Law Business Research

The Mergers & Acquisitions

Review

Fifth Edition

Editor

Simon Robinson

�

The Mergers & Acquisitions Review

fifTh ediTion

Reproduced with permission from Law Business Research Ltd.

This article was first published in The Mergers & Acquisitions Review,5th edition (published in September �011 – editor Simon Robinson).

for further information please email Adam.Sargent@lbresearch.com

The Mergers & Acquisitions

Review

fifth edition

editorSimon Robinson

Law Business Research Ltd

PuBLiSheR Gideon Roberton

BuSineSS deveLoPMenT MAnAGeR

Adam Sargent

MARkeTinG MAnAGeRS nick Barette, katherine Jablonowska

MARkeTinG ASSiSTAnT

Robin Andrews

ediToRiAL ASSiSTAnT Lydia Gerges

PRoducTion MAnAGeR

Adam Myers

SuBediToRS davet hyland, caroline Rawson, Sarah Morgan

ediToR-in-chief

callum campbell

MAnAGinG diRecToR Richard davey

Published in the united kingdom by Law Business Research Ltd, London87 Lancaster Road, London, W11 1QQ, uk

© �011 Law Business Research Ltdwww.TheLawReviews.co.uk

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i

AcknoWLedGeMenTS

The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book:

ABduLAziz ALGASiM LAW fiRM in ASSociATion WiTh ALLen & oveRy LLP

ÆLeX

AGuiLAR cASTiLLo Love

ALfARo-ABoGAdoS

AndeRSon M oRi & ToMoTSune

ARiAS, fáBReGA & fáBReGA

ARnTzen de BeSche AdvokATfiRMA AS

BeiTen BuRkhARdT RechTSAnWALTSGeSeLLSchAfT MBh

BeRnoTAS & doMinAS GLiMSTedT

BoWMAn GiLfiLLAn inc

BoyAnov & co

BRedin PRAT

BRiGARd & uRRuTiA ABoGAdoS SA

chARLeS AdAMS RiTchie & duckWoRTh

cRAvATh, SWAine & MooRe LLP

diTTMAR & indReniuS

deBevoiSe & PLiMPTon LLP

dRyLLeRAkiS & ASSociATeS

eLiG ATToRneyS AT LAW

euBeLiuS

f cASTeLo BRAnco & ASSociAdoS

fenech & fenech AdvocATeS

ii

fonTeS & TARSo RiBeiRo AdvoGAdoS

GLiMSTedT

GLiMSTedT & PARTneRS

GoRRiSSen fedeRSPieL

hARneyS ARiSTodeMou LoizideS yioLiTiS LLc

henGeLeR MueLLeR

S hoRoWiTz & co

hunTon & WiLLiAMS

JiMénez de ARéchAGA, viAnA & BRAuSe

kBh kAAnuun

khAiTAn & co

khAn & ASSociATeS

kiM & chAnG

LAWcASTLeS

MAkeS & PARTneRS LAW fiRM

MAnnheiMeR SWARTLinG AdvokATByRå

MATheSon oRMSBy PRenTice

MoRAvČeviĆ voJnoviĆ zdRAvkoviĆ in cooPeRATion WiTh SchönheRR

MoReno BALdivieSo eSTudio de ABoGAdoS

Acknowledgements

iii

nAGy éS TRócSányi ÜGyvédi iRodA

noBLe & ScheideckeR

noeRR

oSLeR, hoSkin & hARcouRT LLP

Quevedo & Ponce

RuBio LeGuíA noRMAnd

RužiČkA cSekeS SRo

SAnTAMARinA y STeTA Sc

ScheLLenBeRG WiTTMeR

SchönheRR RechTSAnWäLTe GMBh

SheARMAn & STeRLinG LLP

SiMPSon ThAcheR & BARTLeTT LLP

SLAuGhTeR And MAy

STAMfoRd LAW coRPoRATion

ToRReS, PLAz & ARAuJo

uRíA Menéndez

vAn dooRne

vASiL kiSiL & PARTneRS

younG conAWAy STARGATT & TAyLoR, LLP

Acknowledgements

Contents

iv

Editor’s Preface ���������������������������������������������������������������������������������������������xiSimon Robinson

Chapter 1 European Overview �������������������������������������������������������������� 1Simon Robinson

Chapter 2 EU Competition ����������������������������������������������������������������� 13Michael Rosenthal and Paul McGeown

Chapter 3 European Private Equity ����������������������������������������������������� �1Thomas Sacher and Steffen Schniepp

Chapter 4 US Antitrust ����������������������������������������������������������������������� 30D Bruce Hoffman

Chapter 5 US Private Equity ��������������������������������������������������������������� 46Gary Horowitz

Chapter 6 US Energy Transactions ������������������������������������������������������ 55Sarah A W Fitts

Chapter 7 Shareholders and Boards of Directors in US Mergers & Acquisitions ������������������������������������������������ 7�George A Casey and Cody L Wright

Chapter 8 Argentina ���������������������������������������������������������������������������� 85Pedro Iván Mazer

Chapter 9 Austria �������������������������������������������������������������������������������� 99Christian Herbst

Chapter 10 Bahrain ����������������������������������������������������������������������������� 111Haifa Khunji and Elise S Paul-Hus

Chapter 11 Belgium ���������������������������������������������������������������������������� 1�4Koen Geens and Marieke Wyckaert

Chapter 12 Bolivia ������������������������������������������������������������������������������ 13�Luis F Moreno G

conTenTS

Contents

v

Chapter 13 Brazil �������������������������������������������������������������������������������� 140Marcus Fontes, Max Fontes and Paulo de Tarso Ribeiro

Chapter 14 Bulgaria ���������������������������������������������������������������������������� 151Yordan Naydenov and Nikolay Kolev

Chapter 15 Canada ����������������������������������������������������������������������������� 16�Robert Yalden, Ward Sellers and Emmanuel Pressman

Chapter 16 Cayman Islands ���������������������������������������������������������������� 177Antony Duckworth and Alan de Saram

Chapter 17 Colombia �������������������������������������������������������������������������� 18�Sergio Michelsen Jaramillo

Chapter 18 Costa Rica ������������������������������������������������������������������������ 194John Aguilar Jr and Alvaro Quesada

Chapter 19 Cyprus ������������������������������������������������������������������������������ �00Nancy Ch Erotocritou

Chapter 20 Denmark �������������������������������������������������������������������������� �05Henrik Thouber and Anders Ørjan Jensen

Chapter 21 Ecuador ���������������������������������������������������������������������������� �13Alejandro Ponce Martínez

Chapter 22 Estonia������������������������������������������������������������������������������ �18Priit Lätt

Chapter 23 Finland ����������������������������������������������������������������������������� ��7Jan Ollila, Anders Carlberg and Wilhelm Eklund

Chapter 24 France ������������������������������������������������������������������������������� �37Didier Martin

Chapter 25 Germany ��������������������������������������������������������������������������� �55Heinrich Knepper and Christian Möller

Chapter 26 Greece ������������������������������������������������������������������������������� �67Cleomenis G Yannikas, Vassilis-Thomas G Karantounias and Sophia K Grigoriadou

Chapter 27 Hong Kong ����������������������������������������������������������������������� �77George Goulding and Jason Webber

Contents

vi

Chapter 28 Hungary ��������������������������������������������������������������������������� �87Péter Berethalmi and Balázs Karsai

Chapter 29 India ��������������������������������������������������������������������������������� �96Rabindra Jhunjhunwala and Ashwin Mathew

Chapter 30 Indonesia �������������������������������������������������������������������������� 307Yozua Makes

Chapter 31 Ireland ������������������������������������������������������������������������������ 319Patrick Spicer

Chapter 32 Israel ��������������������������������������������������������������������������������� 3�9Clifford Davis and Keith Shaw

Chapter 33 Japan �������������������������������������������������������������������������������� 338Hiroki Kodate and Kenichiro Tsuda

Chapter 34 Korea �������������������������������������������������������������������������������� 348Sang Hyuk Park and Gene Oh Kim

Chapter 35 Latvia �������������������������������������������������������������������������������� 361Semjons Fogels

Chapter 36 Lithuania �������������������������������������������������������������������������� 370Audrius Žvybas

Chapter 37 Luxembourg ��������������������������������������������������������������������� 379Marie-Béatrice Noble and Stéphanie Antoine

Chapter 38 Malta �������������������������������������������������������������������������������� 391Nicolai Vella Falzon and Jeanette Ciantar

Chapter 39 Mexico ������������������������������������������������������������������������������ 400Aarón Levet V and Alberto Solís M

Chapter 40 Montenegro ���������������������������������������������������������������������� 409Slaven Moravčević and Milan Dakić

Chapter 41 Netherlands ���������������������������������������������������������������������� 4��Onno Boerstra and Guus Kemperink

Chapter 42 Nigeria ������������������������������������������������������������������������������ 439L Fubara Anga

Contents

vii

Chapter 43 Norway ����������������������������������������������������������������������������� 444Geir Evenshaug and Gard A Skogstrøm

Chapter 44 Pakistan ���������������������������������������������������������������������������� 45�Mansoor Hassan Khan

Chapter 45 Panama ����������������������������������������������������������������������������� 461Julianne Canavaggio

Chapter 46 Peru ���������������������������������������������������������������������������������� 469Emil Ruppert and Sergio Amiel

Chapter 47 Portugal ���������������������������������������������������������������������������� 480Rodrigo Almeida Dias

Chapter 48 Russia ������������������������������������������������������������������������������� 490Ilia Rachkov and Evgeny Maslennikov

Chapter 49 Saudi Arabia ��������������������������������������������������������������������� 498Johannes Bruski and Zeyad Khoshaim

Chapter 50 Serbia�������������������������������������������������������������������������������� 511Matija Vojnović and Petar Kojdić

Chapter 51 Singapore �������������������������������������������������������������������������� 519Lee Suet-Fern and Elizabeth Kong Sau-Wai

Chapter 52 Slovakia ���������������������������������������������������������������������������� 531Jana Pagáčová

Chapter 53 South Africa ���������������������������������������������������������������������� 543Ezra Davids and Ashleigh Hale

Chapter 54 Spain �������������������������������������������������������������������������������� 554Christian Hoedl and Javier Ruiz-Cámara

Chapter 55 Sweden ����������������������������������������������������������������������������� 564Biörn Riese, Eva Hägg and Anna Lundgren

Chapter 56 Switzerland ����������������������������������������������������������������������� 57�Lorenzo Olgiati, Martin Weber, Jean Jacques Ah Choon, Harun Can and David Mamane

Chapter 57 Tanzania ��������������������������������������������������������������������������� 585Ngassa Dindi

Contents

viii

Chapter 58 Turkey ������������������������������������������������������������������������������ 596Tunç Lokmanhekim and Saniye Simge Eren

Chapter 59 Ukraine ���������������������������������������������������������������������������� 604Anna Babych and Artem Gryadushchyy

Chapter 60 United Arab Emirates ������������������������������������������������������� 617Daniel Abela and Elise S Paul-Hus

Chapter 61 United Kingdom ��������������������������������������������������������������� 6�8Simon Robinson

Chapter 62 United States��������������������������������������������������������������������� 655Richard Hall and Mark Greene

Chapter 63 US: Delaware �������������������������������������������������������������������� 680Rolin P Bissell and Elena C Norman

Chapter 64 Uruguay ���������������������������������������������������������������������������� 691Fernando Jiménez de Aréchaga (Jr), Nicolás Constantinidi and Ignacio Menéndez

Chapter 65 Venezuela �������������������������������������������������������������������������� 700Guillermo de la Rosa, Juan D Alfonzo and Nelson Borjas

Appendix 1 About the Authors ������������������������������������������������������������ 713

Appendix 2 Contributing Law Firms’ Contact Details ������������������������� 753

xi

editor’s preface

after a prolonged period of uncertainty and decreased M&a activity, deal-making is undergoing something of a resurgence. over the course of recent years, corporations across the world have been carefully navigating the economic downturn and attempting to consolidate their positions. in 2011 the market has proved more conducive to M&a and, at least in the first half year, confidence seems to be returning. Opportunities are seemingly limited to those companies and private equity houses that enjoy a stable financial basis. Governments have addressed the perceived failings of the regulatory framework and, for the most part, reforms have now been implemented. one of the underlying reasons for the drop in M&A was the drought of acquisition finance; without the necessary funding, few players were able to launch major takeover bids. However, the loan market appears to have gained a new lease of life and banks are adamant that they are willing and able to fuel well-conceived bids. the task that lies ahead of companies and funds is identifying truly value-generative targets and negotiating the new regulatory framework. there is increased emphasis on the views of shareholders following the financial crisis, and companies are best advised to gauge shareholder sentiment early. the provenance of M&a is undergoing a gradual shift, with deal-making in the Asia-Pacific region reaching its highest-ever level in 2010 and also representing its highest proportion of the total global value of M&a. in addition, the emerging markets are witnessing heightened deal activity, in particular the Bric nations. these trends seem set to continue.

it would be premature, however, to suggest that M&a has completed a Lazarus-like revival. the recovery of deal-making is in its infancy and it is still highly susceptible to external forces. a number of major political and economic factors may impede sustained M&a activity, and could even force it to retreat. the sovereign debt tribulations in europe, the weakening of the Us economy, the ‘arab spring’ uprisings, the earthquake in Japan, rising commodity prices and global austerity measures all pose severe challenges. Given the fragile state of the global economy, such issues could well shackle the fledgling M&a revival. in short, economists remain uncertain about the health of M&a, and

Preface

xii

although many commentators hope that it will continue to gather pace, albeit slowly, there are a number of variables that may waylay deal-making. economists have not ruled out short-term stagnation in deal value and volume, as a precursor to the dawning of an M&a renaissance further down the line.

i wish again to thank all the contributors for their continued support in producing this book – one would hope that in this uncertain time the following chapters should provide cause for cautious optimism, while also reiterating some of the lessons from the recent lean years.

Simon RobinsonSlaughter and MayLondonAugust 2011

30

Chapter 4

us antitrustD Bruce Hoffman*1

* D Bruce Hoffman is a partner at Hunton & Williams LLP.

i US COMPETiTiON OVERViEW

The Obama administration promised vigorous antitrust enforcement, particularly in comparison to the prior administration.1 two years in, it is appropriate to assess how those promises have been addressed. The chart below2 sets forth the data for the Hart-scott-rodino act (‘the Hsr’) filings over the past four years:

Year 2007 2008 2009 2010Hsr filings 2201 1726 716 1166

Challenges 34 37 31 41

DOJ 12 16 12 19

FtC 22 21 19 22

Percentage offilings challenged

1.5% 2.1% 4.3% 3.5%

1 see, for example, Christine a Varney, Vigorous antitrust Enforcement in this Challenging Era, remarks Prepared for the Centre for american Progress (11 May 2009), www.justice.gov/atr/public/speeches/245711.htm.

2 Figures taken from fiscal year 2010, 2009, 2008, and 2007 Federal trade Commission and Department of Justice antitrust Division ‘Hart-scott-rodino annual reports,’ available at www.ftc.gov/bc/anncompreports.shtm. ‘Challenges’ are defined by the agencies to include: (1) the issuance of a preliminary injunction; (2) resolution by consent decree; or (3) abandonment of the transaction after the agency informs the parties of its antitrust concerns.

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The chart shows that while the number of filings plummeted, the number of mergers challenged remained roughly the same, and the rate of merger challenges increased in 2009/2010. although the vast majority of mergers go unchallenged, the rate of challenge during the first two years of the Obama administration is approximately double that of the prior two years.3 interestingly the FtC, an independent administrative agency, continues to challenge more mergers than the DOJ, an executive department directly responsive to the president, although the gap narrowed considerably in 2010.

statistics aside, the major change in merger policy during the Obama administration is not in the rate of mergers challenged, but rather in the remedies adopted. increasingly over the past two years, the government has been willing to accept behavioural remedies in merger cases, retreating from its prior scepticism toward such remedies. This is particularly true in vertical mergers, but has occurred to some degree in horizontal cases as well. as a consequence of this apparent shift in remedial policy, the government has placed itself in a position where continuing regulatory oversight will be necessary in an increasing number of matters.4 Given the implications, it remains to be seen whether this policy change will prove to be successful.

in the past year, the Horizontal Merger Guidelines (‘Guidelines’) were revised to better reflect current agency review practices. in view of the recent issuance of the final 2010 Guidelines, this chapter will briefly highlight some of the more important changes. Thereafter, the chapter will discuss significant merger cases over the past year, noting those cases relying upon the 2010 Guidelines.

i The 2010 Horizontal Merger Guidelines

upon the issuance of the 2010 Guidelines, both agencies emphasised that their purpose was to provide clarity and transparency, so that private parties and courts could better understand how the agencies evaluate transactions.5 There can be no doubt that the revisions achieve their intended purpose of more accurately reflecting the agencies’ merger review process. significantly, however, some of the changes in the Guidelines appear to be geared toward improving the agencies’ likelihood of success in challenging mergers. some of the major highlights of the Guidelines are described below:

3 Because the actual number of challenges has remained relatively constant as compared to the final two years of the Bush administration, the statistics may simply reflect the continued efforts of the same agency resources applied to a much smaller universe of mergers.

4 This apparent shift in emphasis has led one commentator to conclude that ‘the exuberance with which the agencies are placing themselves in a role of regulating ongoing post-merger conduct ... reflects a new confidence in their ability to structure a remedy that does more good than harm and to administer that remedy over the life of the decrees without burdening the agencies or the parties with undue costs.’ David L Meyer and Joshua a Harman, Merger Enforcement two Years Later – What Clue Does the Obama administration’s record Hold for the Years ahead?, 13 in antitrust Law section of the aBa, tHE tHrEsHOLD Xi:2 (spring 2011).

5 see, for example, FtC Press release (19 august 2010), Federal trade Commission and us Department of Justice issue revised Horizontal Merger Guidelines, www.ftc.gov/opa/2010/08/hmg.shtm.

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a The Guidelines clarify that merger analysis does not entail the uniform application of a single methodology, but rather is a fact-specific process aimed at determining whether the merger will likely result in anti-competitive effects. to this end, the Guidelines move away from the traditional step-by-step structural analysis, focusing instead on the transaction’s competitive effects and the evidence bearing most directly upon this issue. Thus, the Guidelines explain that merger analysis need not begin with market definition, and that market definition and concentration are useful tools only to the extent they provide insight about likely competitive effects. Where other, more direct evidence of effects is available, the agencies will give such evidence greater weight. note, however, that because section 7 of the Clayton act expressly requires that there be anti-competitive effects in a ‘line of commerce’ in a ‘section of the country’,6 a reduced emphasis on market definition means that while a market need not be defined by exact ‘metes and bounds’; market definition cannot be abandoned entirely.

b The emphasis in the Guidelines on anti-competitive effects as the touchstone for merger analysis is demonstrated by the inclusion of a new section, at the beginning, entitled ‘Evidence of adverse Competitive Effects’. This section provides a non-exhaustive list of several categories of evidence (e.g., actual effects, natural experiments) that the agencies, in their experience, have found informative in predicting likely competitive effects.

c The new Guidelines update (and increase) the concentration thresholds that determine whether a transaction warrants further scrutiny. For example, a highly concentrated market now requires a Herfindahl-Hirschman index (‘HHi’) level in excess of 2500 points (as compared to 1800 points in the 1992 Guidelines).7 a merger-induced increase of 100-200 in such a market will potentially raise significant competitive concerns, and an increase of more than 200 points will be presumed to enhance market power.

d The sections on unilateral and coordinated effects have been updated, seemingly with a view toward reducing the agencies’ burden of proof. For example, the discussion of unilateral effects reflects the reduced emphasis on market definition, noting that ‘[d]iagnosing unilateral price effects ... need not rely on market definition or the calculation of market shares and concentration.’8 similarly, the section on coordinated effects relaxes the prior requirement that the agencies provide a ‘roadmap’ to collusion, noting instead that, under the Clayton act’s incipiency standard, the agencies may challenge mergers that pose a risk of

6 15 u.s.C. section 18.7 interestingly, these thresholds are still considerably lower than the levels at which data indicates

the agencies actually take enforcement action (except in oil and gas, pharmaceuticals and supermarket industries in which the FtC has traditionally imposed remedies at relatively low concentration levels).

8 2010 Guidelines section 6.1.

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coordinated effects ‘even without specific evidence showing precisely how the coordination likely would take place’.9

e The Guidelines place increased emphasis on economic evidence such as margins and prices. such emphasis on econometric evidence, while an additional and often useful tool for analysing potential competitive effects, may have the unintended consequence of making the agencies’ task more difficult in some cases.

ii RECENT gOVERNMENT ChallENgES TO PROSPECTiVE MERgERS

Whenever possible, either agency will seek to enjoin a prospective merger it believes violates the antitrust laws before consummation. in order to do so, the DOJ must bring a permanent injunction action in federal district court to enforce section 7 of the Clayton act.10 The FtC, on the other hand, typically commences a preliminary injunction action in aid of an administrative enforcement proceeding under section 13(b) of the FtC act.11 in the past, the Commission would generally delay the decision to commence an administrative proceeding until after the resolution of its preliminary injunction action. Over the past three years, however, the trend has been for the FtC to commence an administrative action simultaneously with the federal court preliminary injunction proceeding. significantly, all three of the FtC injunction cases discussed here proceeded in this manner.

This approach provides the FtC with certain advantages. Most importantly, the pendency of the administrative proceeding demonstrates to the district court that, unlike a DOJ merger challenge, the determination on the merits is reserved for the Commission, and the preliminary injunction action seeks only to preserve the status quo until the FtC can perform its function. This also makes clear to the court that the FtC faces a lower legal burden than the DOJ, because the Commission proceeds under the less-stringent ‘public interest’ standard under section 13(b) (weighing the equities and considering the likelihood of ultimate success), instead of the traditional four-part injunction test. in addition, the immediate commencement of the FtC’s administrative proceeding will expedite that proceeding,12 while placing pressure on the merging parties to litigate in two fora simultaneously.

i Agency challenges to vertical mergers

Over the past two years, the biggest change to merger policy under this administration has been its increased reliance upon conduct remedies in vertical mergers. indeed, in

9 id. at section 7.1.10 15 u.s.C. section 18.11 15 u.s.C. section 53(b)(2).12 FtC administrative proceedings have often been criticised as lengthy and slow-moving, leading

some courts to express their reluctance to impose a preliminary injunction that might effectively doom the merger. see for example, FTC v. Laboratory Corp. of America, 2011 us Dist. LEXis 20345, Case no. saCV 10-1873, slip op. (C.D. Cal. 22 February 2011).

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June 2011 the DOJ revised its Policy Guide to Merger remedies to take into account this greater reliance on conduct remedies.13 in addition, the DOJ has tasked its Office of General Counsel with principal responsibility to monitor compliance with consent agreements containing conduct remedies.14 The new Policy Guide lists six specific types of vertical merger conduct relief: information firewalls; non-discrimination; mandatory licensing; transparency; anti-retaliation; and contracting prohibitions. it also updates citations to recent cases employing one or more of these various conduct-restraining tools, citing recent examples US v. Ticketmaster Entertainment, Inc,15 US v Google,16 and US v. Comcast (see below).

United States v. Comcast Corporation17

taken in the context of Ticketmaster, Comcast may be viewed as continuing the trend towards using behavioural remedies in vertical transactions. in 2011, the DOJ and several state attorneys general obtained a consent decree involving a proposed joint venture between Comcast, General Electric (‘GE’), nBC universal (‘nBCu’), and navy, LLC, (‘the JV’ or ‘newco’), which would have given Comcast ‘control of nBCu programming’.18 notably, the consent embraces behavioural remedies; the government has historically had a strong preference for structural relief in merger cases, despite sometimes accepting behavioural remedies in vertical mergers.

Comcast is a video programming distributor and owns multiple cable programming networks.19 GE owns a majority of nBCu, which owns the nBC broadcast network and produces approximately three-quarters of the original, primetime programming shown on nBC and the usa cable network.20 nBCu also owns 32 per cent of Hulu, an online video distributor.’21

The parties had agreed to contribute assets to a joint venture of which Comcast would own 51 per cent, with GE retaining 49 per cent.22 The contributed assets included ‘all of the assets of nBCu’ and ‘all of [Comcast’s] cable programming assets […] but not its cable systems or its online video website’.23

The DOJ challenged the transaction because ‘its likely effect would be to lessen competition substantially in the market for timely distribution of professional, full-

13 www.justice.gov/atr/public/guidelines/272350.pdf.14 This creates within the DOJ an equivalent to the FtC’s longstanding Compliance division.15 2010-2 trade Cas.p 77,113 (D.D.C. 2010)16 1:11-cv-00688, Competitive impact statement 9-13 (D.D.C. 2011), which required Google

to make available software, impose firewalls, and reporting requirements to address vertical concerns.

17 1:11-cv-00106 (D.D.C. 18 January 2011).18 Comcast Corp., (Complaint). p 4.19 id. at p 15.20 id. at p 16-17.21 id. at p 17.22 id. at p 18.23 id.

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length video programming to residential customers [...] in major portions of the united states.’24 The DOJ’s complaint focused on the fact that ‘[c]ontrol of nBCu will give Comcast an even greater ability to disadvantage its competitors’, by raising prices for, or denying access to, nBCu content.25 The Department was also troubled by ‘[t]he impact of the joint venture on emerging competition from the [online video distributors]’, as the joint venture gives ‘Comcast an incentive to encumber, through its control of the JV, the development of nascent distribution technologies [...] by denying [online video distributors] access to nBCu content or substantially increasing [its] cost.’26

The consent required the joint venture to ‘license its broadcast, cable, and film content to [online video distributors] on terms comparable to those in similar licensing agreements’.27 Enforcement mechanisms included consent to arbitration for aggrieved online video distributors.28 The main structural remedy was to delegate all voting rights in Hulu proportionally among its other owners and for GE to ‘relinquish any veto right or other right to influence, control, or participate in the governance or management of Hulu’.29 ultimately, the breadth of control exerted over the post-merger conduct is extensive and, when coupled with a similar result in the Ticketmaster merger, suggests the agencies are not concerned about their ability to effectively regulate post-merger conduct in a way that alleviates their competitive concerns.

United States v. Graftech International Ltd30

in Graftech, the DOJ challenged a merger between the largest manufacturer of graphite electrodes and seadrift, ‘one of two domestic manufacturers of petroleum needle coke, the key input product in the manufacture of graphite electrodes’.31 The Department expressed concern with the effects of this merger on the market for petroleum needle coke.32 ultimately, the department accepted a consent incorporating behavioural remedies. The consent required Graftech to relinquish its audit and most favoured nation rights with another petroleum needle coke supplier and to refrain from sharing any of that supplier’s information with seadrift.33 seadrift was also subjected to significant reporting requirements.34

24 Comcast (Competitive Impact Statement) (‘Comcast CIS’), 2.25 Comcast Complaint at pp 49-51.26 id. at pp 52-55.27 Comcast CIS at 30.28 Comcast Final Judgment, 1329 id. at 14.30 1:10-cv-2039 (D.D.C. 24 March 2011) (Final Judgment).31 United States v. Graftech Int’l Ltd., 1:10-cv-2039 pp 5-6 (D.D.C. 29 november 2010)

(Complaint).32 id. at pp 10-16.33 Graftech (D.D.C. 24 March 2011) (Final Judgment at 5,7).34 id. at 6.

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ii Agency challenges to horizontal mergers

FTC v. Laboratory Corp of America35

in LabCorp, the FtC sought to enjoin LabCorp’s acquisition of Westcliff Medical Laboratories (‘Westcliff’). Consistent with the FtC’s more recent preliminary injunction cases, the agency simultaneously commenced an administrative proceeding to adjudicate the merits of the proposed acquisition. notably, the transaction was not reportable under the Hsr act. FtC staff became aware of it prior to closing and notified LabCorp of potential antitrust concerns, leading LabCorp to voluntarily enter into a hold separate until 30 days after compliance with the FtC’s compulsory process requests.

The FtC alleged that the relevant market was the sale of capitated clinical laboratory testing services to physician groups in southern California. in the FtC’s view, this market was highly concentrated, and the increase in the HHi was sufficient to create a substantially more concentrated market.36

in denying a preliminary injunction, the court ruled against the FtC in virtually every respect. in finding that the Commission had failed to demonstrate a likelihood of success on the merits, the court followed the traditional analytical framework (with heavy emphasis on market definition), despite acknowledging that, under the new Guidelines and the Whole Foods case,37 ‘this analytical structure does not exhaust the possible ways to prove a section 7 violation on the merits’.38 in essence, then, the court rejected the view that market definition should play a reduced role in merger analysis, instead concluding that defining a relevant market was the ‘first step’ (and ‘key’ issue) in the analysis.39 The court then found that the FtC’s proffered market definition was too narrow, both in terms of product and geographic markets.40

in terms of equities, the court held that substantial merger-specific efficiencies would result from the transaction, that the FtC’s administrative proceeding would take over two years, that divestiture would remain possible after integration, and that there was a ‘real possibility’ that a preliminary injunction ‘would financially devastate or destroy [Westcliff]’.41 Hence, the court concluded that, ‘even if the FtC had demonstrated

35 id.36 see administrative Complaint, In re Laboratory Corp. of America, Dkt. no. 9345 (FtC 30

november 2010).37 FTC v. Whole Foods Mkt., Inc., 548 F.3d 1028 (D.C. Cir. 2008).38 LabCorp, p 123. another court decision that may reflect scepticism of the principles embodied

in the new guidelines is City of New York v. Group Health Inc., 2010 WL 2132246 (s.D.n.Y. 11 May 2010). There, when rejecting a motion to amend a complaint for undue delay, a district court stated in dicta that an amended complaint incorporating the ‘upwards pricing pressure’ test (featured in the new guidelines) was futile, noting that not a single court had adopted the test. see id. at *6 n.6.

39 LabCorp, pp 141-43.40 id. at pp 47-58.41 id. at pp 86-111.

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likelihood of success on the merits, such likelihood is minimal and heavily outweighed by the equities favoring denial of the injunction’.42

although the FtC sought a stay pending appeal, its motion was denied by both the district court43 and the ninth Circuit. Following these developments, the FtC withdrew its appeal on 24 March 2010. as a result, the Commission dismissed its administrative complaint, applying the criteria set forth in its 1995 Policy statement on administrative Litigation Following the Denial of a Preliminary injunction, and concluded that, although it continued to have reason to believe the acquisition would result in anti-competitive effects, further adjudication of the case would not serve the public interest.44

FTC v. ProMedica Health System Inc45

Demonstrating the agencies’ continued interest in hospital mergers despite numerous setbacks, the FtC and the Ohio attorney General sought a preliminary injunction on 7 January 2011, challenging ProMedica’s acquisition of st Luke’s Hospital. ProMedica is a healthcare system headquartered in toledo that operated three general acute-care hospitals in Lucas County, Ohio. at the time of the acquisition, st Luke’s was an independent, general acute-care (‘GaC’) hospital in Lucas County recognised as a high-quality, low-cost hospital.

after limited discovery, the court held a two-day hearing on 10-11 February. On 29 March 2011, the court granted a preliminary injunction – the FtC’s first victory in a litigated hospital merger injunction case in many years.

relying extensively on the new guidelines to shape its analysis, the court nonetheless adopted a traditional analytical construct – beginning with market definition, assessing concentration, then turning to effects and entry, and finally addressing alleged defences. The court held that GaC inpatient hospital services sold to commercial health plans constituted a relevant product market. Citing the guidelines, the court noted, in passing, that evidence predicting a price increase for a group of products could itself establish that those products constitute a relevant product market. although defining the geographic market has frequently been a difficult hurdle for the government in hospital merger cases, the court had little difficulty holding that Lucas County was the relevant geographic market.

The court agreed with the FtC that the acquisition reduced the number of GaC competitors from four to three, and the number of obstetrical competitors from three to

42 id. at p 184 & Disposition.43 id.44 The factors considered were (1) the factual findings and legal conclusions of the federal court;

(2) any new evidence developed during the preliminary injunction proceeding; (3) whether the transaction raises important issues of fact, law, or policy; (4) an overall assessment of the costs and benefits of further proceedings; and (5) any other matter bearing on the public interest. statement of Commissioners Leibowitz, Kovacic, and ramirez, In re Laboratory Corp. of America, Dkt. no. 9345 (apr. 21, 2011), www.ftc.gov/os/adjpro/d9345/index.shtm.

45 2011 WL 1219281 (n.D. Ohio 29 March 2011).

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two. Citing the HHi levels set forth in the new guidelines, the court noted that mergers resulting in highly concentrated markets involving an HHi increase of more than 200 points will be presumed likely to enhance market power. Because this acquisition far exceeded those thresholds, the court found it presumptively anti-competitive in both markets.

as to anti-competitive effects, the court found reasons for concern that bolstered the FtC’s already strong prima facie case. For example, ProMedica and st Luke’s were found to have been significant ‘head-to-head’ competitors. This conclusion was reinforced by a real-world natural experiment showing significant effects on both hospitals when st Luke’s was readmitted to a particular managed care network after having been excluded for several years.

Given the FtC’s strong likelihood of success on the merits, the lack of public equities militating against relief, and the need for court-ordered relief to preserve the possibility of effective permanent relief and to prevent interim harm, the court entered the injunction, ordering defendants to hold separate until the completion of all FtC proceedings, though warning that if the FtC did not complete the case before 30 november 2011, it would entertain ‘additional steps to insure that all parties are treated fairly and expeditiously’.46

FTC v. Phoebe Putney Health System Inc47

in Phoebe Putney Health System, the FtC and the Georgia attorney General sought a preliminary injunction – at roughly same time as the agency filed an administrative complaint – to block Phoebe Putney Health system’s (‘Phoebe’s’) proposed acquisition of its rival Palmyra Park Hospital. according to the FtC, the merger was a merger to monopoly that ‘will cause consumers and employers in the albany region to pay dramatically higher rates for vital health care services, and will likely reduce the quality and choice of services available in the community as well’.48

On 27 June 2011, the district court denied the FtC’s motion for a preliminary injunction and dismissed its complaint without reaching the merits, finding instead that the acquisition was protected by state action immunity.49 The FtC had argued that state action immunity does not apply where (1) a private party has usurped the ‘decision and supervision’ powers of a public entity for the private parties benefit and (2) that actions by a public entity that are contrary to state policy are not protected by state action immunity because they could not have been reasonably foreseeable by the legislature.50 The Court rejected these arguments in their entirety. This case joins a growing line of

46 id., Conclusion of Law at p 47.47 FTC v. Phoebe Putney Health Sys., Inc. et al., 1:11-cv-00058 (M.D. Ga. 27 June 2011) (order

denying motion to dismiss).48 Federal trade Commission, Press release, ‘FtC and Georgia attorney General Challenge Phoebe

Putney Health system’s Proposed acquisition of Palmyra Park Hospital as anticompetitive’ (20 april 2011).

49 Phoebe Putney Health Sys., Inc., 1:11-cv-00058.50 id. at 17.

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cases holding that, where the legislature has generally authorised it, quasi-public health care entities may ‘accomplish their mission of promoting public health notwithstanding the anticompetitive results’.51

United States v. Verifone Systems Inc.52

The DOJ challenged a proposed acquisition of Hypercom by VeriFone systems, inc. (‘VeriFone’), and a related attempt at a fix-it-first divestiture agreement between VeriFone and ingenico sa (‘ingenico’). according to the DOJ, ‘Verifone, Hypercom and ingenico are the leading providers of [point of sale (‘POs’)] terminals in the united states.’53 POs terminals are used by retailers to accept credit and debit card payments. The DOJ alleged that the market for the sale of POs terminals in the us is highly concentrated, with these three companies accounting for a 92 per cent market share.

The parties’ initial consultations with the DOJ regarding VeriFone’s proposed purchase of Hypercom were met with agency objections. in an attempt to alleviate the DOJ’s concerns, VeriFone proposed to ‘divest’ Hypercom’s us business to ingenico. The divestiture was not as clean as the DOJ would have preferred:

‘Ingenico would not own the intellectual property relating to the Hypercom devices, . . . would not be able to modify or improve the devices going forward[, and] Ingenico would be required to rely on VeriFone to provide ongoing support for the Hypercom devices, including routine upgrades, bug fixes, and technical support.’54

The DOJ was concerned that: ‘[L]icensing the assets to Ingenico would eliminate the competitive discipline Ingenico provides today even as a small seller and fails to replicate the three-way competition between VeriFone, Hypercom, and Ingenico’

and: ‘the structure of the agreement, which is akin to a franchise agreement rather than a clean divestiture, would not give Ingenico the means and incentive to maintain the level of premerger competition in the relevant markets.’55

recently, in response to the DOJ’s complaint, the portion of this transaction involving the sale of certain us assets of Hypercom to ingenico was terminated. accordingly, the DOJ has sought to stay proceedings so that it may file an amended complaint reflecting the abandonment of the Hypercom/Ingenico deal and requesting the dismissal of ingenico as a defendant.56 The stay motion further indicates the possibility that the DOJ would

51 id. at 32.52 1:11-cv-00887 (12 May 2011 D.D.C.)53 1:11-cv-00887, p 2 (12 May 2011 D.D.C.) (Complaint).54 id. p 12.55 id. p 10. 56 see 1:11-cv-00887 (25 May 2011 D.D.C.) (Motion to stay).

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accept an alternate buyer of Hypercom’s us business as a remedy to the DOJ’s concerns.57 This posibility was realised on 4 august 2011, when DOJ filed a proposed consent order allowing the transaction subject to divesitures to the Gores group.58

iii gOVERNMENT ChallENgES TO CONSUMMaTEd MERgERS

The antitrust agencies continue to investigate and challenge consummated mergers, which are typically those below the minimum Hsr reporting thresholds. The agencies have shown that non-reportable mergers will be carefully scrutinised (perhaps even more so when the volume of pre-merger filings decreases). The continued emphasis on consummated mergers may well lead the government to bring effects cases that follow the new guidelines by minimising the importance of market definition. However, one major problem in pursuing consummated mergers is the difficulty of providing effective relief, as evidenced by the FtC’s decision to abandon its administrative proceeding in LabCorp following the denial of a preliminary injunction. all of the recent agency challenges to consummated mergers were based on horizontal concerns.

i FTC v. Lundbeck59

in December 2008, the FtC and the Minnesota attorney General filed actions challenging Lundbeck’s acquisition of the us rights to neoProfen, one of two drugs used to treat patent ductus arteriosus (‘PDa’). in 2005, Lundbeck had acquired indocin iV, the only drug approved at that time by the FDa to treat PDa. two days after acquiring the rights to neoProfen, Lundbeck raised the price of indocin by almost 1300 per cent to $1,500.

The FtC followed the traditional approach to merger analysis, focusing first and foremost on market definition.60 under the FtC’s analysis, the case turned entirely on whether the product market could properly be defined as FDa-approved drugs to treat PDa. after an extensive series of findings of fact, the court held that the two drugs were not in the same product market. The court found that the FtC failed to define the product market based upon a quantitative analysis of the cross-elasticity of demand. The court instead credited the defense expert who ‘did not calculate a specific cross-price elasticity between neoProfen and indocin iV, [but did] [...] testif[y] that it is very low’.61 in adopting this approach, the court rejected the FtC’s long-standing approach of defining pharmaceutical markets based upon qualitative evidence (e.g., functional substitutability, customer and industry views, internal marketing documents) and other empirical data (e.g., data regarding hospitals’ purchases).

57 id. 58 i:ii-cu-00887 (4 august 2011 DDC) (Proposed consent order).59 2010 WL 3810015 (D. Minn. 31 august 2010). The case is on appeal to the Eighth Circuit.60 This is hardly surprising, since the proposed revisions to the Guidelines were not released until

april 2010.61 2010 WL 3810015 at *21.

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The court gave short shrift to effects evidence. in its findings, the court concluded that the enormous indocin price increase had nothing to do with Lundbeck’s acquisition of neoProfen, because that increase was planned well before the acquisition (based upon the fact that indocin had been underpriced by its prior owner) and would have taken place regardless of whether the later acquisition occurred. However, the court also largely ignored other potential evidence of effects (e.g., internal documents estimating that neoProfen would capture a significant portion of the market at indocin’s expense).62

The Lundbeck case is currently on appeal to the Eighth Circuit, where it has been briefed and argued and is now sub judice. The appellate court’s eventual decision will likely have significant impact on the approach to market definition, and perhaps on the use of effects evidence as well.

ii In re Polypore Int’ernational Inc63

in 2008 Polypore int’l, inc. (‘Polypore’) acquired Microporous, a competing manufacturer of battery separators. in an administrative complaint, the FtC challenged the acquisition under section 7 of the Clayton act and section 5 of the FtC act. after a full trial before an administrative law judge (‘the aLJ’), the aLJ upheld the complaint and ordered divestiture. Polypore appealed to the full Commission, whose 13 December 2010 opinion largely affirmed the aLJ, upholding divestiture relief in the first agency decision issued in a merger case since the adoption of the 2010 Guidelines.

Before addressing Polypore’s arguments, the Commission discussed the framework that it would apply in analysing the acquisition. Emphasising that the parties had litigated the case by beginning with market definition and applying a traditional step-by-step burden-shifting framework, and that the aLJ applied the same framework, the Commission reasoned that this framework was the one best suited to this case. However, citing the Guidelines, the Commission went to great lengths to explain that market definition is merely a predictive tool and that, in some cases, post-acquisition evidence of actual anti-competitive effects may be sufficient to establish liability without separate proof of market definition. Thus, the Commission concluded that ‘the legal framework for analysing a section 7 claim is and should be a flexible tool’ that best organises the evidence so as to ‘shed [...] light on the likely competitive effects...’64 in his concurring opinion, Commissioner rosch went even further, noting that especially where, as here, the merger at issue is consummated, it is generally preferable to determine whether a merger has had anti-competitive effects by reference to the parties’ motives for the transaction and the actual effects resulting from the merger instead of trying first to define with precision the dimensions of the relevant market...65

turning first to the issue of product market, the Commission concluded that the complaint counsel had successfully established four distinct product markets. The Commission explained that ‘practical indicia’ of market boundaries (e.g., industry or

62 id. at *11.63 2010 WL 5132519, Dkt. no. 9327 (FtC 13 December 2010).64 In re Polypore Int’l, Inc., 2010 WL 5132519, at *14 (FtC 13 December 2010).65 id. at *5 (FtC 13 December 2010) (rosch, C., concurring).

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public recognition, peculiar characteristics and uses, unique production facilities, distinct customers, distinct prices)66 constitute evidentiary proxies for direct proof of substitutability. The Commission relied upon the complaint counsel’s expert, who applied the hypothetical monopolist test from the Guidelines to verify each market using a critical loss analysis.

The Commission next concluded that Complaint Counsel’s prima facie case was buttressed by other evidence of likely anti-competitive effects. This consisted of evidence of pre-acquisition competition between Polypore and Microporous, evidence that Polypore’s intent was to eliminate a competitive threat, and evidence that post-acquisition prices increased. The Commission also noted that, in a market with high barriers to entry, a merger that resulted in a durable duopoly created a presumption of coordinated effects. The Commission also approved the divestiture remedy.

iii United States v. Dean Foods Co67

The DOJ has made a point about paying close attention to mergers in the agricultural sector of the economy. recently, it obtained a settlement to its challenge of the consummated merger of Dean Foods Company (‘Dean Foods’) and Foremost usa (‘Foremost’),68 alleging that Foremost had been a significant competitor of Dean Foods with respect to the sale of fluid milk.69 The settlement came after the court denied Dean Foods’ motion to dismiss.70 Dean Foods agreed to divest a plant it obtained through the merger.71

iv United States v. George’s Foods LLC72

in 2011, the DOJ challenged another consummated agricultural merger in which George’s Foods, LLC acquired a chicken processing plant in Harrisonburg, Virginia from tyson Foods, inc. for $3 million. The market was alleged to be ‘the purchase of broiler grower services from chicken farmers in the shenandoah Valley’.73 according to the complaint, the two companies, located 30 miles apart, were each other’s nearest geographic competitor for chicken growers. The DOJ alleged that only one other processor, with limited capacity, was available to growers. The DOJ seemed particularly concerned that the merger closed after it had tried unsuccessfully to obtain information from the parties, to whom the DOJ’s ‘serious concerns’ were expressed.74 The complaint focuses on market

66 Brown Shoe Co., Inc. v. United States, 370 u.s. 294, 325 (1962).67 2010 WL 1417926 (E.D. Wis. 7 april 2010).68 United States v. Dean Foods Co., 2010 WL 1417926 (E.D. Wis.7 april 2010).69 id. at *1.70 id. at *2. 71 United States v. Dean Foods Co., no. 2:10-cv-00059 at section ii.C (E.D. Wis. 7 april 2010)

(proposed final judgment).72 United States v. George’s Foods, LLC, no. 5:11-cv-ooo43-gec (W.D. Va. 10 May 2011)

(Complaint)73 id. at p 20.74 id. at p 1.

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definition, market shares, and HHis, citing section 5.3 of the guidelines.75 interestingly, the settlement of this horizontal merger did not require divestiture, but rather behavioural remedies requiring George’s to fix the roof of a building and install additional equipment to allow it to produce a wider range of products at both its facilities. in requiring these capital projects, the DOJ asserted that they would give George’s the ‘incentive and ability to increase local poultry production, thereby increasing the demand for grower services and averting the likely adverse competitive effects arising from the acquisition’.76 it will be interesting to see how the novel remedy of requiring a purchaser to increase capacity (and presumably its share of purchasing) will restore competition.

iV PRiVaTE aCTiONS

The federal antitrust agencies are not the only parties with standing to challenge mergers under section 7 of the Clayton act. Customers and competitors may also bring suit to obtain injunctive relief. Because monetary damages are not available under section 7, until recently, few small plaintiffs had the incentive to bring such suits. still, a lawsuit by a single private plaintiff can have the same impact as a suit by the agencies because injunctive relief can result in an order prohibiting a merger from closing, or forcing the unwinding or divestiture of a merger that has already closed.

a plaintiff is not precluded or prohibited from settling a section 7 claim for monetary compensation. Consequently, some plaintiffs’ firms have brought suit on behalf of individual consumers under section 7 for injunctive relief, apparently hoping to pressure merging companies into monetary settlements.77 some initial success may have led to increased use of this tactic. in the past year, three such suits were decided in favour of defendants. it is not clear whether this will dissuade plaintiff firms from bringing such suits in the future. in the meantime, counsel for merging firms should be aware of the risk of such suits materialising.

i Malaney v. UAL Corporation78

in Malaney, a group of 49 individual plaintiffs sought to enjoin preliminarily the merger of united airlines and Continental airlines, inc.79 The court proceeded on a quick timetable: the suit was filed 9 august 2010, and the opinion issued on 27 september after a two-day evidentiary hearing. The court refused to issue a preliminary injunction, noting that plaintiffs failed in all of their three proposed markets to ‘show the existence

75 id. at p 24.76 Press release, 23 June 2011. www.justice.gov/atr/public/press_releases/ 2011/272510.htm77 note that in all three of the cases discussed below, one particular law firm represented plaintiffs

in each.78 2010 WL 3790296 (n.D. Cal. 27 september 2010).79 Malaney v. UAL Corp., 2010 WL 3790296, at *1 (n.D. Cal. 27 september 2010). The plaintiff

group and its counsel were the same as those who had in 2008 challenged the merger of Delta air Lines and northwest airlines, which settled for a monetary award. id. at *14, fn. 20.

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of a relevant market and then establish that the pending acquisition is “reasonably likely to cause anticompetitive effects” in that market’.80

The court also held that the plaintiffs failed to meet the burden for injunctive relief, noting that while, as consumers of airline tickets, the plaintiffs had standing, they failed to ‘establish any significant harm they will personally suffer that would warrant preliminary injunctive relief ’. This was particularly true given that none of the plaintiffs ‘testified as to having flown regularly’ and that their ‘unformed hope of future air travel’ was a ‘speculative and de minimis injury’.81 This case was recently affirmed on appeal to the ninth Circuit Court of appeals in a summary opinion.82

ii Ginsburg v. Inbev NV/SA83

a section 7 challenge was made to the merger of anheuser-Busch and inbev by plaintiff ‘beer drinkers’. The district court denied a request for a preliminary injunction in 2008, so plaintiffs then sued to seek divestiture after the merger closed, which was also denied. On appeal, the Eighth Circuit noted that indirect purchasers are private parties who may sue for injunctive relief under the Clayton act.84 The court noted that private indirect purchaser plaintiffs are, however, ‘at the least accessible end of a spectrum of injunctive relief ’, noting that a federal court has never ordered a divestiture at the request of a private party who was ‘neither a customer or competitor of the merging parties’.85 The court noted that the DOJ, after reviewing 400,000 pages of Hsr documents, did not oppose the merger’s effects on potential competition.86 Finding any antitrust injury to plaintiffs likely speculative and localised in comparison to the hardship and disadvantage that divestiture would impose on the merged company, the court affirmed the district court’s denial of relief.87

iii Golden Gate Pharmacy Services Inc v. Pfizer Inc88

in Golden Gate, a private plaintiff challenged a consummated merger between Pfizer and Wyeth, two pharmaceutical companies.89 The plaintiff alleged that this combination ‘ha[d] already lessened competition and tended to create a monopoly, in numerous markets and submarkets,’ including manufacture, research, development, innovation, and sale of ‘pharmaceuticals’.90 The court dismissed the plaintiff’s second amended complaint based

80 id. at *5.81 id. at *12-14.82 Malaney v. UAL Corp., 2011 WL 1979870 (9th Cir. 23 May 2011).83 623 F.3d 1229 (8th Cir. 2010).84 id. at 1233. 85 id. at 1234 (cit omitted). 86 id. 87 id. at 1236-7.88 2010 WL 1541257 (n.D. Cal. 16 april 2010).89 Golden Gate Pharmacy Servs., Inc. v. Pfizer, Inc., 2010 WL 1541257 (n.D. Cal. 16 april

2010).90 id. at *1.

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on its failure to ‘sufficiently allege the existence of a cognizable product market,’ holding that it could not ‘simply assume that all prescription drugs are reasonably interchangeable for the same purposes, such that, for example, if the price of a prescription drug used to treat osteoporosis rises, consumers may react by switching to a prescription drug to treat alzheimer’s disease’.91 This case was recently summarily affirmed on appeal by the ninth Circuit Court of appeals.92

V haRT-SCOTT-ROdiNO

There were no reported penalties or enforcement of civil violations of the reporting requirements of the Hart-scott-rodino act during the past year.

Vi CONClUSiON

Most significantly, the past year saw a pronounced shift in the government’s willingness to adopt behavioural remedies in mergers. Because such remedies require continuing regulatory oversight, it is unclear whether the government will have the resources and ability to monitor and enforce such remedies, let alone whether such regulatory oversight will prove to be pro-competitive.

in addition, a steady number of merger challenges in 2010-11, against a backdrop of significantly fewer Hsr filings, resulted in a higher rate of challenge. This may indicate that the antitrust agencies are pursuing more vigorous merger enforcement. although most merger challenges are resolved through consents, the agencies continued to have mixed results in litigated cases. it remains to be seen whether changes made in the 2010 Guidelines will affect the agencies’ litigation success rate. in particular, it will be interesting to see whether the agencies will relax their emphasis on market definition and if so, whether the courts will react favourably to such a change in emphasis.

91 id. at *3.92 Golden Gate Pharmacy Servs., Inc. v. Pfizer, Inc., 2011 WL 1898150 (19 May 2011).

713

D Bruce Hoffman

Hunton & Williams LLPD Bruce Hoffman, a former Deputy Director of the Federal Trade Commission’s Bureau of Competition, is the head of Hunton & Williams’ global competition practice. He has extensive experience with antitrust and competition matters, including merger review, government investigations and litigation. Mr Hoffman is currently representing numerous clients in a wide range of industries in various aspects of the merger review process. He is also handling several federal and state antitrust and consumer protection investigations, and antitrust litigations in several jurisdictions around the US. He received a JD from the University of Florida College of Law where he was Order of the Coif and received the WD McDonald Prize for graduating first in class. He earned a BA from Penn State University, where he graduated Phi Beta Kappa.

Hunton & Williams

2200 Pennsylvania Avenue, NWWashington, DC 20037United States+1 202 955 1500+1 202 778 2201scastro@hunton.comwww.hunton.com

appendix 1

ABOUT THe AUTHOrS