November Antitrust Bulletin

November 2, 2015

FTC Files Complaints for Violations of HSR Act in Two Recent Cases

On October 6, the Federal Trade Commission (FTC) filed a complaint for civil penalties against investor Len Blavatnik for his failure to report voting shares that he acquired when he, via his company Access Industries, purchased shares of a technology startup called TangoMe in August 2014. The complaint follows a similar one filed by the FTC on September 22 against Leucadia National Corporation alleging that it failed to report a conversion of its ownership interest in the financial services company Knight Capital Group, Inc. The FTC charged that both parties were required under the Hart-Scott-Rodino Act to notify the FTC and Department of Justice (DOJ) of transactions exceeding certain dollar thresholds that affect commerce in the United States and otherwise meet the statutory filing requirements. Both parties had previously committed the same violation but, in those instances, the FTC decided against recommending civil penalty actions. Due to these subsequent violations of the law, however, Blavatnik agreed to pay $656,000 in civil penalties and Leucadia agreed to pay $240,000.

NCAA Agrees to Examine Time Demands on Division I Athletes

In September, we reported on the Ninth Circuit’s order deferring the implementation of extensive changes to the NCAA’s policy governing the compensation of student athletes. On September 30, Ninth Circuit ruled that student-athletes can be provided scholarships that cover the full cost of attending college, and struck down a lower court decision that would have permitted student-athletes to be paid for the use of their names, images and likenesses. One day later, the Division I Council and the Student-Athlete Experience Committee decided to take a closer look at the time demands on student-athletes. The Division I board of directors asked both the Division I Council and the Division I Student-Athlete Advisory Committee to provide guidance on how to more accurately measure and limit the time commitments of college athletes, acknowledging that the greatest concern is that athletic commitments can interfere with student-athletes’ ability to pursue certain majors, internships and other opportunities.

FTC Chairwoman Ramirez Testifies on Proposed Legislation Impacting the FTC’s Role in Mergers

On October 7, Chairwoman Edith Ramirez provided testimony regarding proposed legislation, known as the Standard Merger and Acquisition Reviews Through Equal Rules Act (SMARTER Act), before the U.S. Senate Committee on the Judiciary and the Subcommittee on Antitrust, Competition Policy and Consumer Rights. The chairwoman indicated that the FTC’s primary concern was that the proposed legislation would eliminate the FTC’s adjudicative function in certain merger cases. Much of the chairwoman’s testimony focused on the FTC’s historical and recent success in merger enforcement. She stated that FTC merger enforcement has preserved competitive market conditions in vital sectors of the economy − such as health care, technology, consumer goods and services, and energy − and that it prevented price increases and spurred innovation. In arguing that the proposed change in legislation is unnecessary and risks undermining the beneficial role the FTC plays in merger enforcement, the chairwoman stated that the FTC has already revised its rules governing administrative litigation in response to previous concerns that the adjudicatory process was too protracted. She said there is no evidence showing difference in outcomes between merger cases handled by the FTC and those handled by the DOJ. The testimony concluded that the proposed legislation risks eroding the fundamental quasi-judicial role that Congress deliberately granted to the FTC when the agency was created to serve as a complement to DOJ enforcement.

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