Federal Trade Commission

Transcription

1 Federal Trade Commission 600 Pennsylvania Avenue NW, Washington, DC 20580, United States Contacts Maureen K Ohlhausen Acting Chairman Tel: mohlhausen@ftc.gov Terrell McSweeny Commissioner Tel: tmcsweeny@ftc.gov Edith Ramirez Commissioner Tel: eramirez@ftc.gov D Michael Chappell Chief Administrative Law Judge Tel: mchappell@ftc.gov David C Shonka Acting General Counsel Tel: dshonka@ftc.gov Randolph W Tritell, Office of International Affairs Tel: rtritell@ftc.gov Tara Isa Koslov Acting, Office of Policy Planning Tel: tkoslov@ftc.gov Jeanne Bumpus, Office of Congressional Relations Tel: jbumpus@ftc.gov Bureau of Competition Tel: antitrust@ftc.gov Deborah L. Feinstein Tel: dfeinstein@ftc.gov Bureau of Consumer Protection Jessica Rich Tel: jrich@ftc.gov Bureau of Economics Tel: Ginger Jin Tel: gjin@ftc.gov Office of Public Affairs (Press Office) Tel: opa@ftc.gov Justin Cole Tel: jcole@ftc.gov 400 The Handbook of Competition Enforcement Agencies 2017

2 Overview The FTC is an independent regulatory agency headed by five commissioners appointed by the President for seven-year terms and confirmed by the Senate. The president designates the chairman from among the commissioners. The FTC is organised into three bureaus: the Bureau of Competition; the Bureau of Economics; and the Bureau of Consumer Protection. Each is supervised by a bureau director, and several supporting Offices. The Bureaus of Competition and Economics are principally responsible for antitrust enforcement. The agency also has seven regional offices throughout the US, three of which participate in antitrust enforcement (they all engage in consumer protection enforcement). As an independent regulatory agency within the executive branch, the FTC has both prosecutorial and adjudicative powers to enforce the FTC Act, which includes violations of the Sherman Act and the Clayton Act. In its prosecutorial role, the FTC, like the Antitrust Division of the Department of Justice (DOJ), investigates potentially anticompetitive conduct through subpoenas, civil investigative demands, investigational hearings and other forms of pre-complaint discovery. The FTC s adjudicative role is performed by an administrative law judge (ALJ) who adjudicates Complaints filed by the FTC (in its prosecutorial role) against individuals or organisations, alleging unfair methods of competition. An ALJ is empowered to issue a cease-and-desist order prohibiting the continuation of the challenged anticompetitive practices, which may also include fencing-in provisions that prohibit practices beyond those challenged in the complaint in order to ensure effective relief. The FTC staff or the respondent can appeal the ALJ s initial decision to the FTC, sitting as an adjudicative tribunal, which can conduct a de novo review. The FTC may seek civil penalties in federal district court if it believes a respondent has violated its order. The FTC can also seek an injunction in federal district court to challenge an allegedly anticompetitive merger or anticompetitive conduct, pending the FTC s administrative adjudication. Questions and answers How long is the head of agency s term of office? The five commissioners serve staggered seven-year terms and can be removed only for cause. The President designates a chairman from among the commissioners or can nominate one if there is a vacancy. The President can designate a new chairman at any time. When is he or she next due for reappointment? President Trump designated Commissioner Maureen K Ohlhausen to serve as acting chairman on 25 January She was sworn in as a commissioner in 2012 to a term that will expire in September Which posts within the organisation are political appointments? The commissioners (including the chairman) are nominated by the President subject to confirmation by the Senate. The bureau directors, general counsel, and a few other senior staff positions are typically filled by political appointees selected by the chairman, with the approval of the Commission. What is the agency s annual budget? For fiscal year 2017, the FTC s budget is US$307 million (including competition and consumer protection missions) pursuant to the Continuing Resolution in effect through 28 April How many staff are employed by the agency? The FTC employs 1,191 full-time equivalents, of which 542 work on the competition mission. To whom does the head of the agency report? The FTC is an independent agency within the executive branch. Its chair does not report to anyone, but the agency is subject to oversight by the Senate Committee on Commerce, Science and Transportation, and the House of the Representatives Committee on Energy and Commerce. Do any industry-specific regulators have competition powers? Yes: the Federal Communications Commission in the telecommunications sector; the Department of Transportation in the airline sector; the Surface Transportation Board regarding railroads; the Federal 401

3 Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision in the financial services industry; and the Federal Energy Regulatory Commission in the electric power sector. If so, how do these relate to your agency s role? There are a very few sectors, such as railroads, in which the regulator has principal authority to evaluate the effect of mergers on competition. In these sectors, when the regulator must take into account competitive concerns, the antitrust agencies may exercise an advisory role. In other sectors, such as banking, telecommunications and electric power, a separate federal government agency has concurrent jurisdiction to evaluate proposed mergers under a different statutory or regulatory standard. The FTC has authority to enforce the competition laws concurrently with the sectoral regulator (eg, in the electric power sector), and in matters investigated concurrently, the FTC coordinates closely with the regulator. (The FTC Act exempts common carriers such as airlines.) May politicians overrule or disregard authority s decisions? If they have ever exercised this right, describe the most recent example. Politicians cannot overrule or disregard the FTC s prosecutorial or adjudicative decisions. Does the law allow non-competition aims to be considered when your agency takes decisions? No, the Supreme Court has made it clear that only competition aims can be considered. Which body hears appeals against the agency s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this? Has any competition decision by the agency been overturned? Respondents may appeal the FTC s decisions to the courts of appeal. Certain other agency actions are reviewable in the district courts. Final appeal of all decisions is to the Supreme Court. There is no additional form of judicial review. Courts have overturned the agency s competition decisions. Has the authority ever blocked a proposed merger? If yes, please provide the most recent instances. Yes. The FTC can challenge a proposed merger in federal court and through the FTC s administrative adjudicatory process. The court or the ALJ in the first instance determines whether the acquisition violates federal antitrust law. In the vast majority of mergers in which the FTC finds a competitive problem, the parties choose either to enter into a consent agreement or to abandon the transaction. In fiscal year 2016, the parties abandoned one transaction after FTC staff informed the parties of its antitrust concerns, and the FTC issued consent orders settling charges and requiring divestitures in 16 transactions concerning, among others: pharmaceuticals, medical services, energy, and semiconductors (Keystone Orthopaedic Specialist, LLC; Mylan/ Perrigo; NXP Semiconductors/Freescale Semiconductor; Cumberland Gulf/ArcLight Capital Partners; DSI Renal/ US Renal Care; Lupin Ltd and Lupin Pharmaceuticals/ GAVIS Pharmaceuticals; Bedford Laboratories/ Hikma Pharmaceuticals; Roxane Laboratories/Hikma Pharmaceuticals; Air Liquide/Airgas; The Williams Companies/Energy Transfer Equity; HeidelbergCement/ Italcementi; Ball/Rexam; Delhaize Group/Ahold; Teva Pharmaceutical Industries/Allergan; Meda AB/Mylan NV; and ON Semiconductor/Fairchild). The FTC also challenged one merger in its administrative process and four mergers in federal district court (Cabell Huntington/St Mary s Medical Center; Staples/Office Depot; Pinnacle/Penn State Hershey; Advocate/North Shore; and Superior Canexus). In Cabell Huntington/St Mary s Medical Center, the FTC withdrew its complaint after the West Virginia legislature authorised certain cooperative agreements, and the state healthcare authority approved one between the hospitals. In Staples/Office Depot, the parties abandoned the transaction after the district court granted FTC staff s request for a preliminary injunction. In Pinnacle/Penn State Hershey, the parties abandoned the transaction after the appellate court directed the district court to grant the FTC request for a preliminary injunction. In Superior/Canexus, the parties abandoned the transaction after the FTC authorised staff to seek a preliminary injunction. Finally, in Advocate/North Shore, the appellate court reversed the district court s determination that the merger should be allowed to proceed; this case is pending a remand hearing before the federal district court. Has the authority ever imposed conditions on a proposed merger? If yes, please provide the most recent instances. Yes. Merger investigations may be settled by a consent order allowing the parties to consummate the transaction subject to conditions, including divestitures. As discussed above, in fiscal year 2016, the FTC 402 The Handbook of Competition Enforcement Agencies 2017

4 entered into settlement orders with conditions in 16 transactions. ON Semiconductor/Fairchild is the most recent instance in which the FTC imposed conditions on a proposed merger. Has the authority conducted a Phase II investigation in any of its merger filings? If yes, please provide the most recent instances. Under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act), the Commission issued Second Requests (prompting the US equivalent of Phase II investigations) in 25 merger investigations in fiscal year Has the authority ever pursued a company based outside your jurisdiction for a cartel offence? If yes, please provide the most recent instances. Not applicable. These cases are handled by the DOJ, which has criminal enforcement authority. Do you operate an immunity leniency programme? Whom should potential applicants contact? What discounts are available to companies that cooperate with cartel investigations? This is operated by the DOJ. Is there a criminal enforcement track? If so, who is responsible for it? Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does? The DOJ is responsible for criminal enforcement. Are there any plans to reform the competition law? There have been few statutory changes to competition law in recent years, and while bills to modify the antitrust laws are introduced in every Congress, very few of these are enacted. Several competition measures were introduced thus far during the 114th Congress ( ). Some of these bills proposed to expand the reach of federal antitrust enforcement, such as by giving enforcers greater authority over the business of health insurance, addressing anticompetitive agreements between generic and brand drug manufacturers, and more fully applying antitrust laws to railroads. Other measures would have limited the application of federal antitrust laws, such as a measure allowing healthcare providers to collectively bargain with health plans, and broadly exempting the conduct of individuals from the antitrust laws. One proposed bill sought to change the FTC s process for challenging unconsummated mergers. The proposal would have eliminates the FTC s ability to adjudicate these challenges in its administrative court, and instead require the FTC to adjudicate the matters in federal district court as the DOJ does now. In addition, the proposal would have armonised the legal standard for the FTC and DOJ to obtain an injunction in federal court. It is unclear if any of these measures will be enacted. This measure passed the House but was not advanced by the Senate during the 114th Congress ( ). The same measure was reintroduced in the House during the 115th Congress ( ) on 24 January A Senate version has not yet been introduced. When did the last review of the law occur? The House and Senate Judiciary Committees hold hearings to oversee the general enforcement of the federal antitrust laws, examine high-profile mergers, and consider specific issues in antitrust such as international enforcement. The reach and application of current antitrust laws, as well as proposed amendments to them, are regularly discussed at these hearings. The Senate Judiciary and Commerce Committees held antitrust oversight hearings in March 2016 and September 2016, respectively, while a panel of the House Judiciary Committee held one focused on international antitrust enforcement in June Do you have a separate economics team? If so please give details. If so please give details. The FTC has 81 PhD economists in its Bureau of Economics. About 70 per cent of the economists time is spent on antitrust matters and 30 per cent on consumer protection matters. The FTC s investigations of competition matters integrate legal and economic analysis. The economists work with the lawyers as a team. The Bureau of Economics, however, provides its own recommendation to the chairman and the FTC on most matters. Has the authority conducted a dawn raid? This is operated by the DOJ. Has the authority imposed penalties on officers or directors of companies for offences committed by the company? If yes, please provide the most recent instances. These are conducted only in connection with suspected hard-core cartels, and therefore only by the DOJ

5 What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger? In general, the HSR Act requires a pre-merger notification filing where either the acquiring or acquired person is engaged in US commerce, and the acquisition is of voting securities, non-corporate interests (as long as control is also being acquired), or assets valued in excess of US$80.8 million. In addition, if the acquisition is valued between US$80.8 million and US$323 million, one party must have sales or assets of US$161.5 million and another party must have sales or assets of US$16.2 million. The dollar thresholds are adjusted annually to reflect changes in the US GNP. Generally, the acquisition of foreign assets by a US buyer is exempt unless the foreign assets generated sales in or into the US exceeding US$80.8 million in the most recent fiscal year. Similarly, the acquisition of foreign voting securities by a US buyer is exempt unless the foreign issuer either holds US assets valued at more than US$80.8 million or made aggregate sales into the US of over US$80.8 million in the most recent fiscal year. For more detail regarding the acquisition of foreign assets and voting securities, including acquisitions by foreign buyers, see 16 CFR and 16 CFR Are there any restrictions on investments that involve less than a majority stake in the business? The requirement to comply with the HSR Act is not limited to transactions that involve a change of control. Any acquisition that results in the acquiring person holding more than US$50 million worth of the voting securities of another company (as adjusted) may require a filing, even if that amount represents a very small percentage of the total outstanding stock of the target. However, there is a narrowly interpreted exemption for the acquisition of up to 10 per cent of a corporation s voting securities, where the acquisition is made solely for the purpose of investment. Acquisitions of less than 50 per cent of a noncorporate entity are not reportable. 404 The Handbook of Competition Enforcement Agencies 2017