December 11, 2017

The Antitrust Week In Review

Here are some of the developments in antitrust news this past week that we found interesting and are following.

Supreme Court Refuses to Hear Lawsuit by Minor Leaguers. The Supreme Court declined to hear a lawsuit filed by minor league baseball players accusing Major League Baseball of colluding to suppress wages, leaving intact a District Court ruling that dismissed the case.  In a one-sentence announcement Monday, the Supreme Court said it would not accept Miranda v. Selig, a suit filed by four minor leaguers in December 2014 alleging MLB’s hiring and employment policies violated antitrust laws by restraining competition among teams and illegally depressing minor league salaries.  U.S. District Judge Haywood S. Gilliam Jr. dismissed the case the following September, citing the antitrust exemption granted professional baseball by the Supreme Court in 1922 and the failure of Congress to alter it for minor leaguers in the Curt Flood Act of 1998.

CVS likely wants FTC antitrust review, not Justice Department, of Aetna deal. It is uncertain who in the U.S. government will carry out an antitrust review of CVS Health Corp’s deal to buy health insurer Aetna Inc, but the drugstore company is likely hoping the potentially more lenient Federal Trade Commission gets the nod, antitrust experts say.  The Justice Department’s Antitrust Division and Federal Trade Commission share the job of reviewing mergers to make sure they don’t hurt consumers, but sometimes it comes down to a coin toss as to who reviews a deal that involves both agencies’ areas of expertise.  The Justice Department might be best-placed since it recently reviewed, and stopped, two insurance industry tie-ups, including Aetna’s plan to buy rival Humana Inc.

Trump and Warren Find Common Ground on Antitrust. President Trump and Senator Elizabeth Warren make odd antitrust bedfellows. Ms. Warren, the Massachusetts Democrat, says megadeals like Aetna’s $77 billion sale to CVS could kill competition.  She also backs the Justice Department’s fight against an AT&T-Time Warner merger and has concerns about past merger remedies.  That puts her in the same camp as the president.  She laid out her views on deal making in a speech on Wednesday. AT&T’s $85 billion acquisition of Time Warner, she said, would mean higher prices, fewer choices and worse service for consumers.  That echoes Mr. Trump’s antitrust chief, Makan Delrahim, and the Justice Department’s November lawsuit to block the deal, which asserted that the merger would leave millions of television viewers paying more and would slow innovations like video streaming.

AT&T/Time Warner antitrust trial set for March. The trial to determine if the U.S. Department of Justice can stop AT&T Inc’s $85 billion purchase of media company Time Warner Inc will begin on March 19 with no decision expected before the companies’ April 22 deadline to complete the deal, a federal judge said on Thursday.  Time Warner and AT&T, which is the No. 2 U.S. wireless company and also owns DirecTV, announced their deal in October 2016, but it was not until last month that the Justice Department sued AT&T to block the deal, arguing it could raise prices for rivals and pay-TV subscribers and hamper the development of online video.  Judge Richard Leon said during a hearing on Thursday he would likely not have a decision by the deadline in the companies’ merger agreement, but would rule in late April or May.

 

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Categories: Antitrust Enforcement, Antitrust Litigation, Uncategorized

    May 1, 2017

    The Antitrust Week In Review

    Here are some of the developments in antitrust news this past week that we found interesting and are following

    U.S. Appeals Court Blocks Anthem Bid to Merge with Rival Cigna.  The U.S. Court of Appeals for the D.C. Circuit on Friday blocked health insurer Anthem Inc.’s bid to merge with Cigna, upholding a lower court’s decision that the $54 billion deal should not be allowed because it would lead to higher prices for healthcare.  The ruling will probably kill the proposed merger, which was opposed by the U.S. Justice Department, 11 states and a District Court judge after consumers, medical professionals and others objected to it.  In the end, Cigna itself tried to back out.  Still, Anthem and Cigna have the option of trying to save the deal by asking the appeals court to re-consider the case or appealing straight to the U.S. Supreme Court.

    How Trump’s Pick for Top Antitrust Cop May Shape Competition.  Makan Delrahim, the nominee for chief antitrust cop at the Justice Department, was 10 when his family immigrated to the United States from Iran as Jewish political refugees.  Unable to speak English, he struggled to keep up in school. He worked afternoons and weekends at his father’s gas station near Los Angeles until college.  As a young Senate staff member years later, Mr. Delrahim found those early experiences had laid the foundation for his conservative views.

    Sanofi Files U.S. Antitrust Lawsuit Against Mylan Over EpiPen.  France’s Sanofi SA on Monday sued Mylan NV, accusing the pharmaceutical company of engaging in illegal conduct to squelch competition to its EpiPen allergy treatment, which has been at the center of a public debate over drug prices.  In a lawsuit filed in federal court in Trenton, New Jersey, Sanofi said Mylan caused it to lose hundreds of millions of dollars in sales by erecting barriers to U.S. consumers’ access to and use of a rival product, Auvi-Q.  In particular, Sanofi said Mylan offered rebates to insurers, pharmaceutical benefit managers and state Medicaid agencies conditioned on Auvi-Q not being an epinephrine auto-injector device they would reimburse for use by consumers.

    FTC Allows Sycamore to Sell Family Dollar Stores to Dollar General.  The Federal Trade Commission gave a private equity firm approval on Thursday to sell to Dollar General Corp 323 stores that Sycamore purchased as part of a divestiture package two years ago, the agency said on Thursday.  Sycamore Partners II, LP bought the stores in 2015 when Dollar Tree was forced to sell shops in 35 states to win antitrust approval to buy the Family Dollar chain in what was then a $9.2 billion deal.  Sycamore, which had created Dollar Express LLC to run the business, asked the FTC to approve the stores’ transfer to competitor Dollar General (DG.N) in March and said in a document filed with the FTC that the chain could “no longer viably operate as a standalone business.”

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    Categories: Antitrust Litigation, Antitrust Policy, General, Uncategorized

      February 6, 2017

      The Antitrust Week In Review

      Here are some of the developments in antitrust news this past week that we found interesting and are following.

      Drug Makers Accused of Fixing Prices on Insulin.  A lawsuit has been filed accusing three makers of insulin of conspiring to drive up the prices of their lifesaving drugs, harming patients who were being asked to pay for a growing share of their drug bills.  The price of insulin has skyrocketed in recent years, with the three manufacturers — Sanofi, Novo Nordisk and Eli Lilly — raising the list prices of their products in near lock step, prompting outcry from patient groups and doctors who have pointed out that the rising prices appear to have little to do with increased production costs.  The lawsuit, filed in federal court in Massachusetts, accuses the companies of exploiting the country’s opaque drug-pricing system in a way that benefits themselves and the intermediaries known as pharmacy benefit managers.

      EU Probes Online Sales in Electronics, Video Games, Hotels.  EU antitrust regulators opened three investigations on Thursday into 15 companies suspected of restricting online sales of electronics, video games and hotel rooms to deny consumers choice and prevent them from buying at the lowest prices.  The EU aims to boost online cross-border sales and stop “geo-blocking” — restricting offers based on a customer’s location — which runs counter to its goal of a single market for digital goods and services that would underpin economic growth.  “E-commerce should give consumers a wider choice of goods and services, as well as the opportunity to make purchases across borders,” European Competition Commissioner Margrethe Vestager said in a statement.

      NCAA Agrees to Pay $208 Million Settlement in Antitrust Case.  The NCAA and 11 major athletic conferences announced Friday night they have agreed to pay $208.7 million to settle a federal class-action antitrust lawsuit filed by former college athletes who claimed the value of their scholarships was illegally capped.  The settlement still must be approved by a judge and it does not close the antitrust case.  The NCAA said in a statement the association and conferences “will continue to vigorously oppose the remaining portion of the lawsuit seeking pay for play.”

      Walgreens and Rite Aid Cut Price of Merger.  Concerns about regulatory approval have weighed on Walgreens Boots Alliance’s bid to buy a top drugstore rival, Rite Aid, as the two cut the price of the deal while pushing back the expected closing date by six months.  In a joint statement, the retailers said that they would cut the price of the takeover to between $6.50 a share and $7 a share, potentially revaluing the transaction to as little as $6.8 billion.  When the transaction was announced in 2015, Walgreens had agreed to pay $9 a share, or $9.4 billion.

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      Categories: Uncategorized

        January 3, 2017

        The Antitrust Week In Review

        Here are some of the developments in antitrust news this past week that we found interesting and are following.

        Russia’s Gazprom Files Proposals to EU Aimed at Ending Antitrust Case.  Russia’s Gazprom said it had filed proposals with the European Commission aimed at resolving a five-year EU case over the Russian gas giant’s alleged monopoly practices.  The Russian state gas exporter, which supplies a third of the EU’s gas, has been on the European Commission’s radar since 2012, culminating in charges last year that it overcharged customers in eastern and central Europe and blocked rivals.  Since then, Gazprom has offered concessions aimed at staving off a potential fine of up to 10 percent of its global turnover.

        South Korean Antitrust Regulator Fines Qualcomm $865 Million.   South Korea’s antitrust regulator slapped a 1.03 trillion won ($865 million) fine on Qualcomm Inc. Wednesday for allegedly violating competition laws.  The Fair Trade Commission said that the San Diego, California-based company had engaged in unfair business practices in patent licensing and chip sales, including refusing to let rival chipmakers license patents essential for chip making.  The FTC said Qualcomm allegedly used its dominant position in the modem chip market to force handset makers to pay license fees for a broad set of patents under terms it set unilaterally and to coerce handset makers into signing licensing contracts.

        Abbott Gets U.S. Antitrust Approval to Buy St. Jude Medical.  Healthcare company Abbott Laboratories has won U.S. antitrust approval for its proposed $25 billion acquisition of medical device maker St. Jude Medical Inc., the U.S. Federal Trade Commission said.  Abbott agreed to divest two medical devices used in cardiovascular procedures to resolve FTC concerns the acquisition would stifle competition, the commission said in a statement.  “We continue to work to obtain final regulatory approvals and anticipate closing before the end of the year or shortly thereafter,” Abbott spokeswoman Elissa Maurer said in an email.

        FTC Seeks More Iinfo on Bass Pro-Cabela’s Deal.  U.S. fishing and hunting equipment retailer Cabela’s Inc., which is being bought by privately held rival Bass Pro Shops, said the Federal Trade Commission had sought more information from the companies about the deal.  As part of the proposed $5.5 billion deal, announced in October, Capital One Financial Corp. had said it would buy Cabela’s credit card business and signed a 10-year partnership with Bass Pro to issue credit cards to Cabela’s customers.  On Friday, Cabela’s said Capital One had informed the company that it does not expect to get approval for acquiring the credit card business, called World’s Foremost Bank, before Oct. 3, 2017, hence not allowing the deal to close in the first half of 2017.

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        Categories: Antitrust Enforcement, Antitrust Litigation, International Competition Issues, Uncategorized

          April 11, 2016

          The Antitrust Week In Review

          Here are some of the developments in antitrust news this past week that we found interesting and are following.

          U.S. Sues ValueAct, Saying Hedge Fund Violated Antitrust Law.  Not long after Baker Hughes and Halliburton announced a merger agreement in November 2014, the prominent hedge fund ValueAct  started acquiring stakes in both energy giants.  The hedge fund came up with a plan if the $35 billion deal turned messy:  to push the chief executives to do what it took to ensure the deal went through.  That strategy (and when ValueAct came up with it) is at the heart of a $19 million antitrust lawsuit filed by the U.S. Department of Justice.  According to the government, ValueAct violated the Hart-Scott-Rodino Act when it failed to notify regulators upon acquiring about $2.5 billion worth of stock in both Baker Hughes and Halliburton.

          Mega deals morph into mega problems for Wall Street.  Some of the mega transactions that had champagne corks popping in boardrooms are running into antitrust problems and, in the case of pharmaceutical firm Pfizer Inc’s $160 billion takeover of rival Allergan PLC, political opposition to a deal that envisaged the biggest drug company in the United States moving to Ireland to lower its taxes.  The U.S. Treasury unveiled new rules last week that, while they did not name Pfizer and Allergan, had provisions that targeted a specific feature of their agreement and prompted both parties to walk away from what would have been the second-largest deal of all time.  The move by the Obama administration to change the rules has sent a chilling message to dealmakers and comes on top of a number of legal challenges to big transactions such as Halliburton Co’s takeover of rival oil services company Baker Hughes Inc. on antitrust grounds.

          Justice Dept. Sues to Block Halliburton-Baker Hughes Merger.  The U.S. Department of Justice is suing to block the pending merger of Halliburton and Baker Hughes, the latest instance of the Obama administration taking a tougher stance on big-ticket deals.  In its lawsuit, filed in federal court in Delaware, the Justice Department is arguing that combining the two oil field services companies would cut competition in the industry to unacceptable levels.  “The proposed deal between Halliburton and Baker Hughes would eliminate vital competition, skew energy markets and harm American consumers,” Attorney General Loretta E. Lynch said in a statement.

          EU cuts SocGen antitrust fine by about half to 227.7 mln euros.  European Union antitrust regulators have cut Societe Generale’s rate-rigging fine by 49 percent to 227.72 million euros ($259.24 million) after the French lender recalculated the value of its sales.  France’s second-largest bank was hit with a fine of 446 million euros in December 2013, one of seven banks charged with rigging the euro interbank offered rate (Euribor) as a cartel.  “The amended fine is based on the amended value of sales data provided by Societe Generale in February 2016 after the bank realised that it had initially provided incorrect data to the Commission,” the European Commission said in a statement.

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          Categories: Uncategorized

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