Legal Library: Cases and Proceedings

Amgen settled antitrust charges that its proposed $16 billion acquisition of Immunex Corporation would reduce competition and tend to create a monopoly in the biopharmaceutical markets for neutrophil (white blood cell) regeneration factors; tumor necrosis factor (TNF) inhibitors; and interleukin-1 (IL-1) inhibitors. The consent order requires the firms to sell all of Immunex's assets related to Leukine -a neutrophil regeneration factor -to Schering AG; license certain intellectual property rights to TNF inhibitors to Serono S.A.; and license certain intellectual property rights related to IL-1 inhibitors to Regeneron Pharmaceuticals Inc.

A consent order permitted the $45 billion merger of Chevron and Texaco In., but required significant divestitures in the petroleum industry, including gasoline marketing assets, refining and bulk supply facilities, crude oil pipeline interests and terminaling facilities. Specifically, the Commission alleged that the proposed acquisition would likely substantially reduce competition in each of the following markets: 1) gasoline marketing in the western United States (in Arizona, Idaho, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming), the southern United States (in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, Tennessee, Texas, Virginia, and West Virginia), in Alaska and Hawaii, and smaller local areas; 2) the marketing of California Air Resources Board (CARB) gasoline in California; 3) the refining and bulk supply of CARB gasoline for sale in California; 4) the refining and bulk supply of gasoline and jet fuel in the Pacific Northwest (Washington and Oregon, west of the Cascade mountains; 5) the bulk supply of Phase II Reformulated Gasoline (RFG II) in metropolitan St. Louis, Missouri; 6) the terminaling of gasoline and other light petroleum products in Arizona (Phoenix and Tucson), California (San Diego and Ventura), Mississippi (Collins), and Texas (El Paso), and the Hawaiian islands of Hawaii, Kauai, Maui, and Oahu; 7) the pipeline transportation of crude oil from California's San Joaquin Valley; 8) the pipeline transportation of crude oil to shore from portions of the Eastern Gulf of Mexico; 9) the pipeline transportation of offshore natural gas to shore from locations in the Central Gulf of Mexico; 10) the fractionation of raw mix into natural gas liquids products at Mont Belvieu, Texas; and 11) the marketing and distribution of aviation fuel to customers in the western and southeastern United States.

The Commission charged Biovail Corporation with illegally acquiring an exclusive patent license for Tiazac, a pharmaceutical used to treat high blood pressure and chronic chest pain. The complaint further alleged that Biovail, in an effort to maintain its monopoly, wrongfully listed the acquired license in the U.S. Food and Drug Administration’s “Orange Book” for the purpose of blocking generic competition to its branded Tiazac. The consent order requires Biovail to divest part of its exclusive rights to DOV; prohibits the firm from taking any action that would trigger additional statutory stays on final FDA approval of a generic form of Tiazac; and also prohibits Biovail from wrongfully listing any patents in the Orange Book for a product for which the company already has an New Drug Application from the FDA.

A consent order settled charges that FMC and Asahi Chemical Industry Co. Ltd. of Japan entered into a conspiracy to divide the world market for microcrystalline cellulose (MCC), a binder used in making pharmaceutical tablets, into two territories. According to the complaint, FMC allegedly agreed not to sell the pharmaceutical to customers in Japan or East Asia without Asahi Chemical's consent, while Asahi Chemical agreed not to sell the pharmaceutical to customers in North America or Europe without the consent of FMC. The final order prohibits such behavior in the future and restricts FMC from acting as the U.S. distributor for any competing manufacturer of microcrystalline cellulose (including Asahi Chemical) for 10 years. In addition, for five years, FMC is prohibited from distributing in the United States any other product manufactured by Asahi Chemical.

A doctors’ group consisting of nearly every obstetrician and gynecologist with active medical staff privileges at the two general acute care hospitals in Napa County, California settled charges that they restrained price and other competition by engaging in illegal agreements to fix fees and other terms of dealing with health care insurance plans. According to the complaint issued with the consent order, the doctors refused to deal with the third party payers except on collectively determined terms. The consent order not only prevents the doctors from engaging in similar practices in the future but also requires the dissolution of the group.

The Commission authorized staff to file a motion for a preliminary injunction to block the proposed acquisition of Vivendi Universal S.A.’s Seagram Wine and Spirits Business on grounds that the transaction, would combine the second- and third-largest rum producers in the U.S. eliminating actual competition between the firms, leading to higher prices for rum. The Commission charged that Diageo and Bacardi together would control 95 percent of all U.S. premium rum sales, and that Diageo would have access to highly sensitive business information about Seagram's Gin, Chivas Regal Scotch whisky, The Glenlivet Scotch, and Martell Cognac, products with which Diageo is in significant competition.  If Diageo were to acquire these brands, it would maintain (or have a financial interest in) virtually all popular gin sales, virtually all deluxe Scotch whisky sales, 32 percent of all single malt Scotch whisky sales, and 63 percent of all Cognac sales in the United States.  Those brands, which compete directly with other brands marketed by Diageo in the United States (including Gordon's Gin, Classic Malt Scotch whiskies, Johnnie Walker Black Scotch, and Hennessy Cognac), are Seagram's Gin, Chivas Regal Scotch whisky, The Glenlivet Scotch whisky, and Martell Cognac.  The parties settled the charges and by consent order, Diageo was required to divest the Malibu rum business worldwide to a Commission-approved buyer.  The order also prevented Diageo from obtaining or using any competitively sensitive business information related to Seagram's Gin, Chivas Regal Scotch whisky, The Glenlivet Scotch whisky, or Martell Cognac.

The Commission authorized staff to seek a preliminary injunction to block DGF’s proposed acquisition of Leiner Davis Gelatin Corporation and its Goodman Fielder USA, Inc. subsidiary. According to the Commission this transaction, if allowed to proceed as planned, would increase the likelihood of anticompetitive activity in the U.S. market for pigskin and beef hide gelatin, used by the food industry as an ingredient in edible products and by the pharmaceutical industry to produce capsules and tablets. The combination of the two firms would account for more than 50 percent of the relevant market in the U.S. A proposed consent agreement designed to remedy the significant antitrust concerns was accepted for public comment March 7, 2002; the consent order was finalized April 17, 2002.