Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC Bureau of Competition issues Spring 2015 report, (Apr 20, 2015)

By Greg Hammond, J.D.

Deborah L. Feinstein, the Director of the FTC Bureau of Competition, has issued a report detailing the Commission’s competition workload over the course of the last year. The “Director’s Report Spring 2015” provides an overview of the Commission’s mergers and anticompetitive conduct actions involving litigation and settlements, as well as Hart-Scott-Rodino premerger notification program enforcement efforts.

With regard to litigating merger matters, Feinstein touted the Commission’s ability “to litigate when necessary to enforce the antitrust laws and prevent consumer harm.” She noted that the FTC will be presenting evidence in the near future before the federal district court in Washington, D.C. on its motion for a preliminary injunction in the proposed merger of Sysco and US Foods—two of the largest broadline foodservice distributors in the United States, with a combined 75 percent share of sales to national customers. The commission, along with state attorneys general from 11 states and the District of Columbia, believe that the proposed acquisition will likely harm competition in 32 local markets.

“While our litigated challenges grab headlines, most agency antitrust enforcement occurs through challenges settled by a consent order,” Feinstein reported. “By sheer numbers, consent orders remain an important tool in the FTC’s enforcement arsenal.”

In particular, Feinstein highlighted consent orders that were reached in the pharmaceutical, medical device, supermarket, and hospitals and ambulatory surgery centers markets. Prestige Brands Holdings, Inc.—the maker of Dramamine—agreed to divest Bonine, in order to proceed with its acquisition of Insight Pharmaceuticals—the maker of Bonine. Similarly, Feinstein reported that Novartis agreed to divest Habitrol to move forward with a joint venture with GlaxoSmithKline. In the supermarket industry, Feinstein noted the Commission’s largest divestiture order in any supermarket merger, which required Albertsons and Safeway Inc. to sell 168 supermarkets to settle charges that the proposed $9.2 billion merger would likely be anticompetitive.

Turning to non-merger matters, Feinstein stated, “it is often through the reasoned evaluation of potentially harmful conduct that the agency is able to shape the law to sweep away impediments to vigorous competition. Whether through litigation or consent orders, the Commission seeks to identify conduct that interferes with the fundamental give-and-take of competitive rivalry but does not offer countervailing benefits to consumers. When it identifies such conduct, the Commission will take appropriate action to stop it and prevent its recurrence.”

The FTC’s biggest news over the court of the last year, with regard to anticompetitive conduct, was its win before the Supreme Court in North Carolina State Board of Dental Examiners v. FTC. In that case, the Court significantly scaled back antitrust immunity for state regulatory boards that are controlled by market participants.

Lastly, Feinstein discussed Hart-Scott-Rodino (HSR) premerger notification enforcement, noting that the Commission “takes seriously the obligation of all investors to ensure that they comply with HSR Rules.” The report highlighted that the Commission obtained nearly $900,000 in civil penalties from Berkshire Hathaway Inc. for its “failure to make the required HSR filing when it acquired voting securities through a conversion of notes that gave it shares with a value over the applicable filing threshold.”

News: Antitrust FederalTradeCommissionNews