Legal Library: Cases and Proceedings

The FTC allowed the $16 billion merger of El Paso Energy Corporation and the Coastal Corporation after requiring the companies to divest their interests in 11 natural gas pipeline systems totaling more than 2,500 miles of pipe. The agreement provides for the divestiture of the proposed Gulfstream pipeline in Florida to a new purchaser - restoring competition to pre-merger levels and assuring future competition for natural gas transportation into the state. The agreement also provides for divestiture of El Paso and Coastal interests in existing natural gas pipelines serving customers in New York State and the Midwest. In addition, it would restore competition in the Gulf of Mexico by requiring the divestiture of seven pipelines and establishing a development fund for the purchaser of El Paso's Green Canyon and Tarpon pipelines to cover the costs of extending these pipelines to specified areas in the Gulf where El Paso and Coastal pipelines are significant competitors. Under the FTC’s Order, El Paso Energy divested certain pipelines in the Gulf of Mexico to Williams Field Services and established a $40 million development fund for Williams to use to build a pipeline or related facility. The Commission later modified its order to remove the requirement that El Paso maintain the development fund.

The Commission issued an administrative complaint challenging Carilion Clinic’s 2008 acquisition of two competing outpatient clinics in the Roanoke, Virginia, area. The complaint alleges that Carilion’s acquisition of these outpatient centers eliminated competition for patients in the Roanoke area.  On October 7, 2009 Carillion agreed to sell two independent outpatient medical clinics it acquired last year to settle the charges.

U-Haul International, Inc. and its parent company settled FTC charges that they violated Section 5 of the FTC Act by inviting U-Haul’s closest competitor, Avis Budget Group, Inc., to collude on prices for truck rentals. U-Haul and Budget control more than 70 percent of the “do-it-yourself” one-way truck rental business in the United States. The FTC’s complaint alleges that on several occasions between 2006 and 2008, U-Haul tried to increase rates for one-way truck rentals by privately and publicly communicating with Budget, the second-largest truck rental company in the United States. The proposed settlement order against U-Haul and its parent company AMERCO bars them from inviting a competitor to divide markets, allocate customers, or fix prices, as well as participating in, maintaining, organizing, implementing, enforcing, offering, or soliciting any other company to engage in such conduct.

The Commission charged that Transitions Optical, Inc., the nation’s leading manufacturer of photochromic treatments that darken corrective lenses used in eyeglasses, used anticompetitive practices to maintain its monopoly and increase prices. Photochromic treatments are applied to eyeglass lenses and treated lenses darken when exposed to UV light. The FTC charges that the company illegally maintained its monopoly by engaging in exclusive dealing at nearly every level of the photochromic lens distribution chain.  The FTC alleged that Transitions’ exclusionary tactics locked out rivals from approximately 85 percent of the lens caster market, and partially or completely locked out rivals from up to 40 percent or more of the retailer and wholesale lab market.  Under FTC consent order, Transitions agreed to stop all exclusive dealing practices that pose a threat to competition, making it easier for competitors to enter.

The Commission settled charges that the executive director of a Colorado physicians’ association actively tried to evade the terms of a 2008 FTC order by telling insurers that because she was not named individually in the order, she could simply negotiate on behalf of competing physicians on the “outside” and “not with my [association] hat, but as an individual.” The Commission complaint and consent order settling the FTC’s charges name the executive director individually, and will prevent her from orchestrating or implementing price-fixing agreements among the group’s competing physicians.

The Commission charged that Watson Pharmaceuticals, Inc.’s acquisition of Robin Hood Holdings Limited, owner of Arrow Pharmaceuticals, would have harmed consumers by eliminating future competition for important generic drugs used to treat Parkinson’s disease (cabergoline) and the side effects of chemotherapy (dronabinol). The Commission’s order requires the firms to sell assets related to the two drugs to FTC-approved buyers and to ensure the acquirers have the means to compete effectively in the future.

There is a related federal proceeding and two related administrative proceedings:

• Watson Pharmaceuticals / Actavis Inc.
• Watson Pharmaceuticals, Inc. and Andrx Corporation