December 18, 2006

Merger watch

In 2003, the FTC investigated the merger of two major prescription benefit managers (PBMs), Caremark Rx Inc. s $4.5 billion offer for AdvancePCS. State attorneys general from California, Connecticut, Delaware, Florida, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, New York, Ohio, Pennsylvania, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin and Puerto Rico also investigated. [FTC:WATCH No. 618, October 20, 2003 and No. 620, November 17, 2003]

In the end, the agency let the deal proceed unchallenged, reducing the major PBMs from 4-3 by …

November 20, 2006

And now for something completely different

With the impending exit of a Republican controlled Congress in January, control of Congressional committees and subcommitees will shift to a group of senior Democrats in the U.S. House of Representatives and U.S. Senate.

While the general press naturally concentrates on how the shift will affect issues as the run-up to and conduct of the U.S. invasion and occupation of Iraq as well as other national security issues; political corruption; and the federal minimum wage, the election …

Generic prescription drug competition enforcement increases

FTC success at stopping reverse payment deal:
Deal is abandoned and generic goes on sale

An FTC challenge to a pharmaceutical deal between brand-name and generic drugmakers has resulted in a welcome victory for an agency troubled by recent judicial defeats on similar deals. The important parts of the allegedly anticompetitive deal were abandoned, the FTC says, and a generic version of a popular birth control drug is now available for U.S. consumers.

The FTCs November 2005 Complaint against pharmaceutical firm …

October 23, 2006

The coming counter-revolution?

Depending on which political poll one believes, after the November 7 elections, the Democratic Partys candidates are poised to take control of the U.S. House of Representatives and possibly the U.S. Senate in January, 2007.

Polls of the electorate by news organizations predict that Democrats will hold a majority in the House and just maybe the Senate. On the other hand, a poll of candidates bank accounts by Jim McTague of Barrons magazine suggests that the GOP will hang on to …

October 9, 2006

Could the FTC have saved the U.S. auto industry?
Should Commissions grade their predecessor?
Can anti-dumping rules punish cartels?
Hayeks ghost haunting Europeans?

Former FTC Economics Bureau Director F. M. (Mike) Scherer (1974-1976) says that his greatest failure during his FTC tenure was a failed study of the U.S, automobile industry.

Because I had a long connection with Detroit, when I was Director, he said recently, I put a very high priority on beginning an investigation of the automobile industry. It was clear already in the 70s …

September 25, 2006

National advertising cases piling up at the FTC

The American Association of Advertising Agencies has hired a public relations rm to to stave off negative headlines and burnish the industrys reputation with reporters and other inuencers according to a September 25 report in the trade publication Advertising Age.

Some part of the industrys perceived perception problem may be found in the large number of advertising cases that the self-regulation mechanism has forwarded to the FTC in recent months.

The Council of …

September 11, 2006

Rambus: Commissioners overturn ALJ;
remedy briefs due September 15;
Leibowitz urges more use of Section 5

The Commissionerss decision to overturn an administrative law judges decision in the Rambus standard-setting case sets up an unaccustomed job for the agency this month: setting royalty rates on key computer memory technology.

In an August 2 unanimous decision by Commissioner Pamela Jones Harbour, the Commissioners found that Rambus, a technology licensing firm, was guilty of unlawfully monopolizing markets by concealing its own patents while it served on a standard-setting …

July 31, 2006

Advertising watch – calling in the law

The advertising self-regulation program operated for more than 30 years by the Council of Better Business Bureaus in New York relies, in the end, on FTC and/or state attorneys general participation when advertisers unfortunately fail to respond or respond inadequately to the CCCB’s peer review process. In the last few weeks, the Council’s National Advertising Division (NAD) and associated units have found it necessary to refer seven unresolved cases to the FTC, an inordinately large number.

Most recently, NAD told the FTC that …

July 17, 2006

Merger watch: another Tunney Act dispute

Asserting that despite the district court’s specific invitation to the U.S. Government and the merging parties “to offer experts or other witnesses to make presentations in support of their negotiated decrees, such encouragement not only went unanswered but both the government and the parties claimed that no suitable experts were at their disposal,” the american Antitrust Institute has petitioned for permission to intervene with testimony from two antitrust professors.

The cases are U.S. v. SBC Communications, Inc. and …

June 26, 2006

Robinson-Patman advisory opinion
School workers to get prescriptions at nonprofit price

A rural Michigan school district asked the FTC staff if the Robinson-Patman Act allowed it to go forward with a plan to buy prescription drugs at wholesale prices through a local nonprofit hospital; the prescription drugs would be then distributed through local retail pharmacies.

The FTC staff said yes.

The new arrangement would be an end run around Alpena Public Schools’ current employee prescription drug plan.

Citing the NonProfit Institution Act (NPIA) exemption to the RobinsonPatman Act, Markus Meier, the agency’s Health …

June 12, 2006

First Schering now Weyerhaeuser
Choppy waters in antitrust high court jurisprudence

It used to be that Supreme Court decisions on antitrust cases were rare about one every year allowing antitrust practitioners the luxury of time to parse and ponder every nuance.

But the pace of high court antitrust activity has picked up. Last year, there were three antitrust decisions: Illinois Tool Works v. Independent Ink, 041329 (S.Ct.), Texaco Inc. v. Dagher, 04805 (S.Ct.), and Volvo v. ReederSimco, 04905 (S.Ct.)

The quickened pace promises to continue for the Roberts court. Two …

May 8, 2006

Congressional antitrust combustion

In the 1970s, when people in the U.S. found themselves in long lines for gasoline or restricted to buying on odd or even days depending on their license plate numbers, the U.S. Senate came within 6 votes of adopting legislation forcing the major oil companies to divest their refineries.

Thirty years later, with gasoline prices spiking over $3.00, the Senate is considering antitrust legislation aimed specifically at the oil companies. And the American Bar Associations Antitrust Section is not happy.

…

April 24, 2006

Vertical restrictions gain more attention
Harbour: more attention to distribution channels

FTC Commissioner Pamela Jones Harbour is calling for more scrutiny of vertical restraints between manufacturers and retailers practices like resale price maintenance and exclusive dealing arrangements.

And FTC Competition Bureau Director Jeffrey Schmidt said recently that his colleague Economics Bureau Director Michael A. Salinger continually expresses interest in examining vertical restraints.

The Commission should be doing more to investigate and, when warranted, prosecute vertical restraints, Harbour said in an interview in …

March 27, 2006

Invitation to collude deemed unfair
Publisher allegedly tried price-fixing during an earnings conference

If an invitation to collude takes place in a crowd, is it still illegal? The FTC says yes and has just used its authority to challenge unfair methods of competition to declare that a public offer to collude on prices is just as illegal as the same offer made in the privacy of a locked room.

Relying solely upon the authority of the unfair methods of competition clause in Section 5 of …

March 13, 2006

Specter proposes antitrust law rewrite for petroleum

A March 14 Senate Judiciary Committee hearing on Consolidation in the Oil and Gas Industry: Raising Prices? is likely to be newsworthy if only because executives of the largest domestic oil companies finally agreed to appear for questioning. (Will they be sworn in this time?)

But Judiciary Committee Chairman Arlen Specter (R-Pa.) heighten the stakes on March 9 when he released a discussion draft of a proposed Petroleum Industry Antitrust Act of 2006, which would rewrite the …

February 27, 2006

Merger watch

The Justice Dept.s Antitrust Division has issued subpoenas in its investigation of Intelsats proposed acquisition of PanAmSat, a deal pending since August, 2005.

Antitrust review of Whirlpools proposed acquisition of Maytag, hanging around since July, 2005, has passed up the Antitrust Divisions chain of command to Assistant Attorney General Thomas O. Barnett, who was only confirmed by the U.S. Senate on February 10. Most investigations that reach the assistant attorney generals desk without a resolution are destined for trouble. This is Barnetts first major merger review.

A source familiar …

February 13, 2006

North Texas Specialty Physicians win a rare stay

The FTC has decided to suspend one part of its November, 2005 anti-price-fixing Order against North Texas Specialty Physicians (D. 9312) and also modified another part of the Order to assuage FTC staff concerns that it may be unclear.

North Texas Specialty Physicians had asked that the whole Order be stayed pending resolution of the firms appeal in the Fifth Circuit Court of Appeals.

While, “The Commission considers its unanimous decision in this case to be correct” and unlikely to …

January 16, 2006

ExxonMobil resists FTC tax data demands

Commissioner Pamela Jones Harbour has denied a petition to quash parts of a civil investigative demand the agency staff issued as part of a Congressionally-mandated investigation of gasoline price spikes.

Section 1809 of the Energy Policy Act of 2005 (“Energy Act”) directs the Commission to “conduct an investigation to determine if the price of gasoline is being artificially manipulated by reducing refiner capacity or by any other form of market manipulation or price gouging practices.”

Therefore, …