Wednesday, January 02, 2008

FTC Enforcement: 2007 Highlights

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

In 2007, the FTC continued to focus its enforcement efforts on sectors of the economy that it believed had the greatest impact on consumers, including health care, energy, retail, technology, and real estate.

Health Care

The FTC ended some long-running administrative proceedings in the health care industry. The agency issued an order ending litigation arising out of Chicago-area Evanston Northwestern Healthcare Corp.'s acquisition of Highland Park Hospital in 2000 and rejecting an administrative law judge's decision that divestiture was the appropriate remedy. The Commission instead imposed an injunctive order requiring Evanston Northwestern Healthcare to establish two separate and independent teams for negotiating contracts with managed care organizations (2007-2 Trade Cases ¶75,814).

The South Carolina State Board of Dentistry agreed in June to settle FTC charges brought in September 2003 that it unlawfully restrained competition by adopting a rule that required a dentist to examine every child before a dental hygienist could provide preventive care (Trade Regulation Reporter ¶16,023). The agency also resolved a federal court action filed in November 2005 against Barr Laboratories for conspiring with Warner Chilcott to delay market entry of a generic drug (Trade Regulation Reporter ¶16,081).

Among the numerous merger challenges brought in the sector, the FTC challenged an alleged agreement between two dialysis clinic operators under which one of the operators agreed to acquire some of the competitor's clinics in one market and to pay the competitor to exit another (CCH Trade Regulation Reporter ¶16,045).


The FTC suffered two defeats in the energy sector. The agency dismissed administrative litigation challenging Western Refining, Inc.'s acquisition of Giant Industries, Inc., after a federal district court in Albuquerque, New Mexico, denied preliminary injunctive relief (2007-1 Trade Cases ¶75,725).

The FTC's challenge to the proposed combination of Equitable Resources Inc. and The People's Natural Gas Co.—natural gas suppliers serving Allegheny County, Pennsylvania—on state action immunity grounds was dismissed in May (2007-1 Trade Cases ¶75,702). The agency is appealing that decision to the Third Circuit.


The agency faced another setback when a federal district court refused to block the combination of Whole Foods Market, Inc. and Wild Oats Markets, Inc. in August. The agency is appealing the matter to the U.S. Court of Appeals in Washington, D.C. Also in the retail sector, the agency conditioned the Great Atlantic & Pacific Tea Company, Inc.'s $1.3 billion acquisition of Pathmark Stores, Inc. on divestitures (CCH Trade Regulation Reporter ¶16,080).


The Commission's decision not to challenge Google Inc.'s $3.1 billion acquisition of Internet advertising server DoubleClick Inc. (Trade Regulation Reporter ¶16,092) was the leading development on the technology front. A Commission order requiring Rambus Inc. to refrain from making misrepresentations or omissions to standard-setting organizations and to adhere to licensing obligations ended administrative litigation against the developer and licensor of computer memory technologies (CCH Trade Regulation Reporter ¶15,979).

Real Estate

In addition to bringing actions in 2007 against groups of real estate agents for restricting competition, the agency issued a May joint report with the Department of Justice, entitled “Competition in the Real Estate Brokerage Industry.”

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