Non-profits use intent as defense; merging hospitals claimed they wouldn't abuse market power

Article Abstract:

FTC v. Butterworth Health Corp. with its successful defense on the grounds of intent to unfair competition charges offers useful lessons for future merging parties. The defendants claimed, with expert evidence as support, that high market concentration in the hospital industry does not necessarily mean higher market prices. Merging parties in the future will have the most power if they bifurcate their defense. They should give any reason thought of why prices will not rise after a merger and why the community would benefit from a merger. Parties should remember that the government is rarely successful in antitrust merger cases.

Mergers, acquisitions and divestments, Health services administration, Hospitals, Public, Public hospitals, Hospitals, Voluntary, Voluntary hospitals

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Antitrust investigations can delay or kill deals; merging parties that fail to prepare adequately for agency review may endanger the deal

Article Abstract:

Companies envisioning a merger can expect continued aggressive oversight from the Department of Justice and the Federal Trade Commission. Their antitrust review processes require company counsel to first analyze whether regulators may let the deal go through, then address procedural concerns and strategy for the merger and compliance efforts. Usually companies want to maximize the chance of the deal being approved, without lengthy delays; these two goals sometimes conflict. Flexiblity remains vital throughout.

Investigations

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When analyzing a potential merger, the Department of Justice and the Federal Trade Commission now also examine its anti-competitive effects on innovation

Article Abstract:

Research and development and general innovation have become standard tools in anticompetitive analysis regarding mergers since 1993. The Dept of Justice used the concept of an innovation market in US v General Motors in 1993, and it appears in at least six Federal Trade Commission complaints since 1994. Merger challenges fall in three categories: a merger of direct competitors, a lost potential competitor, and loss of competition leading to downstream economic welfare losses.

Management, Technological innovations

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