Get ready to un-scramble the eggs.
The Federal Trade Commission today announced that it has filed suit against The Dun & Bradstreet Corp., objecting to the company’s $29 million purchase of Quality Education Database in February 2009.
The FTC alleges that the deal, which fell well below the threshold for pre-merger review, gives the combined companies more than 90% of the market for K-12 educational marketing data.
“Despite its relatively low dollar value, this transaction dramatically decreased competition in the marketplace,” said Richard Feinstein, director of the FTC’s Bureau of Competition in a statement. “When Dun & Bradstreet acquired QED, it bought its closest competitor and created a monopoly. That’s going to get the FTC’s attention every time.”
In the FTC’s administrative complaint, the agency charged that the acquisition violated Section 5 of the FTC Act. Calling it a “merger-to-monopoly,” the FTC said that it would likely allow the company to “unilaterally to exercise market power in various ways, including increasing prices and reducing product quality and services.”
The FTC vote to approve the suit was 4 – 1, with Commissioner J. Thomas Rosch voting no.
In a statement, Dun & Bradstreet said it "believes we have not violated any antitrust laws as a result of our acquisition of QED. We are in the process of trying to resolve this issue with the Federal Trade Commission."
The company is being represented by Shearman & Sterling.
While it's not common, the FTC does periodically go after consummated mergers.
Most recently, FTC Chief Administrative Law Judge Michael Chappell in March found that Polypore International Inc.’s consummated acquisition of rival battery separator manufacturer Microporous L.P. was anticompetitive and violated federal law. He ordered Polypore to divest Microporous to an FTC-approved buyer.
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