Thank you for sharing!

Your article was successfully shared with the contacts you provided.
In a warning to merging companies to keep competing until a deal closes, the Department of Justice filed a lawsuit Sept. 28 against Computer Associates International Inc. over its 2-year-old purchase of Platinum Technology International Inc. The Justice Department said Sept. 28 that the merger agreement between CA and Platinum imposed “extraordinary conduct of business restrictions” on the seller, preventing the companies from competing while regulators reviewed the deal. Islandia, N.Y.-based CA bought Platinum in early 1999 for $3.5 billion cash. Specifically, the DOJ claims that, prior to the merger closing, Oakbrook Terrace, Ill.-based Platinum needed CA approval before entering certain contracts with customers and that a CA employee was installed at Platinum headquarters to review customer contracts and other management decisions. The conduct, known as “gun jumping,” violates the pre-merger review structure established under the Hart-Scott-Rodino Act of 1976 and the Sherman Act, Justice said. The review period is designed to give officials with DOJ and the Federal Trade Commission time to investigate proposed transactions for possible antitrust violations. “By assuming control of Platinum before the expiration of the required waiting period while the Justice Department was investigating the legality of the proposed acquisition, CA failed to obey the law,” said Assistant Attorney General Charles James in a statement. “This conduct prematurely reduced competition between the companies.” Justice is seeking $1.27 million in civil penalties, or $638,000 apiece from CA and Platinum, and a ban on CA from engaging in similar conduct in the future. CA officials were unavailable for comment. In a statement, the company called the Justice Department’s actions “arbitrary” and said it would defend itself vigorously. CA said the provisions of its deal for Platinum were “virtually identical” to provisions it used in other deals, “many of which had been thoroughly investigated and passed upon by the DOJ.” Justice officials originally challenged the CA-Platinum deal in May 1999 because of antitrust concerns, but the case was settled when CA agreed to divest Platinum products and assets in six software markets. Robert Lande, a University of Baltimore law school professor, said he believes this case is most likely an isolated incident and not a sign of a new regulatory crackdown. “Frankly, most people are too sophisticated to do this,” he said. “They have counsel to tell them what not to do, and they don’t do it.” Copyright (c)2001 TDD, LLC. All rights reserved.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.