Legal Library: Cases and Proceedings

Under terms of a final consent order settling charges stemming from the merger of SmithKline and Glaxo Wellcome plc, the parties agreed to divest pharmaceutical products in six markets: antiemetics; the antibiotic, ceftazidime; oral and intravenous antiviral drugs for the treatment of herpes; topical antiviral drugs for the treatment of genital herpes; and over-the-counter H-2 blocker acid relief products.

Final consent order permitted the acquisition of Mynd Corporation and required the divestiture of Mynd's Claims Outcome Advisor System to Insurance Services Office, Inc. Claims assessment systems are used by insurance companies to evaluate appropriate payments for claims of bodily injury and to evaluate return-to-work plans in workers compensation matters.

The Commission authorized staff to seek a preliminary injunction to block the proposed acquisition of National Tobacco Company, L.P. on grounds that the $165 million acquisition would lessen competition in the market for loose leaf chewing tobacco and that Swedish Match’s market share would increase to 60 percent. On December 14, 2000, the U.S. District Court for the District of Columbia issued a 42-page opinion granting the Commission’s motion for the injunction. On December 22, 2000, the parties abandoned the transaction.

Complaint filed in the U.S. District Court for the District of Columbia charged Mylan with restraint of trade, monopolization and conspiracy to monopolize the market for two generic drugs used to treat anxiety, lorazepam and clorazepate, through exclusive dealing arrangements.  The Commission alleged that Mylan, Gyma Laboratories of America, Inc., Cambrex Corporation and Profarmaco S.R.L. conspired to deny Mylan’s competitors ingredients necessary to manufacture lorazepam and 40 clorazepate. The complaint sought consumer redress of at least $120 million and to enjoin the alleged illegal exclusive licensing agreements. The district court upheld the Commission’s authority to seek restitution in antitrust injunction actions under Section 13(b).  The Commission approved a $100 million settlement. The opinion settled Commission concerns that Mylan, Gyma Laboratories of America, Inc., Cambrex Corporation and Profarmaco S.R.L. conspired to deny Mylan’s competitors ingredients necessary to manufacture lorazepam and 40 clorazepate. On February 1, 2002, the court granted approval to a plan of distribution to injured consumers who paid the increased prices and state agencies, including Medicaid programs, that purchased the drugs while the illegal agreements were in effect. The funds were distributed by the states.

The consent order settles antitrust concerns stemming from the acquisition of ADT Automotive Holdings, Inc., the nation's third largest operator of wholesale motor vehicle auctions, by Manheim Auctions, the nation's leading operator of auctions.  The complaint alleged that the proposed acquisition would substantially reduce competition among wholesale auction services in six geographic markets.  In addition, the complaint alleges that Manheim's 1996 acquisition of its only rival in Phoenix resulted in a merger to monopoly in that market.  The order requires Manheim to divest nine auctions in Kansas City, Missouri; Denver and Colorado Springs, Colorado; Atlanta, Georgia; San Francisco, California; Seattle, Washington; Tampa, Orlando and Daytona Beach, Florida; and Phoenix, Arizona.

The Commission authorized staff to file a motion in federal district court to prevent the merger of BP Amoco p.1.c. and Atlantic Richfield Company. The complaint, filed in the U.S. District Court for the Northern District of California, alleged that the merger would reduce competition in the exploration and production of Alaska North Slope crude oil and its sale to West Coast refineries, and in the market for pipeline and storage facilities in Cushing, Oklahoma. Under the terms of the order, BP Amoco was required to divest all of ARCO's assets relating to oil production on Alaska's North Slope (ANS) to Phillips Petroleum Company or another Commission-approved purchaser. BP Amoco also would have to divest all ARCO assets related to its Cushing, Oklahoma crude oil business within four months.

The FTC charged that five distributors of recorded music illegally required retailers to advertise compact discs at or above the minimum advertised price (MAP) set by the distribution company in exchange for substantial advertising payments for various types of media including television, radio, newspaper and signs and banners within the retailers own stores. Time-Warner Inc., Bertlesmann, Universal Music and Video Distribution Corporation and UMG Recordings, Inc., EMI Music Distribution, and Sony Music Entertainment represent approximately 85 percent of all CD’s purchased in the United States. According to the complaint, the MAP policies violated the antitrust laws in two respects. First, when considered together, the arrangements constitute practices that facilitate horizontal collusion among the distributors, and, when viewed individually, each distributor's arrangement constitutes an unreasonable vertical restraint of trade under the rule of reason.  In separate settlements, each distributor agreed to stop linking promotional funds to the advertised prices of their retailer customers for the next seven years. For the next 13 years after that, each company was prohibited from conditioning promotional money on the prices contained in advertisements they do not pay for, or terminating relationships with any retailer based on that retailer's prices.

Conso International Corporation, owner of the Simplicity brand of home sewing patterns, abandoned its proposed acquisition of McCall Pattern Company after the Commission filed a motion for a preliminary injunction in the United States District Court for the Southern District of New York. The complaint charged that the acquisition would reduce the number of United States sewing pattern designers and producers from three to two, creating a firm with more than 75% of the domestic unit sales of domestic home sewing patterns.

Final consent order permits Pfizer’s merger with Warner-Lambert Company and requires divestitures in several pharmaceutical markets including: Pfizer’s RID brand of head lice treatment; Pfizer’s antidepressant drug, Celexa; Warner’s Cognex, a drug used in the treatment of Alzheimer’s disease; and assets relating to the Epidermal Growth Factor receptor tryosine kinase inhibitor - drugs under development to treat solid cancerous tumors such as head and neck, non-small cell lung, breast, ovarian, pancreas and colorectal cancers.

The dental association with a membership of more than 1800 dentists practicing in Puerto Rico agreed not to encourage its members to enter into agreements that set or fixed the fees charged or terms and conditions under which dentists would deal with health insurance plans or other payers in an attempt to obtain higher reimbursement rates for dental services.

A consent order requires Ceridian to grant licenses to new and existing firms that provide commercial credit cards (known as "trucking fleet-cards") used by over-the-road trucking companies to make purchases at retail locations. The order settles charges that Ceridian's consummated acquisitions of NTS Corporation and Trendar Corporation gave Ceridian the power to control the markets for the provision of trucking fleet cards and the systems used to read them at truck stops throughout the country.

A consent order settled charges that Fidelity’s acquisition of Chicago Title Corporation would reduce competition for title information services in San Luis Obispo, Tehama, Napa, Merced, Yolo, and San Benito, California. The order requires the divestiture of title plants in each of the six areas.

VNU N.V. settled antitrust concerns that its proposed acquisition of Nielsen Media Research, Inc. would restrict competition in the market for advertising expenditure measurement services in the United States. The order requires VNU to divest its Competitive Media Reporting division, the nation's largest supplier in the specialized market.