Antitrust Advocate

Antitrust Advocate

News, Developments and Practical Advice from Antitrust Leaders

Sometimes Merger Fixes Are as Close as the End of Your Nose

Posted in Government Investigations, Merger, Merger Review

When it comes to negotiating merger remedies with federal antitrust enforcement agencies, the Department of Justice and the Federal Trade Commission each have guides or statements that may help.  But as good as their guidance may be, sometimes the fix for a merger is as close as the end of your nose.

Back on July 1, 2013, for example, CoreLogic, Inc. announced its plan to acquire DataQuick Information Systems, Inc., among other assets and interests, for $661 million.  At that time, CoreLogic and DataQuick were two of three competitors offering real estate national assessor and recorder bulk data, which consists of aggregated current and historical assessor and recorder data for the vast majority of U.S. properties.  Together assessor and recorder data provide information about property ownership, status, and value.

After investigating the proposed deal, the FTC concluded that the deal “would significantly increase concentration in an already highly concentrated market for national assessor and recorder bulk data.”  Specifically, the FTC found that national customers could not cobble together an alternative using “regional assessor and recorder bulk data” providers to meet their needs, and that regional providers would not expand their offerings to provide national assessor and recorder bulk data.

How did CoreLogic remedy the FTC’s concerns?  Corelogic agreed to license its national and recorder bulk data as well as several ancillary data sets that DataQuick provided to customers to Renwood RealtyTrac.  This licensing arrangement satisfied the FTC that competition lost due to the transaction could be replaced by facilitating entry into the market.

The irony of this is that DataQuick obtained historical data through a prior acquisition and since 2004 had obtained on-going national assessor and recorder bulk data primarily through a license with CoreLogic.  That license allowed DataQuick to re-license the data in bulk and act independently of CoreLogic.  In the FTC’s words, the deal “allows RealtyTrac to step into the shoes of DataQuick as CoreLogic’s licensee.”  And, in what might turn out to be a boon for DataQuick customers, the deal requires CoreLogic to provide certain DataQuick customers with the opportunity to terminate contracts early and switch to RealtyTrac.  The reason for that is to give “RealtyTrac more customers to compete for and will ensure that all DataQuick customers will be able to take advantage of RealtyTrac’s entry during the first three years RealtyTrac is in the market.”

To be sure, federal enforcement agencies often are suspicious of licensing remedies because their efficacy may be uncertain, and they require competitors to occupy a close and continuing business relationship with each other.  But here, in a business where licensing evidently had worked competitively for a decade, the parties were able to allay any qualms the FTC may have had about licensing as a remedy.

But why pay $661 million to acquire a competitor to just turn around and enter into a deal that requires a license agreement that replaces the competition lost due to the transaction and opens up contracts to new competition?  The answer to that question may have to do with the parties’ Purchase and Sale Agreement.  It required CoreLogic to “use commercially reasonable efforts to obtain any required approval from any Governmental Authority and to prevent the initiation of any lawsuit by any Governmental Authority under any Antitrust Laws or the entry of any decree, judgment, injunction, or order that would otherwise make the transactions contemplated by this Agreement unlawful.”  One could suppose that if you already had a license agreement that enabled the firm you are buying to compete, entering into a new license agreement that facilitated entry to “obtain [the] required approval” would be “commercially reasonable.”  All of this goes to show how everyday business dealings and the details of transactional documents really matters.

Drawing on the complementary experience of members of our business group, our team of antitrust lawyers has the depth and experience to handle the most significant transactions. If you have any questions regarding this topic, or would like to learn more about our antitrust capabilities, please contact Jonathan L. Lewis, or 202.861.1557, or Lee H. Simowitz, or 202.861.1608.

How Direct Is Direct? Judge Posner Clarifies the Extraterritorial Scope of the Antitrust Laws via the “Direct” Effects Test under the FTAIA

Posted in Antitrust Litigation

A recent decision from Judge Posner in the Seventh Circuit, Motorola Mobility LLC v. AU Optronics, offers the latest insight into the extraterritorial reach of the Sherman Act.  In dismissing Motorola’s price-fixing claims of more than $3.5 billion, Judge Posner continued the clarification of the Foreign Trade Antitrust Improvements Act (“FTAIA”), by narrowing the conduct that constitutes a “direct” effect sufficient for a viable Sherman Act claim.

The FTAIA Imposes a Direct Effect Test for Foreign (Non-Import) Commerce to be Actionable Under the Sherman Act

The FTAIA, 15 U.S.C. § 6a, was enacted in 1982 to constrain the extraterritorial reach of the Sherman Act.[1]  In general, the FTAIA “remov[es] . . . (1) export activities and (2) other commercial activities taking place abroad” from the ambit of the Sherman Act “unless those activities adversely affect domestic commerce, imports to the United States, or exporting activities of one engaged in such activities within the United States.”[2]  It requires that any otherwise qualifying anticompetitive conduct that involves non-import foreign commerce must exhibit “a direct, substantial, and reasonably foreseeable effect” on domestic commerce in order to state a viable claim under the antitrust laws.[3]  At length, the FTAIA provides:

 Sections 1 to 7 [of the Sherman Act] shall not apply to conduct involving trade or commerce (other than import trade or commerce) with foreign nations unless –

1) such conduct has a direct, substantial, and reasonably foreseeable effect –

A. on trade or commerce which in not trade or commerce with foreign nations, or import trade or import commerce with foreign nations; or

B. on export trade or export commerce with foreign nations, or a person engaged in such trade or commerce in the United States; and

2) such effect gives rise to a claim under the provision of sections 1 to 7 [of the Sherman Act].[4]

This language has left two issues open to active debate:  (i) whether the limitations set by the FTAIA are jurisdictional or substantive in nature and (ii) how “direct” any domestic effect must be in order for foreign conduct to fall inside the ambit of the antitrust laws.

The first question has been answered by the Supreme Court decisions of Arbaugh v. Y&H Corp.[5] and Morrison v. National Australia Bank Ltd.[6]  Those decisions explained that courts should interpret a statute as jurisdictional where Congress has explicitly articulated it as such.  The Third Circuit’s recent decision in Animal Science Products, Inc. v. China Minmetals Corp.[7] applied this reasoning and found that the FTAIA’s silence as to jurisdiction of the courts means it constitutes a substantive merits rather than a jurisdictional limitation, in effect creating an additional element to any Sherman Act claim involving foreign commerce.  Other courts have echoed this finding.[8]

Motorola & the “Direct Effects” Exception

Judge Posner’s decision in Motorola Mobility, decided March 27, 2014, runs to the second of these questions.

Motorola’s suit arises from a series of international investigations beginning in December 2006, when authorities in Japan, Korea, the European Union, and the United States opened probes into an international cartel among liquid-crystal display (“LCD”) panel manufacturers to fix prices between 1999 and 2006.  LCD panels affected by the conspiracy were eventually incorporated into televisions and other electronic devices sold worldwide, including in the United States.  Criminal convictions followed, as eight companies plead guilty to the conspiracy and faced record fines.  Defendant AU Optronics Corp., for example, agreed to a $500 million fine with the United States Department of Justice.

As part of the civil litigation arising from the LCD price-fixing conspiracy, Motorola brought a follow-on civil action under the antitrust laws seeking roughly $3.5 billion in damages.  There, Judge Posner observed that only 1% of LCD panels were actually bought by Motorola, and the remaining 99% of the goods were purchased by Motorola’s foreign subsidiaries, which were then (in less than half of the cases) incorporated into goods resold in America.  Id. at 2.

Relying on the FTAIA, Judge Posner dismissed the case, finding price fixing on a component part that is sold internationally but later resold to the United States fails to satisfy the FTAIA’s requirement of a direct and foreseeable effect on United States commerce.  “[W]hat is missing from Motorola’s case is a ‘direct’ effect.  The effect is indirect – or ‘remote,’ the term used in Minn-Chem Inc. v. Agrium, Inc. . . . to denote the kind of effect that the statutory requirement of directness excludes.”  Id. at 4 (internal citations omitted).

As he later elaborated:

[The defendants] are selling [LCD panels] abroad to foreign companies (Motorola subsidiaries) that incorporate them into products that are then exported to the United States for resale by the parent.  The effect of component price fixing on the price of the product of which it is a component is indirect, compared to the situation in Minn-Chem, where “foreign sellers allegedly created a cartel, took steps outside the United States to drive the price up of a product that is wanted in the United States, and then (after succeeding in doing so) sold that product to US consumers.

Id. at 4-5 (underline added for emphasis) (internal citations omitted).[9]

In Minn-Chem, referenced by Judge Posner, the complaint alleged serious anticompetitive conduct abroad.  The Seventh Circuit borrowed the interpretation of the Department of Justice and Federal Trade Commission that direct means “a reasonably proximate causal nexus.”[10]  However, the Court found that allegations of anticompetitive behavior abroad, and corresponding effect on foreign prices, depended on “uncertain intervening” actions it considered too speculative and unspecific to establish a direct and foreseeable effect on United States commerce.

Last week’s Motorola decision squares with this interpretation.  It continues the winnowing of the extraterritorial reach of the Sherman Act, holding that price-fixing on a component good which is first sold abroad and then later incorporated into a good for resale in the United States does not create enough effect on domestic commerce to qualify as direct.  In the Seventh Circuit, at least, the test for foreign non-import commerce just got clearer.

With more than 20 full-time antitrust lawyers in our Washington, D.C. office alone (more than 40 firm-wide), we have the depth and experience to handle the most challenging antitrust matters.  If you have questions regarding this recent decision, or would like to learn more about our antitrust capabilities, please contact our practice leader, Robert G. Abrams, or 202.861.1699, or the author of this article, Erik Raven-Hansen, or 202.861.1539.

[1] See Pub. Law 97–290, Export Trading Company Act of 1982, H.R. Rep. 97–686, as reprinted in 1982 U.S.C.C.A.N. 2487, 2496 (stating that “The intent of the Sherman and FTC Act Amendments in H.R. 5235 is to exempt from the antitrust laws conduct [with foreign impact] that does not have the requisite domestic effects.”).

[2] F. Hoffman‐La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 161 (2004) (emphasis omitted).

[3] 15 U.S.C. § 6a.

[4] Id.

[5] 546 U.S. 500 (2006) (holding that the numerical qualification contained in Title VII’s definition of employer does create a subject-matter jurisdiction test).

[6] 130 S. Ct. 2869 (2010) (finding that the extraterritorial reach of § 10(b) of the Securities and Exchange Act of 1934 did not create a subject-matter jurisdiction test but rather was a merits question).

[7] 654 F.3d 462 (3d Cir. 2011).

[8] See, e.g., Minn-Chem, Inc. v. Agrium Inc., 683 F.3d 845 (7th Cir. 2012) (en banc) (recognizing the Supreme Court’s stance as discussed).

[9] Perhaps in response to an amicus brief submitted by the Japanese Ministry of Economy, Trade and Industry, Judge Posner also noted the practical rationales limiting the extraterritorial application of the Sherman Act:

Many foreign manufacturers are located in countries that do not have . . . antitrust laws. . . . As a result, the prices of many products exported to the United States are elevated to some extent by price fixing or other anticompetitive acts. . . . The position for which Motorola contends would if adopted enormously increase the global reach of the Sherman Act, creating friction with many foreign countries and “resent[ment at] the apparent effort of the United States to act as the world’s competition police officer,” a primary concern motivating the foreign trade act.

Id. at 8 (internal citations omitted).

[10] 683 F.2d at 857.

Webinar Now Available: Lessons Learned from FTC Investigation and Challenges of Healthcare Provider Transactions

Posted in BakerHostetler, Events, Government Investigations, Healthcare, Merger Review

Healthcare_In_The_Unted_States_1719657If you missed our webinar “Lessons Learned from FTC Investigation and Challenges of Healthcare Provider Transactions” featuring Former FTC Commissioner Pamela Jones Harbour and other antitrust partners from our Washington, D.C. office, you can listen and view the webinar by clicking here.

Retaining the Attorney-Client Privilege in a Merger

Posted in Antitrust Litigation, Merger

Editors’ Note: This post, originally authored by Jason D. Cabico and Steven H. Goldberg and published by BakerHostetler, is reprinted with permission.

In Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP, Chancellor Strine of the Delaware Chancery Court recently reaffirmed that the target company in a Delaware merger is the sole holder of the attorney-client privilege to communications with its counsel and the privilege cannot be claimed by the seller (the target’s shareholders). The Great Hill case involved a buyer who filed suit for fraudulent inducement by the seller following the consummation of the buyer’s merger with a company owned by the seller because the buyer found troubling communications between the seller and counsel for the company about the merger on the company’s computers. The seller argued that, as the pre-merger owner of the company, it owned the attorney-client privilege that protected communications between the company and counsel and that it also retained the attorney-client privilege after closing of the merger. Chancellor Strine disagreed with the seller. Upon the closing of the merger, the court expressly held that the attorney-client privilege rests with the surviving corporation owned by the buyer and the seller retains no rights or access to the target’s privileged pre-closing communications.

In one of his last decisions before his confirmation as Chief Justice of the Supreme Court of Delaware, Chancellor Strine held, “the privilege over all pre-merger communications — including those relating to the negotiation of the merger itself — [passes] to the surviving corporation in the merger, by plain operation of clear Delaware statutory law under § 259 of the DGCL.” Nonetheless, the parties to a merger can negotiate “special contractual agreements to protect themselves and prevent certain aspects of the privilege from transferring to the surviving corporation in the merger.” However, since the buyer in a merger is unlikely to be willing to forgo acquisition of the target’s attorney-client privilege, the seller and target in a merger should negotiate for the seller to retain rights to the target’s attorney-client privilege for communications and attorney work product arising prior to the closing of a merger.

The Great Hill decision and § 259 of the DGCL can have far-reaching and unexpected consequences for parties to a merger. For a buyer, silence is golden, as the attorney-client privilege passes to the surviving corporation as a matter of law. For the same reason, a seller’s silence as to the company’s attorney-client privilege is problematic because the seller stands to lose all rights to the company’s communications at closing. Accordingly, a seller may wish to protect its rights to the (pre-merger) company’s privileged communications through joint privilege provisions in the terms of a merger agreement. Typical joint privilege provisions subject pre-closing privileged communications to a joint privilege to be held by the seller and the (pre-merger) company and give the seller and the (pre-merger) company equal rights to assert the joint privilege and its protections, unless the privilege is waived by the other party.

Alternatively, the seller and (pre-merger) company can negotiate a common interest agreement apart from the merger agreement, whereby the seller and company agree to joint rights to the company’s privileged communications and prohibition of the use of the privileged communications against each other. A particular benefit of a common interest agreement between the seller and the (pre-merger) company is that consent by the buyer is not required.

In addition to protecting their rights to pre-closing privileged communications, it is also important for selling shareholders, target boards, and buyers to consult with their own counsel at the outset of merger negotiations to ensure that necessary precautions are taken to prevent the inadvertent waiver of the attorney-client privilege by including parties not covered by the privilege in privileged communications during merger negotiations.

If you have any questions about this post, please contact Steven H. Goldberg at or 212.589.4219; Ronald A. Stepanovic at or 216.861.7397; or any member of BakerHostetler’s Mergers and Acquisitions team.

Pharmaceutical Association Calls Out FTC in Filing Seeking to Enjoin New Rule Targeting the Industry

Posted in Government Investigations, Healthcare, Patents, Premerger Notification

bigstock-Abstract-medical-background-wi-43928152Last November, the Federal Trade Commission (“FTC”) with the “concurrence” of the Antitrust Division of the Justice Department, and over the strenuous objection of Pharmaceutical Research and Manufacturers of America (“PhRMA”), issued final changes to the Hart-Scott-Rodino Act premerger notification rules limited solely to pharmaceutical industry.  Those special rules relate to the transfer of certain pharmaceutical patent rights, which the FTC treats as asset acquisitions for HSR reporting purposes.  A few days before the new rule took effect on December 16, PhRMA filed suit in federal district court challenging the new rule claiming, among other things, that it exceeds the scope of the FTC’s authority by burdening the pharmaceutical industry “alone.”  PhRMA has now moved for summary judgment asking the court to declare the new rule unlawful, to vacate it, and to enjoin enforcement of it in all respects.

So, what’s at stake here?  Plenty, according to PhRMA’s filing.  Beyond the added delay imposed by complying with the new rule, PhRMA estimates that the additional expense imposed on the pharmaceutical industry will range on average from roughly $2.4 million to $3.6 million annually.  And, if the FTC issues a “second request,” which PhRMA’s filing says should be expected each year, the expense would be even more.  According to estimates cited by PhRMA, compliance with such a request can range from $5 million per transaction up to $20 million in very complex cases.

Why did the FTC single out the pharmaceutical industry?  The FTC says it limited the new rules to the pharmaceutical industry because “this is where the need for clarification” is and “where the Commission has experience with the relevant transactions.”  According to the FTC, for the five-year period ending December 31, 2012, it received filings for 66 transactions involving exclusive patent licenses, and all were for pharmaceutical patents.  The FTC also says that its new rules simply capture more completely its approach and long-standing position.  Namely, the new rules provide that (1) the transfer of exclusive rights to a patent or part of a patent in the pharmaceutical industry is a reportable asset transfer if it allows only the recipient to commercially use the patent as a whole, or part of the patent in a particular therapeutic area or specific indication within a therapeutic area, (2) the retention of co-rights does not render a license to the patent or part of the patent as non-exclusive, and (3) a reportable asset transfer may occur even if the licensor retains the limited right to manufacture under the patent or part of the patent for the licensee.

But why not include all other industries too?  The FTC says that in its “experience, the pharmaceutical industry is the only industry in which the parties regularly enter into exclusive patent licenses that transfer all commercially significant rights.”  The FTC does say that if it “finds that such arrangements occur in other industries, the Agencies can then assess the appropriateness of a similar rule for those other industries.”  But beware, warns the FTC: “Even in the absence of a specific rule concerning other industries, however, such exclusive patent licenses remain potentially reportable [under the Hart-Scott-Rodino Act].”

What does this mean in terms of your contemplated pharmaceutical license deal?  For now, the new rules still apply, so you should consider involvement of antitrust counsel.  Changes in the future depend on what happens with PhRMA’s challenge as it works its way through the court.

Drawing on the experience of members of our intellectual property and healthcare teams, our team of antitrust lawyers has the depth and experience to handle the most significant antitrust litigation and transactions.  If you have any questions regarding this matter, or would like to learn more about our antitrust capabilities, please contact Jonathan L. Lewis, or 202.861.1557, or Lee H. Simowitz, or 202.861.1608.

FTC Victory in Idaho Hospital-Physician Acquisition Case Should be a Wake-Up Call for Future and Past Deals

Posted in Antitrust Litigation, BakerHostetler, Government Investigations, Healthcare, Merger

bigstock-Medical-Center--2489809The ink is still drying on the Idaho federal district court’s order requiring St. Luke’s Health System (“St. Luke’s”) to unwind its acquisition of Saltzer Medical Group (“Saltzer”) – a for-profit, physician-owned, multi-specialty group comprising approximately 44 physicians located in Nampa, Idaho.  But hospitals considering future acquisitions of physician groups, and those that the FTC may view as having failed to make good on their promises to improve care without hiking prices, better take notice.

St. Luke’s closed its acquisition of Saltzer in December 2012, after convincing the federal district court judge to allow the transaction to go forward despite objections from two rival hospitals and repeated requests by the FTC and Idaho AG to delay the closing so each could complete its investigation of the transaction.  As we covered, two competitors of St. Luke’s had sued to block the deal from closing, and in March 2013 the FTC and Idaho AG joined the battle by filing a complaint seeking to unwind the transaction.

Significantly, the Court found that “it appears highly likely that health care costs will raise as the combined entity obtains a dominant market position that will enable it to (1) negotiate higher reimbursement rates from health insurance plans that will be passed on to the consumer, and (2) raise rates for ancillary services (like x-rays) to the higher hospital-billing rates.”  And even though the Court “applauded” St. Luke’s efforts to improve healthcare quality, it believed that those same improvements could be achieved through alternative arrangements short of a full merger without the higher reimbursement rates and increase in ancillary services fees.  The Court has released only an abbreviated opinion; additional insights will be available after the Court resolves confidentiality issues and releases its full opinion.

Why is the FTC’s victory in Idaho a wake-up call for both future and past hospital-physician deals?  First, the Court’s finding clearly shows that the theory of harm articulated by the FTC in hospital merger cases—that a transaction can increase bargaining leverage with health insurance plans resulting in higher reimbursement—is fully applicable to physician acquisition cases, and it highlights at least one way hospital systems can raise rates post-transaction—shifting lower priced physician provided ancillary services to higher hospital-billing rates.  (Shifting to higher hospital-billing rates is seen as a means to provide higher compensation to the acquired physicians.)  Second, the Court’s finding that the “there are other ways to achieve the same [improvements] that do not run afoul of the antitrust laws and do not run such a risk of increased costs” makes clear that affiliation models short of employing physicians after an acquisition need to be considered where a proposed deal is likely to raise competitive concern.

More importantly, the FTC’s victory further supports the call made by FTC Chairwoman Edith Ramirez last summer that the FTC launch a retrospective review of completed healthcare provider transactions.  While speaking at a symposium on retrospective analysis of agency determinations in merger transactions, she emphasized what the FTC learned from its first hospital merger retrospective, namely, that the FTC needed to “revamp” its approach to litigating horizontal hospital merger challenges.  The FTC’s revamped approach now “emphasizes how a merger can leave an insurer—the direct payor for hospital services—with few alternatives to include in its network, increase the bargaining leverage of the combined hospital, and lead to higher prices.”  The result from this new approach, beginning with the Evanston case in 2007, according to Chairwoman Ramirez, has been “a winning streak that now includes three successfully-litigated merger challenges and a growing list of hospital deals abandoned after the FTC threatened a challenge.”  And as noted above, that revamped approach played a central role in the FTC’s win against St. Luke’s.

Since healthcare “remains a top agency priority,” Chairwoman Ramirez suggests that a renewed provider healthcare merger retrospective is on the horizon.  But where would such a retrospective focus?

Chairwoman Ramirez sees much to be gained by examining more closely the effects of combinations that have “a significant vertical element.”  An area of examination would include the impact of integration among physicians in different specialties that results from hospital acquisitions of physician practices, she said.  Another, where she said the FTC hears “growing concerns,” involves “provider consolidation in non-overlapping product or geographic markets,” which may lead to higher prices.  These combinations might include, for example, “center city hospitals acquiring smaller hospitals in outlying areas or a general acute care hospital acquiring a children’s hospital.”  According to Chairwoman Ramirez, “preliminary economic evidence suggests that harm from this type of integration, ordinarily not what we would challenge, could be real and substantial.”

The FTC’s victory in Idaho and much more will be the focus of an hour-long webinar on February 26 from 12:30 pm – 1:30 pm EST titled “Lessoned Learned from FTC Investigations and Challenges of Healthcare Provider Transactions.”  We hope that you will join Former FTC Commissioner Pamela Jones Harbour and other members of BakerHostetler’s antitrust practice for this an in-depth look at FTC investigations into hospital and physician transactions.  Topics of the webinar include:

  • Insights from a former FTC Commissioner involved in nearly 30 healthcare enforcement actions while at the Commission
  • Latest statistics on FTC investigations of, and challenges to, provider transactions
  • Factors that may trigger an investigation by the FTC
  • What may bring about a direct challenge from the FTC
  • Steps and strategies healthcare providers can employ when contemplating a transaction to minimize the likelihood of an FTC investigation or challenge

You can register for this event by clicking here.

Drawing on the experience of members of our healthcare team in complementary areas of health law, including transactions, tax, labor and employment, and healthcare regulation, our team of antitrust lawyers have the depth and experience to handle the most significant antitrust healthcare matters, including transactions and investigations.  If you have any questions regarding this matter, or would like to learn more about our healthcare antitrust capabilities, please contact Jonathan L. Lewis, or 202.861.1557, or Lee H. Simowitz, or 202.861.1608.

BakerHostetler Lawyers to Present Webinar on Lessons Learned from FTC Investigations and Challenges of Healthcare Provider Transactions

Posted in BakerHostetler, Events, Healthcare, Uncategorized

Members of BakerHostetler’s Antitrust and Competition team will present a webinar on February 26, 2014 which takes an in-depth look at FTC investigations and challenges of hospital and physician transactions.

The topics will include:

  • Insights from a former FTC Commissioner involved in nearly 30 healthcare enforcement actions while at the Commission
  • Latest statistics on FTC  investigations of, and challenges to, hospital transactions
  • Factors that may trigger an investigation by the FTC
  • What may bring about a direct challenge from the FTC
  • Steps and strategies healthcare providers can employ when contemplating a transaction to minimize the likelihood of an FTC investigation or challenge

The webinar will be moderated by Christopher J. Swift, a Co-Leader of BakerHostetler’s Healthcare Industry Team. The speakers will include Pamela Jones Harbour, a former FTC Commissioner and current BakerHostetler Partner and Co-Leader of the Firm’s Privacy and Data Protection team, and Gregory L. Baker, Jonathan L. Lewis, and Lee H. Simowitz, BakerHostetler Partners and members of the Firm’s Antitrust and Competition team in Washington, D.C.

Registration >> | Additional Details >>

BakerHostetler Lawyers Publish Chapter on Antitrust Trends in U.S. Agribusiness

Posted in Agriculture, BakerHostetler

The 2014 Antitrust Review of the Americas features a chapter, “‘United States: Private Antitrust Litigation,” authored by BakerHostetler Antitrust Chair Robert G. Abrams, Partner Gregory J. Commins Jr., and Partner and Editor of Antitrust Advocate Danyll W. Foix.

They write, “The US agriculture and food market has become increasingly concentrated in several sectors and across multiple levels. This market structure, along with the potential for decreased competition, has been an impetus for several recent private and government antitrust actions. As is often the case, these types of antitrust actions are not only costly to defend but can also, if successful, lead to substantial damages or conduct restraints on the defending parties. Concentration and coordination is expected to continue to increase, leading to fewer independent entities as they are replaced by larger retailers, processors and producers. For those not prepared for an increasingly concentrated and coordinated agribusiness market, there will likely be more litigation and government enforcement risk, expense and exposure.”

Read the full chapter, “United States: Private Antitrust Litigation,” an extract from The Antitrust Review of the Americas

The 16th annual edition of The Antitrust Review of the Americas includes articles by leading antitrust and competition lawyers, with an objective of delivering specialist intelligence and research to help navigate the America’s increasingly complex competition laws, reviewing their application over the past year, and analyzing the economic theories which guide their interpretation.

Past as Prologue: Rebirth of the Merger Trial and the Bazaarvoice Case

Posted in Antitrust Litigation, Government Investigations, Merger, Merger Review, Premerger Notification, Sherman Act 7

For many years after its implementation, the Hart-Scott-Rodino Antitrust Improvements Act of 1976 seemed to sound the death knell of post-consummation merger trials.  By establishing a file-and-wait system rather than the old catch-me-if-you-can non-system, the Act enabled the antitrust enforcement agencies to prevent the consummation of potentially anticompetitive mergers until they completed their investigation, and then to block the deal by seeking a preliminary injunction.  Often, the threat of an injunction was enough to cause the parties to abandon the transaction.  If the enforcement agency obtained an injunction, most deals simply disintegrated.  Neither the companies nor their sources of financing were willing to tolerate litigating a case through a trial.

Today, the filing thresholds for the HSR Act have been increased by legislation, which also indexed those thresholds to inflation.  (On January 17, 2014, the FTC announced that the value of transaction threshold has been raised to $75.9 million.)  As the filing thresholds increased, so has the interest of the FTC and the DOJ in transactions that fall below those thresholds and do not require the parties to file and to comply with the HSR Act’s waiting period.  Those transactions often close before the enforcement agencies take an interest in them and launch an investigation.  At that point, abandonment is no longer an option—money has changed hands, the companies have been integrated, and the colors have been nailed to the mast.  The companies’ only options—more precisely, the company’s only options—are to agree to a difficult unscramble-the-egg divestiture or to litigate the case through trial.

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