First, Shoot All The Lawyers
January 1st, 2012 by David FischerThe Washington Post had an interesting article on Christmas Day about the role of AT&T’s antitrust counsel in its failed merger with T-Mobile. According to the article:
Yet the deal collapsed anyway, and some of the backlash has been aimed at the attorneys advising the transaction. Some Wall Street pundits were quick to point fingers, particularly now that AT&T will have to cough up a $4 billion breakup fee.
The only analyst quoted is CNBC commentator Jim Cramer (always a calm, dispassionate voice of reason). And then it quotes a bunch of other lawyers who cast doubt on the analysis that the lawyers gave the deal an all clear and advised that AT&T agree to a $ billion dollar breakup fee. The general theory seems to be the lawyers are at fault because they presumably said with 100% confidence that the government would approve the deal. First, I have no idea what advice the lawyers gave and neither do any of the analysts (or reporters). It is lazy to make assumptions about this. Second, this seems to feed into a post-breakup meme that it was a surprise that the merger was challenged by the government. As we said at the time, and again (and this site is certainly not the one who voiced this) but a vigorous examination of the merger by the government was perhaps one of the least surprising antitrust developments of 2011. This meme should never exist but since it does, it should die a quick death.
ACOs and The Antitrust Source
December 22nd, 2011 by David FischerThe latest edition of The Antitrust Source is out and if you are interested in antitrust and Accountable Care Organizations (ACOs) you are in luck. The entire edition is about ACOs. Unsure of what an ACO is (or could be)? Kaiser Health News provides this useful definition and analogy:
An ACO is a network of doctors and hospitals that shares responsibility for providing care to patients. In the new law, an ACO would agree to manage all of the health care needs of a minimum of 5,000 Medicare beneficiaries for at least three years.Think of it as buying a television, says Harold Miller, president and CEO of the Network for Regional Healthcare Improvement and executive director of the Center for Healthcare Quality & Payment Reform in Pittsburgh. A TV manufacturer like Sony may contract with many suppliers to build sets. Like Sony does for TVs, Miller says, an ACO would bring together the different component parts of care for the patient – primary care, specialists, hospitals, home health care, etc. – and ensure that all of the “parts work well together.”
The problem today, Miller says, is that patients are getting each part of their health care separately. “People want to buy individual circuit boards, not a whole TV,” he says. “If we can show them that the TV works better, maybe they’ll buy it,” rather than assembling a patchwork of services themselves. “But ACOs will need to prove that the overall health care product they’re creating does work better and costs less in order to encourage patients and payers to buy it.”
AT&T-T-Mobile Merger Is Off
December 20th, 2011 by David FischerYesterday, the companies announced that AT&T’s acquisition of T-Mobile was off. The New York Times reports that “[t]he decision to scrap the $39 billion takeover — which would have been the biggest deal of the year — is a major setback for AT&T, which had pinned its hopes for growth on the acquisition. The company wanted T-Mobile’s cellular airwaves, or spectrum, to relieve its congested network and offer faster service for data-hungry devices like the iPhone.”
One thing I found odd was this statement from the Times’ article:
“People in this town didn’t think that the department was willing to take the risk to litigate big, complex cases,” said a senior Justice Department official, who spoke on the condition of anonymity because employees were not authorized to go beyond the department’s public statement. “But this puts down a very firm marker that we are taking antitrust enforcement very seriously.”
To copy a Seth Meyers/SNL bit, really? I mean really?
The Antitrust Source
October 31st, 2011 by David FischerA new edition of The Antitrust Source is now available. As someone who also regularly litigates False Claims Act matters, I was personally most interested in the article regarding the potential addition of a whistleblower rewards program to DOJ’s Antitrust Division’s Corporate Leniency Program. The authors conclude that:
Adding a whistleblower rewards provision is likely to be a counter-productive addition to U.S antitrust policy. It is unlikely that employees who are not engaged in cartel activity will be able to provide the Antitrust Division with the vital information needed to prosecute a cartel. The implementation of such a policy may both eliminate procompetitive collaboration among firms and result in higher internal costs to firms. Furthermore, with a whistleblower rewards program, the financial interests of the whistleblowers could supersede both the actual individuals damaged by the cartel and general public policy considerations.
FTC Issues Another “Report” on Reverse Payment Settlements
October 25th, 2011 by David FischerUPDATE: The FTC has released its “report” and calling it a report, even with the quote marks is a stretch. The report is 2 pages long (with half of the second page being blank) and it contains only conclusory statements that a certain number of final settlements are anticompetitive (although, noticeably, the report itself does not use that term, only the press release does). The report states that of the 156 settlements examined, 28 contain “both compensation to the generic manufacturer and a restriction on the generic manufacturer’s ability to market its product”; 100 settlements “restrict the generic manufacturer’s ability to market its product, but contain no explicit compensation”; and the remain 28 contain no restrictions upon entry.
Although it does not identify the any of the settlements, which precludes anyone from evaluating the staff alleged analysis, I think it is fair to say that the FTC has not challenged 28 “pay for delay” settlements in FY 2011. If the settlements really were anticompetitive, presumably they would have been challenged by the FTC in court.
Original Post:
The Washington Post editorial board apparently obtained a pre-release copy of “[a]n upcoming report by the Federal Trade Commission shows that brand-name pharmaceutical makers continue to cut questionable deals with generic manufacturers that delay the introduction of cheaper drugs onto the market.” Of interest, the editorial notes that “[i]n its new report, the agency points to 28 cases that bear the telltale signs of pay-for-delay, including ‘compensation to the generic manufacturer and a restriction on the generic manufacturer’s ability to market its product.’”
DOJ Hires Pomerantz to Try AT&T/T-Mobile Casse
October 19th, 2011 by David FischerBloomberg reports that DOJ is hiring Glenn Pomerantz, as outside trial counsel, “to bolster its trial team and work with the division’s chief litigator, Deputy Assistant U.S. Attorney General Joseph Wayland.” Pomerantz is a partner at Munger, Tolles & Olson LLP.
Reaction to the DOJ Lawsuit Over the AT&T/T-Mobile merger
September 1st, 2011 by David FischerAs noted yesterday, in a shocking (shocking!) development, the Department of Justice will sue in the DC District to block the AT&T and T-Mobile merger. Some highlights of the reaction to the lawsuit:
- AT&T released a statement.
- The New York Times noted that “[c]onsumer advocacy groups cheered the administration’s move” but that “[l]abor groups, however, have generally supported the merger, in part because a substantial number of AT&T employees are members of the Communication Workers of America, while T-Mobile is a largely nonunion company.”
- At All Things D, Ina Fried reports that the DOJ complaint appears to mirror, in part, T-Mobile’s advertising that -Mobile pitched itself as a scrappy and affordable alternative to big carriers, particularly AT&T, that were offering poorer service and higher prices.
- Over at Truth on the Market, Josh Wright wonders why Sprint’s stock price rose yesterday and Geoff Manne has some quick reactions to the lawsuit, including some thoughts on the relevant market(s).
- The American Antitrust Institute approves of the lawsuit arguing that the “merger would reduce the number of national competitors from four to three and result in highly concentrated markets nationwide and locally.”
- At Fortune, Scott Wooley speculates that AT&T focused on how the merger would create jobs to the (near) exclusion of the argument that it “would make the industry dramatically more efficient, slashing the cost of providing wireless service to its customers” in order to appeal to the FCC and therefore lost the antitrust argument at DOJ.
No one saw that coming…
August 31st, 2011 by Manfred GabrielThe Department of Justice will sue in the DC District to block the AT&T and T-Mobile merger. The Division points to disruptive competitive force that T-Mobile has been, through low prices and innovation, and to considerable overlap: “AT&T and T-Mobile compete head to head … in 97 of the nation’s largest 100 cellular marketing areas.”
Full details, and a link to the complaint, on the Division’s webpage.
Google A Little Less Hobbled In Smartphone Market
August 15th, 2011 by David FischerThis morning’s news about Google’s latest acquisition calls into question the basis of the reported DOJ investigation into the sale of the Nortel patents. About two weeks ago news broke that DOJ was:
intensifying an investigation into whether tech giants including Apple Inc., Microsoft Corp. and Research in Motion Ltd. could use a recently acquired trove of patents to unfairly hobble competing smartphones using Google Inc.’s Android software, according to people familiar with the matter. A consortium of six companies last month paid $4.5 billion to acquire a portfolio of 6,000 patents auctioned by the bankrupt Canadian telecom equipment maker Nortel Networks Corp., thwarting Google’s interest.
This morning, Google announced it was buy Motorola Mobility for $12.5 billion. The AP reported that:
What Google likely wants from the acquisition is Motorola’s trove of more than 17,000 patents on phone technology. Google recently lost out to a consortium that included Microsoft Corp., Apple and Research In Motion Ltd. in bidding for thousands of patents from Novell Inc., a maker of computer-networking software, and Nortel Networks, a Canadian telecom gear maker that is bankrupt and is selling itself off in pieces Motorola has nearly three times more patents than Nortel.
It appears that Google paid about 3 times the amount for 3 times the patents (plus, the not insignificant other assets of Motorola Mobility). And the acquisition of these patents would appear to undercut the argument that the Nortel patents could be used to exclude Google from the smartphone market. Obviously, a detailed analysis of the patent portfolios is necessary (and beyond anything we can do here) but at least on the surface, this would appear to be a market-based reaction.
Antitrust News & Notes
August 7th, 2011 by David FischerAntitrust News & Notes
July 17th, 2011 by David Fischer- Saying what we all know, and now that she is leaving office, Christine Varney said that Congress should reexamine the overlapping merger authority at DOJ and the FTC. According to the Wall Street Journal, she “expressed concern that antitrust regulators at the Justice Department and the Federal Trade Commission may have ‘substantively different legal standards’ when blocking mergers as anticompetitive.” Shocking, shocking I say, news.
- On a related note, DOJ and the FTC agreed to streamline the basic HSR form.
- The Sedona Conference is accepting applications to its 13th Annual Antitrust Conference.
Varney Leaving DOJ
July 6th, 2011 by David FischerChristine Varney is leaving DOJ for Cravath, Swaine & Moore according to the Washington Post.
EC vs. FTC on Patent Settlements
July 6th, 2011 by David FischerEarlier today, the European Commission released its second report on its monitoring of patent settlements. According to its press release:
The European Commission’s second monitoring exercise of patent settlements in the pharmaceutical sector shows a continuing decline of settlements potentially problematic under EU antitrust rules. This highlights an increased awareness of so-called originator and generic companies of which types of settlements can give rise to antitrust scrutiny – generally the so-called pay-for-delay settlements – and is good news for consumers who will benefit from cheaper pharmaceuticals.
(The press release, the report and other relevant documents are available online.)
This decline in “problematic” settlements is in stark contrast to the FTC’s May report on this subject: it found a 60% increase in such settlements. Although I am sure that the differences could technically be explained by examining things like the differences in the time periods covered, geography, definitions, etc., surely no one can dispute the dramatic differences in tone between the EC and the FTC June/May 2011 reports on this subject.
On The Move: Timothy Muris, Christine Wilson, Bilal Sayyed, and Ian Conner
March 29th, 2011 by David FischerCongratulations to Timothy Muris, Christine Wilson, Bilal Sayyed, and Ian Conner who are joining Kirkland & Ellis. Muris, Wilson and Sayyed are leaving O’Melveny & Myers while Conner comes from Hunton & Williams. According to the Kirkland press release:
Kirkland & Ellis LLP is pleased to announce a significant expansion of its already strong antitrust practice with the addition of former Federal Trade Commission (FTC) Chairman Tim Muris and his FTC Chief of Staff Christine Wilson to the Firm’s Washington, D.C., office. Muris is the only former FTC chairman with an active private practice.Muris and Wilson join Kirkland from the Washington, D.C., office of O’Melveny & Myers, LLP, where Muris co-chaired the antitrust practice and Wilson was a partner. Bilal Sayyed, formerly at O’Melveny & Myers, LLP and the FTC, and Ian Conner, formerly at Hunton & Williams LLP and the Antitrust Division of the U.S. Department of Justice (DOJ), will also join Kirkland with Muris and Wilson.
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