December 15, 2003

Merger watch

Talk about settling on the court house steps. At 8:15am on Monday, December 15, the Justice Dept. announced that First Data Corp. had agreed to divest its entire interest in NYCE Corporation in order to proceed with its proposed $7 billion acquisition of Concord EFS.

Trial of the Department’s motion for an injunction blocking First data’s acquisition of Concord EFS, Inc. was scheduled to begin that morning. A hold-separate agreement accompanying the settlement is dated sunday, December 14.

First Data …

December 1, 2003

Merger watch

On November 24, Oracle Corp. said it would stage a proxy fight to overcome PeopleSoft Inc.’s resistance to Oracle’s hostile takeover bid. According to the Washington Post, Oracle Executive Vice President Safra A. Catz predicted that antitrust officials in the U.S. and the European Union would eventually approve the acquisition.

But FTC:WATCH has learned that not only are E.U. competition investigators skeptical of the deal, but also the U.S. Justice Dept.’s Antitrust Division has begun contacting (or recontacting) the firms’ customers and …

November 17, 2003

Merger watch

Antitrust review of R. R. Donnelley & Sons proposed acquisition of Moore Wallace will fall to the FTC, which has some history with the Donnelley firm.

In 1990, Donnelley bought major printing firm Meredith/Burda, and the FTC charged that the acquisition “could substantially lessen competition in high-volume publication gravure printing in the United States.” The FTC failed to persuade a federal court to enjoint the deal pending trial on the merits, but after a six-month trial, Administrative Judge Lewis F. Parker in …

November 3, 2003

Merger watch

R.J. Reynolds’ planned to buy British American Tobacco’s cigarette business will encounter serious FTC scrutiny and, according to one source familiar with Competition Bureau and Economics Bureau thinking, will have to overcome the presumption that it’s illegal. The analysis will be heavy on economics, similar to the process that greeted Royal Caribbean Cruises Ltd.’s and Carnival Corp.’s competing bids for P&O Princess Cruises plc. The Commission ultimately found that neither deal was anticompetitive. [FTC:WATCH No. 596, October 7, 2002]

ArvinMeritor’s hostile bid …

October 20, 2003

Merger watch

While the U.S. Justice Dept.’s Antitrust Division ponders the legality of Oracle Corp.’s proposed hostile takeover of PeopleSoft, Inc., Connecticut Attorney General Richard Blumenthal is pursuing his state’s pending lawsuit seeking a federal court injunction to block the transaction. (State of Connecticut v. Oracle Corp. and Pepper Acquisition Corp.; 03-CV-1072 (AWT); U. S. Dist. Ct. D. Conn.)

Last week, Blumenthal replied to Oracle’s motion to dismiss the charges that the combination of these two “enterprise software” firms would produce a duopoly, since …

October 6, 2003

Pushing back the spam sea – a brief history

In February, 1998 the FTC warned more than 1,000 e-mail mass marketers that they are being watched and may be prosecuted. One month later, the agency announced its first “spam” e-mail case, against Internet Business Broadcasting, a firm that allegedly misrepresented the earnings potential of selling advertising space on the Internet, using false and misleading claims on both the company web page and in mass e-mailings.

By June, 1998, the agency was predicting that the …

September 22, 2003

First Data acquisition of Concord EFS Inc.
likely to be challenged absent settlement

First Data Corp.s proposed acquisition of Concord EFS Inc. continues to encounter determined resistance from the Justice Dept.s Antitrust Division. FTC:WATCH No. 614, July 28; No. 610, May 26; and No. 612, June 23]

The Division recently shifted a seasoned litigator and former merger task force head, Craig W. Conrath, from the Transportation, Energy & Agriculture section to the Networks & Technology section, where chief First Data-Concord investigator Joshua H. Soven …

Washington, DC
September 8, 2003

Verisign agrees not to send deceptive domain name notices

Verisign, a major Internet domain name registrar, has signed an FTC consent agreement barring the firm from distributing deceptive expiration notices to those who have registered their URLs (uniform resource locators) with another service.

The FTCs action follows a California class action suit settled several months ago.

That lawsuit alleged that some domain-name owners … received from VeriSign an official-looking Domain Name Expiration Notice with a reply date that implies (falsely) …

July 28, 2003

Major changes

The Senate has confirmed Pamela Jones Harbour as a commissioner of the FTC, replacing Sheila F. Anthony, whose term expired in September, 2002. As provided by the FTC Act, Anthony has remained as a commissioner pending confirmation of her successor. He last day will be Friday, August 1. Harbour is an Independent.

Commissioner Mozelle Thompsons term expires on September 25, and FTC:WATCH has learned that the president will likely nominate a former member of the Senate Judiciary Committee staff, …

July 7, 2003

New predatory-pricing rule: the government always loses

The 10th Circuit Court of Appeals has sustained a district judge’s dismissal of predatory-pricing charges against American Airlines on summary judgment.

An opinion by Circuit Judge Carlos F. Lucero acknowledges that the 10th Circuit has yet to decide the proper test for below-cost pricing, but says the Justice Dept .’s Antitrust Division failed in its attempt to prove that American Airlines illegally lowered prices and added capacity for several city-pairs radiating from its Dallas-Ft. Worth hub to break competition from new, low-cost entrants.

Failed …

June 23, 2003

Merger watch – lets all go to court

Connecticut Attorney General Richard Blumenthal has won the government race to the courthouse, filing suit in federal district court in Hartford on June 18 to block Oracle Corp.s proposed hostile takeover of PeopleSoft, Inc.

Of course, J.D. Edwards Co. beat Blumental by six days, filing its own suit in Colorado and California state courts alleging, among other things, that Oracle is engaged in tortious interference with Edwards agreement to be acquired by PeopleSoft.

The …

June 9, 2003

Sons of Hippocrates
California anesthesiology groups
settle FTC price-fixing charges

Two San Diego County, Cal. anesthesiologists groups have accepted a ban on entering into agreements to jointly set fees or establish stipends to settle Federal Trade Commission charges that they fixed prices. According to the FTC’s complaints, each group jointly agreed on certain fees and other “competitively significant” terms that they demanded from Grossmont Hospital for providing on-call services. The two groups, Anesthesia Service Medical Group, Inc. (ASMG) and Grossmont Anesthesia Services Medical Group, Inc. (GAS), ceased implementing …

May 26, 2003

If we can take over Iraq …

While the executive branch of the U.S. government is busily trying to arrange a new government for the people of Iraq (with varying degrees of success), it has been unable for nine months to complete a simple background check on a nominee to replace FTC Commissioner Sheila F. Anthony, whose term expired in September 2002.

As provided in the FTC Act, Anthony can and does continue to serve until her successor is nominated, confirmed and sworn in …

Washington, D.C.
April 28, 2003

Merger watch: Rx drugs and extra yummy ice cream

Dreyers Grand Ice Cream Inc. Chief Financial Officer Tim Kahn told the Los Angeles Times on April 24 that he expects his firms acquisition by Nestle to close by mid-June, although the FTC commissioners voted unanimously on March 4 to challenge the transaction in federal court.

After that vote, Nestle took the antitrust problems with the deal seriously enough to start providing the agency with the sales and distribution data investigators had been requesting …

April 7, 2003

Rambus – 101 negative inferences

FTC staff trying the case alleging that Rambus, Inc. illegally distorted the standards-setting process for dynamic ramdom access memory (DRAM) chips in the 1990s have filed another, 60-page motion asking Administrative Law Judge Stephen J. McGuire to expand upon a previous order in the matter (D.9302) by entering an order containing 101 negative inferences to be drawn from the fact that Rambus engaged in massive document destruction in nticipation of litigation, including FTC enforcement litigation.

Among other purposes, a …

March 17, 2003

Nestle dawdles, FTC approves suit

From the time it announced its takeover bid for Dreyers Grand Ice Cream, Inc. in june, 2002 until the end of the year, Nestle stonewalled FTC staff requests for data necessary to evaluate the competition implications of the deal, FTC:WATCH has learned.

Finally, after repeated agency requests, Nestle produced the data on December 24. On December 26, the firm certified its compliance with the agencys Second Request under the Hart-Scott-Rodino Act.

Thus, allowing for the traditional end …

February 3, 2003

This could be the best show in town

Rambus, Inc. has joined FTC Competition Bureau lawyers in calling for oral argument on the FTC staffs motion to enter a default judgment in D.9302 on allegations that Rambus deliberately destroyed documents in anticipation of both private and FTC litigation of charges that it snookered an electronics industry standards-setting body into unknowingly setting a standard based in part on Rambus patents. Rambus subsequently has demanded royalties and/or filed patent infringement suits against competitors who have incorporated the standard …

January 20, 2003

Rambus – a bit of Byzantium at the FTC

Imagine an administrative trial where: the respondent has been accused of deliberately destroying documents in anticipation of litigation with the FTC; where the Justice Dept., lost, then won, a motion to keep grand jury testimony from the respondent as well as the FTC; an FTC attorney advisor had to report an ex parte contact from another government agency after receiving a desperate telephone call from the agency; the grand jury in question is investigating alleged price-fixing in …

January 6, 2003

Staff demands default judgment against Rambus

FTC staff attorneys trying the case against Rambus, Inc. have asked Administrative Law Judge James P. Timony to enter a default judgment against the firm on the grounds that its alleged deliberate and pervasive destruction of documents in anticipation of litigation have tainted the defense.

In June, the agency charged Rambus with unfairly manipulating the standards-setting process for computer memory by willfully declining to disclose its existing and pending patents while participating in the JEDEC Solid State Technology …