Legal Library: Cases and Proceedings

The FTC required Western Digital Corporation to sell assets used to manufacture and sell desktop hard disk drives to Toshiba Corporation as part of a proposed settlement that resolves charges that Western Digital's proposed acquisition of rival Hitachi Global Storage Technologies Ltd. would likely have harmed competition in the market for desktop hard disk drives used in personal computers. The proposed FTC order settles charges that the deal as originally proposed would have left only two companies, Western Digital and Seagate Technology LLC, in control of the entire worldwide market for desktop hard disk drives.

The FTC approved an order settling charges that Robert Bosch GmbH’s acquisition of the SPX Service Solutions business of SPX Corporation would have given it a virtual monopoly in the market for air conditioning recycling, recovery, and recharge devices for vehicles. Under a settlement with the FTC, Bosch agreed to sell its automotive air conditioner repair equipment business, including RTI Technologies, Inc., to automotive equipment manufacturer, Mahle Clevite, Inc. Bosch also agreed to resolve allegations that, before its acquisition by Bosch, SPX harmed competition in the market for this equipment by reneging on a commitment to license key, standard-essential patents (SEPs) on fair, reasonable and non-discriminatory (FRAND) terms. The FTC alleged that SPX reneged on its obligation to license on FRAND terms by seeking injunctions against willing licensees of those patents. Bosch has agreed to abandon these claims for injunctive relief. 

Graco, Inc. settled FTC charges that it violated the antitrust laws by buying Gusmer Corp. (Gusmer) in 2005 and GlasCraft, Inc. (GCI) in 2008, its two closest competitors in the North American market for fast set equipment (FSE) used by contractors to apply polyurethane foams and polyurea coatings. The consent order settling the FTC’s charges is designed to restore competition to the FSE market that was lost as a result of Graco’s acquisitions. It incorporates a private litigation settlement between Graco and Polyurethane Machinery Corp. (Gama/PMC) that requires Graco to license certain technology to Gama/PMC. The consent order also contains provisions that provide Gama/PMC and other competitors easier access to distributors, so they can distribute competing FSE products effectively in the North American market.

The FTC required Corning, Inc. to transfer assets and to supply some of its laboratory products to another company, under a settlement that resolves charges that Corning’s proposed acquisition of Becton, Dickinson and Company’s Discovery Labware Division would otherwise be anticompetitive. Under the FTC settlement, Corning will provide assets and assistance to enable life science company Sigma-Aldrich Co., LLC to manufacture Corning’s line of tissue culture treated (TCT) dishes, multi-well plates, and flasks in a manner substantially similar to Corning’s process. Until Sigma Aldrich develops its own manufacturing capabilities for these products, Corning will supply them to Sigma Aldrich to be marketed under Sigma Aldrich’s own brand, allowing Sigma Aldrich to immediately replace the competition lost as a result of Corning’s acquisition of Discovery Labware.

The FTC required specialty metals manufacturer Carpenter Technology Corporation to sell assets involved in producing two metal alloys used in the aerospace industry, under a settlement resolving charges that Carpenter's proposed $410 million acquisition of Latrobe Specialty Metals, Inc. would harm competition in the U.S. markets for these alloys.The FTC's complaint alleges that the deal – a merger to monopoly – likely would lead to higher prices for consumers of the two alloys.  The order requires Carpenter to divest assets necessary for manufacturing the two alloys – MP159 and Aerospace MP35N – to another metals manufacturer, Eramet S.A.

The FTC filed separate complaints against the three largest U.S. suppliers of ductile iron pipe fittings, which are used in municipal water systems around the United States. The FTC charged that the three companies, McWane, Inc., Star Pipe Products, Ltd., and Sigma Corporation, illegally conspired to set and maintain prices for pipe fittings, and that McWane illegally maintained its monopoly power in the market for U.S.-made pipe fittings by implementing an exclusive dealing policy. Sigma settled the FTC's charges prior to litigation (final order dated Feb. 27, 2012); Star settled soon after (final order dated May 8, 2012).  The complaint against McWane was heard before an administrative law judge and later appealed to the Commission; see Docket No. 9351.

The Commission issued a complaint to block Omnicare, Inc.'s hostile acquisition of rival long-term care pharmacy provider PharMerica Corporation, alleging that the combination of the two largest U.S. long-term care pharmacies would harm competition and enable Omnicare to raise the price of drugs for Medicare Part D consumers and others. In its complaint, the FTC charges that a deal combining Omnicare and PharMerica would significantly increase Omnicare's already substantial bargaining leverage by dramatically increasing the number of skilled nursing facilities, known as SNFs, that receive long-term care pharmacy services from the company. Due to its substantial market share, the FTC alleges that the combined firm likely would be a "must have" for Medicare Part D prescription drug plans, which are responsible for providing subsidized prescription drug benefit coverage for most SNF residents and other Medicare beneficiaries. On 2/23/2012, the FTC dismissed the complaint in light of Omnicare's decision to abandon the proposed transaction.