November Antitrust Bulletin

November 18, 2011

Court Agrees with DOJ Market Definition, Halts H&R Block Deal

On Nov. 10, 2011, a district court enjoined tax preparer H&R Block’s proposed $287.5 million acquisition of 2SS Holdings, a provider of digital tax preparation software. The court, which was presented with dueling definitions of the relevant tax-preparation product market, determined that the relevant product market consisted of only “digital do-it-yourself tax preparation products,” and not other tax preparation methods (such as hiring a tax professional or completing one’s own tax return manually) as had been urged by the merging parties. In so doing, the court employed the so-called “hypothetical monopolist test” endorsed by the U.S. Department of Justice and Federal Trade Commission in their 2010 Horizontal Merger Guidelines. On Nov. 15, 2011, H&R Block announced its decision to abandon the proposed acquisition.

Competitors Have Standing in Suit to Block AT&T’s Acquisition of T-Mobile

On Nov. 2, 2011, a district court refused to dismiss a lawsuit brought by Sprint Nextel and Cellular South to block AT&T’s proposed $39 billion acquisition of T-Mobile USA. Although noting that “[a]lleging harm to consumers . . . is not sufficient to demonstrate antitrust injury” to competitors, the court held that the mere fact that Sprint and Cellular South are competitors of the merging parties “is no bar” to pursuing such litigation. Finding plausible the theory that the merger would give AT&T monopsony power (a “buyer’s monopoly”) over the market for mobile wireless devices, the court allowed the lawsuit to proceed.

New EC Best Practices Aim to Streamline Multi-Jurisdictional Merger Review

On Nov. 8, 2011, the European Commission and the heads of the respective European national competition authorities (NCAs) agreed to a set of best practices for multi-jurisdictional mergers that do not qualify for review by the Commission itself. The best practices are part of an effort to alleviate difficulties related to multiple filings for clearance in several individual European countries and reduce the risk of divergent outcomes by identifying the key steps at which the NCAs should cooperate and the information they may share.

Distributors Can’t Be Stopped from Selling Online in EU

On Oct. 13, 2011, the European Court of Justice found that an absolute ban on Internet sales by distributors will, in most cases, constitute an automatic infringement of European Union competition law. Additional information is available in our November 2011 EU/UK Competition Law Newsletter.

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