Washington, DC
December 21, 1998

Surfing the merger wave

Everything would have been just fine if BP had bought Amoco before Exxon decided that it needed to marry up with Mobil.

But major oil company mergers make lots of folks, including politicians, nervous especially if looks like theres an attempt underway to reconstitute the Standard Oil Trust. Just think how many voters are running around in brobdingnagian sport utility vehicles that average, oh, about 15 miles per gallon, with even larger ones on the automobile manufacturers drawing …

December 7, 1998

Womens reproductive health services market meets the Clayton Act

The National Womens Law Center has just published an explosive report encouraging the use of Section 7 of the Clayton Act to challenge hospital mergers that may result in the elimination of abortion, sterlization and other womens reproductive health services.

The NWLC says the merger of religious-affiliated hospitals with secular institutions — particularly when one of the merger partners has a Catholic affiliation or is associated with another organization that dictates limitations on abortions …

November 16, 1998

Microsoft Watch: so far, so good (for the Government)

Twice each day, Monday through Thursday, at the lunch break and days end, a Microsoft spokesman appears before a clutch of reporters and TV cameras outside the Federal Courthouse in Washington, D.C. to declaim that Microsoft Corp. is trouncing the Antitrust Division, which is futilely flailing to prove that Microsoft has illegally used its monopoly power to distort the market for personal computer software and throttle any innovation that threatens Microsofts Windows operating system.

The …

November 2, 1998

Microsoft trial highlights growing controversy over network effects

Did you use this terminology [network effects, lock-in effects] before your dealings with the Department of Justice? Microsofts Attorney, John L. Warden to Netscape CEO, Jim Barksdale

Microsofts lead attorney defending against Justice Dept. monopolization allegations, John L. Warden, last week accused Netscape executives of inventing antitrust allegations against Microsoft in order to improve their own market position and claimed that their current description of earlier events has been dramatically colored by their use of Department …

October 12, 1998

FTC proposes new interpretation of LLC HSR reportability

Most of these rules were created back in 1978 when there was no such thing as LLCs. We need a new road map. – FTC Premerger Notification Office Director Joseph Krauss

Concerned that the Hart-Scott-Rodino reportability rules for Limited Liability Companies (LLCs) are somewhat outdated in our contemporary corporate environment, the FTCs Premerger Notification Office is publishing a new formal interpretation of LLCs this week.

The new interpretation reads: The formation of an LLC which brings two …

September 28, 1998

Two more high-profile mergers encounter antitrust resistance

The proposed merger of Monsanto and American Home Products Co. may require divestiture of as much as $1 billion to escape an FTC challenge, and Dressers proposed acquisition of Haliburton is encountering resistance at both the FTC and the Justice Dept. FTC:WATCH has learned.

One of the product markets the FTC has identified as problematical is the development and production of genetically-engineered, herbicide-resistant soybean and cotton seeds, sources say.

While the FTC investigates the proposed …

September 14, 1998

Lets stop the Republic while we study Starrs report*

In two weeks, the federal government will not be out of money, but it may be out of business.

The fiscal year 1998 ends at midnight, September 30, and Congress has yet to pass a single appropriations bill, including the one that funds the Federal Trade Commission and the Justice Dept.s Antitrust Division. Thats the appropriation for State, Commerce, Justice, the Judiciary and Related Agencies. And the FTCs share is a paltry $100 million, approximately …

Washington, DC
July 27, 1998

Administrative litigation heats up at the FTC

Its a little much for one administrative law judge, but hes all the FTC has at the moment.

Last week, ALJ James P. Timony rejected an Intel Corp. request to allow its inside lawyers to see confidential, third party documents, despite Intels having proffered a protective order that the firm said fully protects the rights and interests of all parties, including third parties, as to disclosure and use of material designated confidential by a producing party.

…

Washington, DC
July 13, 1998

Sporkin Watch

And you know, I dont take enforceability lightly. I turned down a proposed antitrust decree that … the Antitrust Division gave me because I said it wasnt enforceable, and it wasnt. So I think I know what cannot be enforced. – U.S. District Judge Stanley S. Sporkin from the bench in FTC v. Cardinal, et al and McKesson, et al

Judge Sporkin continues to prod the FTC to accept some kind of consent decree in the prescription drug wholesaler mergers the agency is now …

June 29, 1998

Merger Watch

On June 25th, Adaptec, Inc. and Hyundai Electronics America announced that they were abandoning Adaptecs proposed acquisition of Hyundais Symbios, Inc. subsidiary. Not by coincidence, the FTC had scheduled a meeting on the 25th to consider a staff recommendation that they seek a preliminary injunction in federal court to block the sale.

As the would-be newlyweds put it in their own press release, they had concluded that the U.S. Federal Trade Commission was unlikely to approve the transaction in its current form.

…

June 15, 1998

Merger Watch

If you think that I have made up my mind, youve lost your mind.
Its one fascinating case. – U.S. Dist. Judge Stanley S. Sporkin

Its two prescription drug wholesale merger cases, actually, FTC. v. Cardinal Health/Bergen Brunswig and FTC v. McKesson/Amerisource.

And the FTC is having trouble with both of them, in part because Sporkin clearly would rather capture the mergers claimed efficiencies than enjoin the deals pending an FTC administrative trial. In part because the FTCs economic expert, former Deputy …

Washington, DC
June 1, 1998

The war on Wintel

Wintel is the name many computer users give to personal computers that operate on a chip designed and built by Intel Corp. and the Windows operating system engineered and distributed by Microsoft Corp. This combination is widely believed to drive 80-90% of the personal computers in the world.

The FTC staff is preparing to follow the Justice Dept. into battle against the Wintel monopoly with a two-part antitrust assault on Intel Corp., the first part of which will …

May 18, 1998

Eight of nine ad self-regulation cases escape FTC challenge

Advertisers: whatever you do, dont claim that your pills can help someone who eats a pound of Kentucky Fried Chicken every day for two months lose 25 pounds while lowering his cholesterol remarkably and reducing his blood fat.

That set of claims, among others, seems to have been too much both for the Council of Better Business Bureaus advertising self-regulation program and for the FTC.

I am especially concerned that the advertisers continued …

May 4, 1998

The FTC and cigarette advertising

Minnesota Attorney General Hubert Humphrey, III and Blue Cross/Blue Shield of Minnesota are charging the major tobacco companies with, among other things, conspiracy in restraint of trade. They allege, among other things, that the firms agreed among themselves starting in 1953 to cease making health claims for their products, a quaint notion in 1998, to be sure. The allegation is that the result of the alleged conspiracy was cessation of any effort to develop a cigarette less likely to kill a …

Washington, DC
April 20, 1998

FTC, Missouri sue to block hospital merger

The last time the FTC ventured forth into Missouri to challenge a merger of two hospitals, a federal district judge threw the agency out of court and accused it of meddling in local affairs of which it has no knowledge, being located in Washington, D.C., and all.

This time around, the agency’s challenge to the merger of the only two primary care hospitals within 90 miles of Poplar Bluff, Mo. is backed by the state attorney …

Washington, DC
April 6, 1998

FTC pondering changes to Hart-Scott-Rodino form and interpretations

FTC Premerger Office Director Joseph G.Krauss startled some members of the ABAs Antitrust Section last week when he disclosed that the agency is likely to reinterpret its understanding of the Hart-Scott-Rodino Act to require many Limited Liability Corporations (LLCs) to file premerger reports and to expand the definition of transaction specific documents called for in Part 4(c) of the reporting form to include documents that merging parties previously did not have to submit to the government.

…

Washington, DC
March 23, 1998

FTC Competition staff recommends challenge to patent pool

After nearly three years of investigation, FTC antitrust lawyers have asked the Commissioners to challenge a patent pool formed by two manufacturers of machines that use computer driven lasers to perform photorefractive keratectomy, a procedure for correcting myopia by cutting precision slices in the cornea, FTC:WATCH has learned.

The FTC inherited the case from the Justice Dept.s Antitrust Division in 1995 [FTC:WATCH No. 444, November 6, 1995]

…

March 9, 1998
Washington, DC

New MasterCard and VISA antitrust investigation

A year ago, the press, including this newsletter, was full of
breathless accounts of a possible Antitrust Division challenge to
MasterCard’s and VISA’s dominance of the consumer credit card
business. ["Antitrust Division investigation of Mastercard & Visa
nears decision point," FTC:WATCH NO. 471, January 27, 1997]

Nothing developed. The Justice Dept.’s investigation has been
neither closed nor turned into a case.

Now, the FTC has opened a separate investigation of the credit card
pair without Justice Dept. objection, FTC:WATCH has learned.

…

Washington, DC
February 23, 1998

Feds and states expand merger enforcement cooperation

The federal antitrust enforcement agencies and the state attorneys general have agreed to expand their cooperative efforts in merger enforcement, FTC:WATCH has learned.

Following the Supreme Court’s landmark 1980s decision in California v. American Stores finding that state attorneys general have the power to enjoin prospective mergers under the Clayton Act, corporations have often found themselves, to their chagrin, facing multiple investigations of pending mergers. Their frustration was compounded by two appeals court cases, engineered by …

Washington, DC
February 9, 1998

Hill Republicans challenge Microsoft regulation or competition?

U.S. Sen. Orrin Hatch (R-Utah), chairman of the Senate Judiciary Committee put the issue squarely to the software industry, and Microsoft in particular, when he told a February 5 computer industry economics seminar that, “if one company [exerts] proprietary control over the Internet, and the Internet does in fact become a critical underlying medium for commerce and the dissemination of news and information, … we will be hearing calls from all corners for the heavy hand of government …

Washington, DC
January 26, 1998

Merger Watch

Senior FTC Competition Bureau officials huddled for some two hours last week trying to decide what to do about two pending prescription drug wholesale mergers: Cardinal Health Inc./Bergen Brunswig Corp. and McKesson/Amerisource.

While these mergers would reduce the number of nationwide distributors from four to two, the FTCs task is complicated by the fact that the wholesalers customers are divided over the issue. Some are protesting loudly, sources say, while others are in in favor of or indifferent to the …

January 12, 1998
Washington, DC

Merger watch: timing is everything

Intel’s acquisition of Chips & Technology has survived FTC review and Intel’s planned acquisition of a Digital Equipment Corp. manufacturing plant will probably go through in spite of — and possibly because of — the FTC’s continuing monopolization investigation of Intel.

It is understood that the three Intel matters pending at the FTC (two acquisitions, plus the monopolization case) are among the agency’s highest priority investigations, and the C&T and DEC merger investigations appear to have been subsumed …