Monday, January 05, 2009

States Collaborated with Federal Antitrust Enforcers in 2008

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

State antitrust enforcers worked with the Department of Justice Antitrust Division to assert competition concerns related to a number of large mergers and acquisitions in 2008.

Seventeen states and the Antitrust Division challenged JBS S.A.'s proposed acquisition of National Beef Packing Company LLC, which would combine the third and fourth-largest U.S. beef packers.

Seven states, along with the Antitrust Division, challenged Republic Services Inc.'s proposed $4.5 billion acquisition of Allied Waste Industries Inc. A consent decree requires divestitures of commercial waste collection/disposal assets in 15 markets (CCH Trade Regulation Reporter ¶50,966).

Verizon Acquisitions

In two separate actions challenging acquisitions by telecommunications giant Verizon Communications Corporation, states collaborated with the Antitrust Division to resolve competition concerns. The Antitrust Division, along with seven states, required Verizon to divest assets in 100 areas in 22 states in order to proceed with its planned $28 billion acquisition of Alltel Corporation under the terms of a proposed consent decree (CCH Trade Regulation Reporter ¶50,964).

Separately, the State of Vermont worked with the Antitrust Division to resolve concerns over Verizon's proposed $2.7 billion acquisition of Rural Cellular Corp. (CCH Trade Regulation Reporter ¶50,960).

Parallel Actions

States also filed parallel actions, challenging allegedly anticompetitive transactions that were the subject of federal antitrust suits. The State of Nevada filed a complaint challenging the combination of UnitedHealth Group, Inc. and Sierra Health Services Inc. A consent decree resolved the state's competition concerns over the merger of first and second largest sellers of Medicare Advantage plans in the Las Vegas area (2008-2 Trade Cases ¶76,432).

Simultaneously with the FTC, the State of Minnesota in December filed an action against Ovation Pharmaceuticals, Inc. for preserving its U.S. monopoly in drugs used to treat a potentially deadly congenital heart defect in premature babies by acquiring its only competitor in that market.

Local Concerns

The states took particularly local concerns into their own hands in 2008. In December, boycott claims brought by the State of Illinois against Carle Clinic Association, a physicians group operating in the central part of the state, were resolved. In addition, Connecticut announced a settlement with the Independent Connecticut Petroleum Association, barring its member home heating dealers from colluding to boycott state energy assistance programs.

Lastly, Mississippi filed a lawsuit against utility provider Entergy Mississippi, charging that the company's business practices violated Mississippi antitrust and consumer protection laws.

Microsoft Final Judgment

State and government enforcers were not always in agreement. In the long-running Microsoft antitrust case, ten states and the District of Columbia sought to extend the antitrust final judgments that had been set to expire in large part in November 2007.

The U.S. Department of Justice supported the computer software maker's argument that the states had not met their burden for modification. However, in January, decree provisions were extended until November 2009 (2008-1 Trade Cases ¶76,020).

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