How the FTC’s Hertz Antitrust Fix Went Flat – Professor Maurice Stucke; WSJ.com

How the FTC’s Hertz Antitrust Fix Went Flat
Wall Street Journal
December 8, 2013

Maurice Stucke, a University of Tennessee professor and lawyer with GeyerGorey LLP, said the latest Advantage bankruptcy ought to prompt some soul-searching by the FTC and the Justice Department.

If merger settlements “are going to be business as usual, the agencies need to spend more time examining how their remedies work out over the long haul,” he said. “You would think there could be more safeguards to prevent this from happening.”

Allen Grunes quoted regarding Publicis-Omnicom Merger in Bloomberg News

Allen Grunes shared his perspective with Bloomberg News regarding the proposed Publicis-Omnicom Merger.  Click Below:

Publicis-Omnicom Merger Seen as Drawing Antitrust Look

BARRY DILLER TO PAY $480,000 CIVIL PENALTY FOR VIOLATING ANTITRUST PREMERGER NOTIFICATION REQUIREMENTS

Violations Occurred When Diller Acquired Voting Securities of The Coca Cola Company

WASHINGTON — Corporate investor Barry Diller will pay a $480,000 civil penalty to settle charges that he violated premerger reporting and waiting requirements when he acquired voting securities of The Coca Cola Company, the Department of Justice announced today.

The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission (FTC), filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against Diller for violating the notification requirements of the Hart-Scott-Rodino (HSR) Act of 1976.  At the same time, the department filed a proposed settlement that, if approved by the court, will settle the charges.

The HSR Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements on individuals and companies over a certain size before they consummate acquisitions resulting in holding stock or assets above a certain value, which at the time of Diller’s violations ranged from $63.4 million to $68.2 million and is currently $70.9 million.

Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice.  For a party in violation of the HSR Act the maximum civil penalty is $16,000 a day

Maurice E. Stucke Curriculum Vitae

Maurice E. Stucke Curriculum Vitae (pdf)

Leading Antitrust Lawyers and DOJ Alumni Allen P. Grunes and Maurice E. Stucke Join GeyerGorey LLP

GeyerGorey LLP is pleased to announce that two veteran Department of Justice prosecutors, Allen P. Grunes and Maurice E. Stucke, have joined the firm.  Grunes, recently named as a “Washington D.C. Super Lawyer for 2013” in antitrust litigation, government relations, and mergers & acquisitions, joins as a partner.  Stucke, a widely-published professor with numerous honors including a Fulbright fellowship, joins as of counsel.  Stucke will continue to teach at the University of Tennessee College of Law.

“We are delighted that Allen and Maurice have decided to join us,” said Brad Geyer.  “They add considerable fire power to our already impressive antitrust, compliance and white collar roster and give us more capabilities and capacity, particularly on the civil side.”

Robert Zastrow, who was Verizon’s Assistant General Counsel for 15 years before co-founding the firm in October 2012, added, “Allen’s and Maurice’s extensive background and expertise nicely complement our firm’s unique philosophy and enrich our competition and merger practices.  We are thrilled they are joining our innovative effort in delivering legal services.”

GeyerGorey LLP presents a new way to practice law.  It may be the only law firm in the country where prior federal prosecutorial experience is a prerequisite for partnership.  Given its lawyers’ extensive legal expertise, GeyerGorey can handle trials involving the most complex legal and factual issues, and, when advantageous, work with other law firms, economists and specialists, particularly former federal prosecutors and agents, who bolster existing resources, expertise and constantly freshen perspective.  As founding partner Hays Gorey added, “We seek to avoid the traditional hierarchal partner-associate pyramid, hourly billing fee structure, and practice fiefdoms.  We want to attract entrepreneurial lawyers, like Allen and Maurice, who love competition policy and practicing law.  Having worked with them at DOJ, I am excited about the expertise and enthusiasm they bring to our clients.”

Consistent with GeyerGorey’s philosophy, both Grunes and Stucke are alumni of the U.S. Department of Justice, Antitrust Division, in Washington, D.C.  At DOJ, they led numerous civil investigations, worked on high-profile trials, and negotiated consent decrees involving significant divestitures across many different industries.  In their last case together at the Division, In re Visa Check/MasterMoney Antitrust Litigation, they successfully sought, as a matter of equity and the first time in the Division’s history, for the government’s share of damages in a private class action settlement.

Grunes and Stucke are regarded as leading authorities on competition policy in the media.  Their scholarship on media and telecommunications policy has been published in the Antitrust Law Journal, the Northwestern University Law Review, the Connecticut Law Review, the Journal of European Competition Law & Practice, and the Federal Communications Law Journal.  They have spoken at numerous conferences on competition policy and the media, including the U.S. Federal Trade Commission’s workshop, How Will Journalism Survive the Internet Age?  Both are frequently quoted in the press on mergers and anticompetitive conduct.  In addition, both serve on the advisory boards of the American Antitrust Institute and the Loyola Institute for Consumer Antitrust Studies in Chicago.

Allen Grunes joins GeyerGorey from another Washington, D.C. firm, where he was a shareholder.  His recent matters include acting as class counsel in litigation against several hospitals and an association in Arizona that allegedly artificially depressed the rates paid to temporary nurses, opposing the merger of AT&T and T-Mobile for a coalition of companies including DISH Network, and representing Warner Music Group in connection with the merger of Universal and EMI.  He has counseled dozens of companies and associations on antitrust issues and corporate mergers.  He also serves as chair of the antitrust committee of the Bar Association of the District of Columbia.

Maurice Stucke is a tenured professor at the University of Tennessee and a leading competition law scholar.  With over 30 articles and book chapters, Stucke has been invited by competition authorities from around the world and the OECD to speak about behavioral economics and competition policy.  He currently is one of the United States’ non-governmental advisors to the International Competition Network, the only international body devoted exclusively to competition law enforcement.  His scholarship has been cited by the U.S. federal courts, the OECD, competition agencies and policymakers.

Headquartered in Washington, D.C., GeyerGorey specializes in white collar criminal defense, particularly investigations and cases involving allegations of economic crimes, such as violations of the federal antitrust laws (price fixing, bid rigging, territorial and customer allocation agreements), procurement fraud, securities fraud, foreign bribery (Foreign Corrupt Practices Act) and qui tam (False Claims Act) and whistleblower actions.  The firm also conducts internal investigations of possible criminal conduct and provides advice regarding compliance with U.S. antitrust and other laws.

GeyerGorey LLP’s Phillip C. Zane Named to 2013 Edition of Washington D.C. Super Lawyers

12159445-geyergorey-llps-phillip-zane-named-to-2013-edition-of-washington-dc-super-lawyers

Justice Department Reaches Settlement with Anheuser-Busch InBev and Grupo Modelo in Beer Case

Divestitures of Piedras Negras Brewery, Perpetual Licenses to Modelo Beer Brands, and Other Assets Will Maintain Competition in the Beer Industry Nationwide

WASHINGTON – The Department of Justice announced today that it has reached a settlement with Anheuser-Busch InBev SA/NV (ABI) and Grupo Modelo S.A.B. de C.V. that requires the companies to divest Modelo’s entire U.S. business – including licenses of Modelo brand beers, its most advanced brewery, Piedras Negras, its interest in Crown Imports LLC and other assets – to Constellation Brands Inc., in order to go forward with their merger.    The department said the proposed settlement will maintain competition in the beer industry nationwide, benefitting consumers.

Today’s proposed settlement was filed in the U.S. District Court for the District of Columbia.    If approved by the court, the settlement will resolve the department’s competitive concerns.

On Jan. 31, 2013, the department filed an antitrust lawsuit against ABI and Modelo alleging that ABI’s $20.1 billion acquisition of the remaining interest in Modelo that ABI did not already own, as originally proposed, would substantially lessen competition in the market for beer in the United States as a whole and in at least 26 metropolitan areas across the United States.    The department alleged that the transaction would result in consumers paying more for beer and would limit innovation in the beer market.

 

“Before the merger, there were two competitors – Modelo and ABI – and ABI owned a substantial stake in Modelo.    The companies’ proposed merger would have reduced those two competitors to one – ABI.  The proposed settlement announced today will create an independent, fully integrated and economically viable competitor to ABI.    This is a win for the $80 billion U.S. beer market and consumers,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.    “If this settlement makes just a one percent difference in prices, U.S. consumers will save almost $1 billion a year.”

The settlement requires ABI and Modelo to divest Modelo’s entire U.S. business to Constellation or to an alternative purchaser if for some reason the transaction with Constellation cannot be completed.    Specifically, the settlement requires ABI and Modelo to divest:    the Piedras Negras brewery, Modelo’s newest, most technologically advanced brewery; perpetual and exclusive licenses of the Modelo brand beers for distribution and sale in the United States; Modelo’s current interest in Crown – the joint venture established by Modelo and Constellation to import, market and sell certain Modelo beers into the United States; and other assets, rights and interests necessary to ensure that Constellation is able to compete in the U.S. beer market using the Modelo brand beers, independent of a relationship to ABI and Modelo.

 

The licensed brands include all seven brands that Modelo currently offers (through its distributor, Crown) in the United States – Corona Extra, Corona Light, Modelo Especial, Negra Modelo, Modelo Light, Pacifico and Victoria – as well as three brands not yet offered in the United States, but currently sold by Modelo in Mexico – Pacifico Light, Barrilito and León.   The licenses include rights that will give Constellation the ability to adapt to changing market conditions in the United States.

 

Constellation has committed to expand the capacity of Piedras Negras in order to meet current and future demand for the Modelo brands in the United States, and that commitment is a condition of the proposed settlement.    The settlement also sets milestones for the expansion of the Piedras Negras brewery.    In order to enable Constellation to compete in the United States during the time it takes to expand the Piedras Negras brewery’s capacity to brew and bottle beer, the settlement requires ABI to enter into interim supply and transition services agreements with Constellation.   These agreements are time-limited to ensure that Constellation will become a fully independent competitor to ABI as soon as practicable.

 

ABI and Modelo originally proposed selling Modelo’s stake in Crown to Constellation and entering into a 10-year supply agreement to provide Modelo beer to Constellation to import into the United States.    The department rejected that purported fix because it would have eliminated the Modelo brands as an independent competitive force in the United States beer market.    Unlike the companies’ original proposal, which left Constellation with no brewing assets and beholden to ABI for the supply of beer, the proposed settlement ensures that Constellation, or an alternative purchaser, will have independent brewing assets and the ownership of the Modelo beer brands for sale in the United States in perpetuity.    As a result, Constellation will fully replace Modelo as a competitor in the United States.

 

ABI is a corporation organized and existing under the laws of Belgium, with headquarters in Leuven, Belgium.    ABI brews and markets more beer sold in the United States than any other firm, with a 39 percent market share nationally.    ABI owns and operates 125 breweries worldwide, including 12 in the United States.    It owns more than 200 different beer brands, including Bud Light – the best-selling brand in the United States – and other popular brands such as Budweiser, Busch, Michelob, Natural Light, Stella Artois, Goose Island and Beck’s.

 

Modelo is a corporation organized and existing under the laws of Mexico, with headquarters in Mexico City.    Modelo is the third-largest brewer of beer sold in the United States, with a seven percent market share nationally.    Modelo owns Corona Extra–the top-selling beer imported into the United States.    Its other popular brands sold in the United States include Corona Light, Modelo Especial, Negra Modelo, Victoria and Pacifico.    Crown imports, markets and sells Modelo’s brands into the United States.    ABI currently holds a 35.3 percent direct interest in Modelo and a 23.3 percent direct interest in Modelo’s operating subsidiary Diblo.

 

Constellation, headquartered in Victor, N.Y, is a beer, wine and spirits company with a portfolio of more than 100 products, including Robert Mondavi, Clos du Bois, Ruffino and SVEDKA Vodka.    It produces wine and distilled spirits, with more than 40 facilities worldwide.

The proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register, consistent with the requirements of the Antitrust Procedures and Penalties Act.   Any person may submit written comments concerning the proposed settlement within 60 days of its publication to James Tierney, Chief, Networks and Technology Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7100, Washington, D.C. 20530.   The comments will be published in the Federal Register.   At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

GeyerGorey LLP quoted regarding Cisco and Meraki merger and its effect on the wireless market

GeyerGorey LLP quoted on Cisco-Meraki Merger:

20-11-12 Cisco-Meraki announce

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