Legal Library: Cases and Proceedings

The Commission challenged Flow International Corporation’s proposed $109 million acquisition of rival waterjet manufacturer OMAX Corporation. Both corporations develop, manufacture, and sell computerized waterjet cutting systems which use pressurized water mixed with abrasive garnet particles to cut various materials, including steel and stone. The proposed acquisition would have united the two largest competitors in the market for the manufacture and sale of computerized waterjet cutting systems and allowed Flow to exercise market power and increase prices. Furthermore, the Commission charged that entry would be very unlikely because OMAX received two broad patents relating to the control systems for waterjet cutting systems. The Commission approved a consent agreement requiring OMAX to grant any request for a royalty-free license for its controller patents.

The Commission challenged a series of acquisitions by TALX Corporation, a fully owned subsidiary of Equifax, Inc., that lessened competition in the markets for outsourced unemployment compensation management (UCM) and verification of income and employment (VOIE) services. Unemployment compensation management services consist of the administration of unemployment compensation claims filed with a state or territory. Verification of income and employment services consists of providing income and employment information on behalf of employers to third parties, such as lenders or other creditors. According to the Commission’s complaint, TALX’s series of acquisitions from 2002 to 2005 substantially reduced competition in the nationwide provision of VOIE services and in the provision of outsourced UCM services, and enhanced TALX’s ability to unilaterally increase prices and decrease the quality of its services. Under the Commission consent order designed to restore competition, TALX agreed to allow certain customers terminate their agreements and give notice to the FTC before acquiring, or entering a management contract with, a UCM or VOIE service provider.