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Federal Trade Commission

Bureau of Competition

Susan A. Creighton, Director

Antitrust

Enforcement Activities

Fiscal Year 2000 March 15, 2004

ABA Antitrust Section Spring Meeting 2004

FEDERAL TRADE COMMISSION

March I . 2004

Bureau of Competition

Assistanb lo the Director

Thomas J . Klotz

Deputy Director

Bernard A. Nigro, Jr.

Mergers I

Michael R. Moiseyev, Assistant Director

James H. Holden, Jr. and

Yolanda M. Gruendel,

Mergers 11

Michael Knight, Assistant Director

Rhen Krulla ond Monis Bloom,

Mergers III

Phillip L. Bmyles, Assistant Director

John Lacci,

Deputy Assistant Directors

Deputy Assistant Dzrector

Mergers IV

Chul Pak, Assistant Director

Catharine M. Moscatelli and

Philip Eisenstat,

Deputy Assistant Directors

Deputy Asststant Directors

Daniel P. Ducore, Assistant Director

Roberta Baruch and

Elizabeth Piohowski,

Healthcare Sewices & Products

Jeffrey Brennan, Assistant Director

David Pender and Markus Meier,

Deputy Assistant Directors

Operaa'ons

Marian R. Bruno, Assistant Director

Patricia A.Foster,

Premerger Notif~ation

Marian R Bruno, Assistant Director

Robert Jones,

Acting Executive Otlicn

1 1

Policy and Coordination

Alden F. Ahbott, Associate Dincfor

Em&Na@%

/ Honors Parale~?al

- \

Program

Philo Liedquist-Scott,

Coordinator

Dcpug Associate Dincmr

I I

NERO - Bsrbars Anthony

WRO - Jeffrey A. Klurfeld

International Antihust

Randolph W. Tritell,

Assistant Dkector

ABA ANTITRUST SECTION

SPRING MEETING

Summary of Bureau of Competition Activio

Fiscal Year 2000 Through March 15. 2004

Table of Contents

. Mergers .................................................................

Consentorders ..................................................

Agrium, Inc ...................................................... 1

Airgas.Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Albertson's, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

AmericaOnline. Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

AmgenInc ........................................................

Associated Octel Company Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Baxter International, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

BayerAG ......................................................... 2

The Boeing Company ............................................... 2

BPAmocop.1.c .................................................... 3

. .

Cendian Corporation ............................................... 3

Chevron Corporation .............................................. - 3

Computer Sciences Corporation ...................................... 3

Dainippon Ink and Chemicals, Inc ..................................... 3

Delhaize Freres et cie "Le Lion" S.A. .................................- 3

Deutsche Gelatine-Fabriken Stoess AG ................................. 3

Diageoplc ........................................................ 4

Dominion Resources, Inc ........................................... - 4

Dow Chemical Company, The ......................................... 4

DSMN.V. .......................................................

...........................................

Duke Energy Corporation

El Paso Energy Corporation .......................................... 4

El Paso Energy Corporation ........................................... 5

El Paso Energy Corporation .......................................... 5

Exxon Corporation ................................................. 5

Fidelity National Financial. Inc ......................................... 5

FMCCorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

GenCorpInc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S

General Electric Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Hoechst . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

WA-Holding Schaeffler KG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 6

KochIndustries.Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Koninklijke Ahold NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

KrogerCompany .................................................. 6

KrogerCompany .................................................. 7

Lafargecorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

MacDermid,Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Manheim Auctions, Inc.............................................. 7

MCN

MetsoOyj ........................................................

MSC . Software Corporation ......................................... 8

Nestle Holdings, Inc................................................ 8

NovartisAG ......................................................

PfizerInc......................................................... 8

PftzerInc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Philip Moms Companies, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Phillips Petroleum Company ......................................... 9

Precision Castparts Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Quest Diagnostics, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Reckitt & Colman plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

RHIAG ......................................................... 9

Rhodia, Donau Chemie AG . . . . . . . . . : ................................ 9

Service Corporation International ..................................... 10

Shaw's Supermarkets, Inc ........................................... 10

ShellOilCompany ................................................ 10

SiemensAG .....................................................

SmithKline Beecham plc ........................................... 10

So1vayS.A. .....................................................1 0

Southern Union Company ..........................................

Tyco International, Ltd............................................. 11

Valero Energy Corporation ......................................... 11

Valspar Corporation ................................................

VNUN.V. .......................... ;............................ 11

Wal-Mart Stores, Inc...............................................

Winn-Dixie Stores, Inc ............................................. 11

Authorizations to Seek Preliminary Injunctions ....................... 12

BPAmocop.1.c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Conso International Corporation ..................................... 12

Cytyc Corporation ................................................ 12

Deutsche Gelatine-Fabriken Stoess AG . . . . . . . . . . . . . . . . . . . . . . . . . . : . . . . . 12

Diageoplc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

The Hearst Tmst and The Hearst Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

H.J. Heinz Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Kroger CompanyRaley's Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Kroger CompanylWinn-Dixie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Libbey.Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

I1.

Meade Instruments Corporation ...................................... 14

Nest16 Holdings. Inc ............................................... 14

Swedish Match A 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Vlasic Pickle Company ............................................ 14

Commission Opinions/Initial Decisions .............................. 15

Chicago Bridge &Iron Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SwedishMatchAB ............................................... 15

Tenet Healthcare Corporation ....................................... 15

. . .

CourtDec~stons ................................................. 15

H.J.HeinzCompany .............................................. 15

Swedish Match AB ............................................... 15

OrderViolations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Boston Scientific Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

RHIAG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Other Commission Orders ........................................ 16

H.J. Heinz Company ............................................... 16

Tenet Healthcare Corporation ....................................... 16

Administrative Complaints ........................................ 16

AspenTechno1ogy.h~............................................. 16

Chicago Bridge & Iron Company N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Evanston Northwestern Healthcare Corporation .......................... 17

H.J.HeinzCompany .............................................. 17

Libbey. Inc......................................................

........................................

MSC . Software Corporation

Swedish Match AG ...................................... ;. . . . . . . . 18

Other ..........................................................

Best Practices Analysis for Merger Review Process ........... :.......... 18

Business-to-Business Electronic Marketplaces .... : ......................19

Clayton Act -- Section 8 ............................................ 19

Guidelines for Merger Investigations .................................. 19

Horizontal Merger Investigation Data. Fiscal Years 1996 - 2003 ............ 19

Merger Efficiency Roundtable ....................................... 19

Merger Enforcement Workshop ...................................... 20

Merger Remedies - Second Workshop ................................. 20

Hart-Scott-RodinoAntitrust Improvements Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

A. CourtDects~ons ................................................. 21

The Hearst Trust and The Hearst Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

B . Consentorders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

C. Complaints (Complaints filed as part of a consent agreement not listed

separately) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Rules and Formal Interpretations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 2 1

E. Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

I11

Non-Merger Enforcement

HorizontalEnforcement ................................................ 24

Commission Opinionsnnitial Decisions .............................. 24

P o l y g m Holding. Inc . (The Three Tenors) ............................24

Rmbus.Inc .....................................................

Schering-Plough Corporation ....................................... 24

Summit Technology and VISX ...................................... 24

CourtDecisions ................................................. 25

California Dental Association ....................................... 25

Authorizations to Seek PreliminaryRermanentInjunctions ............. 25

Consent Orders ................................................. 25

AbbottLaboratories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Alaska Healthcare Network .......................................... 25

American Home Products Corporation ................................ 25

American Institute for Conservation of Historic and Artistic Works .......... 26

Anesthesia Service Medical Group. Inc . and Grossmont Anesthesia Services

MedicalGroup ............................................. 26

Aurora Associated Primary Care Physicians. L.L.C. ...................... 26

Bertelsmann Music Group. Inc ....................................... 26

BiovaiICorporation ............................................... 27

Biovail Corporation and Elan Corporation ............................. 27

Bristol-.Myers Squibb Company ...................................... 27

Capitol Records. Inc . dba "EM1 Music Distribution" ..................... 27

Carlsbad Physician Association .......................................27

....................... : .. 28

colegio de ~irujanos~ e n t j s t a de

s ~ u i r t Rico

FMC Corporation .................................................. 28

GenevaPharmaceuticals ...................... : .................... 28

Hoechst Marion Roussel ........................................... 28

Indiana Household Movers and Warehousemen. Inc. . . . . . . . . . . . . . . . . . . . . . 28

Institute of Store Planners ........................................... 28

Iowa Movers and Warehousemen's Association ......................... 29

Maine Health Alliance ............................................. 29

~ e m o r i a~l e r m a n n~ e a l t h~ e t w o r kproviders .................... : ..... 29

Michael T. Berkley. D.C. ............................................ 29

Mark A. Cassellius. D.C. ........................................... 29

Minnesota Transport Services Association ............................. 29

National Academy of Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

New Hampshire Motor Transport Association . . . . . . . . . . . . . . . . . . . . . . . . . . 29

NineWestGroupInc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Obstetrics & Gynecology Medical Corporation of Napa Valley . . . . . . . . . . . . . 30

Physician Network Consulting. L.L.C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Professional Integrated Services of Denver. Inc., Michael J . Guese. M.D., and

Marcia A . Brauchler ......................................... 30

Professionals in Women's Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

SonyMusicEntertainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Southern Valley Pool Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

South Georgia Health Partners. L.L.C. ............................. : .. 31

SPA Health Organization dba Southwest Physician Associates ............. 31

Surgical Specialists of Yakima . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

System Health Providers ........................................... 31

Tenet Healthcare Corporation ....................................... 31

TexasSurgeons,P.A ............................................... 32

Time Warner. Inc................................................. 32

Universal Music & Video Distribution Corporation & UMG Recordings, Inc . . 32

Warner Communications Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Washington University Physician Network . . . . . . . . . . . . . . . . . . . ; . . . . . . . . . 33

Wisconsin Chiropractic Association .................................. 33

Administrative Complaints ........................................ 33

Alabama Trucking Association. Inc................................... 33

California Pacific Medical Group dba Brown and Toland Medical Group ..... 33

Hoechst Marion Roussel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Kentucky Household Goods Carriers Association, Inc..................... 34

Movers Conference of Mississippi. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

North Texas Specialty Physicians .................................... 34

Piedmont Health Alliance, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Polygram Holding, Inc . (The Three Tenors) ............................34

Schering -Plough Corporation ....................................... 34

South Carolina State Board of Dentistry ............................... 35

Other ..........................................................

Public Documents/Policy StatementsIConferences ...........................35

Policy Statement on Monetary Equitable Remedies in Competition Cases .... 35

FTC Antitrust Actions in PharmaceuticalServices and Products ............ 35

Second Public Conference on the U.S. Oil and Gasoline Industry . . . . . . . . . . . 35

Refined Petroleum Products in the United States ........................ 35

Midwest Gas Price Investigation ..................................... 36

Commission Studies/Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Pharmaceutical Agreement Notification Filing Requirements .............. 36

Slotting Allowances in the Retail Grocery Industry ...................... 36

To Promote Innovation: The Proper Balance of Competition and Patertt Law and

Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Report of the State Action Task Force: Recommendations to Clarify and Reaffirm

the Original Purposes of the State Action Doctrine to Help Ensure that

Robust Competition Continues to Protect Consumers . . . . . . . . . . . . . . 36

Possible Anticompetitive Bamers to E-Commerce: Wine . . . . . . . . . . . . . . . . . 36

Generic Drug Entry Prior to Patent Expiration: An FTC Study . . . . . . . . . . . . . 36

Antitrust Guidelines for Collaborations Among Competitors . . . . . . . . . . . . . . . 37

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

AdvisoryOp~n~ons

Advocacy Ftlrngs ...................................................... 38

WorkshopsIHearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Intellectual Property and Patent Law ..................................... 43

Other ................................................................

Vertical Enforcement ................................................... 45

Commission Opinionsnnitial Decisions .............................. 45

Toys '4 R Us ..................................................... 45

CourtDec~s~ons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Toys R Us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Authorization to Seek PreliminarymermanentInjunctions . . . . . . . . . . . . . 45

Mylan Laboratories. Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45

Consent Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

McCormick & Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Administrative Complaints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Other .......................................................... 46

Single Firm Enforcement ............................................... 47

Commission Opinionsfinitial Decisions .............................. 47

Administrative Complaints ........................................ 47

V. Competition Speeches .................................................... 51

VI. Statistics .............................................................. -57

IV International Activities ...................................................

ABA ANTITRUST SECTION

SPRING MEETING

Summary of Bureau of Competition Activity

Fiscal Year 2000 Through March 15,2004

Mergers

Consent Orders

Agrium, inc. (Final Order November 13,2000): A consent order requires Agrium to divest a

deepwater terminal near Portland, Oregon, an up water terminal in central Washington and other

assets settling charges concerning its proposed acquisition of the nitrogen fertilizer business of

Union Oil Company of California. Agrium and Unocal are the leading producers in the

Northwest of nitrogen fertilizer - anhydrous ammonia, urea and UAN 32% solution - ingredients

used for plant growth.

Airgas, Znc. (Final Order December 18,2001): Airgas, Inc., the nation's largest distributor of

industrial, medical, and specialty gases, settled antitrust charges that its January 2000 acquisition

of Mallinckrodt, Inc.'s Puritan Bennett Medical Gas Business eliminated competition in the

North American market for the production and sale of nitrous oxide. Under terms of the order,

Airgas is required to divest two nitrous oxide plants and related assets to Air Liquide America

Corporation within 10 days after the Commission issues its final order. Nitrous oxide is a clear,

odorless gas used mainly in dental and surgical procedures as an analgesic agent or as a

supplement to anesthesia.

Albertson's, Inc. (Final Order December 8,2000): The final order, modified after the public

comment period, does not require the divestiture of a Lucky (American Stores Company) store in

Lompoc, California to Ralph's. Albertson's Inc. agreed to divest 104 supermarkets and American

Stores Company agreed to divest 40 supermarkets to settle charges that Albertson's acquisition

of American Stores raised antitrust concerns in 57 markets in California, Nevada and New

Mexico. The divestiture agreement is the largest retail divestiture of supermarkets ever required

by the Commission.

AmericaOnline, Inc. (Final Order April 17,2001): AOL and Time Warner Inc. settled

Commission concerns relating to their proposed merger. The order requires AOL Time Warner

to open its cable system to competitor internet service providers. In addition, the company is

prohibited from interfering with content passed along the bandwidth contracted for by nonaffiliated internet service providers; and prohibited from interfering with the ability of nonaffiliated providers of interactive television services to interact with interactive signals that AOL

Time Warner agreed to cany.

Amgen Znc. (Final Order September 3,2002): Amgen settled antitrust charges that its proposed

$16 billion acquisition of Immunex Corporation would reduce competition and tend to create a

monopoly in the biophmaceutical markets for neutrophil (white blood cell) regeneration

factors; tumor necrosis factor (TNF) inhibitors; and interleukin-1 a - 1 ) inhibitors. The consent

order requires the firms to sell all of hmunex's assets related to Leukine - a neutrophil

regeneration factor - to Schering AG; license certain intellectual property rights to TNF inhibitors

to Serono S.A.; and license certain intellectual property rights related to IL-I inhibitors to

Regeneron Pharmaceuticals Inc.

Associated Octel Company Limited (Final Order December 22, 1999): Associated Octel

settled charges that its acquisition of Oboadler Company would eliminate direct competition and

raise prices in the highly concentrated market for the manufacture and sale of lead antiknock

compounds. Under terms of the order, Octel agreed to supply Oboadler's current distributor,

Allchem Industries, Inc., with lead antiknock compounds for resale in the United States for 15

years.

B ~ t eInternational,

znc. (Final Order February 3,2003): Baxter settled Commission

concerns stemming from its $316 million proposed acquisition of Wyeth Corporation's generic

injectable drug business and agreed to divest several pharmaceutical products. The Commission

charged that the acquisition would reduce competition in the manufacture and sale of propofol (a

general anesthetic); new injectable iron replacement therapies; metoclopramide (used to treat

nausea); and vecuronium and pancuronium (neuromuscular blocking agents used to temporarily

freeze muscles during surgery). The consent order requires divestitures in each of the

pharmaceutical markets.

Bayer AG (Final Order August 2,2002): A consent order permits Bayer to purchase Aventis

CrouScience Holdings S.A. from Aventis S.A. The order requires Bayer to divest businesses and

assets in the following four major markets: new generation chemical insecticide products; new

generation chemical insecticide active ingredients; post-emergent grass herbicides for spring

wheat; and cool weather cotton defoliants. According to the complaint, the transaction as

proposed would result in the elimination of both actual and potential competition in the four

markets; increase baniers to entry; reduce innovation competition for certain products; and

increase the possibility of coordinated interaction between competitors.

The Boeing Company (Final Order January 5,2001): The consent order permits the

acquisition of Hughes Space and Communications, a subsidiary of General Motors Corporation,

but prohibits Boeing from providing systems engineering and technical assistance (SETA) to the

U.S. Department of Defense for a specific classified program. According to the complaint,

Boeing is the sole supplier of SETA programs and Hughes is one of two competing contractors

BPAmocop.1.c. (Final order August 29,2000): BP Amoco settled charges that its acquisition

of Atlantic Richfield Company (ARCO) would lessen competition in the production and sale of

crude oil in several United States markets. The order requires BP to divest ARCO's complete

free standing businesses relating to oil production on Alaska's North Slope to Philips Petroleum

Company within 30 days.

Ceridian Corporation (Final Order April 6,2000): A consent order requires Ceridian to grant

licenses to new and existing firms that provide commercial credit cards (known as "trucking

fleet-cards") used by over-the-road trucking companies to make purchases at retail locations.

The order settles charges that Ceridian's consummated acquisitions of NTS Corporation and

Trendar Corporation gave Ceridian the power to control the markets for the provision of

trucking fleet cards and the systems used to read them at truck stops throughout the country.

Chevron Corporation (Final Order January 4,2002): A consent order permitted the $45

billion merger of Chevron and Texaco In., but required significant divestitures in the petroleum

industry, including gasoline marketing assets, refining and bulk supply facilities, crude oil

pipeline interests and terminaling facilities.

Computer Sciences Corporation (Final Order January 26,2000): Final consent order

permitted the acquisition of Mynd Corporation and required the divestiture of Mynd's Claims

Outcome Advisor System to Insurance Services Office, Inc. Claims assessment systems are used

by insurance companies to evaluate appropriate payments for claims of bodily injury and to

evaluate return-to-work plans in workers compensation matters.

Dainippon Ink and Chemicals, Inc. (Final Order March 13,2003): Dainippon agreed to

divest the perylene business of its U.S. subsidiary, Sun Chemical Corporation, to Ciba Specialty

Chemicals Inc. and Ciba Specialty Chemicals Corporation to settle allegations that its proposed

acquisition of Bayer Corporation's high-performance pigment manufacturing facility would

eliminate competition in the highly concentrated world market for perylenes - organic pigments

used to impart unique shades of red color to products, including coatings, plastics and fibers.

Delhaize Freres et cie ''Le Lion" S.A. (Final Order May 30,2001): The consent order

permitted the merger of Establissements Delhaize Freres et Cie "Le Lion" S.A. and Delhaize

America, Inc. with Hannaford Bros. Co. and required the sale of 37 Hannaford supermarkets and

one Hannaford site to three different buyers.

Deutsche Gelatine-Fabriken Stoess AG (Final Order April 17,2002): A consent order

allowed DGF to complete its $170 million acquisition of Leiner Davis Gelatin Corporation and

its Goodman Fielder USA, Inc. subsidiary under terms that the entire pigskin and beef hide

gelatin business of Goodman Fielder would be excluded from the transaction. The complaint

issued with the order alleged that if the firms were allowed to consummate the transaction, as

originally proposed, they would account for more than 50 percent of the U.S. market for these

gelatin products used by the food industry as an ingredient in edible products and by the

pharmaceutical industry to produce capsules and tablets. The consent order requiring the

restructured transaction was negotiated after the Commission authorized staff to seek a

preliminary injunction in federal district court to block the parties from consummating the

transaction.

Diageoplc (Final Order December 19,2001): Diageo and Vivendi Universal S.A. resolved

antitrust concerns regarding Diageo's and Pernod Ricard S.A.'s joint acquisition of Vivendi's

Seagram Spirits and Wine Business that would combine the second- and third- largest rum

producers in the United States. The consent order, among other things, required Diageo to divest

the Malibu rum business worldwide to a Commission-approved buyer within six months of the

acquisition of Seagram. On October 23,2001, the Commission authorized staff to seek a

preliminary injunction in federal district court to block the transaction.

Dominion Resources, Znc. (Final Order December 14, 1999): A consent order permits

Dominion's acquisition of Consolidated Natural Gas Company but requires the divestiture of

Consolidated's Virginia Natural Gas, Inc. The complaint alleged that the merger would combine

the dominant provider of electric power in Virginia with the primary distributor of natural gas in

southeastern Virginia.

Dow Chemical Company, The (F~nalOrder March 15,2001): Dow settled antitrust concerns

relating to its proposed merger with Union Carbide Corporation. Dow agreed to divest and

license intellectual property necessary to the production of linear low-density polyethylene - an

ingredient used in prermum plastic products such as trash bags and sealable food pouches - to

BP Amoco plc.

DSM N.V. (Final Order January 6,2004): A consent order permitted DSM N.V. to acquire the

Vitamins and Fine Chemicals Division of Roche Holding AG but requires DSM to divest its

phytase business to BASF AG within 10 days after the transaction is completed. Phytase is an

enzyme added to certain animal feed to promote the digestion of nutrients necessary for livestock

production.

Duke Energy Corporation (Final Order May 9,2000): Duke agreed to divest 2,780 miles of

gas gathering pipeline in Kansas, Oklahoma and Texas to settle antitrust concerns stemming

from Duke's and Phillips Petroleum Company's proposed merger of their natural gas gathering

and processing businesses; and it's proposed acquisition of gas gathering assets in central

Oklahoma from Conoco Inc. and Mitchell Energy and Development Corporation The new

company will be known as Duke Energy Field Services, L.L.C.

El Paso Energy Corporation (Final Order January 30,2001): A final order allowed El Paso

Energy Corporation to acquire PG&E Gas Transmission Teco, Inc. and P G U Gas Transmission

Texas Company (subsidiaries of Pacific Gas & Electric) with the provision that it divest its

interest in the Oasis Pipe Line Company; PG&E's share of the Teco Pipeline; and the Matagorda

Island Offshore production area. The divestitures ensure that competition is maintained for

natural gas transportation in three Texas markets.

El Paso Energy Corporation (Final Order March 19,2001): A modified consent order allows

the merger of El Paso and Coastal Corporation and requires the divestiture of more than 2,500

miles of gas pipeline system in Florida, New York and the Midwest. The modifications relate to

the establishment of the Development Fund for the Green Canyoflarpon pipeline acquirer and

is described in the final order.

El Paso Energy Corporation (Final Order January 6,2000): A final order ensures

competition in the markets for natural gas transportation out of the Gulf of Mexico and into the

southeastern United States. The consent order permitted El Paso's $6 billion merger with Sonat

Inc. and requires the divestiture of Sea Robin Pipeline Company; Sonat's one-third ownership

interest in Destin Pipeline Company, L.L.C.; and, the East Tennessee Natural Gas Company.

Exxon Cornoration (Final Order Januarv 30,2001): A consent order settled antitrust concerns

stemming from Exxon's proposed acquisition of Mobil Corporation, and required the largest

retail divestiture in Commission history. The divestitures, representing only a fraction of the

worldwide assets of Exxon and Mobil, include 2,431 gas stations; an ~ x x orefinery

California; a pipeline; and other assets. According to the complaint, the proposed merger would

injure competition in moderately concentrated markets - California gasoline refining; marketing

and retail sales of gasoline in the Northeast, Mid-Atlantic, and in the State of Texas; and in the

highly concentrated markets for jet turbine oil.

Fidelity National Financial, Inc. final Order February 17,2000): A consent order settled

charges that Fidelity's acquisition of Chicago Title Corporation would reduce competition for

title information services in San Luis Obispo, Tehama, Napa, Merced, Yolo, and San Benito,

California. The order requires the divesuture of title plants in each of the six areas.

FMC Corporation (Final Order May 19, 2000): The consent order requires FMC to divest its

phosphorus pentasulfide business in Lawrence, Kansas to Peak Investments, LLC and Solutia

Inc.'s phosphate assets in Augusta, Georgia to Societe Chimique Prayon-Rupel to settle charges

that the proposed FMClSolutia joint venture could substantially lessen competition in the United

States market for pure phosphoric acid and phosphorus pentasulfide.

GenCorp Inc. (Final Order December 19,2003): A consent order allowed GenCorp Inc. to

acquire Atlantic Research Corporation while requiring the divestiture of Atlantic's in-space

liquid propulsion business within six months of consummating the transaction. According to the

complaint issued with the consent order, the transaction as originally planned would have

lessened competition in the United States in four different types of in-space propulsion engines:

monopropellant thrusters; bipropellant apogee thrusters; dual mode apogee thrusters; and

biopropellant attitude control thrusters.

General Electric Company (Final Order January 28,2004): A final consent order settled

antitrust concerns stemming from General Electric Company's proposed acquisition of AgfaGevaerf N.V.'s nondestructive testing business. According to the complaint issued with the

consent order, the transaction as proposed would have eliminated competition in the United

States markets for portable flaw detectors, corrosion thickness gages, and precision thickness

gages - equipment used to inspect the tolerance of materials with damaging them or impairing

their future usefulness. The consent order requires General Electric to divest its worldwide

Panametrics ultrasonic NDT business to RID Tech, Inc. within 20 days after the transaction is

completed.

Hoechst AG (Final Order January 18,2000): A consent order settled charges stemming from

Hoechst's merger with Rhone-Poulenc S.A. According to the complaint, the merger (the merged

firm would be renamed Aventis S.A.) raised antitrust concerns in the market for cellulose acetate

and direct thrombin acetate. The order requires the divestiture of the subsidiary, Rhodia, a

specialty chemicals firm that produces cellulose acetate.

ZNA-HoMing Schaeffler KG (Final Order February 15,2002): The consent order permits

DJA's acquisition of FAG Kugelfischer Georg Schafer AG but requires the divestiture of FAG'S

cartridge ball screw support beanng business to Aktiebolaget SKF within 20 business days after

the consummation of the INAFAG transaction. According to the complaint issued with the

consent order, the acquisition, as planned, would create a monopoly in the market worldwide.

Koch Industries, Znc. (Final Order January 31,2001): A consent order settles allegations that

Entergy-Koch LP's (a limited partnership owned equally by Entergy Corporation and Koch)

acquisition of 50 percent of the Gulf South Pipeline Company,

- LP from Koch would lessen

competition for the sale of electricity to consumers in Louisiana and western Mississippi and the

distribution of natural gas to consumers in New Orleans and Baton Rouge. Entergy is the

regulated electric and natural gas utility in parts of Louisiana and Mississippi. The order requires

Entergy to establish a transparent process to buy natural gas and natural gas transportation that

will assist state regulators in determining whether Entergy

gas supplies at inflated

.. purchased

prices from its ~ n i e r ~ ~ - ~ o c h

Koninklijke AhoM NV (Final Order December 7,2001): Ahofd would be permitted to acquire

Bruno's Supermarkets, Znc. under terns of a consent order, but would be required to divest two

BI-LO supermarkets in Georgia - one Milledgeville, and one in Sandersville. The Commission's

complaint charged that the acquisition as originally proposed would reduce competition in the

retail sale of food and pocery items in supermarkets in the area and would eliminate direct

competition between supermarkets owned and controlled by Ahold and those owned or

controlled by Bruno's.

Kroger Company (Final Order January 10,2000): Final order requires Kroger and Fred Meyer

Stores, Inc. to divest eight supermarkets to settle charges that the acquisition of Fred Meyer

would increase concentration and decrease competition in Arizona, Wyoming, and Utah. Under

terms of the order, two Smith's Food & Drug centers will be sold to c ash-c inch Company; one

"City Market" will be sold to Albertson's Inc.; and five supermarkets (two "City Markets"; two

Fry's, and one Smith's) will be sold to Fleming Companies, Inc.

Kroger Company (Final Order November 8, 1999): A final order settled charges stemming

from Kroger Company's acquisition of The John C. Groub Company. The order requires the

divestiture of three supermarkets in Columbus and Madison, Indiana to Roundy's, Inc., one of

the largest food wholesalers in the United States.

Irlfarge Corporation (Final Order August 8,2001): The consent order required the divestiture

of Blue Circle Industries PLC's cement business serving the Great Lakes region of Ohio,

Michigan, Illinois, Wisconsin and New York; its cement business in the Syracuse, New York;

and its lime business in the southeast United States. These divestitures settled antitrust concerns

stemming from Lafarge's proposed merger with Blue Circle. The two firms are market leaders in

the industry for cement and lime.

MacDemid, Znc. (Final Order February 3,2000): A consent order permits MacDermid's

acquisition of Polyfibron Technologies, Inc. and requires the divestiture, among other things, of

Polyfibron's liquid photopolymer business to Chemence Inc. According to the complaint, the

acquisition would result in a monopoly in the production, distribution and sale of liquid and solid

photopolymer in North America. Photopolymers are used to make flexographic printing plates.

Manheim Auctions, Znc. (Final Order November 13,2000): The consent order settles

antitrust concerns stemming from the acquisition of ADTAutomotive Holdings, Inc., the nation's

third largest operator of wholesale motor vehicle auctions. The order requires Manheim to divest

nine auctions in Kansas City, Missouri; Denver and Colorado Springs, Colorado; ~ t l i t a ,

Georgia; San Francisco, California; Seattle, Washington; Tampa, Orlando and Daytona Beach,

Florida; and Phoenix, Arizona.

MCN (Final Order May 15,2001): A final order permitted the $4 billion merger of MCN, a

natural gas utility servicing communities in Michigan, and DTE, a public utility engaged in the

generation and sale of electricity in Detroit and southeastern Michigan. The consent order,

designed to resolve Commission concerns that the merger would lessen competition in the local

distribution of electricity and in the local distribution of natural gas in the city of Detroit and in

the Michigan counties of Macomb, Monroe, Oakland, Washtenaw and Wayne. MCN is the

parent of Michigan Consolidated Gas Company and DTE is the parent holding company of The

Detroit Edison Company.

Metso Oyj (Final Order October 23,2001): Metso settled charges that if its acquisition of

Svedala Industri AB were allowed to proceed as planned, competition would be lessened in four

rock processing equipment markets: primary gyratory crushers; jaw crushers; cone crushers; and

grinding mills. The firms agreed to divest Metso's worldwide primary gyratory crusher and

grinding mill businesses and Svedala's worldwide jaw crusher and cone crusher businesses. The

three crusher businesses would be purchased by Sandvik AB, a Swedish corporation; the

grinding mill business would be purchased by Outokumpu of Finland. Metso and Svedala are

the two largest suppliers of rock processing equipment in the world.

MSC. Sofhoare Corporation (Final Order August 14,2002): MSC settled charges that its

1999 acquisitions of Universal Analytics, Inc. and Computerized Structural Analysis & Research

Corp. eliminated competition between the three firms in the development and application of

engineering software. The administrative complaint issued October 2000, alleged that the two

acquisitions would eliminate competition for advanced versions of Nastran, an engineering

simulation software program used throughout the aerospace and automotive industries. The

consent order required MSC to divest at least one clone copy of its current advance Nastran

through royalty-free perpetual, non-exclusive licenses to one or two acquirers approved by the

Commission.

Nestle Holdings, Inc. (Final Order February 8,2002): Nestle settled antitrust charges that its

$10.3 billion proposed acquisition of Ralston Purina Company

. . would substantially lessen

competition in the unitedstates market for dry cat food through the elimination of direct

competition between the two firms and increase the likelihood that the combined firm could

unilaterally exercise market power. The order requires the divestiture of Ralston's Meow k x

and Alley Cat brands to J.W. Childs Equity Partners 11, L.P.

Novartis AG (Final Order December 19,2000): The consent order permits the merger of

Novartis and AstraZeneca PLC into a new Swiss company, Syngenta AG. The order requires

Novartis to divest its worldwide foliar fungicide business (based on the strobilurin chemical

class) to Bayer Ag; and requires AstraZeneca to divest its worldwide corn herbicide business

(based on the active ingredient acetochlor) to Dow AgroSciences LLC.

Pfizer Inc. (Final Order May 27,2003): A final consent order permits Pfizer Inc.'s acquisition

of Phannacia Colporation while requiring the divestiture of various products including extended

release drugs used in the treatment of an overactive bladder; hormone replacement therapies;

erectile dvsfunction: canine arthritis; and motion sickness. Novartis AG, Neurocrine

Biosciences, Inc., Schering-Plough Corporation, Johnson &Johnson, Insight Pharmaceuticals

Corporation, and Cadbury Schweppes are named in the order as potential buyers of the various

pharmaceuticals and products.

PfiZer Inc. .Final Order July 28,2000): Final consent order permits Pfizer's merger with

Warner-Lunrbert Company and requires divestitures in several pharmaceutical markets including:

Pfizer's RID brand of head lice treatment; Pfizer's antidepressant drug, Celexa; Warner's

Cognex, a drug used in the treatment of Alzheimer's disease; and assets relating to the Epidermal

Growth Factor receptor tryosine kinase inhibitor - drugs under development to treat solid

cancerous tumors such as head and neck, non-small cell lung, breast, ovarian, pancreas and

colorectal cancers.

Philip Morris Companies, Inc. (Final Order February 27,2001): The consent order permits

the merger of Philip Monis and Nabisco Holdings Corporation while settling charges that the

merger of the two food companies would reduce competition in the already highly-concentrated

food product m'arkets. Under terms of the order, the parties are required to divest Nabisco's drymix gelatin, dry-mix pudding, no-bake dessert, and balang powder assets to The Jel Sert

Company and Nabisco's intense mints assets to Hershey Foods Corporation.

Phillips Petroleum Company (Final Order February 7,2003): A final consent order allows

the merger of Phillips Petroleum and Conoco Inc. but requires certain divestitures and other

relief to maintain competition in the gasoline refining market in specific areas of the United

States. Among the assets to be divested are refineries, propane terminals, and natural gas

gathering facilities. The combined firm will be known as ConocoPhillips.

Precision Custparts Corporation (Final Order December 21,1999): A final order requires

the divestiture of large titanium stainless steel and large nickel-based superalloy production

assets (structural cast metals used in the manufacture of aerospace components) to settle antitrust

concerns stemming from its acquisition of Wyman-Gordon Company. The order requires

Precision Castparts to divest Wyman-Gordon's titanium foundry in Albany, Oregon and WymanGordon's Large Cast Parts foundry in Groton, Connecticut.

Quest Diagnostics, Znc. (Final Order April 3,2003): Quest Diagnostics settled antitrust

concerns that its proposed acquisition of Unilab Corporation would substantially increase

concentration in the clinical laboratory testing services market by agreeing to divest clinical

laboratory testing assets in Northern California to Laboratory Corporation of America.

Reckitt & Colman plc (Final Order January 18,2000): A final order permits Reckitt &

Colman to acquire Benckiser N.V. from NRV Vermogenswewaltung GmbH but requires the

divestiture of Benckiser's Scrub Free@ and Delicare@business to Church &Dwight, Inc.,

producers of household cleaning products.

RHI AG (Final Order March 21,2001): A consent order permits the acquisition of Global

Industrial Technologies, Inc. and requires the divestiture of two refractories manufacturing,

facilities - Global's Hammond, Indiana and Marelan, Quebec plants -to Resco Products, Inc.

According to the complaint, the proposed acquisition would create the largest producer of

refractories in North America with dominant positions in the magnesia - carbon brick refractory

market and in the high alumina brick refractory market. Refractories are used to line furnaces in

many industries that involve the heating or containment of solids, liquids, or gases at high

temperatures.

Rhodia, Donau Chemie AG (Final Order April 21,2000): Rhodia divested certain assets to

resolve antitrust concerns stemming from its acquisition of Allbright di Wilson PLC. The

consent order permits the acquisition but requires the divestiture of Aibright's interest in its

United States phosphoric acid joint venture to its joint venture partner, Potash Corporation of

Saskatchewan.

Service Corporation International (Final Order June 29,2000): Service Corporation

International divested the LuGrone Funeral Home, acquired in 1994, to settle charges that the

acquisition gave Service Corporation a monopoly in the provision of funeral services in Roswell,

New Mexico. The order also requires Service Corporation, for ten years, to obtain prior

Commission approval before acquiring any funeral home serving Chaves County, New Mexico.

Shaw's Supermarkets, Znc. (Final Order April 5,2000): A consent order settled charges that

Shaw's proposed acquisition of Star Markets, Inc. could eliminate supermarket competition and

increase prices in the greater Boston metropolitan area. The consent order permits the

acquisition and requires the divestiture of three Shaw supermarkets and seven Star markets in

eight communities.

Shell Oil Company (Final Order November 18,2002): Shell Oil Company was allowed to

complete its $1.8 billion acquisition of Pennzoil-Quaker State Company but required to divest

certain assets to maintain healthy competition in the refining and marketing of Group II

paraffinic base oil in the United States and Canada. Under terms of the consent order, Shell and

Pennzoil must divest its 50 percent interest in Excel Paralubes (a base oil refinery in Westlake,

Louisiana) and freeze Pennzoil's right to obtain additional Group II supply under a contract with

ExxonMobil at approximately current levels (up to 6,500 barrels of base oil per day).

Siemens AG (Final Order May 18,2001): Siemens settled charges relating to its proposed $9

billion acquisition of Atecs Mannesmann AG, a subsidiary of Vodafone. The consent order

requires, among other things, the divestiture of Vodafone's Mannesmann Dematic Postal

Automation business to Northrop Grummin Corporation. Siemens and Vodafone, through its

Dematic subsidiary, are the two leading suppliers of postal automation systems in the world.

SmithKline Beecham plc (Final Order December 26,2001): Under terms of a final consent

order settling charges stemming from the merger of SmithKline and Glnxo Wellcome plc, the

parties agreed to divest pharmaceutical products in six markets: antiemetics; the antibiotic,

ceftazidime; oral and intravenous antiviral drugs for the treatment of herpes; topical antiviral

drugs for the treatment of genital herpes; and over-the-counter H-2 blocker acid relief products.

Solvay S.A. (Final Order June 25,2002): Solvay settled antitrust concerns stemming from its

proposed acquisition of Ausimont S.p.A. from Italenergia S.p.A., and agreed to divest its U.S.

polyvinylidene fluoride (PVDF) operations and its interest in Alventia LLC, a joint venture

which manufactures the main raw material for PVDF. According to the complaint, the proposed

acquisition would lessen competition in two markets: the production and sale of all grades of

PVDF; and the production and sale of melt-processible grades of PVDF.

Southern Union Company (Final Order July 16,2003): Southern Union Company settled

antitrust concerns stemming from its proposed acquisition of the Panhandle pipeline from CMS

Energy Corporation. The consent order permitted the acquisition but required Southern union to

terminate an agreement to manage the Central pipeline which transports natural gas to several

counties in Missouri and Kansas.

Tyco International, U d . (Final Order December 5,2000): Tyco settled antitrust concerns

relating to its acquisition of Mallinckrodt, Inc. Tyco agreed to divest its endotracheal tube

business to Hudson RCI. The consent order permitted the acquisition.

Valero Energy Corporation (Final Order February 22,2002): The consent order permitted

Valero to complete its $6 billion merger with Ultramar Diamond Shamrock Corporation, but

required the divestiture of Ultramar's Golden Eagle Refinery, bulk gasoline contracts, and 70

Ultramar retail service stations in Northern California to a Commission-approved acquirer.

According to the complaint, the merger as originally proposed, would have lessened competition

in two refining markets in California resulting in consumers paying more than $150 million

annually if the price of CARB gasoline increased just one cent per gallon. CARB gasoline meets

the specifications of the California Air Resources Board.

Valspar Corporation (Final Order January 26,2001): Final order permitted Valspar's

acquisition of Lilly Industries, Inc., but requires Valspar to divest its mirror coatings business to

Spraylet Corporat~on.Mirror coatings are applied to the back of a piece of glass in order to

produce a mirror.

VNU N.V. (Final Order December 7, 1999): VNU.N.V. settled antitrust concerns that its

proposed acquisition of Nielsen Media Research, Inc. would restrict competition in the market

for advertising expenditure measurement services in the United States. The order requires VNU

to divest its Competitive Media Reporting division, the nations's largest supplier in the

specialized market.

WaLMart Stores, znc. (Final Order February 27,2003): A consent order settled Commission

concerns that Wal-Mart's proposed acquisition of the largest supermarket chain in Puerto Rico,

Supermercados Amigo, Inc., would eliminate competition between supercenters and club stores

owned or controlled by Wal-Mart and supermarkets owned or controlled by Amigo. While the

consent order permits the acquisition, it requires Wal-Mart to divest four Amigo supermarkets in

Cidra, Ponce, Manati, and Vega Baja, Puerto Rico to Supermercados Maximo.

Winn-Dixie Stores, Inc. (Final Order February 14,2000): A consent order permitted WinnDixie's acquisition of 68 supermarkets and other assets from bankrupt Jitney-Jungle Stores of

America, Inc. The order prohibits Winn-Dixie, among other things, from acquiring any interest

in four specified Jitney-Jungle supermarkets without obtaining prior Commission approval. The

sale of the 68 supermarkets was also approved by the U.S. Bankmptcy Court for the Eastern

District of Louisiana.

Authorizations to Seek Preliminary Injunctions

BPAmocop.1.c. (February 2,2000): Commission authorized staff to file a motion in federal

district court to prevent the merger of BP Amoco p.1.c. and Atlantic Richfield Company. The

complaint, filed in the U.S. District Court for the Northem District of California, San Francisco

Division on February 4,2000, alleged that the merger would reduce competition in the

exploration and production of Alaska North Slope crude oil and its sale to West Coast refineries,

and in the market for pipeline and storage facilities in Cushing, Oklahoma. The merger would

combine: (1) the two largest producers of crude oil on the North Slope of Alaska; (2) the two

largest suppliers of Alaska North Slope crude oil to refineries in California and washington; (3)

and the two most successful competitors in bidding for exploration leases on the North Slope:

On March 15,2000, five days before the start of the trial, the defendants and the Commission

agreed to seek adjournment of the federal court proceedings to enter into consent negotiations.

The consent order became final August 29,2000.

Conso International Corporation (August 2,2000): Conso International Corporation, owner

of the Simplicity brand of home sewing patterns, abandoned its proposed acquisition of McCall

Pattern Company after the Commission filed a motion for a preliminary injunction in the United

States District Court for the Southern District of New York. The complaint charged that the

acquisition would reduce the number of United States sewing pattern designers and producers

from three to two, creating a firm with more than 75% of the domestic unit sales of domestic

home sewing patterns.

Cytyc Corporation (June 24,2002): The Commission authorized staff to seek a preliminary

injunction to block the acquisition of Digene Corporation on grounds that the combination of the

two firms would reduce competition and increase consumer prices within the highly concentrated

market for primary cervical cancer screening tests, both now and in the future. The parties

abandoned the transaction before court papers could be filed.

Deutsche Gelatine-Fabriken Stoess AG (January 15,2002): The Commission authorized

staff to seek a preliminary injunction to block DGF's proposed acquisition of Leiner Davis

r el at in Corporation and its Goodman Fielder USA, Inc. subsidiary. According to the

Commission this transaction, if allowed to proceed as planned, would increase the likelihood of

anticompetitive activity in the U.S. market for pigskin and beef hide gelatin, used by the food

industry as an ingredient in edible products and by the pharmaceutical industry to produce

capsules and tablets. The combination of the two firms would account for more than 50 percent

of the relevant market in the U.S. A proposed consent agreement designed to remedy the

significant antitrust concerns was accepted for public comment March 7,2002; the consent order

was finalized April 17,2002.

Diageo plc (October 23, 2001): The Commission authorized staff to file a motion for a

preliminary injunction to block the proposed acquisition of Vivendi Universal S.A. 's Seagram

Wine and Spirits Business on grounds that the transaction, would not only combine the secondand third-largest rum producers in the U.S. eliminating actual competition between the firms, but

could also create higher prices for consumers of rum. A consent order permitted the acquisition,

with certain conditions.

The Hearst Trust and The Hearst Corporation (April 5,2001): Hearst and its First

DataBank subsidiary were charged with iliegally acquihng a monopoly over a key type of drug

information database used by pharmacists, hospitals, health plans, and other health care

professionals through Hearst's 1998 acquisition of it main competitor, Medi-Span. The

complaint, filed in the U.S. District Court for the District of Columbia, asked the court to either

order Hearst to create a new competitor to replace Medi-Span or forfeit its profits from the

anticompetitive price increases that followed the acquisition of its only competitor. The

complaint further alleged that the acquisition was consummated as a result of Hearst illegally

withholding documents required for the premerger antitrust review under the Hart-Scott-Rodino

Antitrust Improvements Act of 1976. On December 18,2001, a federal district court entered a

proposed Final Order and Stipulation requiring Hearst to pay $19 million as disgorgement of

unlawful profits and to divest Medi-Span to Facts and Comparisons. This settlement marks the

first time the Commission has sought either divestiture or disgorgement of profits in a federal

court action for a consummated merger. A separate complaint to settle allegations that The

Hearst Trust and The Hearst Corporation subsidiary, violated the reporting

of the

- requirements

Hart-Scott-Rodino Act was filedbctober 11,2001: In that settlement, Hearst paid $4 million in

civil penalties.

H.J. Heirrz Company (July 7,2000): The Commission authorized staff to file a motion for a

preliminary injunction in federal district court on grounds that the proposed $185 million

acquisition of Milnot Holding Company, owner of Beech-Nut Nutrition Corporation, would

reduce the number of competitors in the baby food market from three totwo - creatinga

duopoly. The complaint was filed in the U.S. District Court for the District of Columbia on July

14,2000. The federal district court denied the Commission's request for a preliminary injunction

on October 19,2000. On April 27,2001, the U.S. District Court of Appeals for the District of

Columbia reversed the federal district court decision and remanded for entry of a preliminary

injunction against Heinz and Beech-Nut. Within minutes of the Appeals court decision, the

parties abandoned the transaction.

Kroger Company/Raley 's Corporation (October 2,2002): The preliminary injunction

authorized by the Commission during the investigation into Kroger's acquisition of 18 Raley's

supermarkets in the Las Vegas, Nevada area was not filed. After staff determined that the

transaction would promote healthy competition in the Las VegasElenderson area due to the rapid

growth of the market and the presence of Wal-Mart, Albertson's, Kroger and Safeway - the four

major competitors in the area, the investigation was closed.

Kroger CompanytWinn-DzXe (June 2,2000): The Commission authorized staff to file a

motion in federal district court to block the proposed acquisition of 74 Winn-Dixiesupermarkets

in Texas and Okiahoma. The complaint, filed in the U.S. District Court for the Northem District

of Texas, alleged that the acquisition would end 22 years of direct competition between the two

supermarket chains in several markets in Texas, including metropolitan Fort Worth, Granbury,

Weatherford, Brownwood, Henderson, Denton and Marshall. The parties abandoned the

transaction before the start of the trial.

Libbey, Inc. (December 18,2001): The Commission authorized staff to seek a preliminary

injunction to block Libbey's proposed $332 million acquisition of Anchor Hocking, a subsidiary

of Newel1 Rubbermaid, Inc., on grounds that the acquisition would substantially lessen

competition in the market for soda-lime glassware sold to the food service industry in the United

States. A complaint was filed in the U.S. District Court for the District of Columbia on ~ a n u & y

14,2002. The district court granted the Commission's request for an injunction on April 22,

2002. An administrative complaint, issued on May 9, extend the injunction until the conclusion

of the administrative proceedings. Pursuant to the delegation of authority, the Corhnission

withdrew the matter from adjudication on July 25,2002, to consider a proposed consent

agreement. A consent order was finalized October 7,2002.

Meade Instruments Corporation (May 29,2002): The Commission authorized staff to seek a

temporary restraining order and a preliminary injunction to prevent Meade from acquiring any of

the assets that could become available as a result of the pending bankruptcy proceedings in Tasco

Holdings, Znc.'s Celestron International. According to the Commission, the purchase of the

performance telescope assets would eliminate competition in that market and create a monopoly

for the Schmidt-Cassegrain telescopes. Meade agreed not to submit any bid for Celestron or its

assets.

NestZk Holdings, Inc. march 4,2003): The Commission authorized staff to seek a preliminary

injunction to block the merger of Nest16 and Dreyer's Grand Ice Cream,.Inc.on grounds that the

merger would reduce competition in the highly concentrated market for superpremium ice cream.

Nest16 markets superpremium ice cream under the Haagen Dazs brand; Dreyer's superpremium

brands include Dreamery, Godiva and Starbucks. Before thecomplaint was filed in a federal

district court, the parties agreed to enter into a consent agreement to settle the charges. The final

order requires the divestiture of superpremium ice cream brands Dreamery and Godiva, the

Whole Fruit sorbet brand, and Nestlk's distribution assets to CoolBrands lntemational, Inc.

Swedish Match AB (June 22,2000): The Commission authorized staff to seek a preliminary

injunction to block the proposed acquisition of National Tobacco Company, L.P. on grounds that

the $165 million acquisition would lessen competition in the market for loose leaf chewing

tobacco and that Swedish Match's market share would increase to 60 percent. On December 14,

2000, the U.S. District Court for the District of Columbia issued a 42-page opinion granting the

Commission's motlon for the injunction. On December 22,2000, the parties abandoned the

transaction

Vlasic Pickle Company (October 22,2002): The Commission authorized staff to seek a

preliminary injunction to block the proposed acquisition of Claussen Pickle Company by Hicks,

Muse, Tate & Furst Equity Fund V L.P., the owner of Vlasic Pickle Company on grounds that the

transaction would combine the dominant firm in the market for refrigerated pickles (Claussen)

with its most significant competitor in refrigerated pickles (Vlasic). Six days after the complaint

was filed in federal district court, the parties abandoned the transaction.

Commission Opinions/Initial Decisions

Chicago Bridge & Iron Company (June 27,2003): h administrative law judge upheld the'

complaint that challenged Chicago Bridge's acquisition of the Water Division and the

Engineered Construction Division of Pitt-Des Moines, lnc. The initial decision requires Chicago

Bridge to divest all of the assets acquired in the acquisition in order to restore competition in four

separate markets involving the design and construction of various types of field-erected specialty

industrial storage tanks in the United States. On December 2003, the Commission approved an

interim consent order prohibiting Chicago Bridge & Iron from alter the assets acquired from PittDes Moines, Inc. except "in the ordinary course of business." These assets include but are not

limited to real property; personal property; equipment; inventories; and intellectual property. The

initial decision was appealed and oral argument before the Commission occurred on November

12,2003.

Swedish Match AB (January 5,2001): The Commission dismissed the administrative

complaint after Swedish Match and National Tobacco Company, LP. abandoned the transaction

that would give Swedish Match control of 60 percent of the loose leaf chewing tobacco market.

Tenet Healthcare Corporation (December 23, 1999): The Commission dismissed the

administrative complaint that challenged the acquisition of Doctors Regional Medical Center in

Poplar Bluff, Missouri after the United States Court of Appeals for the Eighth Circuit denied the

Commission's petition for a rehearing en banc and denied the Commission's motion to stay the

mandate in October 1999.

Court Decisions

H.J. Heinz Company (April 27,2001): The U.S. District Court of Appeals for the District of

Columbia reversed the federal district court decision and granted the Commission's request for

entry of a preliminary injunction to enjoin Heinz's proposed acquisition of Milnot Holding

Company, the owner of the Beech-Nut Nutrition Corporation. Within minutes of the Appeals

Court decision, the parties abandoned the transaction.

Swedish Match AB (August

(Dec. 14,5,2002):

2000): The U.S. District Court for the District of Columbia

granted the agency's request for a preliminary injunction to block the proposed acquisition of the

loose leaf chewing tobacco business of National Tobacco Company, L.P. The parties later

abandoned the transaction.

Order Violations

Boston Scientific Corporation (March 31,2003): A federal district judge ordered Boston

Scientific Corporation to pay $7,040,000 in civil penalties to settle charges that it violated a 1995

consent order when it failed to provide Hewlett-Packurd Company with a license to all of its

intellectual property and technical information relating to intravascular ultrasound catheters. The

complaint was filed on October 31,2000 by the Department of Justice on behalf of the

Commission. The trial was held in August 2002.

RHIAG (February 19,2004): RHI AG has agreed to pay a civil penalty of at least $650,000 to

settle charges that it violated a 1999 consent order concerning its acquisition of Global Industrial

Technologies, Inc. According to the complaint, RHI not only failed to divest the two refractories

plants and other assets to Resco Products, Inc. but did not completely comply with other

provisions required by the settlement agreement. The complaint, stipulation, and consent

judgment will be filed in the United States District Court for the District of Columbia.

Other Commission Orders

H.J. Heinz Company (December 7,2001): The Commission dismissed the Part IH

administrative complaint after Heinz abandoned its proposed merger with Milnot Holding

Company, the owner of Beech-Nut Nutrition Corporation, that would combine the nation's

second- and third- largest manufacturers of jarred baby food, respectively.

Tenet Healthcare Corporation (December 23, 1999): The Commission decided not to

continue with administrative litigation of the complaint that charged that the proposed merger of

Tenet and Doctors ~ e ~ i o nMedical

Center would eliminate price, cost and quality competition

and put consumers at risk of paying more for health care in Poplar Bluff, Missouri. The case was

dismissed under the agency's 1995 policy to determine on a case-by-case basis whether to pursue

administrative litigation in merger cases after a federal court has declined to bar the companies

from merging pending the outcome of an administrative trial.

Administrative Complaints

Aspen Technology, Znc. (August 6,2003): The Commission issued an administrative

complaint that challenged Aspen's 2002 acquisition of Hyprotech, Ltd. alleging that the

acquisition eliminated a significant competitor in the provision of process engineering simulation

software for industry. According to the complaint, the acquisition has led to reduced innovation

competition in six specific process, engineering simulation software markets. Trial is scheduled

to commence May 26,2004.

Chicago Bridge & Iron Company N.V. (October 25,2001): The C o m s s i o n challenged the

February 2001 purchase of the Water Division and Engineered Construction Division of Pitt-Des

Moines, Inc. alleging that the acquisition significantly reduced competition in four separate

markets involving the design and construction of various types of field-erected specialty

industrial storage tanks in the United States. The administrative proceedings before an

administrative law judge has been concluded. The initial decision filed June 27,2003 upheld the

complaint. Oral argument on the appeal of the initlal decision occurred on November 12,2003.

Evanston Northwestern Healthcare Coqoration (February 10,2004): An administrative

complaint alleges that following Evanston Northwestern Healthcare Corporations's acquisition

of Highland Park Hospital prices charged to health insurers for medical services increased and

therefore higher costs for health insurance were passed on to consumers of hospital services in

the Cook and Lake counties of Dlinois. The complaint also alleges that a physicians group

affiliated with both hospitals, Highland Park Independent Physician Group, negotiated prices for

physicians on staff at Evanston as well as for several hundred independent physicians not

affiliated with either hospital. According to the complaint, these actions constitute illegal price

fixing among competing physicians or physician groups and denies consumers the benefits of

competition in physician services. A trial date has not yet been scheduled.

H.J. Heinz Company (November 22,2000): An administrative complaint charged that the

proposed acquisition of Milnot Holding Corporation, owner of Beech-nut Nutrition Corporation,

k o k d subst&tially reduce competition in the manufacture and sale of jarred baby food in the

United States. On November 1,2000, the Commission sought an emergency stay from the Court

of Appeals

- for the D.C. Circuit after the federal district court denied the Commission's request

for a preliminary injunction. The Court of Appeals for the District of Columbia enjoined the

transaction. The parties abandoned the proposed transaction and the administrative complaint

was dismissed by the Commission.

Libbey, Inc. (May 9,2002): An administrative complaint charged that the proposed acquisition

of Anchor Hocking, a wholly-owned subsidiary of Newell Rubbermaid, lnc. would substantially

reduce competition in the market for soda-lime glassware sold to the food service industry in the

United States. The complaint was issued after the U.S. District Court in Washington, D.C.

enjoined the acquisition pending administrative adjudication. The matter was withdrawn from

adjudication on July 25,2002 to consider a proposed consent agreement. A consent order was

finalized October 7, 2002.

MSC. Software Corporation (October 9,2001): An administrative complaint challenged the

1999 acquisitions of Universal Analytics, Inc. and Computerized Structural Analysis & Research

Corp. alleging that MSC.. the dominant supplier of advanced computer-aided engineering

software known as "Nastran", acquiredthe other two suppliers in the market. According to the

complaint, the acquisitions eliminated competition and tended to create a monopoly in the

market. The complaint was settled by a consent agreement that became final on October 29,

2002.

Swedish Match AG (December 21,2000): An administrattve complaint was issued after the

United States Federal District Court for the District of Columbia granted the Commission's

motion for a preliminary injunction to block Swedish Match North America from acquiring the

loose leaf chewing tobacco brands of National Tobacco Company. The administrativecomplaint

alleged that the acquisition would substantiallyreduce competition by combining the first and

third sellers of loose leaf chewing tobacco in the United States. According to the complaint, if

the acquisition were consummated, Swedish Match would gain a market share of 60 percent in

U.S. sales. The Commission dismissed the administrative complaint after the parties abandoned

the transaction.

Other

Best Practices Analysis for Merger Review Process (Announced March 15,2002): The

Commission conducted "brown bag" public workshops in Chicago, Los Angeles, New York, San

Francisco, and Washington, DC during 2002 to solicit input from a broad range of interest groups

who have participated in the Commission's or the Department of Justice's merger review

process. The areas under consideration included:

the initial waiting period under HSR,

the content and scope of the second request;

negotiation of modifications to the second request;

special issues concerning electronic records and accounting of financial data.

Remedies issues included:

the package of assets to be divested;

the manner of a proposed divestiture;

the proposed buyer of divested assets;

the Buyer Up Front;

the use of Fix-It-First;

the use of Crown Jewei Provisions;

third party rights;

the risks to competition and to the parties.

Workshops held:

Workshop on Accounting and Financial Data (July 10,2002) Washington, DC

General Session on Best Practices for Merger Investigations (June 27, 2002)

Washington, DC

General Session on Best Practices for Merger Investigations (June 25,2002) Los

Angeles, CA.

General Session on Best Practices for Merger Investigations (June 12,2002) Chicago,

Electronic Records (June 5,2002) Washington, DC

General Session on Best Practices for Merger Investigations (June 5,2002) San

Francisco, CA

Business-to-Business Electronic Marketplaces (Report Announced October 26,2000): A

staff report, "Enteringthe 21" Century: Competition Policy in the World of B2B Electronic

Markerplaces" discusses information gathered and antitrust issues addressed at the public

workshop in Washington, D.C. June 29 - 30,2000. Business-to-Business (B2B) electronic

marketplaces use the Internet to electronically connect businesses with each other, primarily for

the purposes of buying and selling a wide variety of goods and services.

Public Workshops held May 7 - 8, 2001 explored certain competition issues that arise in

connection with B2B and business to consumer (B2C) e-commerce. The workshop continued

the dialogue initiated at the June 2000 workshop.

Section 8 (EffectiveFebruary 2004): Changes in two threshold figures, based

on the change in the Gross National Product, define when it is unlawful for an individual to serve

as an officer or director of two or more competing corporations: (1) each of the two companies

has capital, surplus and undivided profits in excess of $20,090,000; and (2) the competitive sales

of each corporation exceed $2,009,000.

Clayton Act

Guidelinesfor Merger Investigations: The Guidelines represent the first outcome of the Best

Practices Workshop which began March 2002. Available at www.ftc.opa~2002/12/mergerguides

Primary components:

Witnesses will be able to obtain investigational hearing transcripts.

Documents will no longer

- have to be sorted or identified by- specification.

Second sweeps will be avoided whenever possible.

In response to second requests, parties will be able to submit documents and other

materials in an electronic format rather than in hard copy.

Sample products are no longer required by Specification 5(a) of the Model Second

Request.

Horizontal Merger Investigation Data, Fiscal Years 1996 2003 Staff analysis of

horizontal investigations. The staff tabulated certain market structure information as it relates to

the Commission's decision whether or not to seek relief in specific markets investigated.

Released February 2004.

Merger Effziency Roundtable (December 9 - 10,2002;Washington, DC): Experts in

mergers and acquisitions from the academic, consulting, and business communities gave

presentations on how to determine whether a proposed transaction is likely to generate merge1

efficiencies.

Merger Enforcement Workshop (February 17 - 19,2004) sponsored by the Federal Trade

Commission and the Department of Justice. Topics discussed:

Hypothetical Monopolist Test

Concentration & Market Shares

Monopsony

Non-Price CompetitionlInnovation

Unilateral Effects

Coordinated Effects

Uncommitted Entry

EfficienciesDynamic AnaIysisRntegrated Analysis

Merger Remedies Second Workshop (October 23,2002; New York, New York):

Workshop, co-hosted by the Antitrust and Trade Regulation Committee of The Association of

the Bar of the City of New York, was designed to gather information from a broad range of

interested parties regarding consent order remedies in merger and acquisition matters.

II. Hart-Scott-Rodino Antitrust Improvements Act

Enforcement

A. Court Decisions

The Hearst Trust and The Hearst Corporation (October 11,2001): Hearst and its

subsidiary paid a $4 million civil penalty to settle charges that they failed to include required

documents in the notification and report form file in 1998 for the proposed acquisition of MediSpan International, Inc. The complaint alleged that the omitted documents hindered the antitrust

agencies in their review and analysis of the proposed acquisition. The complaint, stipulation and

final judgment were filed in U.S. District Court for the District of Columbia by Commission

attorneys acting as special attorneys to the United States Attorney General. During fiscal year

2001, the Commission filed a related complaint for a permanent injunction alleging that Hearst

and First DataBank created a monopoly through the acquisition of Medi-Span, First DataBank's

only other competitor selling software and data detailing information for pharmaceutical prices,

descriptions, dosages, and interactions. The Final Order and Stipulation requiring divestiture and

disgorgement of profits was entered December 18,2001.

Consent Orders

None

Complaints (Complaintsfiled aspart of a consent

agreement not listed separately)

None

Rules and Formal Interpretations

Hart-Scott Rodino Reform (AmendedFinal Rules, Published March 12,2002):

Amendments to Parts 801 and 802 of the Premerger Notification Rules.

Amendments to Sect~on802.21:Acquisit~onsof voting securities not meeting or

exceeding greater notification threshold.

Hart-Scott-Rodino Refonn (Effective February 1,2001): Significant changes in the filing

requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

The size of transaction threshold increases from $15 million to $50 million. The 15

percent size of transaction threshold is eliminated.

Transactions valued at more than $200 million will be reportable without regard to "size

of person". The current size of person test will continue to be in place for transactions valued at

$200 million or less.

All dollar thresholds will be adjusted each fiscal year, beginning with fiscal year 2005,

to reflect changes in the gross national product during the previous year.

A tiered fee structure replaces the standard $45,000 filing fee for all reportable

transactions. Companies will now pay $45,000 for transactions valued at less than $100 million,

$125,000 for transactions valued at $100 million to less than $500 million, and $280,000 for

transactions valued at $500 million or more.

The length of the waiting period that follows substantial compliance with a second

request for additional information will become 30days for most transactions (instead of 20 days'

under the current law).

Whenever the end of any waiting period falls on a Saturday, Sunday or legal holiday, the

official end of the waiting period will end on the next regular business day.

Second Requests Procedures (Effective April 5,2000): Four new procedures and initiatives

adopted to improve the handling of second request investigations issued by the Commission.

Prior to issuance, all second requests will be reviewed by the senior management staff

of the Bureau of Competition.

Within five business days following the issuance of a second request the Bureau of

competition and the parties in the proposed transaction will conference to discuss the competitive

issues raised in the proposed acquisition.

The Bureau of Competition staff will respond to party requests for modifications of the

second requests within five business days.

The parties will have recourse to the Commission's General Counsel for resolution of

second request modification issues not resolved afterdiscussion with staff.

Limited Liability Companies - Formal Interpretation 15 (Effective March 1,1999):

Creation of an LLC which unites two or more independently-ownedbusiness under common

control may be subject to the reporting requirements of the HSR Act, if the size thresholds of the

HSR Act are met.

Minor amendments announced March 20,2001: The changes reflect the new $50

million filing threshold and the revision of a footnote to reflect the size-of-person test for

transactions valued at more than $200 million.

Other

Premerger Notification Annual Report to Congress Pursuant to Section .'Dl of the Hart-ScottRodino Antitrust Improvements Act of 1976 (August 18,2000): Twenty-second Annual Report

(Fiscal Year 1999).

Premerger Notification Annual Report to Congress Pursuant to Section 201 of the Hart-SconRodino Antitrust Improvements Act of 1976 (April 30,2001): Twenty-third Annual Report

(Fiscal Year 2000).

Premerger Notification Annual Report to Congress Pursuant to Section 201 of the Hart-ScottRodino Antitrust Improvements Act of 1976 (September 27,2002): Twenty-fourth Annual

Report (F~scalYear 2001).

Premerger Notification Annual Report to Congress Pursuant to Section 201 of the Hart-SconRodino Antitrust Improvements Act of 1976 (August 1,2003): Twenty-fourth Annual Report

(Fiscal Year 2002).

111. Non-Merger Enforcement

HORIZONTAL ENFORCEMENT

Commission Opinions/Initial Decisions

Polygram HoMing, Znc. (The Three Tenors) (July 24,2003): The Commission upheld the

ruling of an administrative law judge and prohibited PolyGram from entering into any agreement

with competitors to fix the prices or restrict the advertising of products they have produced

independently. The administrative complaint generally known as The'Three Tenors and

involving respondents PolyGram Holding, Inc.; Decca Music Group Limited; UMG Recordings

Inc.; and Universal Music & Video Distribution Corporation charged PolyGram with entering

into an illegal price fixing agreement not to advertise or discount earlier albums and video

recordings of concerts featuring the Three Tenors in an effort to promote the latest concert,

thought to be Iess appealing to the public. The Commission ordered the respondents to cease and

desist from entering into any combination, conspiracy, or agreement - with producers or sellers at

wholesale of audio or video products - to "fix, raise, or stabilize prices or price levels" in

connection with the sale in or into the United States of any audio or video product.

Rambus, Znc. (February 17,2004): An administrative law judge dismissed all charges against

Rambus, Inc. mling that Commission staff had failed to sustain their burden of proof with respect

to all three violations alleged in the complaint. On March 1,2004, complaint counsel filed a

notlce of appeal.

Schering-Plough Corporation (December 8,2003): The Commission reversed the

administrative law judge's initial decision that had dismissed all charges of anticompetitive

conduct. The Commission found that Schering-Plough Corporation entered agreements with

Upsher-Smith Laboratories, Inc. and American Home Products to delay the entry of generic

versions of Schering's branded K-Dur 20, a widely prescribed potassium chloride supplement.

According to the opinion, the parties settled patent litigation with terms that included

unconditional payments by Schering in return for agreements to defer introduction of the generic

products. The Commission entered an order that would bar similar conduct in the future.

Summif Technology and VZSX (February 7,2001): The Commission dismissed its complaint

after the U.S. patent and Trademark Office issued a Reexamination Certificate of U.S. Patent No.

5,108,388. On June 4, 1999 an administrative law judge dismissed charges against VISX, a key

developer of laser eye surgery equipment and technology, known as photo refractive keratectomy

(PRK). According to the 1998 administrative complaint, VISX and Summit Technology, the

only two firms legally able to market equipment for PRK, placed their competing patents in a

patent pool and shared the proceeds each and every time a Summit or VISX laser was used. The

administrative law judge also dismissed charges that VISX acquired a key patent by inequitable

conduct and fraud on the U.S. Patent and Trademark Office, mling that complaint counsel failed

to present evidence that an act of fraud was committed since information was not willfully

withheld from the patent office. A final order settled the price fixing allegations in the 1998

complaint.

Court Decisions

California Dental Association (September 5,2000): The Court of Appeals for the Ninth

Circuit by a vote of 3-0 issued an opinion that the Commission failed to prove that the

association of dentists in California engaged in anticompetitive advertising restrictions under the

rule-of-reason analysis. The court vacated and remanded the complaint with instructions that the

Commission dismiss the 1993 administrative complaint against the association. The

administrative complaint was dismissed February 15,2001.

Authorizations to Seek Preliminary/Pemanent Injunctions

None

Consent Orders

Abbott Laboratories and Geneva Pharmaceuticals, Znc. (Final Orders May 22,2000):

Abbon and Geneva Pharmaceuticals settled charges that the two firms entered into an illegal

agreement to stop the marketing and development of a competing generic drug. According to the

comnlaint. Abbott. the manufacturer of Hvtrin - the brand name for terazosin HCL. a

prescription drug used to treat hypertension and benign prostatic hyperplasia - entered into an

agreement

with Geneva Pharmaceuticals whereby Abbott would pay

- .Geneva millions of dollars

not to market a generic version of Hytnn. The orders bar Abbon and Geneva, among other

things, from entering into agreements in which a generic company agrees with a manufacturer of

a branded drug to delay or stop the production of a competing drug. This provision remains in

effect for a period of ten years.

Alaska Healthcare Network Ojinal Order April 25,2001): An association of 86physicians

practicing in the Fairbanks, Alaska area settled charges that the Alaskan Healthcare Network

illegally formulated a fee schedule based on its members' current prices for use in negotiations

with third-party payers in an effort to obtain higher prices for medical services.

American Home Products Corporation (Final Order April 5,2002): A consent order settled

charges that American Home Products entered into an anticompetitive agreement with ScheringPlough Corporation to delay the entry of a low-cost generic drug that would be in direct

competition with a branded version developed and manufactured by Schering. According to the

complaint issued with the consent, Schering illegally paid American Home millions of dollars to

delay the entry and sale of its generic version of Schering's K-Dur 20, a drug used to treat

patients who suffer from insufficient levels of potassium, a condit~onthat could lead to cardiac

problems. The consent order, which expires in 10 years, prohibits American Home Products

from entering into such agreements in the future. On December 8,2003, the Commission issued

an opinion that found that the agreements between Schering and Upsher-Smith and American

Home Products violated the antitrust laws. The Commission entered an order for Schering and

Upsher-Smith that is similar to the American Home Products order.

American ~nstitutefor Conservation of Historic and Artistic Works (Final Order October

30,2002): A consent order settled charges that the American Institute for Conservation of

Historic and Artistic Works adopted and enforced provisions in its mles of conduct that

prohibited professional conservators to work for free or at reduced fees. The association agreed

to remove all provisions from its Code of Ethics, and its Commentaries to the Guidelines for

Practice that are inconsistent with the order. Professional conservators manage and preserve

cultural objects (including historical scientific, religious, archaeological and artistic objects).

Anesthesia Service Medical Group, Znc. and Grossmont Anesthesia Services Medical

Group (Final Order July 11,2003): Two anesthesiologists groups settled charges that they

entered into joint agreements to establish fees and services from Grossmont Medical Hospital in

San Diego County. Specifically, the groups agreed on fees that both would demand from health

care insurance companies and other third party payers for taking call for obstetrics and providing

servicks to uninsured emergency room patients. Together, the two groups are composed of

approximately 200 physicians that provide competing anesthesiology services in the San Diego

area.

Aurora Associated Primary Care Physicians, L L C . (Final Order July 19,2002): A

consent order settled charges that the organization of internists, pediatricians, family physicians

and general practitioners in the Aurora, Colorado area engaged in boycotts and entered into

collective negotiations with health care insurers in an effort to increase the costs of physician

services. The order prohibits the organization from entering into any agreement with insurance

payers or providers to negotiate fees on behalf of the physicians group.

Bertelsmann Music Group, Znc. (Final Order September 6,2000): Five distributors of

recorded music illegally required retailers to advertise compact discs (CD) at or above the

minimum advertised price (MAP) set by distribution companies in exchange for substantial

advertising payments for various types of media including television, radio, newspaper and signs

and banners within the retailers' own stores. According to the complaint, large music retailers

would lose millions of dollars if they refused to follow the MAP policies. As a result of this

policy the retail prices of CDs increased. Beginning in 1997, distributors increased the wholesale

prices for CDs, and those wholesale prices have continued to rise each year since. Bertelsmann

and four other firms, Universal Music and Video Distribution Corporation and UMG

Recordings, Inc., Time-Warner Inc., EMI Music Distribution, and Sony Music Entertainment

represent approximately 85 percent of all CDs purchased in the United States.

Biovail Corporation (Final Order October 2,2002): The Commission charged Biovail

Corporation with illegally acquiring an exclusive patent license for Tiazac, a pharmaceutical used

to treat high blood pressure and chronic chest pain. The complaint further alleged that Biovail, in

an effort to maintain its monopoly, wrongfully listed the acquired license in the U.S. Food and

Drug Administration's "Orange Book" for the purpose of blocking generic competition to its

branded Tiazac. The consent order requires Biovail to divest part of its exclusive rights to DOV,

prohibits the firm from taking any action that would trigger additional statutory stays on final

FDA approval of a generic form of Tiazac; and also prohibits Biovail from wrongfully listing any

patents in the Orange Book for a product for which the company already has an New Drug

Application from the FDA.

Biovail Corporation and Elan Corporation (Final Order August 20,2002): A consent order

settled charges that Biovail and Elan Corporation entered into an agreement that contained

substantial monetary incentives not to compete in the market for specified dosages of generic

forms of Adalat CC, a drug used to treat hypertension. The final consent order requires the

companies to terminate their agreement and prohibits them form entering into similar agreements

in the future. This is the Commission's first enforcement action involving an allegedly

anticompetitive agreement between two competing generic drug manufacturers.

Bristol-Myers Squibb Company (Final Order April 14,2003): Bristol-Myers Squibb

Company (BMS) settled charges that it engaged in illegal business practices to delay the entry of

three low price generic pharmaceuticals that would be in direct competition with three of its

branded drugs. The complaint alleged that BMS purposely made wrongful listings in the Orange

Book of the U.S. Food &Drug Administration and that it also paid a potential competitor over

$70 million to delay the entry of its generic drug. The three drugs involved in the complaint are:

Taro1 (containing the active ingredient paclitaxel) - used to treat ovarian, breast, and lung

cancers; Platinol (containing the active ingredient cisplatin) - used for the treatment of various

forms of cancer; and BuSpar (containing the active ingredient buspirone) - used to manage

anxiety disorders.

Capitol Records, Znc. dba "EMI Music Distribution" (Final Order September 6,2000):

Five distributors of recorded music illegally required retailers to advertise compact discs at or

above the minimum advertised price (MAP) set by the distribution company in exchange for

substantial advertising payments for various types of media including television, radio,

newspaper and signs and banners within the retailers own stores. According to the complaint,

large music retailers would lose millions of dollars if they refused to follow the MAP policies.

As a result of this policy the retail prices of CDs increased. Beginning in 1997, distributors

increased the wholesale prices for CDs, and those wholesale prices have continued to rise each

year since. EM1 Music Distriburion, and four other firms, Benlesmann, Universal Music and

Video Distribution Corporation and UMG Recordings, Inc., Time-Warner Inc., and Sony Music

Entertainment represent approximately 85 percent of all CDs purchased in the United States.

Carlsbad Physician Association (Final Order June 13, 2003): A New Mexico physician

organization settled charges that it and its members entered into agreements to fix prices and to

refuse to deal with third party payers and other health care plans except on collectively agreedupon terms.

Colegio de Cirujanos Dentistas de Puerto Rico (Final Order June 12,2000): A dental

association with a membership of more than 1800 dentists practicing in Puerto Rico agreed not to

encourage its members to enter into agreements that set or fixed the fees charged or terms and

conditions under which dentists would deal with health insurance plans or other payers in an

attempt to obtain higher reimbursement rates for dental services.

FMC Corporation and Asahi Chemical Industry Co. U d . (Final Order June 12,2002): A

consent order settled charges that FMC and Asahi Chemical Industry Co. Ltd. of Japan entered

into a conspiracy to divide the world market for microcrystalline cellulose (MCC), a binder used

in making pharmaceutical tablets, into two territories. According to the complaint, FMC

allegedly agreed not to sell the pharmaceutical to customers in Japan or East Asia without Asahi

Chemical's consent, while Asahi Chemical agreed not to sell the pharmaceutical to customers in

North America or Europe without the consent of FMC. The final order prohibits such behavior

in the future and restricts FMC from acting as the U.S. distributor for any competing

manufacturer of microcrystalline cellulose (including Asahi Chemical) for 10 years. In addition,

for five years, FMC is prohibited from distributing in the United States any other product

manufactured by Asahi Chemical.

Geneva Pharmaceuticals (Final Order May 22,2000): Refer to discussion under Abbon

Laboratories.

Hoechst Marion Roussel (renamed Aventis as a result of the merger between Hoechst

AG and Rhone-Poulenc S.A.) (Final Order April 2,2001): A consent order settled

allegations in an administrative complaint that charged that Hoechst agreed to pay Andrx

Corporation millions of dollars not to market and distribute a generic version of ~ o e c h s t ' s

branded Cardizem CD, a once-a-day diltiazem drug product used in the treatment of hypertension

and angina. The consent order prohibits the companies from entering into agreements designed

to restrict the entry of generic competitors in an attempt to monopolize relevant markets .

Indiana Household Movers and Warehousemen, Znc. (Final Order April 25,2003): The

corporation of household goods movers in Indiana settled charges that it filed collective intrastate

rate tariffs with the State's Department of Revenue on behalf of its members. According to the

complaint issued with the consent order, these collective filings reduced competition for

household goods moving services within the state.

Institute of Store PZanners (Final Order May 27,2003): Under the terms of a final consent

order, The Institute of Store Planners is required to remove from its Code of Ethics any provision

that prohibits its members from providing their services for free and any provision that prohibits

competition with other members for work on the basis of price. Its members provide

architectural store design and store and merchandise planning to retail stores.

Iowa Movers and Warehousemen's Association (Final Order September 10,2003): The

Iowa Movers and Warehousemen's Association settled allegations that it filed collectively

established tariffs for intrastate moving rates in Iowa - a practice which did not meet the

requirements of the state action doctrine. Under the state action doctrine, some practices of

private firms are protected against scrutiny by the federal antitrust laws.

Maine Health Alliance (Final Order August 27,2003): A network of doctors, hospitals, and

its executive director, William R. Diggins, settled charges that they illegally engaged in pricefixing activities that raised health care costs in five Maine counties by negotiating jointly with

third-party payers in a effort to obtain higher compensation and more advantageous contract

terms for its members.

Memorial Hermann Health Network Providers (Final Order January 18,2004): Memorial

Hermann Health Network Providers settled charges that it negotiated fees and other services for

medical care provided by its member physicians in the Houston, Texas area in an effort to obtain

higher fees and more advantageous terms. According to the complaint these alleged price fixing

practices increased costs for consumer, employers, and health plans.

Michael T. Berkley, D.C. and Mark A. Cassellius, D.C. (Final Order April 11,2000): A

consent order settled charges that Drs. Michael T. Berkley and Mark A. Cassellius conspired to

fix prices for chiropractic services and to boycott the Gundersen Lutheran Health Plan in an

attempt to obtain higher reimbursement for chiropractic servlces in the La Crosse, Wisconsin

area.

Minnesota Transport Services Association (Final Order September 15,2003): A consent

order settled charges that the household goods movers association filed collectively established

rate tariffs for its members in Minnesota, conduct that was not protected by the state action

doctrine. Under a state action doctrine, some private companies may be protected from the

federal antitrust laws if the state authority regulates and regularly reviews the operations and

practices of the companies.

National Academy of Arbitrators (Final Order January 13,2003): The National Academy of

Arbitrators is prohibited from adopting policies that restrict its members from advertising truthful

information about their services, including prices and conditions of services, under terms of a

consent order. The association is required to remove all provisions that do not conform to the

provisions in the consent order from: (1) its Code of Professional Responsibility for Arbitrators

of Labor-Management Disputes; (2) its Formal Advisory Opinions; (3) any Statements of Policy;

and (4) its Web site.

New Hampshire Motor Transport Association (Final Order December 4,2003): The New

Hampshire Motor Transport Association settled charges that it filed tariffs containing rules that

called for automatic increases in intrastate rates. In addition, the organization agreed to void its

collectively filed tariffs current in effect in New Hampshire.

Nine West Group Inc. (Final Order April 11,2000): Nine West Group Inc. settled charges that

it entered into agreements with retailers; coerced other retatlers into fixing the retail prices for

their shoes; and restricted periods when retailers could promote sales at reduced prices. The

order prohibits Nine West from fixing the price at which dealers may advertise, promote or sell

any product. Nine West is one of the country's largest suppliers of women's shoes.

Obstetrics & Gynecology Medical Corporation of Napa Valley (Final Order May 14,

2002): A doctors' group consisting of nearly every obstetrician and gynecologist with active

medical staff privileges at the two general acute care hospitals in Napa County, California setiled

charges that they restrained price and other competition by engaging in illegal agreements to fix

fees and other terms of dealing with health care insurance plans. According to the complaint

issued with the consent order, the doctors refused to deal with the third party payers except on

collectively determined terms. The consent order not only prevents the doctors from engaging in

similar practices in the future but also requires the dissolution of the group.

Physician Network Consulting, L.LC. (Final Order August 27,2003): The Physician

Network Consulting, L.L.C. of Baton Rouge Louisiana; Michael J. Taylor; Professional

Orthopedic Services, Inc; The Bone and Joint Clinic of Baton Rouge, Inc.; Baton Rouge

Orthopaedic Clinic, L.L.C.; and Orthopaedic Surgery Associates of Baton Rouge, L.L.C. settled

charges that they entered into agreements to fix prices and other terms on which they would deal

with United Healthcare of Louisiana, Inc., a health insurance company. Physician Network

Consulting is an agent for Professional Orthopedic Services' members.

Professional Integrated Services of Denver, Znc., Michael J. Guese, M.D., and Marcia

A. Brauchler (Final Order July 19,2002): A consent order settled charges that a Denver,

Colorado physician organization and its members, its president, Dr. M. J. Guese, and its nonphysician consultant, M. A. Brauchler, increased fees for services through collective boycotts and

agreements in a effort to fix the prices they would receive from health care insurance payers. The

order prohibits the organization and its members and other respondents from entering into any

agreement with insurance payers or providers to negotiate on behalf of the physicians group.

Professionals in Women's Care (Final Order October 2,2002): Eight Denver, Colorado

physician groups specializing in obstetrics and gynecology and their non-physician agent settled

allegations that the practice group and other physicians entered into collective contracts in an

effort to increase prices and terms of services when dealing with health insurance firms and other

third-party payers. The consent order prohibits the following respondents from entering into

such agreements in the future: R.T. Welter and Associates, Inc.; R. Todd Welter; Consultants in

Obstetrics and Gynecology, P.C.; Mid Town Obstetrics & Gynecology, P.C.; M l e High

OGIGYN Associates, P.C.; The OB-GYN, P.C.; The Women's Health Group, P.C.; Cohen and

Womack, M.D., P.C.; and Westside Women's Care, L.L.P.

Sony Musk Entertainment (Final Order September 6,2000): Five distributors of recorded

music illegally required retailers to advertise compact discs at or above the minimum advertised

price (MAP) set by the distribvtion company in exchange for substantial advertising payments for

various types of media includingtelevision, radio, newspaper and signs and banners within the

retailers own stores. According to the complaint, large music retailers would lose millions of

dollars if they refused to follow the MAP policies. As a result of this policy, the retail prices of

CDs increased. Beginning in 1997, distributors increased the wholesale prices for CDs, and

those wholesale prices have continued to rise each year since. Sony Music Entertainment and

four other firms, Bertelsmann, Universal Music and Video Distribution Corporation and UMG

Recordings, Inc., Time-Warner Inc., and EMIMusic Distribution, represent approximately 85

percent of all CDs purchased in the United States.

Southern Valley Pool Association (Final Order November 1,1999): A consent order

prohibits fourteen Bakersfield, California pool construction contractors from entering into any

agreement or conspiracy to substantially raise and set swimming pool construction prices. The

order also prohibits the contractors from refusing to deal with owner-builders or home

construction contractors or developers.

South Georgia Health Partners, L.L.C. (Final Order October 31,2003): A Georgia

physician-hosp~talorganization and its other associated physician groups settled charges that they

entered into agreements to fix physician and hospital prices and refused to deal with insurance

companies, except on collectively agreed-upon terms.

SPA Health Organization dba Southwest Physician Associates (Final Order July 17,

2003): A physician group in the DallaslFort Worth, Texas area settled charges that it collectively

bargained on behalf of its members to negotiate fee schedules with third party payers and other

health insurance companies. According to the complaint, issued with the consent order, these

practices decreased competition and increased prices for the provision of medical services to area

consumers.

Surgical Specialists of Yakima

(Final Order November 11,2003): The Surgical Specialists

of Yakima, Cascade Surgical Partners, lnc., P.S. and Yakima Surgical Associates, P.S. settled

charges that they jointly entered into agreements for their members to fix prices and terms for the

provision of medical services when dealing with health care insurers.

System Health Providers (Final Order August 20,2002): System Health Providers and its

parent corporation, Genesis Physicians Group, Inc., settled charges that they collectively

bargained with health insurance firms to accept proposed fee schedules; discouraged members

from entering into contracts directly with payers; and refused to deal with health insurance firms

and other third-party payers except on collectively agreed upon terms. The order prohibits the

recurrence of the alleged practices and actions.

Tenet Healthcare Corporation (Final Order January 29,2004): A consent order prohibits

Frye Regional Medical Center, Inc., an acute care hospital in Hickory, North Carolina, and its

parent company Tenet Healthcare Corporation from entering into any agreement to negotiate fees

on behalf of any physician practicing in four North Carolina counties and from refusing to deal

with insurance companies and other pavers. Also refer to related administrative complaint issued

to Piedmont ~ e a l t h ~ l l i a n c This

e . skttiement is the first case in which the commission has

named a hospital as a participant in an alleged physician price-fixing conspiracy.

Texas Surgeons, P.A. (Final Order May 18,2000): General surgeons and six competing

general surgery practice groups in the Austin, Texas area settled charges that they collectively

refused to deal with two health plans, forcing the plans to accept the surgeons' demands to raise

surgical rates.

Time Warner, Znc. (Final Order September 6,2000): Five distributors of recorded music

illegally required retailers to advertise compact discs at or above the minimum advertised price

(MAP) set by the distribution company in exchange for substantial advertising payments for

various types of media including telavision,radio, newspaper and signs and bannerswithin the

retailers own stores. According to the complaint, large music retailers would lose millions of

dollars if they refused to follow the MAP policies. As a result of this policy the retail prices of

CDs increased. Beginning in 1997, distributors increased the wholesale prices for CDs, and

those wholesale prices have continued to rise each year since. Time-Warner Inc. and four other

firms, Bertelsmann, Universal Music and Video Distribution Colporation and UMG Recordings,

Inc., EM1 Music Distribution, and Sony Music Entertainment represent approximately 85 percent

of all CDs purchased in the United States.

UniversalMusic and Video Distribution Corporation and UMG Recordings, Znc. (Final

Order September 6,2000): Five distributors of recorded music illegally required retailers to

advertise compact discs at or above the minimum advertised price CMAP) set by the distribution

company in exchange for substantial advertising payments for various types of media including

television, radio, newspaper and signs and banners within the retailers own stores. According to

the complaint, large mlsic retailers would lose millions of dollars if they refused to follow the

MAP policies. As a result of this policy the retail prices of CDs increased. Beginning in 1997,

distributors increased the wholesale prices for CDs, and those wholesale prices have continued to

rise each year since. Universal Music and Video Distribution and four other firms, Bertelsmann,,

Time-Warner Inc., EMI Music Distribution, and Sony Music Entertainment represent

approximately 85 percent of all CDs purchased in the United States.

Warner Communications Znc. (Final Order September 17,2001): Warner Communications,

Inc. and Vivendi Universal S.A. settled charges that they entered into agreements to fix prices

and restrict advertising. According to the complaint issued with the consent order, the two firms

formed a joint venture to distribute compact discs, cassettes, videocassettes of the public

performances of the Three Tenors. The venturers agreed not to advertise or discount the 1990

and 1994 concerts of the Three Tenors in an effort to restrict competition with the recordings of

the1998 concert recording. The 1998 concert was thought to be less appealing and not as popular

as the earlier performances. The consent order prohibits the firms from restraining competition

by entering into agreements fix prices or restrict advertising in the future.

Washington University Physician Network (Final Order August 22,2003): A consent order

prohibits a St. Louis, Missouri physicians' organization from negotiating with third party payers

on behalf of its member physicians and from refusing to deal with health insurance companies.

Wisconsin Chiropractic Association (Final Order May 18,2000): The Wisconsin

Chiropractic Association and its executive director, Russell A. Leonard, settled charges

- that they

conspired to fix the prices for chiropractic goods and services and to boycon third party payers in

an attempt to obtain higher reimbursement rates for services and contracts in the La Crosse,

Wisconsin area.

Administrative Complaints

Alabama Trucking Association, Znc. (July 8,2003): An administrative complaint charged

that the association of household goods movers engaged in the collective filing of tariffs on

behalf of its members who compete in the provision of moving services in the state of Alabama.

Under terms of a final consent order, Alabama Trucking Association, Inc. agreed to stop filing

tariffs containing collective intrastate rates and to void collectively filed tariffs currently in effect

in Alabama.

California Pacijic Medical Group dba Brown and Toland Medical Group (July 8,2003):

An administrative complaint charged a San Francisco, California physicians' organization with

engaging in an agreement under which its competing members agreed collectively on the price

and other terms on which they would enter into contracts with health plans or other third party

payers. The complaint also alleged that Brown and Toland directed its physicians to end their

preexisting contracts with payers and required its physician members to charge specified prices in

all Preferred Provider Organization contracts. A proposed consent agreement accepted for

comment in Febmary 2003, prohibits Brown and Toland from negotiating with payers on behalf

of physicians, refusing to deal with payers, and setting terms for physicians to deal with payers,

unless the physicians are clinically or financially integrated.

Hoechst Marion Roussel (March 16,2000): An administrative complaint charged that

Hoechst Marion Roussel (renamed Aventis as a result of the merger between Hoechst AG and

Rhone-Poulenc S.A.), the manufacturer of Cardizem CD, a once-a-day diltiazem drug product

used in the treatment of hypertension and angina, agreed to pay Andrx Corporation millions of

dollars not to market and distribute a generic version of Cardizem CD. According to the

complaint, Hoechst and Andrx conspired to create a monopoly in the market for diltiazem. A

consent order entered May 11,2001 settled the charges.

Kentuckv Household Goods Carriers Association. Znc. (Julv

An administrative

. . 8.2003):

complaint charged that the association composed of competing household goods movers filed

collective rates for intrastate moving- services in the state of Kentucky. According- to the

complaint, these activities were not protected under the state action docmne and are not immune

from federal antitrust scrutiny.

Movers Conference of Mississippi, Znc. (July 8,2003): An administrative complaint

charged that the association composed of competing household goods movers filed collective

rates for intrastate moving services in the state of Mississippi. According to the complaint, these

activities were not protected under the state action doctrine and are not immune from federai

antitrust scrutiny. Under terms of a final consent order, the Movers Conference agreed to stop

filing tariffs containing collect~veintrastate rates.

North Texas Specialty Physicians (September 16,2003): An administrative complaint

charged that the corporation of 600 physicians negotiated the price and other terms of medical

services that its participating physicians would accept in contracting with third party payers.

According to the complaint, the exchange of prospective price information among otherwise

competing physicians reduced competition and enabled the physicians to achieve supracompetitive prices.

Piedmont Health Alliance, Znc. Wecember 22,2003): An administrative complaint charged

Piedmont Health Alliance, Inc. with collectively setting prices it demanded for physician services

with third party payers. According to the complaint, the physician-hospital organization entered

into signed agreements on behalf of its member physicians to. participate in all contracts

negotiated and to accept the negotiated physician fees. The complaint further alleges that these

practices eliminated price competition among physicians in the North Carolina counties of

Alexander, Burke, Caldwell and Catawba. The complaint also names ten individual physicians

who participated in the alleged price fixing services. Also refer to settlement entered with Tenet

Healthcare Corporation (Frye Regional Medical Center, Inc.).

Polygram HoMing, Inc. (The Three Tenors) (July 30,2001): An administrative complaint

charged that the Warner and PolyGram Music Group joint venture agreed not to discount or

advertise the 1990 and 1994 Three Tenors albums and videos in an attempt to promote the 1998

Three Tenors concert. The complaint further alleged that the parties to the venture, formed to

distribute compact discs, cassettes and video cassettes, was concerned that the 1998 performance

would not be as well received as the earlier recordings. An initial decision upheld the complaint.

The Commission issued an opinion that affirmed the initial decision.

Schering Plough Corporation (March 30,2001): The complaint alleged that Schering Plough, the manufacturer of K-Dur 20 - a prescribed potassium chloride, used to treat patients

with low blood potassium levels - entered into anticompetitive agreements with Upsher-Smith

Laboratories and American Home Products Corporation to delay their generic versions of the KDur 20 drug from entenng the market. According to the charges, Schenng-Plough paid Upsher-

Smith $60 million and paid American Home $15 million to keep the low-cost generic version of

the drug off the market. The charges against American Home were settled by a consent

agreement. An initial decision filed July 2,2002 dismissed all charges against Schering - Plough

and Upsher-Smith Laboratories. A Commission opinion found that the agreements violated the

Federal Trade Commission Act.

South Carolina State Board of Dentistry (September 12,2003): An administrative alleged

thal the South Carolina State Board of Dentisuy prevented dental hygienists from providing

dental care and services on-site to children in South Carolina schools. According to the

complaint, the Board passed regulation that required the children to have a dentist examine the

children before they would be eligible for the school dental program. The complaint further

alleged that this provision decreased competition in the delivery of preventive dentaI services to

school-aged children. The Commission heard oral argument in January 2004 on a motion to

dismiss.

Other

Public Documents/Policy StatementsIConferences

Policy Statement on Monetary Equitable Remedies in Competition Cases (July 25,2003):

The Commission issued a policy statement that identified three factors that will be cons~deredin

determining whether the Commission will seek disgorgement or restitution in competition cases.

F~rst,the Commission will ordinarily seek monetary relief when the underlying violation is clear.

Second, there must be a reasonable basis for calculating the amount of remedial payment. Third,

the Commission will consider the value of seeking monetary relief in light of other remedies

available in the matter including private actions and crimnal proceedings.

FTC Antihust Actions in Pharmaceutical Services and Products (November 8,2002):

Summary of health care antitrust matters involving the pharmaceutical industry and enforcement

policy prepared by the FTC Health Care Services and Products Division Staff.

Second Public Conference on the U.S. Oil and Gasoline Industry (May 2002): From May

6 - 9,2002, the Commission held a second public conference to examine factors that affect prices

of refined petroleum products in the United States. The goal of the conference was to solicit

information and views on the major factors affecting the prices of refined petroleum products,

along with the relative importance of such factors.

Refined Petroleum Products in the United States (Public Conference August 2,2001): A

public conference was held to examine factors that affect prices of refined petroleum prices in the

United States. The participants included consumer groups, industry participants, and

independent experts - parties that can focus on domestic and international aspects of gasoline

industry.

Midwest Gas Price Investigation (March 30,2001): The final Commission Report found that

there was no evidence of collusion or other anticompetitive conduct by the oil industry to cause

gasoline price spikes during the spring and summer of 2000. The nine-month investigation

identified several key factors that contributed to the price increases: refinery production

problems; errors in estimating the potential for supply shortages in the Midwest.

Commission StudiesIGuidelines

Pharmaceutical Agreement Notijkation Filing Requirements (Effective January 7 ,

2004): Agreements between Brand-name and generic pharmaceutical companies regarding the

manufacture, marketing, and sale of generic versions of brand-name drug products .are required to

be filed with the Commission and the Department of Justice, pursuant to Section 1112 of the

Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

Slotting Allowances in the Retail Grocery Industry: Selected Case Studies of Slotting

Allowances in Five Product Categories (November 14,2003): Slotting allowances paid to

certain retailers in certain geographic areas for five product categories: fresh bread, hot dogs, ice

cream and frozen novelties, shelf-stable pasta, and shelf-stable salad dressing.

To Promote Innovation: The Proper Balance o f Competition and Patent Law and

Policy, A Report by the Federal ~ i d commission

(0c;ober 2003): The report is the first of

two reports about how to maintain that balance. The report concludes that questionable patents

are a significant compebtive concern and can harm innovation. The report makes

recornmendabon to reduce the number of questionable patents that are Issued and upheld.

Report of the State Action Task Force: Recommendations to Clarify and Reaffirm the

Original Purposes of the State Action Doctrine to Help Ensure that Robust

Competition Continues to Protect Consumers (September 23,2003): The staff report

concludes that the scope of the antitrust state action doctrine has expanded dramatically since its

articulation by the Supreme Court. The report recommends clarifications of the doctrine,

including more rigorous application of the "clear articulation" and "active supervision"

requirements.

Possible Anticompetitive Bamers to E-Commerce: Wine (July 3,2003): Staff report

concludes that e-commerce offers consumers lower prices and more choices in the wine market.

Report concludes that state bans on interstate direct shipping imposes the largest regulatory

barrier to expanded e-commerce in wine.

Generic Drug Entry Prior to Patent Expiration: An FTC Study (Released July 30,2002):

The Commission recommends changes to the Hatch-Waxman Amendments to permit only one

automatic 30-month stay per drug product, per generic entry application, and to resolve

infringement disputes over patents listed in the "Orange Book" prior to the filing of a generic's

entry application. By limiting the availability of 30-month stays to one per drug product, per

generic application, the report concludes that generic entry by other firms would be facilitated.

In addition,the Commission supports S.754, The Drug Competition Act, to require brand-name

companies and'first generic applicants to provide copies of certain agreements to the Federal

Trade Commission and the Department of Justice.

Antiirust Guidelinesfor Collaborations Among Competitors, Issued by the Federal

Trade Commission and the United States Deparhnent of Justice (April 2000): Guidelines

explain how the Agencies analyze certain antitrust issues raised by collaborations among

competitors. Also included are separate statements by Commissioner Thompson and

C o m s s i o n e r Leary.

Advisory Opinions

Dlmlap Memorial Hospital in Orville, Ohio. Staff concluded that Dunlap's provision of

pharmaceuticals to the Viola Stamman Free Clinic falls within the scope of the Non-Profit

Institutions Act. (January 9,2004)

Medical Group Management Association: Letter from Jeffrey W. Brennan to Gerald

Niederman. An association of medical practice administrators requested an opinion concerning

its proposal to conduct and publish the results of a survey of physician practices. (November

3,2003)

Partlinr LLC. Staff advised that Commission does not presently intend to recommend law

enforcement action in connection with Partlinx's proposed e-commerce joint venture. (October

10,2003)

Bay Area Preferred Physicians. The Bureau advised that it does not presently intend to

recommend an enforcement action if Bay Area Preferred Physicians establishes a physician

- .

network to create new contracting opportunities between physicians and health plans and other

third-party payers. (September 23,2003)

Valley Bap& Medical Center. Sale of pharmaceuticals to contracted workers who provide

services at VBMC.

(March 18,2003)

Arkansas Children's Hospital. Sale of pharmaceuticals to patients seen in clinics that are

located on ACH's campus but are operated by the University of Arkansas for Medical Sciences.

(March 18,2003)

PriMed Physicians : Proposal by physician group to create with other Dayton, Ohio area

physicians an advocacy group to undertake "a campaign to inform and educate the general

public" of policies and procedures by third party payers in Dayton. (February 6,2003)

Joint FTC and DOJ letter urging Council of the North Carolina State Bar to approve a

proposed opinion that would explicitly permit non-lawyers to compete with lawyers to

perform real estate closings. (July 11,2002)

MedSouth, Znc. A multi-specialty physician practice association in Denver, Colorado intends

to operafe a nonexclusive physician network joint venture. (February 21,2002)

Connecticut HospitaI Association The applicability of the Non-Profit Institutions Act to sales

of pharmaceuticals by its member hospitals to their retired employees.(December 20,2001)

Harvard Vanguard Medical Associates, Znc. Sale of pharmaceuticals by non-profit, multispecialty medical clinic to employees and to patients treated at the clinic. (December 18,2001)

Northeast Pharmacy Service Corporation Network of independent pharmacies in

Massachusetts and Connecticut offering

- a -package of medication-related patient care service.

(July 27,2000):

BJC Health System Sale of pharmaceuticals by non-profit hospital system to the system's

employees, affiliated managed care program enrollees, and home care subsidiary. (November 9,

1999):

Advocacy Filings

Comments of Staff of the Federal Trade Commission Bureau of Competition, Bureau of

Economics and the Office of Policy Planning to Kansas State Senator Les Donovan regarding

Bill No. 2330 which would bar the "below-cost" sale of motor fuel. (March 16,2004)

Comments of the Staff of the Federal Trade Commission Bureau of Competition, Bureau

of Economcs, and the Office of Policy Planning. Comments to the Speaker Pro Tempore of the

Alabama State House of Representatives Concerning the Alabama Motor fuels Marketing Act.

(January 29,2004)

Joint Comments of the Federal Trade Commission and the Department of Justice on a

draft of the proposed amendment to the Indiana Supreme Court Admissions & Discipline Rule

regarding Unauthorized Practice of Law to the Indiana State Bar Association. (October 10,

2003)

Comments of the Staff of the Federal Trade Commission Bureau of Competition, Bureau

of Economics, and the Office of Policy Planning. Analysis of Wisconsin's Unfair Sales Act:

Letter to Wisconsin State Representative Shirley Krug. (October 1,2003)

Comments to th Federal Energy Regulatory Commission regarding proposed revisions to

market-based tariffs and authorization.

(August 28,2003)

Letter sent to New York Attorney Eliot Spitzer. Comments of the Ofice of Policy and

Planning and the Bureau of Competition stated that there is a significant risk that the Motor Fuel

Marketing Practices Act could harm consumers by reducing competition in the sale of motor

fuels. (July 24,2003)

Application for Approval of Asset transfer Agreements with Affiliated Company,

Ameren Union Electric Company. Comments to the Illinois Commerce Commission

regarding the transfer of generat~onassets from an unregulated affiliated to its regulated parent

utility. (June 18,2003)

Proposed Amendments to the North Carolina Motor Fuel Marketing Act. Comments of

the Federal Trade Commission's Bureau of Competition, Bureau of Economics, and the Office of

Planning. Letter to Senator Daniel G. Clodfelter, Chairman of the Judiciary I Committee, stating

that the proposed amendments to the state's Motor Fuel Marketing Act are not only unnecessary,

but have significant potential to harm consumers by causing them to pay more at the pump.

(May 21,2003)

Standards for Determining Whether Natural Gas Prices are Constrained by Market

Forces. Comments to the Georgia Publ~cService Commission regarding proposed standards to

determine whether market forces constrain retail prices for natural gas. (April 24,2003)

The Potential Effect of Tenet Healthcare Corporation's Proposed Purchase of Slidell

Memorial Hospital. Letter from Bureau of Competition, Bureau of Economics and the Office

of Policy Planning to Louisiana Attorney General, The Honorable Richard P. leyoub, opposing

the proposed acquisition by Tenet Health Care Systems of the Slidell Memorial Hospital.

According to the letter, the proposed acquisition would eliminate competition and probably give

Tenet the opportunity to increase prices unilaterally following the acquisition. (April 1,2003)

Real Estate Closing Activities. The Commission and the Department of Justice Joint letter to the

Rhode Island House of Representatives on Proposed Bills H.5936 and H.5639: Proposed

Restrictions on Competition from Non-Attorneys. The agencies expressed concerns that the bills

would elinunate competition between non-lawyers and lawyers in the closing of real estate deals

in Rhode Island by requiring a lawyer to close almost all real estate closings. (April 1,2003)

Competition and the Effects of Price Controls in Hawaii's Gasoline Market

28,2003)

(January

Competition and the Effects of Price Controls in Hawaii's Gasoline Market (January

28,2003)

In the Matter of Application for FDA Approval to Market a New Drug; Patent Listing

Requirements; Comments of the FTC Before the HHS and FDA (December 23,2002)

FTC/DOJ Comments on the American Bar Association's Proposed Model Definition of

the Practice of Luw (December 20,2002)

Ohio House Bill 325 Physician Collective Bargaining (October 16,2002)

Bill No.SO4.522 (New York Motor Fuel Marketing Practices Act); /Bill No. A06942 (An

Act to Amend the General Business Law, in Relation to the Operation of Retail Service

Stations) (August 8,2002)

Proposed North Carolina State Bar Opinions Concerning Non-Attorneys' Involvement

in Real Estate Transactions (July 11,2002)

Proposed Bill H.7462, Restricting Competitionfrom Non-Attorneys in Real Estate

Closing Activities (March 29,2002)

The Threat of Consumer Harm Resulting from Physician Collective Bargaining Under

A h k a Senate Bill 37 (March 22,2002)

Virginia Senate Bill No. 458, "Below-Cost sales of Motor Fuels"

(February 15,2002)

Washington House Bill 2360, Physician Antitrust Immunity ( F e b ~ w8,2002)

Alaska Senate Bill 37, Physician Antihust Immunity (January 18,2002)

North Carolina State Bar Opinions Restricting Involvement of Non-Attorney in Real

Estate Closings and Refinancing Transactions (December 14,2002)

Competition and Consumer Protection Perspectives on Electric Power Regulatory

Reform (July 20,2002)

Arkansas Public Service Commission: Market Power Analysk (April 14,2000)

FDA: Citizen Petitions (March 2,2000)

Response to Chairman Bliley: Electricity Competition and Reliability Act

(January 14,

FDA: I80-Day Marketing Exclusivity for Generic Drugs (November 4,1999)

District of Columbia City Counsel Letter to D.C. City Counsel on Bill to Permit

Physicians to Collectively Bargain with Health Plans (October 29,1999)

Healthcare

Hearings on Healthcare and Competition Law and Policy sponsored by the Commission

and the Department of Justice. September 24 - 26; and 30; October 1,2003, Washington, DC.

Physician Product and Market Definition

Physician Information Sharing

Physician IPAs - Pattems and Patterns of Integration - Messenger Model

Physician Unionization; Group Purchasing Organizations

International Perspectives on Health Care and Competition Law and Policy

Medicare and Medicaid

Remedies: CiviUCriminal

Hearings on Healthcare and Competition Law and Policy sponsored by the Commission

and the Department of Justice. June 25 - 26,2003, Washington, DC.

Mandated Benefits

Pharmaceutical: Formulary Issues

Prospective Guidance

Hearings on Healthcare and Competition Law and Policy sponsored by the Commission

and the Department of Justice. May 27; 29; and 30 and June 10 - 12,2003, Washington, DC.

Quality and Consumer Information - Hospitals

Physicians

Market Entry

Long Term CareIAssisted Living Facilities

Noerr-PenningtonIStateAction

Financing DesignIConsumer Information Issues

Hearings on Healthcare and Competition Law and Policy sponsored by the Commission

and the Department of Justice. April 21 - 23; May 7 - 8,2003, Washington, DC.

Health Insurance Monopoly - Market Definition. Competitive Effects

Health Insurance Monopoly - Entry and Efficiencies

Health Insurance Monopsony - Market Definition - Competitive Effects

Health InsurancelProviders:Countervailing Market Power - Most Favored Nation Clauses

Physician Hospital Organizations

Qualify and Consumer Information - Overview

Hearings on Healthcare and Competition Law and Policy sponsored by the Commjssion

and the Department of Justice. March 26 - 28,2003, Washington, DC.

Round table discussion on hospital-related issues and an examination of product and

geographic markets for hospitals

Issues in litigating hospital mergers

Hearings on Healthcare and Competition Law and Policy sponsored by the Commission

DC. Examined the state of

and the Department of Justice. February 26 - 28,2003, Washington,

the healthcare market place and the role of competition, antitrust, and consumer protection in

satisfying citizens' preferences for high-quality, cost-effective healthcare.

Healthcare Impact of Competition Law & Policy on the Cost, Quality and Availability of

Healthcare and the Incentivesfor Innovation in the Field. September 9 10,2002 Workshop,

Washington,DC.

Intellectual Property and Patent Law

Intellectual Property Law and Policy

- Roundtable Discussion (October 25,2002)

Competition, Economic, and Business Perspectives on Patent Quality and Institutional

Issues: Competitive Concerns, Prior Art, Post-Grant Review, and Litigation

Competition,Economic, and Business Perspectives on SubstantivePatent Law Issues:

Non-Obviousness and Other Patentability Criteria

Antitrust Law and Patent Landscapes

Standard Setting Organizations: Evaluating the Anticompetitive Risks of Negotiating

Intellectual Property Terms and Conditions Before a Standard is Set

Relationships Between Competitors and Incentives to Compete: Cross Licensing of

Patent Portfolios, Grantbacks, Reach-Through royalties, and Non-Assertion Clauses

www.ftc.govlopp/intellect~index

Antitrust and Intellectual Property Law and Policy

Patent Pool and Cross-Licensing: When Do They Promote or Harm Competition? (April

17,2002)

Standard-Setting Practices: Competition, Innovation and Consumer Welfare to Deal?

(April 18,2002)

The Strategic Use of Licensing: Is There Cause for Concern about Unilateral Refusals to

Deal? (May 1,2002)

Patent Settlements: Efficiencies and Competitive Concerns (May 2,2002)

Antitrust Analysis of Licensing Practices (May 14,2002)

An International Comparative Law Perspective on the Relationship Between

Competition and Intellectual Property, Parts I and I! (May 22 - 23,2002)

Competition and Intellectual Property Policy

Cross-Industry Perspectives on Patents (April 9, 2002)

Substantive Standards of Patentability (April 10,2002)

Patenting Procedures, Presumptions, and Uncertainties (April 10,2002)

Patentable Subject Matter - Business Method and Software Patents (April 11,2002)

Patent Criteria and Procedures - International Comparisons (April 11,2002)

Hearings to Focus on the Implications of Competitionand Patent l a w and PoIicj)

Competition and Intellectual Property Law and Policy in the Knowledge-Based

Economy (February 6,2002)

Patent Law for Antitrust Lawyers (February 8,2002)

Antitrust Law for Patent Lawyers (February 8,2002)

Economic perspectives on Intellectual Property; Competition and Innovation (February

20,2002)

Business and Economic Perspectives on Real-World Experiences with Patents

(February 25 - 28,2002)

Business and Other Perspectives on Real-World Experiences with Patents (March 19 20,2002)

Other

Anticompetitive Efforts to Restrict Competition on the Internet - (October 8 - 10,2002

Washington, DC): Public workshop explored possible anticompetitiveefforts to restrict

competition on the Internet.

Federal Circuit Jurisprudence: Jurisdiction, Choice of Law, and Competition Policy

Perspectives (July 11,2002)

Slam-ng Allowances (May 31; June 1,2000): Commission held two public workshops on

"Slotting Allowances" - lump sum and up-front payments that food manufacturers pay to get

new products placed on supermarket shelves. The workshop provided manufacturers, retailers

and other interested persons who have had actual-hands on experience with grocery marketing

practices with a forum to discuss the nature of slotting allowances to assess whether they raise

competitive concerns.

Report on Slotting Allowances and Other Grocery Marketing Practices

(February 20,2001): Staff report on information gathered and antitrust issues addressed at

the public workshops held in 2000. Commission staff recommended that the agency

gather basic data on current grocery marketing practices and continue to pursue

anticompetitive conduct on a case-by-case basis. In addition, staff recommended that the

agency refrain from issuing slotting allowance guidelines.

VERTICAL ENFORCEMENT

Commission Opinions/Znitiul Decisions

Toys "R" Us (Commission Decision November 1,2000 - Final Order; Initial Decision

September 30, 1997): An Administrative Law Judge issued an initial decision that, if made final,

would prohibit Toys " R Us from entering into agreements with toy manufacturers and others

that result in restrictions on sales to warehouse clubs. TRU threatened to stop buying products

that were sold to warehouse clubs, which resulted in major toy makers halting the sale of certain

products to clubs. The A U found that these practices reduced competition and led to higher toy

prices. The initial decision would prohibit the toy chain from entering into any agreement with a

supplier to restrict sales to any toy discounter; from facilitating agreements among suppliers that

would limit sales to any retailer; and for five years, from refusing to or announcing it will refuse

to purchase from a supplier because the supplier sells to a toy discounter. On October 14, 1998

the Commission issued its decision that Toys " R Us had orchestrated horizontal and vertical

agreements with and among toy manufacturers to restrict the availability of popular toys to

warehouse clubs. On December 7,1998, Toys "R" Us filed a notice of appeal in the U.S. District

Court for the Seventh Circuit. In August 200, the Commission's complaint was upheld by

Seventh Circuit Court of Appeals.

Court Decisions

Toys "R" Us (August 1,2000): The United States Court of Appeals for the Seventh Circuit

unanimously affirmed the 1998 Commission decision. The Court found that the nation's largest

toy retailer engaged in horizontal and vertical agreements with and among toy manufacturers to

restrict the availability of popular toys to warehouse clubs.

Authorization to Seek Preliminary/Permanent Injunctions

Mykzn Laboratories, Inc. (December 22,1998): Complaint filed in the U.S. District Court for

the District of Columbia charged Mylan with restraint of trade, monopolization and conspiracy to

monopolize the market for two generic drugs used to treat anxiety, lorazepam and clorazepate,

through exclusive dealing arrangements. The complaint seeks consumer redress of at least $120

million and to enjoin the alleged illegal exclusive licensing agreements. Federal District Court

Judge Hogan released a 46 page decision upholding the Commission's authority to seek

restitution in antitrust injunction actions under Section 13(b) of the Federal Trade Commission

Act. November 29,2000: Commission approved a $100 million settlement-the largest

monetary settlement in Commission history. The opinion settled Commission concerns that

Mylan, Gyma Laboratories of America, Inc., Cambrex Corporation and P r o f m a c o S.R.L.

conspired to deny Mylan's competitors ingredients necessary to manufacture lorazepam and

clorazepate. On April 27, 2001, the U.S. District Court for the District of Columbia granted

preliminary approval to a plan of distribution to injured consumers who paid the increased prices

and state agencies, including Medicaid programs, that purchased the drugs while the illegal

agreements were in effect. The court granted final approval of the settlement February 1,2002.

The funds were distributed by the states.

Consent Orders

McComick & Company (Final Order April 27,2000): McCormick & Company agreed to

settle charges that it violated the Robinson-Patman Act when the firm charged some retailers

higher net prices for its spice and seasoning products than it charged other retailers. According

to the complaint, McCormick, the world's largest spice company, offered its products to some

retailers at substantial discounts using a variety of different discounting schemes, such as slotting

allowances, free goods, off-invoice discounts and cash rebates. The order prohibits McCormick

from engaging in price discrimination and from selling its products to any purchaser at a net price

higher than McCormick charged the purchaser's competitor.

Administrative Complaints

None

Other

None

SINGLE FIRM ENFORCEMENT

Commission Opinions/Znitial Decisions

Union Oil of California (November 25,2003): An administrative law judge dismissed a

complaint in its entirety against Union Oil of California that charged the company with

committing fraud in connection with regulatory proceedings before the California Air Resources

Board regarding the development of reformulated gasoline. The judge ~ i e much

of Unocal's

conduct.was permissible activity under the Noerr-Pennington doctrine and that the resolution of

the issues outlined in the complaint would require an in depth analysis of patent law which he

believed were not with the jurisdiction of the Commission. Compliint counsel filed an appeal of

the decision. An oral argument was held on March 10,2004.

Administrative Complaints

Rambus, Znc. (June 19,2002): An administrative complaint charged that between 1991 and

1996, Rambus joined and participated in the E D E C Solid State Technology Association

(JEDEC), the leading standard-setting industry for computer memory. According to the

complaint, JEDEC rules require members to disclose the existence of all patents and patent

appl~cationsthat relate to ~ E C ' standard-setting

work. While a member of -c,

Rambus

observed standard-setting work involving technologies which Rambus believed were or could be

covered by its patent applications, but failed to disclose this to JEDEC. In 1999 and 2000, after

TEDEC had adopted industry-wide standards incorporating te technologies at issue and the

industry had become locked in to the use of those technologies, Rambus sought to enforce its

patents against companies producing IEDEC-compliant memory, and in fact has collected

substantial royalties from several producers of DRAM (dynamic random access memory): An

initial decision dismissed the charges. An appeal has been filed.

Union Oil Company of California (March 4,2003): An administrative complaint charged

that Union Oil Company

. - of California (Unocal) made misleading statements concerning its

emissions results for the production of "summer-time" gasoline mandated by the ~ a l i f o k i Air

Resources Board (CARB) for use March through October. According to the complaint, Unocal

lead producers of the CARB gasoline to believe that its research was non-proprietary and in the

public interest, while at the same time it failed to disclose that it had patent pending claims on the

research results with the U.S. Patent and Trademark Oftice. As a result of the patent being

allowed, Unocal is now in a position to enforce its patent rights - requiring companies that

produce the "summer-time" CARB gasoline to pay substantial royalties to Unocal if they use the

patented technology. An initial decision dismissing the complaint was filed on February 17,

2004. The initial decision has been appealed to the Commission.

IV. International Activities

The Bureau of Competition is involved in a variety of international activities that are

increasingly critical to the achievement of the agency's missions. The FTC has built a strong

network of cooperatjve relationships with counterpart agencies abroad, and plays a lead role in

key multilateral fora. The FTC actively assists competition agencies in new market-based

economies in developing competition laws, agencies, and enforcement tools and policies. The

FTC works increasingly with other nations to protect American consumers who can be harmed

by both,anticompetitive conduct perpetrated beyond our borders, and to foster convergence

toward best practices.

Cooperation in Enforcement and Policy Development

Cooperation with competition agencies of otherjurisdictions is a key component of an

effective enforcement program. The FTC has broadened and deepened its cooperation with

agencies around the world on individual cases and on policy issues. The FTC's relationships

with counterparts in the European Union, Canada, and otherjurisdictions remain vital as our

staffs continue to work together closely on investigations of mutual interest, including the

following matters during the past year:

~fizer/Pharrnaci'a.The resolution of the competition concerns raised by Pfizer's

$60 billion acquisition of Pharmacia involved close coordination between the

FTC and the European Commission on two of the eight affected markets in which

the FTC obtained remedial measures. The FTC also coordinated various

antitrust aspects of the transaction with competition authorities in Australia,

Canada, Mexico, and South Africa.

DSMIRoche. DSM's proposed $2 billion acquisition of Roche Vitamins and Fine

Chemicals Division presented potential anticompetitive effects in the market for a

critical enzyme in certain cattle feed. The remedy ultimately achieved by the FTC

and the EC required the unwinding of a joint venture as well as assurances that the

remaining venture partner would be capable of maintaining competition. The case

presented critical policy issues regarding remedies, on which the U.S. agencies

and the EC have coordinated.

GEIAgfa. The successful resolution of this merger investigation involved

cooperation with the competition authorities of Ireland, Germany, and the EC.

The cooperation demonstrated the value of the contacts that have developed

among the agencies that enable them to respond quickly to multi-jurisdictional

mergers. The parties reached settlements with the FTC and the EC that were

announced within two weeks of each other and within the time frame sought by

the parties.

The FTC and its counterpart agencies seek to streamline cooperation in merger cases, and

remain committed to addressing and minimizing policy divergences in all areas. These efforts

are exemplified by the "best practices" that the EC and the U.S. agencies issued in 2002 that

institutionalize and make more transparent the means by which the agencies can review mergers

subject to review in both jurisdictions. During the past year, the U.S. agencies provided input

into EC proceedings regarding merger policy and intellectual property regulations, the Japan Fair

Trade Commission's proposed reform of rules relating to the treatment of "essential facilities,"

and proposed amendments to the Canadian Competition Act. The U.S. agencies have, similarly,

benefitted from input from their foreign counterparts on policy reviews in the U.S.

Multilateral Competition Cooperation

The FTC participates actively in various multilateral competition fora that further

international cooperation and convergence.

ICN. The International Competition Network, which has 86 member competition

agencies from 76 jurisdictions, provides a venue for antitrust officials worldwide to achieve

consensus on proposals for procedural and substantive convergence on best practices in antitrust

enforcement and policy. In June 2003, the ICN hosted its second annual conference, highlighting

its work on multi-jurisdictional merger review, competition advocacy, and capacity building.

Based on recommendations of the Merger Working Group's Subgroup on Notification and

Procedures, which the FTC chairs, the ICN adopted a set of seven Recommended E'ractices on

Merger Notification Procedures, which complement the eight Guiding Principles for Merger

Notification and Review adopted the previous year. In prepsation for the ICN's April 2004

annual conference, the Mergers Working Group has prepared new recommended practices on

conduct of merger investigations, procedural fairness, confidentiality, and interagency

coordination, and is preparing a manual on recommended techniques for merger investigations

The ICN's Competition Advocacy Working group developed an online infbmation and

resource center, prepared a compilation of advocacy provisions, conducted sectoral studies of

advocacy, and assembled a "tool kit" of competition advocacy mechanisms; its work is

continuing in the Capacity Building and Competition Policy Implementation Working Group.

The Capacity Building group also prepared a report on the challenges developing countries face

in implementing competition policies, and one of its subgroups, which the FTC co-chairs, is

conducting a study on the types of technical assistance that work best in particular circumstances,

examining ways to build broader support for competition policy, and examining the relationship

between technical assistance funding agencies and their counterpart competition agencies. The

working group on Antitrust Enforcement in Regulated Sectors, created in 2003, has subgroups

compiling reports on the viability of antitrust law in regulated sectors, antitrust enforcement

initiatives in regulated industries, and the manner in which antitrust authorities and regulators

exercise authority in areas of overlap.

OECD. The OECD Competition Committee i s an important forum for competition

officials from developed countries to share experiences and promote best practices. During the

past year, the FIT has participated actively in the OECD's continuing work on, inter alia,

merger process convergence,regulatory reform, and examining the issues at the intersection of

trade and competition policy. The FTC was a leader in the OECD's first joint roundtable on

competition and consumer protection, in which the synergies between the two disciplines in

promoting consumer welfare were explored. The OECD also hosted a Global Forum on

Competition involving OECD members and representatives of approximately thirty nonmembers.

Trade/Competition Fora

Trade agreements increasingly involve competition issues. The FTC co-chairs the U.S.

delegation to the World Trade Organization Working Group on the Interaction between Trade

and Competition Policy, which examined issues relating to the role of competition policy in the

WTO. FTC staff participated in the WTO Ministerial Conference in Cancun. The FTC has

been working with other U.S. agencies and the other nations of the hemisphere to develop

competition provisions for a Free Trade Agreement of the Americas. The FTC also participated

in the U.S. delegation that negotiated the competition chapter of proposed Free Trade Agreement

with Australia.

International Technical Assistance

For over a decade, the FTC has assisted transition economies that have made the

commitment to market and commercial law reforms. With funding principally from the U.S.

Agency for International Development (USAID), and in partnership with DOJ, over 40 nations

have received technical assistance with the development of their competition laws. In this past

year, the technical assistance program was active in Southeast Europe, Eurasia (i.e., Russia and

other components of the former Soviet Union), the Andean Community, Egypt, Indonesia,

Mexico, and South Africa. The FTC maintains a resident advisor program in Indonesia and, with

DOJ, continues its resident advisor program in South Africa. The FTC's short-term programs

have emphasized the development of investigative skills. These programs rely on a combination

of resident advisors, regional workshops, and targeted short-term missions. The agency

schedules these technical assistance activities to enable career FTC staff to share their expertise

with their counterparts in the newer competition agencies of the world. In the past year, the FTC

received funding to begin new programs of assistance to the ASEAN community of ten nations

in Southeast Asia.

V. Competition Speeches

LLUnilateral

Merger Effects & Economic Models" (March 3,2004) Luke M. Froeb,

Director, Bureau of Economics, The 2004 Antitrust Conference: Antitrust Issues in Today's

Economy, New York, New York.

"Diagnosing Physician-Hospital Organizations" (January 22,2004) Susan A. Creighton,

Director, Bureau of Competition, American Health Lawyers Association, Program on Legal

Issues Affecting Academic Medical Centers and Other Teaching Institutions, Washington, DC.

"Competition Policy and Regulatory Reform: Means and Ends, How Should

Competition Policy Transform Itself?" (November 20,2003) Todd J. Zywicki, Director,

Office of Policy Planning, Competition Policy Research Center, Fair Trade commission of

Japan, Inaugural Symposium.

"A Regulator's Perspective on Protecting Consumers and Competitive

Marketplaces: Developments

at the FTC" (November 7,2003) Orson Swindle,

Commissioner, American Bar Association, Section of Administrative Law and Regulatory

Practice, 2003 Administrative Law Conference, Washington, DC.

'The Role of Expert Economic Testimony in Antitrust Litigation" (November 2003)

Luke M. Loeb, Director, Bureau of Economics, Committee on Antitrust and Trade Regulation of

the Association of the Bar of the City of New York.

"State InterventionJState Action A U.S. Perspective" (October 24,2003) Timothy J.

Muris, Chairman, Fordham Annual Conference on International Antitrust Law & Policy, New

York, New York.

"A FederaLState Partnership on Competition Policy: State Attorneys General as

Advocates" (October 1,2003), National Association of Attorneys General, 2003, Antitrust

Seminar, Washjngton, DC.

"Antitrust in Healthcare: A Keynote Address" (May 15,2003) Thomas B. Leary,

Commissioner, Written version of May 15,2003 speech given at forum on Antitrust and

Healthcare, Health Lawyers Association and the ABA Sections on Antitrust Law and Health,

Wash~ngton,DC.

"How History Informs Practice Understanding the Development of Modern U. S.

Competition Policy (November 19,2003) Timothy J. Muris, Chairman, American Bar

Association's Fall Forum, National Press Club, Washington, DC.

"Advertising and Unfair Competition: FTC Enforcement" (March 21,2003) Thomas

B. Leary, Commissioner, 18" Annual Advanced ALI-ABA Product Distribution and Marketing

Course of Study Program, Orlando, Florida.

"Vertical issues: T h e Federal View" (March 20,2003) Thomas B. Leary, Commissioner,

18" Annual Advanced ALI-ABA Product Distribution and Marketing Course of Study Program,

Orlando, Florida.

b'Discussion of Generic Drug Study" (January 29,2003) Michael S. Wroblewski, Assistant

General Counsel for Policy Studies, Office of General Counsel, Generic Pharmaceutical

Association Annual Meeting, Rio Grande, Puerto Rico.

"Improving the Transitional Process: Key Issues and Recommendations" (January 21,

2003) Mozelle W. Thompson, Commissioner, American Antitrust Institute's 3* Annual Energy

Roundtable Workshop "Getting From Here to There: Transitional Competition Issues in U.S.

Electric Industry Restructuring", National Rural Electric Cooperative Association, Arlington,

Virginia.

American Bar Association Antitrust Section Mid Winter Meeting (January 20,2003)

Timothy J. Muris, Chairman, Participant, Puerto Rico.

"Industrial Organization and Antitrust Enforcement: Will Modern Industrial

Organization Move Out of the Classroom and into the Courthouse?" (January 15,2003)

William E. Kovacic, General Counsel, Office of General Counsel, Panel Discussion, George

Mason University Winter 2003 Antitrust Symposium, Washington, DC.

"Coordinated Interaction: Is There a Need For More Vigor?" (January 15,2003) Mary

Coleman, Deputy Director for Antltrust, Bureau of Economics, George Mason University Winter

2003 Antitrust Sympostum; and Timothy J. Muris, Chairman; Keynote Address, Washington,

DC.

Organization for Economic Co-operation and Development Global Business Forum on Ecommerce: ICT's Untapped Resources and Opportunities for Continued Growth (January

13,2003) Mozelle W. Thompson, Commissioner, Participant, Waikiki, Hawaii.

Institute of Public Utilities' 34a Annual Regulatory Policy Conference (December 10,

2002) Thomas B. Leary, Commissioner, Keynote Speaker, Tampa, Florida.

"Antitrust Implications U n d e r Hatch-Waxman" (December 6,2002) Thomas B. Leary,

Commissioner, Food and Drug Law Institute Hatch-Waxman Update Conference, Washington,

DC .

"Competition" (October 30,2002) Thomas B. Leary, Commissioner, International Chamber

of Commerce, Department of Policy and Business Practices, ICC Commission, New York, New

York.

"The Federal Trade Commission Perspective" (October 31,2002) Timothy J. Muris,

Chairman, Fordham Corporate Law Institute's International Antitrust Policy Forum, New York,

New York.

2002 Global Business Dialogue on Electronic Commerce (October 28,2002) Mozelle

W. Thompson, Commjssioner, Participant, Annual Meeting, Brussels, Belgium.

American Bar Associations Antitrust Masters Course (October 25,2002) Thomas B.

Leary, Commissioner, Remarks, Sea Island, Georgia.

"Current Developments in EC & US Antitrust Law" (October 10,2002) Thomas B.

Leary, Commissioner, European Law Research Center at Harvard Law School, Cambridge,

Massachusetts.

"Generic Drugs" (October 9,2002) Timothy J. Muris, Chairman, Testimony before the

Subcommittee on Health, Committee on Energy and Commerce, Raybum House Office

Building, Washington, DC.

Anticompetitive Efforts to Restrict Competition on the Internet Workshop (October

8,2002) Timothy J. Muris, Chairman, Opening Remarks. Comments by Thomas B. Leary,

Commissioner. October 10,2002 Session, Opening Remarks by Sheila F. Anthony,

Commissioner; and Concluding Remarks by Ted Cruz, Director, Office of Policy Planning,

Washington, DC.

"Oversight of Enforcement of the Antitrust Laws" (September 19,2002) Timothy J.

Muris, Chairman, Testimony before the U.S. Senate Committee on t

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