enter the market for truck-mounted fire pumps. The consent order prohibits Waterous from engaging in any conduct that restrains fire truck manufacturers from purchasing mounted fire pumps from any other company.
Wesley-Jessen agreed to settle allegations that its acquisition of Pilkington Barnes Hind International, Inc., would create a monopoly in the market for opaque contact lenses used to change eye color for cosmetic reasons. The consent order requires Wesley-Jessen to divest the Pilkington Barnes Hind opaque lens business to a Commission-approved acquirer. On March 18, 1997, the Commission approved divestiture of the business to The Cooper Companies, Inc.