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2011 h Sr Report

2011 h Sr Report

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Published by Jeff Malkus

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Published by: Jeff Malkus on Jun 14, 2012
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02/19/2014

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hart-scott-rodino annual report
Fiscal Year 2011
Section 7A of the Clayton ActHart-Scott-Rodino Antitrust Improvements Act of 1976(Thirty-Fourth Annual Report)
Jon Leibowitz
Chairman
Federal Trade Commission
Joseph Wayland
 Acting Assistant Attorney General
Antitrust Division
F
EDERAL
T
RADE
C
OMMISSION
B
UREAU
 
OF
C
OMPETITION
D
EPARTMENT
 
OF
J
USTICE
A
NTITRUST
D
IVISION
 
INTRODUCTION
 The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act or the Act),together with Section 13(b) of the Federal Trade Commission Act and Section 15 of the ClaytonAct, enables the Federal Trade Commission (Commission) and the Antitrust Division of theDepartment of Justice (Antitrust Division or Division) to obtain effective preliminary relief against anticompetitive mergers and to prevent interim harm to competition and consumers. Thepremerger notification program was instrumental in alerting the Commission and the Division totransactions that became the subjects of the numerous enforcement actions brought in fiscal year2011
1
to protect consumers
 – 
individual, business, and government
 – 
against anticompetitivemergers.The Commission and the Antitrust Division continue their efforts to protect competitionby identifying and investigating those mergers and acquisitions that raise potentially significantcompetitive concerns.
 
In fiscal year 2011
,
1,450 transactions were reported under the HSR Act,representing about a 24% increase from the 1,166 transactions reported in fiscal year 2010 andabout a 22% increase from the 1,187
 
transactions reported in fiscal year 2002, the first full fiscalyear under the revised reporting thresholds.
2
(
See
Figure 1 below.)
 
1
The fiscal year covers the period of October 1, 2010 through September 30, 2011
.
 
2
The statutory changes to the HSR Act that took effect on February 1, 2001 raised the size-of-transactionthreshold from $15 million to $50 million (with annual adjustments for changes in gross national product that beganin 2005), and made other changes to the filing and waiting period requirements. In fiscal year 2011, the thresholdwas adjusted to $66 million. Section 630 of the Department of Commerce, Justice, and State, the Judiciary, andRelated Agencies Appropriations Act, FY 2001, Pub. L. No. 106-553, 114 Stat. 2762.
See
 
also
Appendix A. Beforethe statutory increase in the size-of-transaction threshold, the number of transactions reported had reached 4,926 inFY 2000.
 
 2
During the year, the Commission challenged 17 transactions, leading to nine consentorders, three administrative complaints (along with attendant requests for preliminary injunctionsin federal district courts), and five transactions that were abandoned or restructured after the
 parties learned of the Commission’s concerns
. These actions spanned several markets, includingpharmaceuticals, hospitals, industrial goods, retail outlet centers, and energy. In addition to thesenew enforcement actions, the Commission continued to pursue litigation begun in previous fiscalyears (Polypore International/Daramic LLC and Lundbeck (Ovation) Pharmaceuticals, Inc.). Asmentioned above, the Commission initiated actions in federal court in three matters seeking topreserve competition among health care providers that would otherwise have been lost as a resultof acquisitions. These matters involved the sale of clinical laboratory testing services tophysician groups (Lab Corp/Westcliff Medical Services) and consolidations of hospitalsproviding general acute-
care services (ProMedica/St. Luke’s Hospital
in the Toledo, Ohio, areaand Phoebe Putney Health System/Palmyra Park Hospital in Albany, Georgia).In addition to its busy litigation docket, the Commission also issued notable consentorders, including its challenge of the Baxter/Hikma acquisition relating to generic medicationsused to control and prevent seizures during or after surgery and a drug used to treat motionsickness, nausea and vomiting and to prevent some types of allergic reactions. In another matter,Griffols/Talecris, the Commission required a leading manufacturer of plasma-derived drugs tomake significant divestitures as part of a settlement allowing it to acquire another firm in thesame industry. These challenges, as well as the litigations noted above, are part of theCommission
’s broader effort to promote competition in the health care sector, which benefits
U.S. consumers with products and services that are lower cost and higher quality.
 
Othersignificant challenges were against proposed mergers in other key industries critical toconsumers, including high technology industries, the energy sector and the retail and distributionindustry. Besides the enforcement actions in those sectors, in December 2010, the Commissionalso
reached a settlement relating to Keystone Holdings, LLC’s planned acquisition of 
Compagnie Saint-
Gobain’s advanced ceramics business. The settlement preserves competition
in the North American market for alumina wear tile, which protects industrial equipment fromabrasive wear. Saint-Gobain is required to retain its Latrobe, Pennsylvania facility, whichmanufactures most of the alumina wear tile sold by Saint-Gobain in the United States.The Antitrust Division challenged 20 merger transactions. Of the thirteen mergerchallenges brought in U.S. District Court, the Division successfully litigated one, resulting in apermanent injunction against the merger, one was dismissed after the parties abandoned thetransaction, and eleven were resolved by consent decrees. Seven other challenges were resolvedby the parties either abandoning or restructuring their proposed transaction or changing theirconduct to avoid competitive problems (see infra at p. 10 for a description of these mergerchallenges).
The Division’s merger challenges protected consumers in markets as varied as
wireless communications, digital tax preparation services, hair care products, stock listingservices and travel website software.
 Notably, the Division sued on August 31, 2011 to block AT&T’s proposed acquisition of 
T-Mobile USA, which would have resulted in tens of millions of U.S. consumers facing higherprices, fewer choices and lower quality products for their mobile wireless services. OnDecember 19, 2011, the parties announced that they were abandoning the merger, a resoundingvictory for consumers in the wireless marketplace. In addition, the Division sued and litigated
successfully to enjoin H&R Block Inc.’s acquisitio
n of TaxACT, a rival digital do-it-yourself taxpreparation software provider. The case went to trial on September 6, 2011, and on October 31,

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