Tag: Competition

The Commission issued an administrative complaint to challenge Oldcastle Architectural’s (a subsidiary of CRH) proposed $540 million acquisition of Pavestone Companies as anticompetitive in the US market for drycast concrete hardscape products sold to retailers such as The Home Depot, Lowe’s, and Wal-Mart Stores. According to the complaint, the acquisition would reduce competition by combining the only two companies capable of the national manufacture and sale of these heavy products, which include concrete pavers, segmented retaining wall blocks, and concrete patio products, due to the difficulty in distribution of such products, and the fact that both Oldcastle and Pavestone already possess large distribution networks. The acquisition as proposed would result in Oldcastle gaining a 90% market share for the manufacture and sale of these drycast products to home centers in the United States. The Commission also authorized staff to file a complaint in federal court seeking a temporary restraining order and preliminary injunction to prevent consummation of the proposed transaction, but the respondents decided not to proceed with the proposed merger and the Commission dismissed the administrative complaint.

In order to restore competition in the U.S. market for consumer pregnancy tests, the Commission effectively reversed a consummated transaction in which Inverness Medical Innovations, a 70% market share holder, purchased the assets related to the development of a water-soluble dye based pregnancy test from ACON Laboratories in order to protect its monopoly power in the market. According to the Commission’s complaint, Inverness restrained competition in two ways. First, Inverness issued covenants not to compete to ACON, took profits from ACON’s joint venture with Church & Dwight, and purchased intellectual property rights which would restrict ACON from developing competing products. Second, Inverness limited product innovation by purchasing, but not using, the water-soluble dye test technology purchased from ACON, one of the only companies utilizing that technology. The Commission’s consent order ended any restrictions Inverness had over the joint venture between ACON and Church & Dwight, and required that Inverness divest its assets relating to the water-soluble dye technology, and its related pregnancy test product.

The Commission sought a federal court temporary restraining order and preliminary injunction, and issued an administrative complaint, against Whole Food Market, Inc.’s proposed acquisition of Wild Oats Markets, Inc. According to the complaint, the approximately $670 million deal raised competition problems in 21 local markets where Whole Foods and Wild Oats both operated stores and were each other’s closest competitors among premium national and organic supermarkets. The district court granted the TRO, but subsequently denied the preliminary injunction, concluding that the merger’s likely effect would not be substantially to reduce competition in violation of Section 7 of the Clayton Act. The Commission appealed the district court’s ruling on grounds that the lower court failed to apply the proper legal standard that governs preliminary injunction applications by the Commission in Section 7 cases. The appellate court remanded the case to the district court for further proceedings to determine if the proposed $670 million deal raised competition problems in numerous local markets where Whole Foods and Wild Oats both operated premium natural and organic supermarkets. In a settlement on March 6, 2009, Whole Foods agreed to sell the name brand of Wild Oats, along with 32 of the company’s stores.

There is a related administrative proceeding.

Enforcing the mandatory premerger notification filing provisions under the Hart-Scott-Rodino Antitrust Improvements Act, the Commission filed a complaint in Federal District Court charging ESL Partners and ZAM Holdings, two investment funds, with failing to make timely filings prior to making two acquisitions. The acquisitions in question were the purchase of blocks of AutoZone, Inc.’s shares in September and October of 2004. According to the Commission’s complaint, the acquisition met the filing threshold established in the HSR act, and thus was required to file. ESL and ZAM agreed to pay civil penalties of $525,000 and $275,000 respectively to settle the Commission’s charges.