August Antitrust Bulletin

August 23, 2011

Company Pleads Guilty to Falsifying Documents in HSR Filing

On August 15, 2011, Nautilus Hyosung Holdings Inc., a Delaware corporation, agreed to plead guilty to two felony charges for submitting false documents to the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) in connection with its proposed acquisition of a competing manufacturer of ATM systems. According to the charging documents, an executive of Nautilus falsified documents and directed other employees to falsify documents in an effort to understate the competitive impact of the proposed acquisition. These documents were submitted with the initial Hart-Scott-Rodino filing and also in response to DOJ's request for additional information about the transaction. Subsequent to these false submissions, the company voluntarily disclosed that numerous documents had been altered before being submitted to the antitrust agencies, and agreed to cooperate in DOJ's criminal investigation of the alleged obstructive conduct. Nautilus faced a maximum criminal penalty of $1 million, but this amount was substantially reduced to $200,000 in consideration of the "nature and extent of the company's disclosure of wrongdoing and its cooperation" with the investigation, according to a DOJ statement.

FTC Modifies Part 3 of Agency’s Rules of Practice

On August 12, 2011, the FTC announced amendments to several sections of the procedural rules (known as "Part 3") that govern how administrative competition cases, including merger challenges, are tried before an administrative law judge (ALJ). The full Commission reviews appeals following an ALJ's initial decision. The changes, which relate to discovery and the admissibility of certain evidence, aim to improve the efficiency of Part 3 proceedings.

Court Rejects Monopolization Claim Premised on Short-Term Exclusive Contracts

On August 17, 2011, a district court rejected a challenge to short-term exclusive agreements between an auto parts seller and its distributors. In SPX Corp. v. Mastercool, U.S.A., Inc., Mastercool counterclaimed that even though SPX’s exclusive contracts were short-term and terminable at will, their overall effect of these agreements was to foreclose competition. The court rejected this argument, holding that such exclusivity agreements were "presumptively lawful" and complaints about such contracts could not plausibly support an antitrust claim.

UK Competition Agency Publishes Compliance Guidance for Directors

In June 2011, the U.K. Office of Fair Trading published new guidance for businesses on competition law compliance–including specific advice for directors, general guidance for all businesses, a quick guide to competition law compliance and a film that includes a dramatized dawn raid–to help businesses comply with competition law. Additional information is available in our August 2011 EU/UK Competition Law Newsletter.

For more information, please contact the lawyers in the Antitrust & Trade Regulation Department at McGuireWoods.

J. Brent Justus
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