In a sign that antitrust work is rebounding, the number of mergers reviewed by the U.S. Department of Justice and Federal Trade Commission increased for the second year in a row after bottoming out in 2009.
In fiscal year 2011, companies submitted 1,450 Hart-Scott-Rodino Act filings to the antitrust agencies, up from 1,166 filings in 2010 — and a mere 716 in 2009. Under the act, companies are currently required to obtain pre-merger review for deals worth more than $66 million.
In a Nov. 17 speech at the American Bar Association’s fall antitrust forum, acting Antitrust Division head Sharis Pozen said DOJ ”allowed 98 percent of the transactions it reviewed to clear its process without requesting any further information from the parties.”
As for the other 2 percent where there’s a second request for information? “In many of these matters, the parties proposed remedies that the division agreed would solve the competitive problem it had identified,” she said. In other cases, DOJ lawyers went to court, recently blocking the merger of H&R Block and TaxACT. A challenge to AT&T's acquisition of T-Mobile USA is still pending.
As for the Federal Trade Commission, which released its annual report this week, it had less to brag about.
The FTC reported that it missed one key antitrust goal in fiscal year 2011. The agency’s target was to “obtain a positive result” 40 to 60 percent of the time when bringing antitrust actions, whether via wins in court, consent decrees, abandoned transactions or restructured transaction remedies.
In 2011, the FTC came out on top in only 14 of 44 “significant merger and non-merger investigations” — or 32 percent of the time. (In 2010, the FTC succeeded in 23 out of 58 cases, or 40 percent of the time).
Of the 14 wins, nine involved consent decrees, four were merger transactions that were abandoned, and one matter was won on appeal.
Among the losses: a bid to block the merger of clinical laboratory testing companies and an appeal in the U.S. Court of Appeals for the 8th Circuit involving a drug for premature babies with heart defects
The FTC did note that although it missed its target, the tally doesn’t count one additional merger investigation and one restructured transaction. According to the report, these were excluded because ”they did not involve the use of compulsory process. (Compulsory Process refers to a resolution, or vote, adopted by the Commission that authorizes staff to issue subpoenas and civil investigative demands (CIDs); it is the adoption of a Compulsory Process resolution that would have made these cases fall under the definition of substantial as specified by this measure.)”