Legal Library: Cases and Proceedings

The Federal Trade Commission required ARKO Corp. and its subsidiary GPM to roll back anticompetitive provisions of their acquisition of 60 Express Stop retail fuel outlets from Corrigan Oil Company last year. The complaint alleged that as originally proposed, the agreement not to compete that ARKO and GPM required Corrigan to sign as part of the acquisition harmed customers in local retail gasoline and retail diesel fuel markets throughout Michigan and Ohio. The order required them to amend a non-compete agreement they imposed on Corrigan, agree to obtain prior approval from the Commission before acquiring retail fuel assets under certain circumstances, and return to Corrigan five retail fuel outlets, among other provisions.  On Aug. 9, 2022, the Commission announced the final consent agreement in this matter.

The Federal Trade Commission required energy pipeline and storage companies Buckeye Partners, L.P. and Magellan Midstream Partners, L.P. to divest to U.S. Venture, Inc. petroleum terminals in the two states as a condition of Buckeye’s $435 million proposed acquisition of 26 Magellan terminals. The complaint alleged that without a remedy, the acquisition would harm competition for terminaling services both for all LPPs, and for gasoline specifically, in North Augusta, South Carolina; Spartanburg, South Carolina; and Montgomery, Alabama. The complaint alleged that in all three geographic markets, the acquisition would eliminate the close competition between Buckeye and Magellan, increase the likelihood of collusive or coordinated interaction between the remaining competitors, reduce the number of terminaling options for third-party customers, and increase prices for terminaling services. On Aug. 9, 2022, the Commission announced the final consent agreement in this matter.

The Federal Trade Commission imposed strict limits on JAB Consumer Partners’ future acquisitions of specialty and emergency veterinary clinics as a condition of JAB’s proposed $1.1 billion acquisition of specialty and emergency veterinary services provider SAGE Veterinary Partners, LLC. The Commission also alleged that the acquisition was likely to be anticompetitive in three geographic markets, ordering divestitures for various types of veterinary care in and around Austin, Texas, in and around San Francisco, California, and in and between Oakland, Berkeley, and Concord, California, and it ordered divestitures in these market.  On Aug. 5, 2022, the Commission announced the final consent agreement in this matter.

As a condition of Hikma Pharmaceuticals PLC’s $375 million acquisition of generic drug services company Custopharm, Inc., the Federal Trade Commission required Custopharm’s parent company, private equity fund Water Street Healthcare Partners, LLC to retain and transfer Custopharm’s assets related to the corticosteroid drug triamcinolone acetonide, or TCA, to another company Water Street owns, Long Grove Pharmaceuticals, LLC. According to the complaint, absent a remedy, Hikma likely would have stopped developing its injectable TCA product, forestalling the increased price competition it would have brought to the market. Thus without this remedy, the acquisition likely would have harmed future competition in the U.S. market for injectable triamcinolone acetonide.

The Federal Trade Commission required Medtronic, Inc. to divest a key subsidiary of Intersect ENT, Inc. as a condition of acquiring Intersect. Under the FTC consent decree, Instersect’s Fiagon subsidiary, which makes ear, nose, and throat navigation systems and balloon sinus dilation products, will be sold to Hemostasis, LLC. According to the complaint, without this divestiture, the acquisition would pose a threat to future competition in the United States for both ENT navigation systems and balloon sinus dilation products. On June 30, 2022, the Commission announced the final consent agreement in this matter.

Everalbum settled Federal Trade Commission allegations that it deceived consumers about its use of facial recognition technology and its retention of photos and videos of users who deactivated their accounts.

The Federal Trade Commission filed an administrative complaint against the Louisiana Real Estate Appraisers Board, alleging that the group is unreasonably restraining price competition for appraisal services in Louisiana, contrary to federal antitrust law. The complaint alleged that the appraisal board’s regulations exceeded the scope of the mandate outlined in the Dodd-Frank Act that required appraisal management companies to pay “a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised.” Specifically, the board required appraisal fees to equal or exceed the median fees identified in survey reports commissioned and published by the board. The board then investigated and sanctioned companies that paid fees below the specified levels. 

Shortly before the administrative trial was set to begin, the FTC and the board reached a proposed settlement agreement.

On April 5, 2022, the Commission announced the final consent agreement in this matter.

The Federal Trade Commission required generic drug marketers ANI Pharmaceuticals, Inc. and Novitium Pharma LLC to divest, to Prasco LLC, ANI’s development rights to one generic drug and assets with respect to another generic drug as part of a settlement resolving charges that ANI’s $210 million acquisition of Novitium likely would be anticompetitive. According to the complaint, without a remedy, the acquisition would likely harm future competition in U.S. markets for both of these generic products. The order requires ANI and Novitium to divest ANI’s rights and assets to generic SMX-TMP oral suspension and generic dexamethasone tablets to Prasco within 10 days after the acquisition is final. On Jan. 12, 2022, the Commission announced the final consent order in this matter.

Ascension will be required to implement a comprehensive data security program as part of a settlement resolving FTC allegations that the firm failed to ensure one of its vendors was adequately securing personal data about tens of thousands of mortgage holders.

To settle FTC charges that its actions violated the antitrust laws, the Board of Dental Examiners of Alabama agreed to stop requiring on-site supervision by licensed dentists of alignment scans of prospective patients’ mouths seeking to address misaligned teeth or gaps between teeth. According to the complaint, the board amended a rule to prohibit dental hygienists and other non-dentist practitioners from performing scans inside a patient’s mouth without on-site dentist supervision. The complaint alleges that the Board unreasonably excluded from competition providers of teledentistry-based teeth alignment products and services, and that it did this without adequate active supervision from neutral state officials, in violation of the FTC Act. On Dec. 21, 2021, the FTC announced the final consent agreement in this matter.

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that three PET resin producers’ proposed $1.1 billion joint acquisition out of bankruptcy of an under-construction PET production facility would violate federal antitrust law.

Pharmaceutical and biologic manufacturers Bristol-Myers Squibb Company and Celgene Corporation agreed to divest Celgene’s Otezla, the most popular oral treatment in the United States for moderate-to-severe psoriasis, for $13.4 billion. The divestiture settled Federal Trade Commission charges that BMS’s proposed $74 billion acquisition of Celgene would violate federal antitrust law. Under the terms of the proposed consent order, the parties were required to divest Celgene’s worldwide Otezla business – including its regulatory approvals, intellectual property, contracts, and inventory – to Amgen, Inc. no later than 10 days after consummating the proposed acquisition. On Nov. 12, 2021, the Commission  announced that it has approved certain modifications to Bristol Meyers Squibb’s divestiture agreements.

The operators of the MoviePass subscription service have agreed to settle Federal Trade Commission allegations they took steps to block subscribers from using the service as advertised, while also failing to secure subscribers’ personal data.The operators of the MoviePass subscription service have agreed to settle Federal Trade Commission allegations they took steps to block subscribers from using the service as advertised, while also failing to secure subscribers’ personal data.

Flo Health has settled Federal Trade Commission allegations that the company shared health information of its users with outside data analytics providers after promising such information would be kept private.

Wine and spirits maker E. & J. Gallo Winery has agreed to divest several product lines and remove certain others from its asset purchase agreement with competitor Constellation Brands, Inc. to settle Federal Trade Commission charges that their proposed $1.7 billion transaction would violate federal antitrust law. The complaint alleges that unremedied, the proposed acquisition would eliminate head-to-head competition between Gallo and Constellation and thereby was likely to substantially lessen competition in the United States for six types of wine-and-spirits products: entry-level on-premise sparkling wine, low-priced sparkling wine, low-priced brandy, low-priced port, low-priced sherry, and high color concentrates.The FTC announced approval of the final order in April 2021.

Tapjoy, operator of an advertising platform within mobile gaming apps, has settled Federal Trade Commission allegations that it failed to provide in-game rewards promised to users for completing advertising offers.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaints can be found on the FTC’s website as a link to each case. The FTC announced final approval of all six orders in March 2021.

Epichouse LLC. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. It requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires the respondents to pay $30,000 to the FTC and notify consumers of the Commission’s order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint is provided below. The FTC announced final approval of all six orders in March 2021.

Reef Industries, Inc. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. More broadly, it requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires them to pay the FTC $85,000 and notify consumers of the Commission’s order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint is provided below. The FTC announced final approval of all six orders in March 2021.

Steves Distributing, LLC. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. More broadly, it requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires the respondents to pay the FTC $75,000 and notify consumers of the Commission’s order.

The Federal Trade Commission required medical device companies Stryker Corp. and Wright Medical Group N.V. to divest all assets related to Stryker’s total ankle replacements and finger joint implant products to remedy concerns, as alleged in the complaint, that Stryker’s proposed $4 billion acquisition of Wright would harm competition in these two markets. Under the consent order, Stryker and Wright must divest all assets associated with Stryker’s total ankle replacements and finger joint implants to DJO Global, allowing it to become an independent, viable, and effective competitor in these markets.  After a period for public comment, the Commission issued its final order on December 11, 2020.