December 17, 2007

The recusal question

In 1993, with one commissioner not participating, the others deadlocked 2-2 on a staff recommendation to ask a federal court to enjoin Microsoft Corp. from certain sales practices. [FTC:WATCH No. 383, February 8, 1993]

The practices were: charging personal computer manufacturers an operating system license for every machine they manufactured, whether or not some machines included a Microsoft system or not; and minimum use contracts that could require royalty payments on unshipped PCs.

As a result of the tie …

December 3, 2007

Court dismisses price-fixing indictment

U.S District Judge Bruce W. Kauffman has dismissed an indictment of a shipping company and its executives, ruling that the defendants were protected from prosecution by an amnesty agreement with the Justice Dept.s Antitrust Division.

In the process, Judge Kauffman excoriated the Antitrust Division for indicting the very witnesses who had enabled it to prosecute and break up an international shipping cartel, securing major fines and jail sentences along the way.

It ill behooves government agents and prosecutors …

November 19, 2007

Merger watch – more trouble for Google

The chairman and ranking Republican member of the Senate Antitrust subcommittee have urged the FTC to be very caution before allowing Googles pending acquisition of DoubleClick to proceed unchallenged. The merger, they say, poses a potential threat to video content, news and advertising.

Subcommittee Chairman Herb Kohl (D-Wisc.) and Republican Orrin Hatch (R-Utah) say the FTC should only approve the merger if … it will not cause any substantial lessening of competition with respect to Internet advertising.

…

November 5, 2007

Merger watch – still pursuing Whole Foods-Wild Oats

The FTC has rediscovered the merits of administrative litigation in merger matters, asking the Circuit Court of Appeals for the District of Columbia to preserve the agencys ability to undo at least part of Whole Foods acquisition of Wild Oats.

In strongly-worded filings with the Appeals Court, the FTC has accused the district court that denied it a preliminary injunction pending trial of subverting the Commissions statutory role as an expert adjudicatory agency with respect to …

October 22, 2007

FTC Intel investigation proceeding unimpeded

Its not as though there is a shortage of Bush Administration scandals, alleged or otherwise, to write about, but the October 22 New York Times sought to add one, in a story alleging that FTC Chairman Deborah Platt Majoras has been blocking an investigation of Intel Corp.

The Times notes that competition officials in Europe and S. Korea have instigated proceedings against Intel for alleged predatory pricing. Intel competitor Advanced Micro Devices has complained since at least 2005 that …

October 8, 2007

Insurance + credit scores + race = controversy:
New FTC insurance study to use 6(b)

The FTC will order insurance companies to file Special Reports as the agency continues to study the use of consumer credit scores in setting insurance rates, FTC Commissioner J. Thomas Rosch told Congress.

Rosch was on the Hill to explain an FTC study on the use of credit scores in auto insurance, which relied on industry-provided data. He went before Rep. Melvin Watts (D-N.C.)s subcommittee on Oversight and Investigations …

September 24, 2007

Physician group finds antitrust safety zone

After a thorough examination of a New York state physician groups collective bargaining arrangement, the FTC staff said it would not recommend an automatic antitrust challenge to the program.

The FTC rarely finds arrangements in which competing physicians agree (collude) on the prices they will charge insurance companies to be legal. (See Commissioner J. Thomas Roschs discussion of the problem in this issue.)

But a September 17 advisory opinion by FTC Assistant Health Care Director Markus …

September 10, 2007

Hot gasoline flap fuels FTC-House feud

Before the price of regular gasoline went from less than a dollar a gallon to somewhere around three dollars a gallon, nobody much cared what time of day (or year) he or she filled up the tank. Except, perhaps, the stray physicist or environmentalist.

All motorists knew that gasoline is sold by volume, not by weight, and some even knew that the lower the temperature at which the fluid is dispensed, the denser it is, and therefore the …

July 9, 2007

Merger watch

Third parties protest disclosure:
FTC targets Whole Foods for administrative trial

The FTCs attempt to stop a Whole Foods Market/Wild Oats merger in federal district court is generating a lot of controversy and now therell be two venues for the disputation.

On June 28, the FTC filed an administrative complaint against the $670 million deal. The FTC said that filing of the complaint preserves the Commissions legal option to pursue an administrative remedy following the federal district court proceeding. The administrative complaint …

June 25, 2007

Staples-Office Depot redux?:
FTC attacks Whole Foods/Wild Oats merger

Given that federal courts have lately taken to deciding in government merger cases that complaining customers dont know what theyre talking about, will U.S. District Judge Paul L. Friedman (D.D.C.) decide that Whole Foods senior corporate officials dont know what theyre talking about, either?

In FTC v. Arch Coal (FTC File No. 031-0191, Docket No. 9316), D.C. District Judge John D. Bates found that plaintiffs rely heavily on testimony from utility customers expressing concern about …

June 4, 2007

Two weeks, two energy deal defeats:
Western-Giant merger to proceed

A federal judge in New Mexico has denied the FTCs request for an injunction blocking the merger of two energy companies, Western Refining and Giant Industries. The FTC had asked for an injunction to allow its administrative law trial in the same case to conclude.

The FTC is considering an appeal of the New Mexico decision, but the merging parties are going ahead with the merger, so any FTC victories from here on would …

May 21, 2007

FTC to appeal Pennsylvania natural gas merger loss

The FTC will appeal a federal judges dismissal of the FTCs request for a preliminary injunction against an acquisition in the natural gas transmission business.

U.S. District Judge Arthur J. Schwab said that the merger had been approved by Pennsylvanias Public Utilities Commission (PUC) and that the FTC must defer to the Pennsylvania General Assembly and the PUC.

The FTC opposed the deal between Equitable Resources, Dominion Resources, and the Peoples Natural Gas Company …

May 7, 2007

Merger watch

The Justice Dept.s antitrust Division has issued subpoenas to the major automobile manufacturers in connection with its investigation of the proposed Sirius-XM Satellite Radio merger.

Monsantos second attempt in a decade to acquire seed company Delta and Pineland Co. appears likely to be successful. According to an informed source, the Justice Dept.s Antitrust Division is preparting to accept a consent decree that would require Delta & Pineland to license seed technology to new entrants.

Settlement negotiations with the FTC continue …

April 23, 2007

Identity theft task force proposes legislation

The Social Security numbers of up to 150,000 people who received Agriculture Department grants have been posted on a government Web site since 1996, but they were taken down last week. – Associated Press, April 23, 2007

A multi-agency task force headed by FTC Chairman Deborah Platt Majoras and Attorney General Alberto R. Gonzales has released a strategic plan to combat identity theft.

According to the two lad agencies, The plan focuses on ways to improve the effectiveness of criminal …

April 9, 2007

Bulletin: The FTC commissioners on April 10 voted to ask a federal court to block Western Refining, Inc.s proposed acquisition of Giant Industries, Inc. on the grounds that the merger would reduce competition for the bulk supply of light petroleum products to northern New Mexico. According to a source familiar with the transaction, Western is now attempting to negotiate a consent agreement to include divestitures that would resolve the FTCs objections.
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Free market good; antitrust sound
Eighty ideas include RPA repeal, Illinois Brick redo

Four years and $4 million …

March 26, 2007

What are you wearing?

The Humane Society of the U.S. has asked the FTC to enforce the Fur Products Labeling Act, 15 U.S.C. 69 et seq. against several national clothing retailers who, it alleges, are mislabeling some of their fur-trimmed products; specifically, importing apparel from the Peoples Republic of China and labeling it for consumers as either faux fur, genuine raccoon or coyote, or rabbit fur when, in fact, the garments include fur from members of the canine family, such as domestic dog, wolf, or …

February 26, 2007

Harbour to Supreme Court: leave Dr. Miles alone

Ladies handbags are not technological wonders requiring extensive operational expertise and consumer education. Ladies handbags do not require acoustically optimized demonstration rooms. Ladies handbags do not require extensive post-sales servicing, or inventories of repair and replacement parts. Ladies handbags do not require special climate-controlled storage to prevent health risks.

In what appears to be an unprecedented challenge to her agencys decision to participate in a Supreme Court amicus brief, FTC Commissioner Pamela Jones Harbour has posted an Open Letter …

February 12, 2007

Western/Giant deal piques FTC interest
HSR compliance issues could cloud FTC probe

A $1.2 billion purchase by Western Refining of Giant Industries hangs by a thread of uncertainty about whether or not the parties have fully complied with the FTCs request for additional information (a/k/a the second request) or, indeed, whether they have filed at all. The parties themselves certified in early December that they had.

However, according to a draft proxy statement submitted to the SEC by Giant on February 1, …

January 29, 2007

Merger watch

Over the objection of two commissioners, the FTC has closed its investigation of cable TV mergers involving Time Warner, Comcast and Adelphia. FTC File No. 051-0151

And with one abstention, the commissioners have also closed an investigation of Brocade Communications Systems Inc.’s acquisition of McData Corporation. FTC File No. 061-0279

In the Time Warner, Comcast and Adelphia deals, involving asset “swaps” as well as acquisitions, Commissioners Jon Leibowitz and Pamela Jones Harbour agreed with the majority that the end result “will be competitively neutral or even procompetitive.” But they …

January 15, 2007

Merger watch

Although FTC investgating attorneys were initially disposed to challenge Brocade Communications Systems, Inc.s pendition acquisition of McDATA Corp. [FTC:WATCH No. 687, December 4, 2006], they have now recommended that the commissioners close the investigation without action.

The commissiomners were scheduled to take up the Brocade-McData matter on January 16, but the merger has been removed from the January 16 agenda and postponed for as much as two-three weeks, FTC:WATCH has learned.

Jurisdiction over the Brocade-McDATA was the subject of a …