by Jon Dubrow, Cerissa Cafasso and Carla Hine.
Failing to comply with premerger document disclosure rules can lead to civil and criminal penalties for companies and their executives.
To read the full article, click here.
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.
by Jon B. Dubrow and Carrie G. Amezcua
On Tuesday the FTC published its comments to FERC’s Notice of Inquiry (NOI), in which FERC had asked for comments on whether, (and if so, how), it should revise its approach for examining market power concerns arising from horizontal mergers to reflect the revised 2010 Horizontal Merger Guidelines published by the FTC and DOJ. The NOI also asked for comments on what impact the revised Merger Guidelines should have on FERC’s analysis of horizontal market power in its electric market-based rate program.
The theme of the FTC’s comments focus on encouraging FERC to adopt the broader set of concepts from the 2010 Horizontal Merger Guidelines, not just the revised HHI thresholds, as FERC’s NOI suggests. HHI (Herfindahl-Hirschman Index) is a measure of market concentration, based on market share analysis. The FTC points out that a "critical thrust" of the 2010 Merger Guidelines is that "merger analysis should examine all dimensions of a transaction’s likely competitive effects," not just market concentration. The FTC cautions that focusing only on HHI calculations can be misleading – either too lenient or too restrictive– especially given characteristics of electricity markets, notably, relatively inelastic demand, capacity-constrained firms, transmission congestion and long-term supply contracts. While market shares are one indicator of competitive effects, other types of evidence include actual effects, direct comparison based on experience, substantial head-to-head competition and the potentially disruptive role of a merging party. The FTC’s comments also note that strict market definition is not the only appropriate starting point for merger analysis, and may not even be required in some circumstances when there is evidence of anticompetitive effects.
If FERC adopts the principles in the 2010 Horizontal Merger Guidelines, FERC’s competition analysis would become similar to the comprehensive competitive effects analysis in FTC and DOJ investigations.
On May 10, the Federal Trade Commission announced that Sanofi-Aventis U.S. LLC and two generic drug makers had violated federal law by failing to notify antitrust authorities about agreements involving Sanofi’s insomnia drug Ambien CR. The FTC found no harm to consumers or competition in this instance and recommended no enforcement action, but the agency seized upon the opportunity to provide public guidance to the industry about the scope the filing requirement under the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA).
The MMA requires filing of certain types of agreements between a brand name drug company and a generic drug applicant that has submitted an Abbreviated New Drug Application that contains a certification that a patent asserted to cover the branded drug is invalid or not infringed (“Paragraph IV certification”). Failure to file within ten business days exposes the parties to penalties of up to $11,000 for each day the party is in violation of the notification requirement.
The Advisory Letters issued by the FTC analyze the Sanofi agreements and seek to clarify how the FTC interprets the Act. The FTC has signaled that it will recommend enforcement actions for future violations of the MMA. This announcement emphasizes the continuing concern that the FTC has shown for the anti-competitive impact of deals between brand name drug manufacturers and generic competitors. The FTC has in recent years repeatedly attacked so-called “pay-for-delay” deals.
For more information on the Sanofi settlement and to view the FTC Press Release with links to Advisory Letters, please visit: https://ftc.gov/opa/2011/05/sanofi.shtm.
by Stephen Wu
Earlier today, the FTC dismissed its complaint against LabCorp after failing to obtain a preliminary injunction in federal district court to prevent LabCorp from further integrating with WestCliff.
LabCorp had acquired WestCliff, a bankrupt lab services competitor in Southern California, in 2010, but the FTC chose to challenge the transaction in front of one of its administrative law judges and had sought a preliminary injunction from a federal district court to prevent LabCorp from integrating WestCliff pending the outcome of the administrative trial.
After losing its bid for a preliminary injunction at the district court, the FTC filed an emergency motion for an injunction pending an appeal that the Ninth Circuit Court of Appeals denied. This meant that LabCorp was free to integrate WestCliff pending the outcome of any appeal of the denial of the preliminary injunction or the FTC’s related administrative trial on the merits of the acquisition.
The FTC’s press release can be found at: https://www.ftc.gov/opa/2011/04/labcorp.shtm.
by Jon B. Dubrow, Gregory E. Heltzer, Blake H. Winbourne and Carrie G. Amezcua
The U.S. Federal Trade Commission and the U.S. Commodity Futures Trading Commission signed a memorandum of understanding that will facilitate the sharing of non-public information for “official law enforcement purposes,” and increase investigation risks for firms.
To read the full article, please visit: https://www.mwe.com/info/news/ots0411i.htm.
by Jon B. Dubrow, Joseph F. Winterscheid and Carla A. R. Hine
In M&A transactions, early involvement of antitrust counsel is essential to avoid unnecessary expense, delay and antitrust risks. Failure to involve antitrust counsel early on in the process may not only jeopardize the parties’ ability to obtain antitrust clearance, but it can also give rise to potential exposure for independent antitrust violations and deal risk. This article discusses five avoidable antitrust pitfalls to keep in mind early in any transaction planning process.
To read the full article, click here.
by Heather Egan Sussman and Carla A. R. Hine
The U.S. Federal Trade Commission’s recently proposed framework for offline and online businesses and policymakers may have a significant impact on entities that collect, maintain and use consumer data. The deadline for public comment is January 31, 2011.
To read the full article, please visit: https://www.mwe.com/info/news/ots1210e.htm.
by Jon B. Dubrow, David Marx, Jr. and Rachael Lewis
The Federal District Court in Minnesota recently decided Ovation Pharmaceutical did not violate federal or state antitrust laws when it acquired Indocin IV and NeoProfen, the only two drugs approved for treatment of a specific heart condition that primarily affects premature babies, because the challengers failed to establish that the drugs were in the same product market. The decision raises significant issues to consider when evaluating antitrust risks in future transactions.
To read the full article, please visit: https://www.mwe.com/info/news/ots0910i.htm.
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