May Antitrust Bulletin

May 4, 2016

FTC, DOJ Issue Statement on Preserving Competition in the Defense Industry

On April 12, 2016, the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) Antitrust Division issued a joint statement explaining the standards they apply in reviewing proposed mergers and acquisitions in the defense industry. Although the statement reaffirmed that the agencies’ joint 2010 Horizontal Merger Guidelines continue to provide the framework for analyzing transactions in all industries, including the defense industry, the FTC and DOJ also acknowledged their reliance on the U.S. Department of Defense’s (DoD) “expertise, often as the only purchaser, to evaluate the potential competitive impact of mergers, teaming agreements, and other joint business arrangements between firms in the defense industry.”

Commenting that “[m]any sectors of the defense industry are already highly concentrated” and “[o]thers appear to be on a similar trajectory,” the agencies’ statement emphasized that they “will not hesitate to take appropriate enforcement action, including a suit to block” a transaction that “threatens to harm innovation, reduce the number of competitive options needed by DoD, or otherwise lessen competition.”

DOJ’s Auto Parts Investigation Rolls On as Capacitor Industry Inquiry Picks Up Steam

On April 20, 2016, DOJ announced that the former president of a Japanese company that sold automotive body sealing products had pled guilty to bid-rigging and price-fixing, and was sentenced to 18 months in prison. Reflecting DOJ’s renewed focus on individual accountability, the indictment named three individual defendants but did not name as defendants, or even identify by name, the companies for which they worked. To date, DOJ’s auto parts investigation has yielded charges against 58 individuals and 39 companies, and over $2.6 billion in criminal fines.

A week later, on April 27, DOJ announced that another Japanese company has agreed to plead guilty to conspiring to fix the prices of electrolytic capacitors, a component used in many electronic devices. The announcement marks the second corporate guilty plea in DOJ’s investigation; the first, in January 2016, yielded a $13.8 million criminal fine.

DOJ Antitrust Division Issues Annual Spring Update

On April 8, 2016, DOJ announced the issuance of its annual spring update for 2016. In addition to providing information on DOJ’s civil and criminal antitrust enforcement activities, the publication provides data on trends in criminal antitrust enforcement, a summary of DOJ’s cooperative efforts with foreign competition regulators, and discussion of DOJ’s advocacy with respect to state health care laws and the intersection of antitrust and intellectual property.

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