April Antitrust Bulletin

April 14, 2016

FTC Files No-AG Suit Against Pharmaceutical Companies

On March 30, 2016, the Federal Trade Commission (FTC) filed a complaintin the U.S. District Court for the Eastern District of Pennsylvania against several drug companies for allegedly blocking competition from generic versions of the pain management drugs Opana Er and Lidoderm. This suit marks the first time that the FTC has challenged a “no-AG commitment” in which drug firms agree not to market a lower-cost, authorized generic drug. The FTC seeks remedies under Section 5 of the FTC Act, including restitution or disgorgement of profits. Announcing the complaint, FTC Chairwoman Edith Ramirez stated that the suit “reflects the FTC’s commitment to stopping pay-for-delay agreements … regardless of the form they take.”

DOJ Files Suit Over Failure to File HSR Act Notification

On April 4, 2016, the Department of Justice (DOJ) filed a complaint in the U.S. District Court for the Northern District of California alleging that the hedge fund ValueAct Capital failed to comply with the requirements of the Hart-Scott-Rodino Act. The alleged failure to comply with the HSR Act was connected to ValueAct’s role in the merger between Halliburton and Baker Hughes. ValueAct bought stakes in Halliburton and Baker Hughes after the $35 billion merger was announced. The DOJ has alleged that this purchase of voting securities obligated ValueAct to file an HSR notification and observe a waiting period before consummating the transaction, and that ValueAct was not eligible for the limited exemption for acquisitions only for the purpose of investment because ValueAct allegedly intended to influence the business decisions of the merging parties. The complaint notes that the hedge fund failed to follow the requirements of the HSR Act before and previously paid a penalty to settle an HSR Act enforcement action.

FTC v. Staples and Office Depot Trial Wraps Up

On April 5, 2016, Staples and Office Depot rested their defense against the FTC’s challenge to their proposed merger without calling any witnesses. The hearing on the FTC’s proposed preliminary injunction lasted over two weeks and was tried before Judge Emmet Sullivan in the U.S. District Court for the District of Columbia. Judge Sullivan will hear argument on the parties’ proposed findings of fact and conclusions of law on April 19, 2016. His decision is expected to determine the fate of the proposed $6.3 billion merger between the nation’s largest office supply companies.

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