In testimony presented to a U.S. House of Representatives Judiciary subcommittee the Federal Trade Commission described its ongoing efforts to promote competition that benefits consumers and businesses in key sectors of the economy.
Testifying on behalf of the FTC before the Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Chairwoman Edith Ramirez said that “for more than 100 years now, the Commission has worked to ensure that American markets are open, vibrant, and unencumbered by unreasonable private or public restraints.”
The testimony indicates that in FY 2014 and through the first half of FY 2015, the agency challenged 28 mergers. In most, it negotiated a remedy allowing the merger to proceed. But in three instances, the parties abandoned the deal after the FTC raised concerns, and in three other cases, the Commission authorized staff to stop the merger. One of those is the pending preliminary injunction action to block the proposed merger between Sysco Corporation and US Foods. The FTC alleges that the proposed Sysco/US Foods merger will lead to higher prices and reduced service for national customers as well as customers in 32 local markets.
Additionally, the Commission continues to prioritize stopping anticompetitive mergers and conduct in healthcare markets, which threaten to undermine efforts to control costs, the testimony states. As shown by two recent important appellate wins in the St. Luke’s and ProMedica cases, in the Nine and Sixth Circuits, respectively, the FTC remains committed to preserving and promoting competition in healthcare provider markets.
Moreover, the testimony notes that in the last two years alone, the agency took action in 13 pharmaceutical mergers, ordering divestitures to preserve competition for drugs that treat diabetes, hypertension, and cancer, as well as widely-used generic medications like oral contraceptives and antibiotics.
The FTC also continued to protect consumers from anticompetitive drug patent settlements that delay generic entry. The trial will begin in federal court in Philadelphia on June 1st in one of these cases, Cephalon, which involves the billion-dollar drug Provigil.
Given their direct impact on consumers’ pocketbooks, we also seek to promote competition in the sale of consumer products. Earlier this year, the Commission ordered the largest divestiture ever in a supermarket merger, requiring Albertsons and Safeway to sell 168 supermarkets in 130 local markets in several western states, ensuring that communities continue to benefit from competition among their local supermarkets, according to the testimony.
The testimony also notes the FTC’s active program to identify and stop anticompetitive business conduct. Recent enforcement actions have challenged allegedly exclusionary tactics to maintain a monopoly position, eliminated allegedly unreasonable provisions in trade association ethical codes that prevented competition among members, and stopped an allegedly illegal invitation-to-collude between two resellers of internet barcodes.
The testimony also states that the Commission earned a significant appellate win last month when the Eleventh Circuit affirmed its decision and order that McWane, Inc.’s exclusive dealing practices violated the antitrust laws, by preventing would-be market entrants from becoming meaningful competitors in the market for domestic pipe fittings. The result was higher prices for municipalities and other waterworks customers, according to the testimony.The Commission also uses its policy and research arms to advance its competition mission. For example, the Commission will host a workshop next month devoted to the so-called sharing economy. It will explore how existing regulatory frameworks can accommodate new business models while maintaining appropriate consumer protections and a competitive marketplace.
The Commission vote approving the testimony and its inclusion in the formal record was 5-0.
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