Legal Library: Cases and Proceedings

Federal-Mogul, one of the world's leading producers of thinwall bearings used in car, truck and heavy equipment engines, agreed to divest the thinwall bearings assets it acquired in its $2.4 billion takeover of T&N, plc. to settle FTC charges that the acquisition would likely substantially reduce competition in the worldwide market for thinwall bearings. According to the FTC, Federal-Mogul and T&N, headquartered in Manchester, England, have a combined market share in the United States of nearly 80 percent or more in each of the four markets identified in the complaint. The FTC consent order requiree Federal-Mogul to divest the thinwall bearings business of T&N, which includes the assets and plants that T&N uses to make thinwall bearings, as well as intellectual property that T&N uses to develop and design new bearings to meet the needs of engines that OEMs will develop in the future. To ensure that the divested thinwall bearings business would be in the same position that T&N had been in terms of research, the proposed order identifies individuals in T&N who worked on bearings research and development, and requires Federal-Mogul and T&N to assign those personnel to the businesses to be divested.

Consent order settles charges that the acquisition of Petroleum Information Corporation could create a monopoly for production and well history data used by geologists and petroleum engineers to find additional oil and gas reserves. The settlement requires Dwight to license a complete set of well history to HPDI, an independent competitor, or another Commission-approved licensee.

An association of 25 automobile dealerships settled charges that they agreed to boycott Chrysler if the manufacturer continued to allocate vehicles based on total sales. Competing dealers marketed vehicles offering lower prices on the Internet and were taking substantial sales from other dealers in the Northwest. The consent order prohibits the dealers from threatening to enter into any boycott or refusal to deal with any automobile manufacturer or consumer.

Nortek, Inc., agreed to settle FTC charges that its $242.5 million acquisition of NuTone, its closest competitor in the hard-wired residential intercom business, would violate federal antitrust laws by creating a dominant firm that could drive up prices in the market.  Nortek, based in Providence, Rhode Island, controls 31 percent of the market for hard- wired residential intercoms, through its M & S subsidiary. NuTone is the leading seller of residential intercoms, with about 56 percent of the market. Together, the merged firm would control about 87 percent of U.S. hard-wired residential intercom sales.To settle the FTC charges, Nortek agreed to divest M & S, its wholly-owned subsidiary and the second-largest seller of hard-wired residential intercoms in the United States.

Sky Chefs modified its acquisition plans, excluding Ogden Corporation's in-flight catering operation at the McCarran International Airport in Las Vegas, Nevada from its purchase agreement, to settle Commission concerns that the consolidation of the two firms in Las Vegas would lead to higher prices for airline catering services. The consent order prohibits Sky Chefs from making certain acquisitions without Commission approval for 10 years.

A group of physicians in the area of Lake Charles, Louisiana settled charges that they illegally conspired to fix the prices for professional services by engaging in joint price negotiations with third-party payers. The final consent order prohibits such practices but does allow the MDP to engage in legitimate joint conduct.

A final order prohibits five institutional pharmacies from engaging in any joint price negotiation or price agreements for the provision of prescription drugs in an attempt to maximize reimbursement rates with managed care organizations.