April 17, 2017

The Antitrust Week In Review

Here are some of the developments in antitrust news this past week that we found interesting and are following.

U.S. telecoms industry set for M&A negotiations frenzy.  In 10 days, the U.S. Federal Communications Commission will lift a ban on telecoms companies engaging in merger talks, and Wall Street is betting on T-Mobile US Inc., Sprint Corp and Dish Network Corp to be the first ones out of the gate.  Shares of these companies have soared over the past 12 months on expectations of deal talks, and are trading at up to 31 times forward earnings, versus the S&P 500 telecom services index’s .5SP50 18 times.  The rich valuations could discourage acquirers, who also have to assume the risk that antitrust regulators may look askance at more consolidation in the sector after a wave of mergers in recent years, investment bankers and industry experts say.

Antitrust Agencies Say Alaska Health Policy Stifles Competition.  Federal antitrust officials on April 12 urged Alaska lawmakers to repeal the state’s program requiring health-care providers to obtain state approval before expanding.  At the request of a state lawmaker, the Justice Department and the Federal Trade Commission weighed in, saying the restrictions can harm competition by limiting the availability of new health care services.  Alaska Sen. David Wilson (R) is sponsoring legislation to repeal the program.

Maersk Wins Conditional EU Approval for Hamburg Sud Takeover.  World No. 1 shipping company Maersk Line gained EU antitrust approval on Monday for its acquisition of Hamburg Sud (HSDG) after agreeing to pull the German company out from five consortia on trade routes to address competition concerns.  The bid by Maersk, part of Denmark’s A.P. Moller-Maersk, underscores the wave of mergers in an industry struggling with over-capacity and slowing global trade.

Siemens, Bombardier Vie for Control of Rail Joint Venture-Sources.  Talks about uniting the rail operations of Germany’s Siemens and Canada’s Bombardier are being complicated by the desire of both companies to keep control of a merged business, two people close to the matter said on Wednesday.  Antitrust issues and political considerations could also ultimately make a deal to create a company with combined sales of $16 billion hard to pull off, industry experts said.  The two groups are talking about a joint venture that could compete better with Chinese state-backed market leader CRRC, which is expanding aggressively abroad and would still be twice their combined size by revenue.

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Categories: Antitrust Litigation, Antitrust Policy, International Competition Issues

    March 20, 2017

    The Antitrust Week In Review

    Here are some of the developments in antitrust news this past week that we found interesting and are following.

    EU’s Vestager Warns Companies Against Abusing Algorithms.  Europe’s antitrust chief on Thursday warned companies against using algorithms to block rivals or form cartels, saying she may slap heftier fines on them if they use such software to commit wrongdoing.  European Competition Commissioner Margrethe Vestager, who is poised to fine U.S. technology giant Google in the coming months for using its algorithm to unfairly demote rival shopping services in internet search results, said she was vigilant to such illegal practices.

    British Regulators to Investigate 21st Century Fox’s Deal for Sky.  Britain asked regulators on Thursday to investigate whether 21st Century Fox’s $14.3 billion deal to take full control of the British satellite television giant Sky would give the media mogul Rupert Murdoch too much control over the country’s media landscape.  The takeover for the 61 percent of Sky that 21st Century Fox does not already own was agreed on in December and is the second such effort to combine the two companies since 2011.  The latest attempt quickly raised a wave of criticism in Britain, where Mr. Murdoch already holds several media interests.

    EU Seeks to Encourage Whistleblowers in Fight Against Cartels.  EU antitrust regulators on Thursday unveiled plans to help individuals to blow the whistle on cartels while protecting their identity, a move which may lead to more cases of wrongdoing being uncovered in the future.  The European Commission, which currently relies on companies to alert them to cartels in exchange for no sanction, said the scheme is aimed at employees who want to do the right thing by stopping illegal price fixing.

    Exclusive: Delrahim to Head Justice Department Aantitrust Unit – Sources.  Makan Delrahim, a veteran lobbyist on President Donald Trump’s transition team, is expected to be nominated to head the U.S. Justice Department’s Antitrust Division, two sources familiar with the vetting process told Reuters on Friday.  Delrahim is expected to move to the Justice Department after finishing up in the White House counsel’s office, where he is working to steer Supreme Court nominee Neil Gorsuch through the Senate confirmation process.

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    Categories: Antitrust Policy, International Competition Issues

      February 20, 2017

      The Antitrust Week In Review

      Here are some of the developments in antitrust news this past week that we found interesting and are following.

      Anthem Sues Cigna to Block Termination of Merger.  Anthem on Wednesday won a temporary restraining order that blocks smaller rival Cigna from officially terminating their proposed $54 billion merger, a transaction already rejected by U.S. antitrust regulators.  The deal would have created the largest U.S. health insurer.  Rivals Aetna and Humana had sought their own merger, representing an unprecedented consolidation among U.S. health insurers.  In separate rulings, federal judges struck down both deals as anticompetitive, at the request of the Justice Department.  Aetna and Humana said on Tuesday they were ending their deal, but Anthem filed an appeal of its ruling.

      Top Antitrust Senators Call for Sessions to Scrutinize AT&T-Time Warner Merger.  The top senators on the  Senate Judiciary Committee’s antitrust panel are urging the U.S. Department of Justice to scrutinize the proposed AT&T-Time Warner merger for the possibility that it leads to anticompetitive practices.  The subcommittee’s chair, Sen. Mike Lee (R-Utah), and Ranking Member Amy Klobuchar (D-Minn.) wrote a letter to Attorney General Jeff Sessions pointing to aspects of the deal that they find troubling.

      U.S. Antitrust Obstacles Seen for T-Mobile, Sprint Deal.  Japan’s SoftBank Corp Group may have renewed interest in combining its Sprint Corp with Deutsche Telekom AG’s T-Mobile US Inc., but a deal between the No. 3 and No. 4 U.S. wireless carriers may not make it past U.S. regulators, antitrust experts and industry watchers said.  SoftBank is prepared to give up control of Sprint to T-Mobile, people familiar with the matter told Reuters on Friday.  The companies are expected to begin negotiations in April after the Federal Communications Commission’s auction of airwaves concludes.

      Kraft Heinz Offers to Buy Unilever in $143 Billion Deal.  The world’s grocery carts could soon be filled with more and more products from one global colossus.  Food, beverage and consumer-goods companies have been seeking merger partners to obtain greater scale and efficiencies as consumers, particularly younger shoppers, eschew the boxed and jarred foods of their parents’ generation.  Now, one such recently merged giant, Kraft Heinz, has set its sights on the biggest target to date: Unilever, the home of Dove soap and Axe body spray, Ben & Jerry’s ice cream and Hellmann’s mayonnaise.  But a merger would be certain to draw antitrust reviews by regulators from many countries.

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      Categories: Antitrust Litigation, Antitrust Policy, General

        December 12, 2016

        The Antitrust Week In Review

        Here are some of the developments in antitrust news this past week that we found interesting and are following.

        E.U. Fines Three Banks About $520 Million for Interest Rate Collusion.  European antitrust regulators on Wednesday fined Crédit Agricole, HSBC and JPMorgan Chase a total of just over 485 million euros for colluding to fix benchmark interest rates tied to the euro.  The penalties, equivalent to about $520 million, came more than two years after the European authorities issued a statement of objections — a formal step in antitrust investigations — against the three banks.  The inquiry began in 2011.

        On Antitrust, Trump Signals a Return to the Bush Years.  As self-styled populist Donald Trump prepares to take office, sector-shaping mergers in media and health care stand poised to remake huge swaths of the nation’s economy, prompting concern among Democrats and Republicans about how consumers may be affected.  Anthem is pursuing a $54 billion purchase of Cigna to create the nation’s largest health insurance company, Aetna is angling to acquire Humana for $37 billion, and AT&T hopes to complete an $85 billion deal to buy Time Warner – transactions that together would amount to 1 percent of U.S. gross domestic product.  Despite his populist rhetoric on the campaign trail, Trump’s appointments suggest he’ll pursue fewer protections for consumers.

        Aetna CEO Defends Merger with Humana in Antitrust Trial.  Aetna’s chief executive denied on Friday that Aetna’s withdrawal from some Obamacare exchanges was in retaliation for government efforts to halt its merger with Humana, as he sought to convince a federal judge to approve the deal.  The U.S. Justice Department sued to stop the $34 billion tie-up in July, saying that it and another insurance mega merger, Anthem’s planned purchase of Cigna, would mean higher prices and worse service for many consumers.

        Alaska Airlines Settles Lawsuit Against Virgin America Deal.  Alaska Airlines has removed its last major hurdle to buying Virgin America.  Alaska said Wednesday it agreed to settle a private antitrust lawsuit that threatened to hold up its $2.6 billion purchase of Virgin America.  The settlement came a day after the U.S. Justice Department approved the purchase, but only after Alaska agreed to scale back a partnership it has with American Airlines on some routes.

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        Categories: Antitrust Enforcement, Antitrust Litigation, Antitrust Policy, International Competition Issues

          December 5, 2016

          The Antitrust Week In Review

          Here are some of the developments in antitrust news this past week that we found interesting and are following.

          Trump Adds Antitrust Expert to Justice Transition Team.  A Republican antitrust veteran has been named to U.S. President-elect Donald Trump’s transition team for the Justice Department, a choice that lawyers say signals a more hands-off approach to antitrust enforcement compared to Democratic President Barack Obama.  David Higbee, a partner at the law firm Hunton & Williams LLP, worked for President George W. Bush’s administration from 2001 to 2005, spending the last year in the Antitrust Division.  While Trump, who campaigned as a populist, has talked tough on media mergers such as AT&T Inc. buying Time Warner Inc., and singled out Amazon.com Inc. for antitrust scrutiny, Higbee’s naming heralds a return to a traditional Republican view of merger enforcement, lawyers said.

          Deutsche Bank to Pay $60 Million to Settle U.S. Gold Price-Fixing Case.  Deutsche Bank AG has agreed to pay $60 million to settle private U.S. antitrust litigation by traders and other investors who accused the German bank of conspiring to manipulate gold prices at their expense.  The preliminary settlement was filed on Friday with the U.S. District Court in Manhattan, and requires a judge’s approval.

          Becton Dickinson Wins Reversal of $340 mln Syringe Award.  A federal appeals court on Friday threw out an antitrust verdict that ordered medical device maker Becton Dickinson and Co. to pay rival Retractable Technologies Inc. $340 million in damages over its marketing of safety syringes.  The U.S. Court of Appeals for the Fifth Circuit in New Orleans called Retractable’s claim that Becton violated the Sherman Act by trying to monopolize the U.S. safety syringe market “infirm as a matter of law.”

          U.S. Judge Throws Out Kodak, Fujifilm Aluminum Price-Fixing Cases.  A U.S. judge on Wednesday threw out the last vestiges of private litigation over alleged aluminum price-fixing, dismissing lawsuits by Eastman Kodak Co., Fujifilm Holdings Corp., Reynolds Consumer Products and three other plaintiffs.  U.S. District Judge Katherine Forrest in Manhattan on Oct. 5 dismissed nationwide litigation in which purchasers accused Goldman Sachs Group Inc., JPMorgan Chase & Co., mining company Glencore Plc and others of conspiring from 2009 to 2012 to boost prices by reducing supply.  Judge Forrest later agreed that the other six plaintiffs were entitled to have their claims considered separately because they had filed their own lawsuits.  But she said those claims must also fail because there was no proof that the defendants engaged in anticompetitive conduct outside the aluminum warehouse services market.

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          Categories: Antitrust Litigation, Antitrust Policy

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