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Joe Simons, director of the Federal Trade Commission’s Bureau of Competition, said Monday the agency is prepared to fight anti-competitive mergers in court. He also suggested that several challenges to smaller transactions could be announced in the coming weeks. “We are hoping we will have a significant amount of litigation, perhaps more than in the past,” Simons said at a “brown bag” lunch sponsored by the American Bar Association’s antitrust section. To prepare for potential legal challenges, the FTC has recruited skilled litigators to fill senior jobs in the competition bureau, Simons said. For mergers exempt from Hart-Scott-Rodino Act notification requirements because they are valued at less than $50 million, the agency has a team of lawyers scouring press reports to identify combinations that raises antitrust issues. “I would not be surprised if you saw some activity in that area fairly shortly,” Simons said. In wide-ranging remarks from the Washington, D.C., offices of law firm Crowell & Moring, Simons said a goal of the competition bureau is to illuminate how the agency decides if a remedy sufficiently resolves the anti-competitive harm caused by a given deal. Part of this will include a question-and-answer section on the FTC Web site devoted to frequently discussed issues involving remedies. The agency also will create a public database on all merger consent decrees so the antitrust community can quickly review how the agency has addressed previous mergers, he said. And it plans to hold informal lunches around the country in the next year to discuss remedy matters. “You will get a better picture [of such issues] than in the past,” Simons said. Responding to a question, Simons said he is more inclined to require merging companies to find a buyer for divested assets prior to closing a transaction if the assets being sold are a hodgepodge of facilities that do not comprise a self-sufficient business unit. This is the so-called upfront buyer issue. By contrast, he said he would be less inclined to require an upfront buyer in a deal where the divested assets constitute an independent business unit. Simons issued a warning to companies that try to bury the FTC with documents as part of a second request for information. “We will not be looking very favorably on that type of action,” he said, adding that such document dumps will only delay the agency’s review of the merger. A goal of the competition bureau is to speed up negotiations pertaining to the scope of the second request. The agency wants to target its requests as narrowly as possible, Simons said. He also said the agency is working on best-practices guidelines for its staff on how to best expedite second-request document demands. Also at the presentation, FTC chief economist David T. Scheffman said the FTC expects merging companies to present a well-supported economic analysis of their deal. “We don’t have any silly cases any more,” he said, noting that the agency is seeing more and more deals that would result in only two or three surviving firms. “The burden is on you. Do you have the facts to support your theory?” Copyright (c)2001 TDD, LLC. All rights reserved.

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