Tag: Competition

A pharmacy association in northern Puerto Rico and Ricardo Alvarez Class settled charges that they engaged in an illegal boycott in an attempt to obtain higher reimbursement rates for pharmacy goods and services under the government's managed care plan for the indigent. The consent order prohibits the members of the association and Mr. Class from engaging in joint negotiations for prices and from threatening to boycott or refusing to provide pharmacy services.

An association of marine pilots in Oregon agreed to settle charges that it monopolized and unreasonably restrained competition in the market for pilotage services on the Columbia River. The consent order prohibits Columbia River Pilots, a group of approximately 40 marine pilots licensed by the state of Oregon to provide navigational assistance to vessels on the Columbia River, from imposing unreasonable noncompete agreements on its members, allocating customers with any competing pilotage group, limiting any competing pilotage group's size, or restricting exclusive dealing contracts or rate proposals.

To settle FTC charges, LaFarge, Corp. agreed to restructure its agreement to purchase certain assets of Holnam, Inc.  LaFarge and Holnam are two of five competitors in the portland cement market in the Puget Sound area. In February 1998, LaFarge and Holnam signed a letter of intent detailing an agreement under which LaFarge would buy Holnam's Seattle cement plant, cement distribution terminal in Vancouver, Washington, a rock quarry in Twin Rivers, Washington, and related assets. The FTC alleged that a provision of the sales agreement between LaFarge and Holnam would have imposed a penalty on LaFarge if it produced quantities of cement in excess of 85 percent of the Holnam plant's capacity. According to the FTC, this provision would encourage LaFarge to restrict the output of cement at the Seattle plant to avoid the production penalty and would prevent an increase in supply and a reduction in price for cement in the Puget Sound area. To restore competition, LaFarge and Holnam agreed to drop the production penalty clause.

The complaint, issued with the consent order, alleged that as a result of Merck's 1993 acquisition of Medco, the nation's largest benefits manager, Merck's drugs received favorable treatment through Medco's drug-list formulary made available to medical professionals who prescribe and dispense prescriptions to health plan beneficiaries. The consent order requires Medco, among other things, to maintain an "open formulary" to include drugs approved by an independent Pharmacy and Therapeutics Committee, staffed by physicians and pharmacologists who have no financial interest in Merck.

The consent order requires Shell Oil and its Tejas Energy, LLC, subsidiary, to divest parts of the ANR pipeline system in Oklahoma and Texas to settle charges that its acquisition of gas gathering assets of The Coastal Corporation would lead to anticompetitive increases in gas gathering rates and an overall reduction in gas drilling and production in the two states.

A final consent order settles allegations stemming from Medtronic's proposed acquisition of Physio-Control International Corporation's automatic external defibrillator business. According to the complaint, Medtronic, through its controlling interest in SurVivaLink Corporation, a direct competitor of Physio-Control, would control both companies as a result of the acquisition and thereby increase the likelihood of coordinated interaction which could result in increased prices and reduce innovation in the market. The consent order requires Medtronic to become a passive investor in SurVivaLink and reduce many of its present and future business contacts with the firm.

A consent order requires Albertson's to divest eight supermarkets in Montana and seven in Wyoming in order to settle FTC charges and maintain competitive grocery pricing in 11 communities following its acquisition of the Buttrey Food and Drug Store Company. Under the consent agreement, 13 of the supermarkets would be sold to Smith's Food and Drug Centers, Inc. and two supermarkets would be sold to Supervalu Holdings, Inc.

Federal-Mogul, one of the world's leading producers of thinwall bearings used in car, truck and heavy equipment engines, agreed to divest the thinwall bearings assets it acquired in its $2.4 billion takeover of T&N, plc. to settle FTC charges that the acquisition would likely substantially reduce competition in the worldwide market for thinwall bearings. According to the FTC, Federal-Mogul and T&N, headquartered in Manchester, England, have a combined market share in the United States of nearly 80 percent or more in each of the four markets identified in the complaint. The FTC consent order requiree Federal-Mogul to divest the thinwall bearings business of T&N, which includes the assets and plants that T&N uses to make thinwall bearings, as well as intellectual property that T&N uses to develop and design new bearings to meet the needs of engines that OEMs will develop in the future. To ensure that the divested thinwall bearings business would be in the same position that T&N had been in terms of research, the proposed order identifies individuals in T&N who worked on bearings research and development, and requires Federal-Mogul and T&N to assign those personnel to the businesses to be divested.