Legal Library: Cases and Proceedings

Magnesium Elektron, a leader in the production of magnesium plates used for photoengraving, settled FTC charges that its acquisition of rival plate manufacturer Revere Graphics Worldwide, Inc. was anticompetitive and a violation of the antitrust laws. The FTC's order restores the competition eliminated by the merger by requiring Magnesium Elektron to sell necessary intellectual property and technical know-how used to manufacture magnesium plates for photoengraving applications to Kansas-based Universal Engraving.  While Universal Engraving does not currently manufacture or sell magnesium plates, it is uniquely positioned to become an effective competitor in this market because it already sells other metals used in the photoengraving process to customers affected by the merger.

On 12/16/2011, Brian L. Roberts, the Chief Executive Officer of Comcast Corporation, agreed to pay a $500,000 penalty to settle Federal Trade Commission charges that he violated the Hart-Scott-Rodino Antitrust Improvement Act (HSR Act) in connection with his acquisitions of Comcast stock between 2007 and 2009. The FTC alleged that Roberts failed to file required notices before acquiring Comcast shares. The amount of the fine was limited by a number of factors, including that the violation was inadvertent and technical; that it was apparently due to faulty advice from outside counsel; that Roberts did not gain financially from the violation; and that he reported the violation promptly once it was discovered.

Dow settled antitrust concerns relating to its proposed merger with Union Carbide Corporation. Dow agreed to divest and license intellectual property necessary to the production of linear low-density polyethylene -an ingredient used in premium plastic products such as trash bags and sealable food pouches -to BP Amoco plc.

In May 1996, the Commission filed an administrative complaint charging Toys "R" Us with using its dominant position as a toy distributor to obtain agreements from toy manufacturers to stop selling to warehouse clubs the same toys that they sold to Toys "R" Us.  After an administrative trial, the ALJ issued an initial decision finding that Toys "R' Us' policy to stop carrying toys made by a manufacturer that sold the same toys to discount club stores had induced manufacturers to agree to stop supplying some toys to club stores in violation of the antitrust laws.  In October 1998, the Commission issued its decision that Toys "R Us had orchestrated horizontal and vertical agreements with and among toy manufacturers to restrict the availability of popular toys to warehouse clubs, and ordered the company to stop pressuring manufacturers to limit supply or otherwise refuse to sell to discount club stores. Toys "R" Us appealed to the Seventh Circuit, and in August 2000, the appellate court upheld the Commission's order.

In April 2014, on a petition from Toys "R" Us, the Commission modified its order to set aside certain provisions that restricted the company's ability to enter into certain conditional supply relationships, finding that Toys "R" Us is no longer the largest toy retailer.

Solvay settled antitrust concerns stemming from its proposed acquisition of Ausimont S.p.A. from Italenergia S.p.A., and agreed to divest its U.S. polyvinylidene fluoride (PVDF) operations and its interest in Alventia LLC, a joint venture which manufactures the main raw material for PVDF. According to the complaint, the proposed acquisition would lessen competition in two markets: the production and sale of all grades of PVDF; and the production and sale of melt-processible grades of PVDF.

Service Corporation International (SCI), the nation’s largest provider of funeral and cemetery services, settled Commission charges that its proposed acquisition of Keystone North America Inc., the fifth-largest funeral and cemetery services provider in North America, raises antitrust concerns in several local markets for funeral services and cemetery services. The order requires SCI to sell 22 funeral homes and four cemeteries in 19 local markets to ensure competition is preserved following its acquisition of Keystone.

Alta Bates Medical Group, Inc., a 600-physician independent practice association serving the Berkeley and Oakland, California, area, settleed Commission charges that it violated federal antitrust law by fixing prices charged to health care insurers. The consent order prohibits Alta Bates from collectively negotiating fee-for-service reimbursements and engaging in related anticompetitive conduct. In addition to price-fixing of fee-for-service reimbursements, the FTC’s complaint alleges an unlawful concerted refusal to deal.

John C. Malone, CEO and Chairman of Discovery Holding Company, agreed to pay a $1.4 million civil penalty to settle Federal Trade Commission charges that he violated the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) in connection with acquisitions of Discovery shares in 2005 and 2008. The FTC alleged that Malone failed to file the required notice in 2005 after buying Discovery shares, and then in 2008 purchased additional Discovery shares before the expiration of a waiting period required by the HSR Act.

In December 2008, the Commission settled antitrust concerns raised by the proposed $8.9 billion acquisition of Barr Pharmaceuticals by Teva Pharmaceutical Industries. The proposed acquisition would have lessened competition in the markets for 17 commonly used generic medications including drugs used in the treatment of cancer, bacterial infections, diabetes, acid reflux, and depression as well as several varieties of oral contraceptives. According to the Commission’s complaint, the acquisition would have likely led to higher prices for consumers through the removal of one of only four competitors in each of these markets. The Commission’s consent agreement requires both Teva and Barr to sell assets in 29 U.S. markets to either Watson Pharmaceuticals or Qualitest Pharmaceuticals.

Enforcing the mandatory premerger notification filing provisions under the Hart-Scott-Rodino Antitrust Improvements Act, the Commission filed a complaint in Federal District Court charging ESL Partners and ZAM Holdings, two investment funds, with failing to make timely filings prior to making two acquisitions. The acquisitions in question were the purchase of blocks of AutoZone, Inc.’s shares in September and October of 2004. According to the Commission’s complaint, the acquisition met the filing threshold established in the HSR act, and thus was required to file. ESL and ZAM agreed to pay civil penalties of $525,000 and $275,000 respectively to settle the Commission’s charges.

The Commission authorized both an administrative complaint and a motion for a preliminary injunction to challenge the proposed merger of Inova Health System Foundation’s and Prince William Health System (PWHS), alleging that the acquisition would violate federal antitrust laws by reducing competition for general acute care inpatient hospital services in Northern Virginia. On June 17, 2008 the Commission approved an order dismissing its administrative complaint, as the respondents publicly announced their mutual decision to terminate the proposed acquisition agreement.

The Commission remedied competitive problems raised by Owens Corning’s proposed acquisition of glass fiber reinforcements and composite fabric assets 8 from Compagnie de Saint Gobain. The investigation involved cooperation among staff of the FTC, the European Commission, and Mexico’s Federal Competition Commission. After staff from the competition agencies raised antitrust concerns, the parties modified their agreement to exclude Saint Gobain’s glass fiber reinforcement assets in the U.S. and certain assets in Europe. The Commission’s consent order addressed additional competitive problems in the highly concentrated North American market for continuous filament mat, which is used in the production of non-electrical laminate, marine parts and accessories, and other products. The order requires Owens Corning to divest sufficient U.S. continuous filament mat facilities, assets, and intellectual property to enable the buyer effectively to produce and sell the products in competition with the new Owens Corning/Saint Gobain joint venture.

Duke agreed to divest 2,780 miles of gas gathering pipeline in Kansas, Oklahoma and Texas to settle antitrust concerns stemming from Duke’s and Phillips Petroleum Company’s proposed merger of their natural gas gathering and processing businesses and its proposed acquisition of gas gathering assets in central Oklahoma from Conoco Inc. and Mitchell Energy and Development Corporation. The new company will be known as Duke Energy Field Services, L.L.C.

The Northern New England Real Estate Network, Inc. settled charges that it violated the antitrust laws by adopting rules that withheld valuable benefits of the Multiple Listing Services (MLSs) it controlled from consumers who chose to enter into non-traditional listing contracts with real estate brokers. According to the complaint, the association's rules or policies state that information about properties will not be made available on popular real estate Web sites unless the listing contracts are Exclusive Right to Sell Listings. These policies, when implemented, prevented properties with non-traditional listing contracts from being displayed on a wide range of public Web sites.The consent order settling the FTC’s charges will prohibit Northern New England Real Estate Network, Inc. from discriminating against non-traditional listing arrangements.