DOJ Developments Archives - Page 24 of 41

Acting Assistant Attorney General Sees Increasing Barriers to Entry in Health Insurance

by Emily Townsend | Mar 26, 2012 | DOJ Developments, Healthcare Antitrust, Mergers & Acquisitions

Last week, Sharis Pozen, Acting Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice, spoke at the World Annual Leadership Summit on Mergers and Acquisitions in Health Care, where she affirmed that protection of competition in the health care industry is a top priority of the Division. Pozen highlighted the Division’s recent enforcement activities in insurance and provider markets, including challenges to insurance company mergers and contracting practices used by dominant insurers or providers such as Most Favored Nation (MFN) provisions and exclusivity agreements.

Of note, Pozen remarked that the Division undertook a comprehensive evaluation of health insurance markets, the results of which have caused the Division to regard with increasing skepticism the ability of new entry to constrain a merged health insurance firm. Pozen explained that new entrants face obstacles because they need provider discounts to attract enrollees but have difficulty obtaining them without a large number of enrollees. Pozen stated that the Division will focus more attention on entry analysis to protect markets from harmful consolidation, especially markets dominated by one or two plans. Regarding provider markets, Pozen described the Division as "on the lookout for agreements or arrangements purported to improve quality but where the real goal is simply to raise prices." This is especially relevant given the Affordable Care Act’s encouragement of provider collaboration in the form of Accountable Care Organizations (ACOs).

Pozen’s remarks are available at: https://www.justice.gov/atr/public/speeches/281236.pdf.

Pozen’s comments highlight the need for health care companies considering collaborative arrangements with competitors or contracting arrangements such as MFNs or exclusivity agreements to consult counsel and articulate a clear pro-competitive basis for such conduct.

FERC Reaffirms Merger Policy; Does Not Adopt DOJ/FTC 2010 Horizontal Merger Guidelines

by McDermott Will & Emery | Feb 27, 2012 | DOJ Developments, Energy/Commodities, FTC Developments, Mergers & Acquisitions

by Jon Dubrow and Cerissa Cafasso

Public utilities could face different levels of scrutiny in merger reviews before the U.S. Federal Energy Regulatory Commission, and the Department of Justice and the Federal Trade Commission (the Antitrust Agencies).

To view the full article, please click here.

DOJ Finds Antitrust Violation in Joint Bid for Oil & Gas Leases

by Emily Townsend | Feb 23, 2012 | DOJ Developments, Energy/Commodities

by Jon B. Dubrow and Shauna A. Barnes

The U.S. Department of Justice’s recent action challenging a joint bidding arrangement for natural gas leases highlights the antitrust risks of joint bids. This newsletter describes considerations parties considering joint bids can take to evaluate and potentially manage their antitrust risks.

To read the full article, click here.

CEO Fined for H-S-R Act Violation on Acquisition of Stock-Based Compensation

by McDermott Will & Emery | Jan 31, 2012 | DOJ Developments, FTC Developments

by Joseph Winterscheid

In December 2011, the United States Department of Justice (DOJ) announced that a public company chief executive officer (CEO) will pay a $500,000 civil penalty to settle charges that he violated Hart-Scott-Rodino Act (H-S-R Act) premerger reporting and waiting period requirements. The DOJ, acting at the request of the Federal Trade Commission, charged the executive for failing to satisfy the H-S-R Act’s requirements before acquiring common stock under the company’s stock-based compensation program. The CEO allegedly exceeded the H-S-R Act filing threshold ($59.8 million when the alleged violation occurred) upon the vesting of outstanding restricted stock units awards and the reinvestment of dividends and short term interest through his 401(k) account.

Violations of the H-S-R Act’s reporting and waiting period requirements are subject to fines of up to $16,000 per day. The DOJ’s recent enforcement action illustrates the potentially costly consequences of a failure to consider H-S-R Act compliance in connection with investment planning for corporate executives (and other individuals) who will hold or acquire stock valued in excess of the H-S-R Act’s notification threshold (currently $66 million and moving to $68.2 million effective February 27, 2012), and that violations may occur under somewhat obscure circumstances. In this connection, it is also important to remember that the relevant valuation is determined by reference to the total value of the voting securities that will held following any given acquisition of shares. Thus, for example, if an executive already holds shares valued at $65,999,999, a reporting obligation could be triggered by acquiring just one additional share. Likewise, if the executive’s existing holding has already crossed the $66 million valuation threshold through appreciation, any further acquisitions could trigger a reporting obligation.

FTC/DOJ Remove Mandatory Antitrust Review for MSSP-Participating ACOs in Final Policy Statement

by Emily Townsend | Nov 9, 2011 | DOJ Developments, FTC Developments, Healthcare Antitrust

by Jeffrey W. Brennan, Ashley McKinney Fischer, David Marx, Jr. and Hillary A. Webber

On October 20, 2011, the Federal Trade Commission and Department of Justice issued a final policy statement on accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP). Significantly, the Agencies eliminated mandatory antitrust review of certain ACOs seeking to participate in the MSSP, but declined to adopt other stakeholder recommendations.

To read the full article, please visit: https://www.mwe.com/info/news/ots1111c.htm.

Increased Antitrust Scrutiny of Non-Reportable or Closed Transactions

by Emily Townsend | Jul 14, 2011 | DOJ Developments, FTC Developments

by Jon B. Dubrow and Carla A. R. Hine

In recent years, the Federal Trade Commission (FTC) and the Department of Justice (DOJ)—the two US agencies responsible for reviewing and challenging transactions that may lessen competition—have increasingly challenged non-reportable and consummated transactions. There have been several such challenges so far in 2011, and at least nine in 2010 (all but one of which resulted in a settlement).

To read the full article, click here.

FTC Announces Major Changes to Disclosure Requirements for Hart-Scott-Rodino Notification Rules and Form

by Emily Townsend | Jul 7, 2011 | DOJ Developments, FTC Developments, Mergers & Acquisitions

by Jon B. Dubrow, Joseph F. Winterscheid and Carla A. R. Hine

Companies should begin regularly collecting required data—in particular revenues by North American Industry Classification System code and information about “associates”—in advance of need to file Hart-Scott-Rodino notification.

To read the full article, click here.

U.S. and Chinese Antitrust Agencies to Sign Cooperation Agreement

by Emily Townsend | Jul 6, 2011 | Cartel Enforcement, Chinese Developments, DOJ Developments, FTC Developments

by Frank Schoneveld and Joseph F. Winterscheid

On June 24, 2011, Assistant Attorney General Christine Varney announced that the U.S. antitrust enforcement agencies will be signing a cooperation agreement with their Chinese counterparts. As a consequence, companies can now expect to see the Chinese authorities participating in coordinated “dawn raids” and related cooperative enforcement initiatives with the U.S. and EU antitrust enforcers in international cartel cases.

To read the full article, click here.

Head of DOJ Antitrust Division Comments on Standard-Setting Organizations

by McDermott Will & Emery | Jun 29, 2011 | DOJ Developments

by William Diaz

The head of the United States Department of Justices’s (DOJ) Antitrust Division, Christine Varney, gave a speech to the Chamber of Commerce on June 24, 2011. One of the topics she discussed involved IP/antitrust issues regarding standard-setting organizations (SSOs). Provided below is the excerpt from her remarks dealing with this topic. While her remarks do not signify a change in the way the DOJ analyzes SSOs, they serve as a reminder that the DOJ is vigilant of anticompetitive practices related to standard-setting.

Christine Varney’s Remarks on SSOs:

One issue that arises in the context of civil non-merger enforcement, and which I understand is of considerable interest to the business community, is the application of the antitrust laws to standard setting. I have examined standard setting since my days as a Federal Trade Commissioner, when I voted to challenge Dell Computer Corporation’s anticompetitive conduct in a Standard Setting Organization (SSO). The FTC alleged that Dell—as a member of an SSO—restricted competition in the personal computer industry and undermined the standard-setting process by threatening to exercise undisclosed patent rights against computer companies that had adopted the standard. In that settlement, the FTC made clear that the antitrust laws do not allow firms to commit to an open standard, and only after the standard is adopted, assert patent rights to block use of the design or increase prices.

However, if structured appropriately, standards promulgated by an SSO can be permissible under the antitrust laws. As you well know, standard setting creates enormous benefits for businesses and consumers, including reducing production costs and fostering public health and safety. The Division has expressed this support for SSOs in a joint report with the FTC, in business review letters and in speeches.

I personally support the role of standard setting in promoting innovation as long as such standards comply with the basic and fundamental principles of the antitrust laws. This requires that standards be open and published, with clear disclosure and license rules, and should be apportioned fairly and efficiently, with no company able to distort the process. In addition, standards should be limited to technical and operational functions that support individual business decisions—not thwart the competitive process by enabling collective and collusive business decisions. The best SSO framework may vary by industry, but these fundamental principles remain.

To view Christine Varney’s full comments, please click here.

DOJ Releases New Merger Remedy Guide

by Emily Townsend | Jun 20, 2011 | DOJ Developments, Mergers & Acquisitions, Monopolization/Abuse of Dominance

by Joel R. Grosberg and Megan Morley

The DOJ has released an updated merger remedies guide that provides an overview on how the DOJ Antitrust Division staff will analyze proposed remedies in merger matters. The revised guide places an increased emphasis on behavioral or conduct remedies to address issues raised by vertical transactions.

To view the full article, click here.

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