M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Wednesday, April 21, 2010

Revised Horizontal Merger Guidelines

The FTC and the  DOJ's Antitrust Division have just released their draft revised horizontal merger guidelines for public comment.  The draft is available on the joint FTC/DOJ webpage.   These revised guidelines are the result of a series of workshops that the FTC and DOJ conducted in the Fall and Winter.  According to the press release major differences between the current and proposed Guidelines are as follows:

  • The proposed guidelines clarify that merger analysis does not use a single methodology, but is a fact-specific process through which the agencies use a variety of tools to analyze the evidence to determine whether a merger may substantially lessen competition.
  • The proposed guidelines introduce a new section on “Evidence of Adverse Competitive Effects.”  This section discusses several categories and sources of evidence that the agencies, in their experience, have found informative in predicting the likely competitive effects of mergers.
  • The proposed guidelines explain that market definition is not an end itself or a necessary starting point of merger analysis, but instead a tool that is useful to the extent it illuminates the merger’s likely competitive effects.
  • The proposed guidelines provide an updated explanation of the hypothetical monopolist test used to define relevant antitrust markets and how the agencies implement that test in practice.
  • The concentration levels that are likely to warrant either further scrutiny or challenge from the agencies are updated in the proposed guidelines. 
  • The proposed guidelines provide an expanded discussion of how the agencies evaluate unilateral competitive effects, including effects on innovation. 
  • The proposed guidelines provide an updated section on coordinated effects.  They clarify that coordinated effects, like unilateral effects, include conduct not otherwise condemned by the antitrust laws.
  • The proposed guidelines provide a simplified discussion of how the agencies evaluate whether entry into the relevant market is so easy that a merger is not likely to enhance market power. 
  • The proposed guidelines add new sections on powerful buyers, mergers between competing buyers, and partial acquisitions.  


April 21, 2010 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 24, 2010

Live Nation - Ticketmaster Analysis

Meese and Richman have a recent paper analyzing the competitive effects of the pending Ticketmaster-Live Nation merger, A Careful Examination of the Live Nation-Ticketmaster Merger.  It's a little long, so pick out your favorite Springsteen album and set your iPod to loop before you start.   If you're interested in this deal and/or antitrust, this paper is worth reading.  

Abstract: As great admirers of The Boss and as fans of live entertainment, we share in the popular dismay over rising ticket prices for live performances. But we have been asked as antitrust scholars to examine the proposed merger of Live Nation and Ticketmaster, and we do so with the objectivity and honesty called for by The Boss’s quotes above. The proposed merger has been the target of aggressive attacks from several industry commentators and popular figures, but the legal and policy question is whether the transaction is at odds with the nation’s antitrust laws. 

One primary source of concern to critics is that Ticketmaster and Live Nation are two leading providers of ticket distribution services, and these critics argue that the merged entity would have a combined market share that is presumptively anticompetitive. We observe, however, that this transaction is taking place within a rapidly changing industry. The spread of Internet technologies has transformed the entertainment industry, and along with it the ticket distribution business such that a reliance on market shares based on historical sales is misleading. A growing number of venues, aided by a competitive bidding process that creates moments of focused competition, can now acquire the requisite capabilities to distribute tickets to their own events and can thus easily forgo reliance upon providers of outsourced distribution services. If self-distribution is an available and attractive option for venues, as it appears to be, then it is unlikely that even a monopolist provider of fully outsourced ticketing services could exercise market power. Ultimately, a proper assessment of the horizontal effects of this merger would have to weigh heavily the emerging role of Internet technologies in this dynamic business and the industry-wide trend towards self-distribution. 

The second category of arguments by critics opposing the merger rests on claims that vertical aspects of the transaction would produce anticompetitive effects. Indeed, Ticketmaster’s and Live Nation’s core businesses are in successive markets, and thus the proposed transaction is primarily a vertical merger, but there is broad agreement among economists and antitrust authorities that vertical mergers rarely introduce competitive concerns and are usually driven by efficiency motivations. This wealth of academic scholarship, which is reflected in current antitrust law, has not - from our vantage point - been properly incorporated into the public dialogue concerning the proposed merger. To the contrary, critics articulate concerns, including the fears that the merger would lead to the leveraging of market power and the foreclosure of downstream competition, that are refuted by accepted scholarship. Moreover, there are a number of specific efficiencies that, consistent with economic and organizational theory, are likely to emerge from a Live Nation-Ticketmaster merger and would be unlikely but for the companies’ integration. For these reasons, we submit this analysis in an effort to inform the debate with current economic and legal scholarship.


March 24, 2010 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Thursday, March 11, 2010

More Comcast/NBC Hearings Today

The Senate Commerce Committee is having more hearings on the Comcast/NBC deal today at 10:00am.  Chirstine Varney (head of the DOJ's anti-trust division), Brian Roberts (CEO of Comcast), Prof. Christopher Yoo (UPenn Law) are among those on the witness list.  The webcast will be available here.


March 11, 2010 in Antitrust, Miscellaneous Regulatory Clearances | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 16, 2010

Russian Pre-Clearance Procedures

You might remember that the Oracle-Sun deal filed and then pulled its pre-clearance notification in Russia when it ran into difficulties with EU anti-trust authorities.  At the time, I was a little mystified.   Now, Clifford Chance is setting us all straight.  Here's their memo on the Russian merger pre-clearance process and part of their assessment of notification requirements for transactions involving a foreign buyer and seller: 

Russian competition law follows the "effects doctrine" and the notification requirements may also apply in case of foreign-to-foreign mergers.

Until August 2009, merger clearance in Russia was required if a foreign-to-foreign transaction met both of the following criteria: (1) it resulted in the acquisition of shares or assets of Russian companies, or direct or indirect control over Russian companies; and (2) it results or may result in the restriction of competition in Russia.

This structure was, however, reformed as a part of the Second Antimonopoly Package, which turned these two formerly cumulative criteria into alternative requirements. In addition, the second criterion was modified, which is expected to result in broader application of the Russian merger control rules by FAS. It is now sufficient that a transaction "affects" competition in Russia, while, previously, it was required that the transaction "restricts or may restrict" competition.

To date FAS has not issued any official clarification as to how it interprets the revised requirement. Based on its current practice, one may, however, surmise that a foreign-to-foreign transaction falls within the Russian merger control regime where the target entity directly or indirectly controls any Russian entities, owns assets located in Russia or has substantial turnover from operations in Russia

February 16, 2010 in Antitrust, Miscellaneous Regulatory Clearances | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 27, 2010

Notification thresholds under the HSR Act lowered

In an unprecedented first, effective February 22, 2010, the notification thresholds under the Hart-Scott-Rodino Antitrust Improvements Act will be lowered. The jurisdictional thresholds are adjusted annually under the indexing required by the 2000 amendments to the Act, which require the Federal Trade Commission to revise the thresholds annually based on the change in gross national product.

Here's Proskauer's memo on the new thresholds


January 27, 2010 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Monday, January 25, 2010

Ticketmaster-Live Nation Transaction Approved

The DOJ Antitrust Division just announced it has approved the proposed Tickmaster-Live Nation deal.  This transaction was subject to a good deal of controversy -- including vocal opposition from The Boss.  And if Springsteen has an opinion on a transaction, it's got to be a big deal.  From the DOJ press release

After a rigorous investigation, we concluded that the transaction, as originally proposed, was anticompetitive. ...  

The relief here is both structural and behavioral. The settlement requires Ticketmaster to divest more ticketing than it will gain through its acquisition of Live Nation. Simultaneously, the licensing solves a second competitive issue by giving AEG, an integrated competitor, the ability and incentive to compete with the combination of Ticketmaster and Live Nation for concert promotion, venue management, and ticketing.

Under the settlement, Ticketmaster will be required to license its ticketing software to AEG, its single largest customer. AEG will now have the opportunity and incentive to compete in primary ticketing, both in its own venues and third-party venues. Under the settlement, AEG will transition from using Ticketmaster for its ticketing needs, which last year involved about ten million tickets, to its own ticketing platform. Thus, the proposed settlement opens the door for AEG to become a vertically integrated competitor with competitive incentives similar to those of the merged company.

In addition, Ticketmaster will divest Paciolan, an established ticketing business that sells tens of millions of tickets annually. Within sixty days, Ticketmaster will divest Paciolan to Comcast-Spectacor, which has already signed a letter of intent, or some other buyer suitable to the Department.

A copy of the DOJ's Competitive Impact Statement filed with the court is here and AEG and Tickmaster's technology agreement - required as part of the settlement is here.


January 25, 2010 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 19, 2010

Japan's Premerger Notification Regime

MoFo has memo on the recent amendments to the Japanese Anti-Monopoly Act that went into effect Jan. 1, 2010 here.


January 19, 2010 in Antitrust, Asia | Permalink | Comments (0) | TrackBack (0)

Monday, January 11, 2010

Chinese Merger Control

Zhang and Zhang have an article, Chinese Merger Control: Patterns and Implications, appearing in the Oxford Journal of Competition Law and Economics assessing the efficacy of the recent Chinese Anti-Monopoly Law.  (There's also a version on SSRN, if you don't have a subscription to the Oxford journal.)  Premerger notification and review is obviously an important deal planning issue and China's entry onto the scene in this respect is important.  It's also raised a number of concerns, in particular how China's government would use its power to block deals or seek remedies.  The fear, of course, is that authorities might be motivated by nationalism or parochial politics in approving or blocking deals as anti-competitive.  Zhang & Zhang take on this and other issues in their review.  

Abstract: China's Anti-Monopoly Law went into effect on August 1, 2008. Even though enforcement authorities tend to build their capacity progressively, China has already seen three milestone case decisions in the past year: InBev/Anheuser-BuschCoca-Cola/Huiyuan, and Mitsubishi Rayon/Lucite. In this article, we elaborate the background of each case and provide in-depth analysis of each decision. In particular, we explore the common characteristics of the cases, the economic theories on which the merger control authority has relied in its merger decisions, and the patterns regarding China's merger policy.

Along the same lines McDermott Will & Emery's China office has client memo on the new regulations on merger notification that went into effect on January 1, 2010.  The regulations start to lay out premerger notification processes that corporations wishing to merge will have to comply with.


January 11, 2010 in Antitrust, Asia | Permalink | Comments (0) | TrackBack (0)

Friday, December 4, 2009

Comcast-NBC and the Various Premerger Approvals

Comcast’s deal to acquire NBC from GE announced yesterday doesn’t break a whole lot of new ground from a deal structuring point of view.  In general, GE contributes its NBC/Universal assets to the joint venture.  For its parts, Comcast pitches in cash plus cable assts like the E! Network and the Golf Channel (which suddenly have many more synergies than they used to).  Where this deal is likely to get interesting, though, is on the regulatory approval front. 

Of course, it will need antitrust clearance through the HSR premerger approval process.  Although this is a pretty well-trod path, the present Administration has already signaled on a number of occasions that the era of somnolent antitrust enforcement is over.  This is a big transaction, vertically integrating a large segment of the media industry (content generation to distribution).  Comcast already making its pitch that this deal will be good for consumers – “Universal movies could reach cable [subscribers] more quickly after showing in theaters.”  Somehow, the thought of Land of the Lost and Drag Me to Hell showing up my TV faster than they otherwise would does not make me feel better.

As I noted in a post a couple of months ago, in media deals, the FCC also has an independent premerger approval process of its own.  Although the FCC rarely stops deals from proceeding, it has a much broader charge than the FTC.  The HSR process is focused on assessing the potential anti-competitive effects of a proposed merger.  The FCC’s charge is to assess the proposed transaction on the basis of a “public interest” analysis. In assessing whether the Comcast/NBC deal is in the public interest, the FCC will determine whether the transaction will media diversity (“the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public.”  Turner Broadcasting System, Inc. v. FCC), the quality of local services and the provision of new services, promote competition, and localism among others.  That’s a lot of ground to cover. I’m sure Comcast’s legal counsel have been studying the FCC’s 2003 order in the GM/Hughes and News Corp merger for hints how this review is going to go.  The structure of the transaction there was similar to this one.  Although the vertical integration in the NewsCorp/Hughes transaction was up the chain and not down, the arguments and the public interest analysis done there should look familiar to people.  This process, because it’s done on a case-by-case basis and because it’s not nearly has common as the HSR process, could take some time to accomplish.

Third, there’s Congress.  Although Congress doesn’t have a premerger approval process, every cable TV subscriber has a Congressman and they must be heard.  That fact no doubt generates what the Supreme Court has called “an independent interest in preserving a multiplicity of broadcasters.” Henry Waxman, Chairman of the House Committee on Energy and Commerce, released the following statement:

The proposed Comcast-NBC Universal joint venture agreement has the potential to reshape the media marketplace.  This proposal raises questions regarding diversity, competition, and the future of the production and distribution of video content across broadcasting, cable, online, and mobile platforms.  It is imperative that the FCC, the Justice Department, and the FTC rigorously assess whether this transaction is in the public interest.

I will work with Rep. Rick Boucher, Chairman of the Subcommittee on Communications, Technology, and the Internet, to schedule hearings on this matter at the earliest practicable date.

So, there will hearings in which assorted Congressmen ask questions and give their point of view on the usefulness of a Comcast/NBC link-up.  That ought to be fun.


Update:  Not to be outdone - Sen. Herb Kohl, Chairman of the Senate Subcommittee on Antitrust, Competition, and Consumer Rights has also released a statement of the proposed deal.  Surprise, surprise, he'll be holding hearings, too!

This acquisition will create waves throughout the media and entertainment marketplace and we don't know where the ripples will end.  Antitrust regulators must ensure that all content providers are treated fairly on the Comcast platform, and that Comcast does not get undue advantages in gaining access to programming.   We plan a public hearing so that consumers can get a better sense of how this deal could affect their access to diverse programming and information, especially as they more often look to the internet for such services.  It's critical that we preserve robust competition and promote innovative and emerging program delivery in this rapidly changing market.

December 4, 2009 in Antitrust, Miscellaneous Regulatory Clearances | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 2, 2009

Horizontal Merger Guidelines Workshops

The FTC is hosting a series of workshops on horizontal merger guidelines as part of its process of rethinking such guidelines.  The first of the five workshops is today in DC.  You can catch the webcast here.  The schedule for the rest of the workshops and materials is here.


December 2, 2009 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Thursday, October 22, 2009

Oracle Fiddling While Sun Burns?

MySQL, an afterthought in Oracle's decision to buy Sun last April has turned into a major obstacle with the EU Competition Commission standing in the way over the fate of the technology.  According to PC World representatives from Oracle met with the commission yesterday and, well, it didn't go well. 

In a meeting with Oracle President Safra Catz in Brussels on Wednesday, Competition Commissioner Neelie Kroes "expressed her disappointment that Oracle had failed to produce, despite repeated requests, either hard evidence that there were no competition problems or, alternatively, proposals for a remedy to the competition problems identified by the Commission," a Commission spokesman said.


Meanwhile Sun's sales have been declining as rivals IBM and Hewlett-Packard take advantage of the uncertainty around Sun's business with aggressive migration plans. Oracle CEO Larry Ellison said last month that Sun is losing $100 million a month while it waits for the deal to close.

He has also asserted that Oracle's database competes with Microsoft's SQL Server and IBM's DB2 products, and not with MySQL.

Sun announced a big round of layoffs yesterday, citing the additional time it is taking to close the deal with Oracle. The company said it will lay off 3,000 workers around the world over the next 12 months. Oracle is widely expected to make deeper job cuts if the deal closes.

Although the delay is expensive, short of reaching a deal with the Commission, there's no real end in sight for Oracle.  The Merger Agreement (Sec. 8.01(b)) won't permit Oracle to walk for antitrust reasons until at least April of 2010.  That's six months, or $600 million in losses away. 

In Section 6.10 (below), the parties included what appears to be relatively modest antitrust language. 

(b) Without limiting the generality of the undertakings pursuant to this Section 6.10, the parties hereto shall (i) provide or cause to be provided as promptly as practicable to Governmental Authorities with regulatory jurisdiction over enforcement of any Antitrust Laws (each such Governmental Authority, a “Governmental Antitrust Authority”) information and documents requested by any Governmental Antitrust Authority or necessary, proper or advisable to permit consummation of the transactions contemplated by this Agreement, including preparing and filing any notification and report form and related material required under the HSR Act and any additional consents and filings under any Antitrust Laws as promptly as practicable following the date of this Agreement (but in no event more than fifteen (15) Business Days from the date hereof except by mutual consent confirmed in writing) and thereafter to respond as promptly as practicable to any request for additional information or documentary material that may be made under the HSR Act and any additional consents and filings under any Antitrust Laws; (ii) use their reasonable best efforts to take such actions as are necessary or advisable to obtain prompt approval of consummation of the transactions contemplated by this Agreement by any Governmental Authority; and (iii) use their reasonable best efforts to contest on the merits, through litigation in United States District Court and through administrative procedures in relation to other Government Authorities, any objections or opposition raised by any Governmental Authority;provided, however, that nothing in this Section 6.10 shall require Parent to appeal any Order from a Governmental Authority.

What are "reasonable best efforts" anyway?  The reaction we're hearing from the EU Competition commission suggests that Oracle could be doing something "reasonable" to assuage their concerns, but it's not. "Reasonable best efforts" is one of those ambiguous phrases, like materiality, that people think have meaning, but when one tries to give them meaning, they get harder to actually pin down. One would think that the mounting losses at Sun would be motivation enough for Oracle to give its dealings with the  EU its best effort, but apparently it's not.   I find it hard to believe that Oracle is unable (or unwilling) to respond to EU requests for a report on the marketplace and competition with respect to MySQL.  So, while Oracle digs in its heels over MySQL, Sun is left to suffer.


October 22, 2009 in Antitrust, Transactions | Permalink | Comments (0) | TrackBack (0)

Sunday, October 11, 2009

Pre-Merger Notification in Japan

Jones Day's overview of pre-merger notification rules in Japan.


October 11, 2009 in Antitrust, Asia | Permalink | Comments (0) | TrackBack (0)

Thursday, October 8, 2009

UK Competition Commission Rules Against Ticketmaster-Live Nation Deal

Apparently, The Boss has fans in the UK.  According to the WSJ, the Competition Commission, the UK antitrust regulators, are moving to hold up the Ticketmaster-Live Nation transaction.  The Competition Commission issued a statement today ruling against the merger:

Ticketmaster Entertainment, Inc and Live Nation, Inc will limit the development of competition in the market for live music ticket retailing.

In its provisional findings published today, the CC has concluded that the merger could severely inhibit the entry of a major new competitor (CTS Eventim) into the UK ticketing market. Prior to the announcement of the merger, Live Nation had signed an agreement with CTS to provide ticketing services for its live music events and venues in the UK. The CC believes that this agreement with Live Nation would have provided CTS with a foothold in the UK market from which it would have grown, increasing significantly the degree of competition in a market which is currently dominated by Ticketmaster and one other large ticketing agent. 

The CC believes that, if the merger were to proceed, Live Nation would have the incentive to impede CTS’s entry into the UK ticketing market, in particular by minimizing the supply of its tickets to CTS, and thereby frustrate CTS from becoming an additional effective competitor to Ticketmaster. This could lead to higher net prices (eg due to lower rebates to promoters and venues) and/or lower service quality and/or less innovation in the market than would otherwise be the case.
The Commission is now considering possible remedies.  They include, among others, prohibition of the merger, prohibition of the merger of the UK operations, and divestment of the UK operations of either Ticketmaster or Live Nation.  No word, yet, whether Ticketmaster will cry "No Surrender". 


October 8, 2009 in Antitrust, Transactions | Permalink | Comments (0) | TrackBack (0)

Sunday, October 4, 2009

Federal Judge Reviewing Diebold Sale

Early last month Diebold announced that it had sold its Premier Election Solutions, Inc. sub to Election Systems & Software (links are to their respective press releases announcing that the transaction had closed).  The sale was small - $5 million plus 70% of receivables from sales as of August 31, 2009.  Given that the sale was well under the HSR filing thresholds, the parties likely did not seek pre-merger approval from the FTC.  Now comes word that ES&S's competitors are seeking an injunction from a federal judge in NJ to "unscramble the eggs" and order ES&S to undo the transaction.  McClatchy reports:

A federal judge in Camden, N.J., agreed late Friday to hear a request for an emergency injuction that could halt Election Systems & Software's announced acquisition of Diebold Inc.'s Premier Election Solutions.

The quietly arranged shotgun wedding between the two voting-machine giants would give ES&S control of election systems in use in almost 70 percent of the nation's voting precincts. Federal Judge Robert Kugler agreed to hear Tuesday the request for immediate injunction brought by a small competitorm, Hart InterCivic Inc. 

The basic contention is that ES&S did a "stealth" transaction - as if by not voluntarily making an HSR filing one might impute some sort of bad faith.  That's a tough bet.  I wouldn't take it.   In any event, it's worth noting that ES&S's competitors - and not local governments (customers) - are the ones seeking the injunction.  This might well color the outcome.  


October 4, 2009 in Antitrust, Transactions | Permalink | Comments (0) | TrackBack (0)

Friday, September 18, 2009

Media Ownership Rules Pop Up as an Issue

With the current state of the economy, creditors are being forced to think about taking equity positions in debtors.  In most sectors that doesn't present a problem, but an article in today's WSJ points to the media sector where this is becoming a surprise issue for unwitting creditors who are taking equity.   The FCC must approve these sales.  While the 2006 ownership rules make cross-ownership and ownership of multiple platforms easier to accomplish, there's still an entire merge approval process at the FCC.  Phil Weiser (formerly of U. Colorado, now of the U.S. Department of Justice Antitrust Division as deputy assistant attorney general for international, policy and appellate mattershas a nice paper that appeared last year in the Federal Communications Law Review on the challenges of the dual merger review regime (DOJ/FTC/FCC).  


September 18, 2009 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 16, 2009

CVS Gets Another Look

A number of members of Congress and pressure groups have apparently started pushing the FTC to give the CVS/Caremark merger from two years ago another look.  This reminds me of a question a student raised in my M&A class last year:  does pre-merger clearance create some sort of safe harbor that removes all post-closing antitrust risk from a transaction?"   The CVS/Caremark deal is a good reminder that the proper answer to that question is no.  One should not mistake pre-merger clearance for an anti-trust "get out of jaill free" card.  Although they don't go there very often, the FTC reserves the right to come back and examine the competitive (or anti-competitive) effects of mergers at any point in the future.


September 16, 2009 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Thursday, September 3, 2009

China Pre-merger Clearance paper

Mitnick, Yang and Emch have a recent paper assessing China's pre-merger clearance regime, The Dragon Rises: China's Merger Control Regime One Year On.  

Abstract: During the first year of existence of China’s Anti-Monopoly Law, much has been accomplished but much remains to be developed. In particular, draft regulations in the merger clearance field remain to be finalized, and draft regulations implementing non-merger aspects of the AML have only recently been proposed or have not yet been proposed at all. Moreover, early merger clearance decisions appear to rest on familiar antitrust principles, yet the application of those principles by the Ministry of Commerce (MOFCOM) may be out of step with some merger control regimes around the world. For example, MOFCOM relied in part on the theory of 'monopoly leveraging' to block the proposed Coca-Cola/Huiyuan transaction. In contrast, the U.S. Supreme Court has largely repudiated that theory in the Sherman Act context, and it has not been the used to block transactions under the Clayton Act. Nevertheless, in both substance and procedure, the Chinese antitrust regime continues to mature and, in most respects, to converge with the mainstream of worldwide antitrust enforcement programs.


September 3, 2009 in Antitrust, Asia | Permalink | Comments (0) | TrackBack (0)

Monday, August 3, 2009

China's Premerger Review Statistics

On July 21, 2009, the Antimonopoly Bureau of China's Ministry of Commerce (MOFCOM) released statistics on their premerger approval work.   The Gerson Lerhman Group has an English language summary with links to the Chinese report is available here.  

Since August 2008 when China's Antimonopoly Law (AML) took effect and through the end of 2009, MOCFOM received 58 merger filings, among them the review of 46 cases had been completed. MOFCOM approved 43 cases without conditions, approved 2 cases with conditions, and rejected 1 case. Pursuant to Article 30 of the AML, MOFCOM had published earlier its decisions on the three cases that were either rejected or approved with conditions. These decisions provide a peek into MOFCOM's thinking in reviewing mergers and acquisitions that might cause anticompetitive concerns in China.

While we're on the topic of China's AML, here's a recent article in China Law Vision on the extraterritoriality of China's AML.  The author suggests that the AML would not reach the Rio Tinto - BHP Biliton transaction.


August 3, 2009 in Antitrust, Asia | Permalink | Comments (1) | TrackBack (0)

Thursday, July 2, 2009

DOJ Wakes Up to Antitrust

In a previous post, Mike noted that US antitrust authorities have a adopted a more aggressive enforcement stance following the change of administrations.  There's another example of the more vigorous enforcement attitude this morning.  According to the WSJ, the DOJ has filed comments with the Department of Transportation objecting to a grant of blanket antitrust immunity with respect to United and Continental's plan to share pricing and scheduling information as part of the "Star Alliance." (Continental is leaving "SkyTeam" to join "Star Alliance."   The 58 page comment letter outlining the DOJ's objections is summarized below:  

Antitrust enforcement has played a vital role in bringing increased competition and consumer benefits to the deregulated airline industry. Accordingly, any exemptions from the antitrust laws should be strongly disfavored. To overcome the presumption against antitrust immunity, applicants must demonstrate that their collaboration will generate significant public benefits that outweigh any harm to competition, that they cannot achieve those benefits without immunity, and that they have narrowly tailored the requested immunity to achieve the benefits claimed.

For many past applications, the principal public interest benefit furthered by DOT's grant of immunity has been the negotiation of open skies agreements with the home country of the U.S. carriers' alliance partners. In the present matter, open skies agreements have been signed with the home countries of all the foreign applicants, and those foreign carriers will continue to be members of the immunized alliances whatever DOT decides here. Granting immunity for  Continental to coordinate with Star ATI Alliance' members on U.S. to Latin American or Pacific routes is not likely to result in further liberalization discussions between the U.S. and countries with which we have not yet negotiated open skies, such as China or Brazil. Therefore, an expansion of immunity offers no open skies benefits for U.S. consumers.

Where an application does not directly promote open skies with its attendant consumer benefits, applicants bear a heavy burden to prove benefits specific to their alliance agreements that justify immunity. Where an application involves the presence of two major domestic competitors, the request for immunity warrants particularly close scrutiny.

The DOJ's stance on the United/Continental joint venture suggests that deal planners might have to be more wary of crossing paths with antitrust authorities in this new enforcement environment.


July 2, 2009 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 9, 2009

CSL-Talecris Agreement Terminated

CSL Limited announced this morning that it was pulling its HSR filing and is terminating its merger agreement with Talecris following a challenge by US antitrust authorities. The CSL-Talecris deal was one of the very first transactions to be challenged by a more assertive, post-Bush Administration, FTC.  

CSL will pay Talecris a $75 million break fee.  The prospect of a lengthy delay and an indeterminate outcome led the parties to decide to walk away.  The FTC was to hear arguments in October 2009, well past the July 2009 drop-dead date in the merger agreement.   Simultaneously, CSL announced a share buyback.  Earlier, CSL's CEO hinted they might make a move like that -- essentially returning to shareholders the money they raised to do the Talecris transaction. 

CSL disucssed their decision to terminate the agreement on an analyst call, which you can listen to here


June 9, 2009 in Antitrust, Deals | Permalink | Comments (0) | TrackBack (0)