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Division Update Spring 2011

Division Highlights

Department of Justice and Federal Trade Commission Sign Antitrust Cooperation Agreement with Chile

Assistant Attorney General Christine Varney, along with Federal Trade Commission Chairman Jon Leibowitz and Chile’s National Economic Prosecutor Felipe Irarrázabal, signed an antitrust cooperation agreement that will enable the antitrust agencies in the two countries to improve their law enforcement relationship. The new agreement contains provisions for antitrust enforcement cooperation and coordination, conflict avoidance and consultations with respect to enforcement actions and technical cooperation, and is subject to effective confidentiality protections.

Press Release

March 31, 2011

Department of Justice and Federal Trade Commission Sign Antitrust Cooperation Agreement with Chile

Department of Justice, Federal Trade Commission Seek Public Comment on Proposed Statement of Antitrust Enforcement Regarding Accountable Care Organizations

The Division and the Federal Trade Commission issued a joint statement about how the agencies will enforce U.S. antitrust laws in regard to new Accountable Care Organizations (ACOs)—groups of health care providers that will collaborate under the new Affordable Care Act of 2010 to improve health care quality and reduce costs. The joint proposed policy statement solicits public comment on the antitrust agencies’ proposed guidance to ensure that newly formed ACOs can innovate to serve Medicare beneficiaries and patients with private health insurance, without raising competitive concerns. The proposed policy statement would create an antitrust “safety zone” for certain ACOs and establish an expedited antitrust review process for others.

In the press release, Assistant Attorney General Christine Varney said: “Providing Americans with quality health care at affordable prices has been and will continue to be a priority for this administration, and the intergovernmental effort on providing guidance to ACOs enhances these goals. The Antitrust Division supports innovative, collaborative, and cost saving efforts—that comply with the antitrust laws—to improve health care and reduce costs to all Americans.”

Press Release

March 31, 2011

Department of Justice, Federal Trade Commissions Seek Public Comment on Proposed Statement of Antitrust Enforcement Regarding Accountable Care Organizations

Policy Statement

March 31, 2011

Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program

Justice Department Reaches Settlement with Dean Foods Company

The Division reached a settlement with Dean Foods Company that requires Dean to divest a significant milk processing plant in Waukesha, Wisconsin, and related assets that it acquired from the Foremost Farms USA Cooperative, including the Golden Guernsey brand name. The proposed settlement also requires that Dean notify the Division before it makes any future acquisition of milk processing plants for which the purchase price is more than $3 million. The Division said that the divestitures and settlement terms will restore competition in the sale of milk to schools, grocery stores, convenience stories, and other retailers in Illinois, Michigan and Wisconsin. State Attorneys General from Illinois, Michigan, and Wisconsin joined in the department’s settlement.

Press Release

March 29, 2011

Justice Department Reaches Settlement with Dean Foods Company

Justice Department Allows Comcast-NBCU Joint Venture to Proceed with Conditions

The Division reached a settlement with Comcast Corp. and General Electric Co.’s subsidiary NBC Universal Inc. (NBCU) that allows their joint venture to proceed conditioned on the parties’ agreement to license programming to online competitors to Comcast’s cable TV services, subject themselves to antiretaliation provisions, and adhere to Open Internet requirements. The department said that the proposed settlement will preserve new content distribution models that offer more products and greater innovation and have the potential to provide consumers access to their favorite programming on a variety of devices in a wide selection of packages.

Press Release

January 18, 2011

Justice Department Allows Comcast-NBCU Joint Venture to Proceed with Conditions

Comment

January 18, 2011

Remarks as Prepared for Delivery by Assistant Attorney General Christine Varney at Briefing on Comcast/NBCU Joint Venture

Justice Department Investigates Price Fixing in the LCD Industry

More than $890 million in criminal fines have been obtained to date, and 22 executives and eight companies have been charged in the department’s ongoing investigation into price fixing in the liquid crystal display (LCD) industry.

Press Releases

January 13, 2011

Taiwan Hannstar Executive Indicted for Role in LCD Price-Fixing Conspiracy

October 27, 2010

Former Hannstar Executive Agrees to Plead Guilty and Serve Jail Time for Participating in Global LCD Price-Fixing Conspiracy

October 14, 2010

Ninth Taiwan Executive Indicted for Participating in Global LCD Price-Fixing Conspiracy

August 4, 2010

Fourth Chi Mei Executive Agrees to Plead Guilty and Serve Jail Time for Participating in Global LCD Price-Fixing Conspiracy

August 4, 2010

Fourth Chi Mei Executive Agrees to Plead Guilty and Serve Jail Time for Participating in Global LCD Price-Fixing Conspiracy

July 28, 2010

Third Chi Mei Executive Agrees to Plead Guilty and Serve Jail Time for Participating in Global LCD Price-Fixing Conspiracy

June 29, 2010

Taiwan LCD Producer Agrees to Plead Guilty and Pay $30 Million Fine for Participating in LCD Price-Fixing Conspiracy

June 10, 2010

Largest Taiwanese LCD Producer, Houston-Based Subsidiary, and Six Executives Indicted for Participating in LCD Price-Fixing Conspiracy

April 30, 2010

Chi Mei Executive Agrees to Plead Guilty and Serve Jail Time for Participating in Global LCD Price-Fixing Conspiracy

December 9, 2009

Taiwan LCD Producer Agrees to Plead Guilty and Pay $220 Million Fine for Participating in LCD Price-Fixing Conspiracy

Justice Department Requires L.B. Foster Co. Divestiture

The Division reached a settlement that required L.B. Foster Company to divest a West Virginia plant used in the development, manufacture, and sale of certain railroad joints to Koppers Inc. in order to proceed with Foster’s acquisition of Portec Rail Products Inc. Without the divestiture, the department said the acquisition would lead to higher prices, lower quality, less customer service, and less innovation.

Press Release

December 14, 2010

Justice Department Requires Divestiture in Order for L.B. Foster Co. to Proceed with Its Acquisition of Portec Rail Products Inc.

Former CEO of the Morgan Crucible Co. Sentenced to Serve 18 Months in Prison for Role in Conspiracy to Obstruct Justice

Ian Norris, the former CEO of the Morgan Crucible Co., was sentenced to serve 18 months in prison for his role in a conspiracy to obstruct a Federal Grand Jury investigation into price fixing of carbon brushes and other carbon products sold in the U.S. and elsewhere. Norris was also sentenced to pay a $25,000 criminal fine. As a result of the department’s investigation, more than $11 million in criminal fines have been obtained, and four executives and two companies have pleaded guilty or have been convicted.

Press Release

December 10, 2010

Former CEO of the Morgan Crucible Co. Sentenced to Serve 18 Months in Prison for Role in Conspiracy to Obstruct Justice

Department of Justice and USDA Hold Five Workshops on Competition Issues in the Agriculture Industry

In 2010, the Department of Justice and the U.S. Department of Agriculture held five joint public workshops to explore competition issues affecting the agricultural sector in the 21st century and the appropriate role for antitrust and regulatory enforcement in that industry. Approximately 4,000 people attended the workshops, and more than 15,000 comments from farmers, consumers, academics, elected officials, and industry organizations were submitted.

On March 12, more than 750 people attended the workshop in Iowa, which focused on issues facing crop farmers. On May 21, about 450 people attended the poultry workshop in Alabama. On June 25, approximately 650 people attended the dairy workshop in Wisconsin. On Aug. 27, more than 1,700 people attended the livestock workshop in Colorado. On Dec. 8, about 450 people attended the margins workshop in Washington, D.C.

Full transcripts and video of the workshops are available on the Division’s agriculture workshop page.

Press Releases

December 8, 2010

Department of Justice and USDA Hold Competition Workshop Focused on Margins in the Agriculture Supply Chain

December 3, 2010

Department of Justice and USDA Announce Agenda for December 8 Margins Workshop

August 20, 2010

Department of Justice and USDA Announce Agenda for August 27 Livestock Workshop in Colorado

June 21, 2010

Department of Justice and USDA Announce Agenda for June 25 Dairy Workshop

May 14, 2010

Department of Justice and USDA Announce Schedule and Panelists for Agriculture Workshop in Alabama

March 12, 2010

DOJ and USDA Hold First-Ever Workshop on Competition Issues in Agriculture

March 12, 2010

DOJ and USDA Hold First-Ever Workshop on Competition Issues in Agriculture

March 10, 2010

Department of Justice and USDA Announce Updated Schedule for Agriculture Workshop on March 12 in Iowa

February 23, 2010

Department of Justice and USDA Workshops to Explore Competition and Regulatory Issues in the Agriculture Industry to Begin March 12 in Iowa

Speeches

December 8, 2010

Joint DOJ and USDA Agriculture Workshops: Concluding Remarks - Remarks as Prepared by Assistant Attorney General Christine Varney for the Final Public Workshop Exploring Competition Issues in Agriculture

June 25, 2010

Remarks as Prepared for Delivery by Assistant Attorney General Christine Varney at the Wisconsin Dairy Workshop

March 12, 2010

A Shared Vision for American Agricultural Markets - Remarks as Prepared by Assistant Attorney General Christine Varney for the Opening of the Department of Justice and Department of Agriculture Joint Workshops

Bank of America Agrees to Pay $137.3 Million in Restitution to Federal and State Agencies

Bank of America entities agreed to pay a total of $137.3 million in restitution to Federal and state agencies for its participation in a conspiracy to rig bids in the municipal bond derivatives market and as a condition of its admission into the Justice Department’s Antitrust Corporate Leniency Program. The department’s ongoing investigation into the municipal bond derivatives industry has resulted in charges against 17 individuals and one corporate entity (CDR Financial Products). To date, eight individuals have pleaded guilty and nine individuals have been indicted.

Press Release

December 7, 2010

Bank of America Agrees to Pay $137.3 Million in Restitution to Federal and State Agencies as a Condition of the Justice Department’s Antitrust Corporate Leniency Program

Justice Department Investigates Price Fixing in the Air Transportation Industry

A total of 21 airlines and 19 executives have been charged in the department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.8 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against the remaining 15 executives.

Press Releases

November 30, 2010

Singapore Airlines Cargo PTE Ltd. Agrees to Plead Guilty to Price Fixing on Air Cargo Shipments

November 16, 2010

Former Executives from Two Japanese Airlines Indicted in Conspiracy to Fix Rates on Air Cargo Shipments

November 1, 2010

All Nippon Airways Co. Ltd. Agrees to Plead Guilty to Price Fixing on Air Cargo and Air Passenger Services

October 28, 2010

Four Former Airline Executive Indicted in Conspiracy to Fix Fuel Surcharges on Air Cargo Shipments to South and Central America

Cargolux Airline Executives Indicted in Conspiracy to Fix Surcharge Rates on Air Cargo Shipments

September 27, 2010

China Airlines Ltd. Agrees to Plead Guilty to Price Fixing on Air Cargo Shipments

September 21, 2010

Martinair Airline Executive Indicted in Conspiracy to Fix Surcharge Rates on Air Cargo Shipments

September 2, 2010

Polar Air Cargo LLC Agrees to Plead Guilty to Price Fixing on Air Cargo Shipments

July 30, 2010

Northwest Airlines LLC Agrees to Plead Guilty for Fixing Prices on Air Cargo Shipments

Justice Department Requires GrafTech International to Make Key Changes to Supply Contracts

The Division reached a settlement that required GrafTech International Ltd. to make significant modifications to its supply agreement with ConocoPhillips Company, along with reporting and firewall obligations, in order to proceed with its proposed acquisition of Seadrift Coke LP. The modifications include removal of the audit rights and most favored nation pricing from GrafTech’s supply agreement with Conoco. The department said that requiring GrafTech to remove certain provisions from the GrafTech-Conoco supply agreement along with providing reports on demand and capacity utilization and implementing firewalls removes the ability and incentive for GrafTech and Conoco to coordinate on price and output post-acquisition.

Press Release

November 29, 2010

Justice Department Requires GrafTech International to Make Key Changes to Supply Contracts in Order to Proceed with Its Acquisition of Seadrift LP

Justice Department Files Antitrust Lawsuit Against Blue Cross Blue Shield of Michigan

The Division filed a civil lawsuit against Blue Cross Blue Shield of Michigan (BCBSM) alleging that most favored nation (MFN) clauses of its agreements with hospitals raise hospital prices, prevent other insurers from entering the marketplace, and discourage discounts. According to the complaint, BCBSM has used MFNs or similar clauses in its contracts with at least 70 of Michigan’s 131 general acute care hospitals, including many major hospitals in the state.

Press Release

October 18, 2010

Justice Department Files Antitrust Lawsuit Against Blue Cross Blue Shield of Michigan

Justice Department Sues American Express, MasterCard, and Visa to Eliminate Rules Restricting Price Competition

The Division filed a civil lawsuit against American Express, MasterCard, and Visa challenging rules that prevent merchants from offering consumers discounts, rewards, and information about card costs, ultimately resulting in consumers paying more for their purchases and increasing merchants’ costs of doing business. At the same time, the Division reached a settlement with Visa and MasterCard that would require the two companies to allow merchants to offer discounts, incentives, and information to consumers to encourage the use of payment methods that are less costly.

Press Release

October 4, 2010

Justice Department Sues American Express, MasterCard, and Visa to Eliminate Rules Restricting Price Competition; Reaches Settlement with Visa and MasterCard

Comment

October 4, 2010

Remarks as Prepared for Delivery by Assistant Attorney General for the Antitrust Division Christine Varney at the Visa, Mastercard, and American Express Announcement

Panasonic Corp. and Whirlpool Corp. Subsidiary Agree to Plead Guilty for Role in Price-Fixing Conspiracy

Panasonic Corporation and a Whirlpool Corporation subsidiary, Embraco North America Inc., agreed to plead guilty and to pay $140.9 million in criminal fines for their role in an international conspiracy to fix the prices of refrigerant compressors used in refrigerators and freezers in homes and businesses and sold in the U.S. and elsewhere between 2004 and 2007.

Press Release

September 30, 2010

Panasonic Corp. and Whirlpool Corp. Subsidiary Agree to Plead Guilty for Role in Price-Fixing Conspiracy Involving Refrigerant Compressors

Six International Freight Forwarding Companies Agree to Plead Guilty to Criminal Price-Fixing Charges

Six international freight forwarders agreed to plead guilty and to pay $50.27 million in criminal fines for their roles in several conspiracies to fix a variety of fees and charges in connection with the provision of freight forwarding services for international air cargo shipments between 2002 and 2007.

Press Release

September 30, 2010

Six International Freight Forwarding Companies Agree to Plead Guilty to Criminal Price-Fixing Charges

Justice Department Requires Six High Tech Companies to Stop Entering into Anticompetitive Employee Solicitation Agreements

The Division reached a settlement with six high tech companies (Adobe Systems, Apple, Google, Intel, Intuit, and Pixar) that prevents them from entering into anticompetitive employee solicitation agreements. The department said that the agreements eliminated a significant form of competition to attract highly skilled employees, and overall diminished competition to the detriment of affected employees who were likely deprived of competitively important information as well as access to better job opportunities. On Dec. 21, 2010, the Division also reached a settlement with Lucasfilm that prevents it from entering into anticompetitive employee solicitation agreements.

Press Release

September 24, 2010

Justice Department Requires Six High Tech Companies to Stop Entering into Anticompetitive Employee Solicitation Agreements

United Airlines Inc. and Continental Airlines Inc. Transfer Assets to Southwest Airlines in Response to Department of Justice’s Antitrust Concerns

In light of the agreement by United Airlines Inc. and Continental Airlines Inc. to transfer takeoff and landing rights (slots) and other assets at Newark Liberty Airport to Southwest Airlines Co., the Division closed its investigation into the proposed merger between United and Continental. After a thorough investigation, the Division concluded that the transfer of slots and other assets at Newark Airport to Southwest, a low-cost carrier that currently has only limited service in the New York metropolitan area and no Newark service, resolves the department’s principal competition concerns and will likely significantly benefit consumers on overlap routes as well as on many other routes. The slot transfer is through a lease that permanently conveys to Southwest all of Continental’s rights in the assets, in compliance with FAA rules.

Press Release

August 27, 2010

United Airlines Inc. and Continental Airlines Inc. Transfer Assets to Southwest Airlines in Response to Department of Justice’s Antitrust Concerns

Department of Justice and Federal Trade Commission Issue Revised Horizontal Merger Guidelines

The Department of Justice and the Federal Trade Commission (FTC) issued revised Horizontal Merger Guidelines that outline how the Federal antitrust agencies evaluate the likely competitive impact of mergers and whether those mergers comply with U.S. antitrust law. These changes mark the first major revision of the merger guidelines in 18 years, and will give businesses a better understanding of how the agencies evaluate proposed mergers. The agencies jointly announced the project in September 2009, followed by a series of workshops over the course of the winter.

Press Release

August 19, 2010

Department of Justice and Federal Trade Commission Issue Revised Horizontal Merger Guidelines

Justice Department Requires Amcor Ltd. Divestiture

The Division reached a settlement that required Amcor Ltd. to divest its North Carolina plant used in the development, production, and sale of certain bags used for medical purposes in order to proceed with its acquisition of the Alcan Packaging Medical Flexibles business from Rio Tinto plc. Without the divestiture, the department said that the acquisition would lead to higher prices, lower quality, less favorable supply-chain options, reduced technical support, and less innovation in the already highly concentrated U.S. market for vented bags for medical use.

Press Release

June 10, 2010

Justice Department Requires Divestiture in Order for Amcor Ltd. to Proceed with Its Acquisition of Alcan’s Medical Flexible Packaging Business

Idaho Orthopedists Charged with Engaging in Group Boycotts and Denying Medical Care to Injured Workers

The Division reached a settlement with the Idaho Orthopaedic Society and five orthopedists that prohibited them from conspiring with competing physicians in the Boise, Idaho, area to deny medical care to injured workers and to engage in group boycotts to obtain higher fees. The department said that the defendants and other orthopedists conspired to gain more favorable fees and other contractual terms by agreeing to coordinate their actions, including denying medical care to injured workers and threatening to withdraw from healthcare plans offered by Blue Cross of Idaho between 2006 and 2008, thereby causing the state of Idaho and other healthcare consumers to pay higher fees for orthopedic services.

Press Release

May 28, 2010

Idaho Orthopedists Charged with Engaging in Group Boycotts and Denying Medical Care to Injured Workers

Department of Justice, Federal Trade Commission, and U.S. Patent and Trademark Office Hold Workshop on Promoting Innovation

The Department of Justice, the Federal Trade Commission, and U.S. Patent and Trademark Office held a joint public workshop on the intersection of patent policy and competition policy and its implications for promoting innovation. The workshop addressed ways in which careful calibration and balancing of patent policy and competition policy could best promote incentives to innovate. The panels addressed the following topics: challenges posed by the patent backlog to the competitive strategies of patent applicants and innovators, the impact of the Supreme Court’s 2006 opinion in eBay Inc. v. MercExchange LLC, and the role of patents in connection with industry standards.

A transcript of the workshop is available on the PTO Web site.

Press Release

May 26, 2010

Department of Justice, Federal Trade Commission, and U.S. Patent and Trademark Office Hold Workshop on Promoting Innovation

Speech

May 26, 2010

Promoting Innovation Through Patent and Antitrust Law and Policy - Remarks as Prepared by Assistant Attorney General Christine Varney for the Joint Workshop on the Intersection of Patent Policy and Competition Policy

Justice Department Requires Divestitures in AMC’s Acquisition of Kerasotes Theatres

The Division required AMC Entertainment Group Inc. to divest movie theater assets in Chicago, Denver, and Indianapolis in order to proceed with its proposed acquisition of most of the theaters operated by Kerasotes Showplace Theatres. In addition, AMC must inform the Division if it proposes to acquire movie theater assets in those markets in the next ten years. The department said that the transaction, as originally proposed, would likely substantially lessen competition among movie theaters that show first-run, commercial movies in the Chicago, Denver, and Indianapolis metropolitan areas, resulting in higher ticket prices and decreased quality viewing experience for moviegoers.

Press Release

May 21, 2010

Justice Department Requires Divestitures in AMC’s Acquisition of Kerasotes Theatres

Justice Department Requires Divestitures in Baker Hughes Inc.’s Merger with BJ Services Company

The Division reached a settlement that required Baker Hughes Inc. and BJ Services Company to divest two specially equipped vessels and other assets in order to proceed with their proposed merger. The proposed settlement also provides the purchaser of the divestiture package with an expansive right to hire personnel from both Baker Hughes and BJ Services. The department said that the transaction as originally proposed would combine two of only four companies that provide specialized pumping services, called stimulation services, necessary for the production of oil and gas from wells in the U.S. Gulf of Mexico. Without the divestitures, the department said the transaction would lead to higher prices and a reduction in service quality.

Press Release

April 27, 2010

Justice Department Requires Divestitures in Baker Hughes Inc.’s Merger with BJ Services Company

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