Legal Library: Cases and Proceedings

Medical device company Boston Scientific Corp. agreed to divest certain assets to Varian Medical Systems to settle Federal Trade Commission charges that Boston Scientific’s proposed $4.2 billion acquisition of medical equipment and pharmaceutical supplier BTG plc would violate federal antitrust law. According to the complaint, Boston Scientific’s acquisition of BTG would harm consumers in the U.S. market for drug eluting beads, or DEBs, which are microscopic beads used to treat certain liver cancers. Interventional radiologists use DEBs, combined with chemotherapy drugs, in a procedure called transarterial chemoembolization. Under the proposed settlement agreement, Boston Scientific was required to divest to Varian its DEB business, as well as its bland bead product line. Bland beads are used in another type of procedure to block the flow of blood to a liver tumor. On Feb. 18, 2022, the Commission announced modifications to the divestiture agreement with Boston Scientific Corp.

The Federal Trade Commission sued to block Lockheed Martin Corporation’s $4.4 billion proposed vertical acquisition of Aerojet Rocketdyne Holdings Inc, the last independent U.S. supplier of missile propulsion systems. Aerojet supplies advanced power, propulsion, and armament systems, which are critical components for the missiles made by Lockheed and other defense prime contractors. The  agency’s  complaint alleged that if the deal is allowed to proceed, Lockheed will use its control of Aerojet to harm rival defense contractors and further consolidate multiple markets critical to national security and defense. On Feb. 15, 2022, the Commission issued a statement regarding the parties’ decision to abandon the transaction.

The Federal Trade Commission filed a law enforcement action to block U.S. semiconductor chip supplier Nvidia Corp.’s $40 billion acquisition of UK-based semiconductor design firm Arm Ltd., the largest transaction in the history of the semiconductor industry. The FTC’s action seeks to preserve competition in markets for computer chips used in datacenters and in automotive advanced driver assistance systems. The complaint named Nvidia Corp., Arm Ltd., and Arm owner Softbank Group Corp. In February 2022, Nvidia Corp. announced that it had terminated its proposed acquisition of Arm Ltd. (Arm) from SoftBank Group Corp, and the Commission dismissed the complaint.

In 2020, Danaher Corporation agreed to divest assets to settle Federal Trade Commission charges that its proposed $21.4 billion acquisition of General Electric’s biopharmaceutical business, GE Biopharma, would violate federal antitrust law. Sartorius Stedim Biotech S.A. is the approved divestiture buyer. Sartorius agreed to obtain the Commission’s prior approval if it proposed to acquire Novasep Process SAS’s chromatography equipment business. On Feb. 1, 2022, the Commission announced that it granted Sartorius’s petition to proceed with this acquisition.

New York-based supermarket operators The Golub Corp., which owns the Price Chopper chain, and Tops Market Corp. have agreed to divest 12 Tops supermarkets to C&S Wholesale Grocers to settle Federal Trade Commission charges that their proposed merger would likely be anticompetitive in 11 local markets in New York and Vermont. In those markets, according to the complaint, without a remedy the merger is likely to allow the newly merged company to increase prices above competitive levels, unilaterally or by coordinating with competitors. The merger is also likely to diminish the combined company’s incentives to compete on quality and service in its stores. The Decision and Order requires Price Chopper and Tops to divest the 12 Tops stores and related assets to C&S on a rolling basis, beginning by Jan. 17, 2022, at a rate of two stores pe week for six weeks. On Jan. 24, 2022, the Commission announced the final consent agreement in this matter.

A lead generation company that collected sensitive information from millions of consumers under the guise of connecting them with lenders will pay $1.5 million in civil penalties and face restrictions on their operations as a result of a Federal Trade Commission lawsuit.

The FTC’s complaint alleges that since at least 2012, ITMedia Solutions LLC, a number of affiliate companies, and their owners and officers have operated hundreds of websites that were designed to entice consumers into sharing their most sensitive financial information—including their Social Security numbers and bank account information. The defendants sold that information to marketing companies and others without regard for how the information would be used, according to the complaint.

Richard Fairbank, CEO of Capital One Financial Corp., has agreed to settle Federal Trade Commission charges that his March 8, 2018, acquisition of Capital One Financial (COF) stock violated the Hart-Scott-Rodino Act. Under a negotiated settlement, Fairbank will pay a $637,950 civil penalty. The complaint alleges that in 2018,  Fairbank violated the notice and waiting period requirements of the HSR Act because he did not file before acquiring COF voting securities in excess of the $100 million filing threshold, as adjusted (which at the time was $168.8 million).

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 Federal Trade Commission has issued a complaint charging Broadcom with illegally monopolizing markets for semiconductor components used to deliver television and broadband internet services through exclusive dealing and related conduct. The complaint alleges that Broadcom illegally maintained its power in the three monopolized markets by entering long-term agreements with both OEMs and service providers that prevented these customers from purchasing chips from Broadcom’s competitors. The complaint also alleges that Broadcom leveraged its power in the three monopolized chip markets to extract from customers exclusivity and loyalty commitments for the supply of chips in the five related markets. Under the consent order, Broadcom must stop requiring its customers to source components from Broadcom on an exclusive or near exclusive basis.

In April 2020, the marketers of three supplements called Neurocet, Regenify, and Resetigen-D settled FTC charges that they deceptively promoted their products to older Americans using false claims that their products could stop pain and treat age-related ailments. The proposed order bars the defendants—five related companies and their principals from making any claims about the health benefits of their products unless they are true and supported by scientific evidence. In October 2021, the FTC announced it was returning $1.1 million to consumer who bought the defendants’ products.

A federal court issued a temporary restraining order against Marc and Courtney Grisham and two companies they operate, Disruption Theory LLC and Emergent Technologies LLC, which do business as inmatecall.com and inmatecallsolutions.com, related to FTC allegations they offered fake calling plans for unlimited minutes and falsely claiming to be affiliated with companies authorized to provide calling services to people who are incarcerated.

Announced in June 2019 as part of a crackdown on illegal robocalls against operations around the country responsible for more than one billion calls, thisFTC complaint against five corporate and four individual defendants<, alleges that since at least 2017 the defendants have used a combination of illegal telemarketing robocalls, live telephone calls, text messaging, internet ads, emails, social media, and live events to market and sell consumers fraudulent money-making opportunities. The complaint charges the defendants, who operate from California, Colorado, New York, and Tennessee, with violating the FTC Act, the Telemarketing Sales Rule (TSR), or both, by making deceptive earnings claims through robocalls and other marketing techniques. In September 2021, The Federal Trade Commission sent checks totaling more than $1 million to consumers who were harmed by the company.