Antitrust Law Blog

On September 30, the FTC (with only 2 Commissioners sitting) announced that it reached a settlement that would allow Procter & Gamble Co.'s ("P&G") proposed $57 billion acquisition of a rival consumer products manufacturer, Gillette Co., to proceed. By a 2-0-2 vote, the Commission approved the merger so long as the companies divest assets ranging from toothbrushes to antiperspirants/deodorants. The divestitures are required to satisfy the FTC that competition will not be harmed following the transaction.

Pursuant to a proposed consent judgment, filed by the Department of Justice on behalf of the Federal Trade Commission, in the U.S. District Court for the District of Columbia, a Connecticut-based hedge fund manager will be required to pay $350,000 in civil penalties to settle charges that he failed to make four premerger notification filings required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act").

People's Choice Wireless, Inc. v. Verizon Wireless, B175179.

In a case building upon the definition of "unfair" as defined in the California Unfair Practices Act¹, plaintiffs, independent dealers of cellular phones ("Independent Dealers") alleged that defendant Verizon Wireless ("Verizon") engaged in unfair competition within the meaning of Business and Professions Code Section 17200 by (1) refusing to sell popular, new cellular telephone models to the Independent Dealers during an extended "holdback" period, and (2) selling cellular telephones to customers below cost in certain circumstances, where because of a change in Verizon's sales policies, the Independent Dealers could not afford to compete. The Independent Dealers brought an action for injunctive relief pursuant to California Business and Professions Code Section 17203.

On September 23, 2005, the European Competition Commissioner, Ms. Neelie Kroes, delivered a speech to the Fordham Corporate Law Institute, New York, on the policy review of Article 82 of the EC Treaty. Article 82 deals with unilateral conduct by a corporation with market power which restricts competition on the market, and is the EU's equivalent of Section 2 of the Sherman Act in the US.

A lawsuit brought by MFS Securities Corp. and its owner, Marco Savarese, against the New York Stock Exchange was properly dismissed, the Second Circuit recently held, where plaintiffs failed to state an antitrust claim when they failed to allege any anticompetitive effects of the NYSE's termination of MFS's membership in the Exchange.

In the magazine distribution business, wholesalers purchase magazines from distributors and resell them to retailers. In the early 1990's, magazine wholesalers operated in defined geographic territories, facing little competition from other wholesalers. Large chain retailers with businesses in many territories, however, desired wholesalers who were capable of serving multiple or all of their retail outlets across geographic territories. The chains began shifting business to such wholesalers and inviting bids from them for contracts wherein the chains would agree to a multi-year commitment in exchange for discounted prices. One wholesaler, Charles Levy Circulating Co. ("Levy"), allegedly gained a large share of the market by entering into such contracts with the chains. Many other wholesalers, however, either went out of business or experienced declining profits as this new trend took hold.