U.S. Antitrust Agencies Increase Merger Scrutiny: Challenge Small, and
Even Consummated, Mergers
Over the past two years, U.S. antitrust agencies have challenged several
mergers that fell well below the $63.4 million Hart-Scott-Rodino reporting
threshold. While the U.S. Department of Justice's Antitrust Division and the
Federal Trade Commission always have had the power to challenge such
transactions, the agencies have exercised that power more frequently in recent
years. Experts attribute the rise in challenges to the slow merger market,
improved monitoring capabilities, and a more aggressive enforcement position by
the agencies in general.
Similarly, in recent months, the FTC has increased its challenges of
consummated mergers, including ordering companies to unravel already combined
companies from past mergers that it deemed anticompetitive. Since that start of
the 2009 fiscal year, the FTC has challenged seven consummated transactions. In
contrast, the FTC averaged one such challenge a year during the previous five
Former CEO Found Guilty of Conspiracy to Obstruct Justice
On July 27, 2010, a federal jury found Ian Norris, the ex-CEO of Morgan
Crucible Co. PLC, a United Kingdom corporation, guilty of conspiring to obstruct
justice during a grand jury investigation of price-fixing charges. According to
a DOJ press release, the count carries a maximum penalty of five years in prison
and a $250,000 fine. Although Norris was indicted on one count of price fixing,
along with three obstruction-related counts, he was not tried for price fixing.
In 2007, the British House of Lords ruled that Norris could not be extradited on
the price-fixing count alone because the conduct alleged in connection with that
count did not amount to a crime under U.K. law at the time it allegedly was
committed. U.S. prosecutors pursued the conspiracy and obstruction counts,
however, and the U.K. Supreme Court ultimately agreed that Norris could be
extradited on those charges.
Draft Regulations Show China Getting Tougher on Price Fixing
China's National Development and Reform Commission has released for public
comment new draft regulations—called the "Special Regulations on Penalties for
Unlawful Practices Committed during the Periods of Abnormal Fluctuation of
Market Price"—that will give the NDRC the power to respond quickly to
suspected price fixing. Among other things, the regulations would allow the NDRC
to fine individuals for antitrust violations. Under China's current law, only
businesses can be fined. Other provisions of the draft regulations would allow
the NDRC to confiscate illegal profits and, in serious cases, the NDRC would
have the power to revoke a company's business license, without which a company
cannot trade legally in China.
ESA Finds Abusive Exclusivity Agreements and Imposes First Competition Law
On July 14, 2010, the EFTA Surveillance Authority, the equivalent of the
European Commission for Norway, Iceland and Liechtenstein, handed down its
first ever competition law fine. The case serves as a reminder that a network of
exclusivity agreements can give rise to abuse of dominant position charges.
Additional information is available in our
EU/UK Competition Law Newsletter.