www.morganlewis.com © 2005 morgan, lewis & bockius, llp. all rights reserved. this update is...

www.morganlewis.com© 2005 Morgan, Lewis & Bockius, LLP. All rights reserved. This update is provided as a general informational service to listeners to this program. It should not be construed as imparting legal advice on any specific matter.

Antitrust Update for In-House CounselAntitrust Update for In-House CounselABA Section of Antitrust Law

Corporate Counseling Committee

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OverviewOverview

1. Washington Update: Don Klawiter & John Shenefield2. Mergers: Harry Robins, Will Tom, & Izzet Sinan3. Criminal and Cartel Matters: Don Klawiter & Tara

Reinhart 4. Civil Non-Merger and Civil Litigation: Mark Edwards,

Jonathan Rich, Izzet Sinan & Clay Everett

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Washington UpdateWashington Update

Don Klawiter

John Shenefield

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Federal Trade Commission NominationsFederal Trade Commission Nominations

• Thomas Rosch– Nomination announced September 29, 2005 to replace Commissioner Leary– Partner, Latham & Watkins in San Francisco– Chair, ABA Section of Antitrust Law 1990-91– Chair, California Bar Antitrust & Unfair Competition Law Section– Director, Bureau of Competition, Federal Trade Commission 1973-75– Preeminent antitrust lawyer; chiefly antitrust litigation

• William Kovacic was nominated earlier to replace Commissioner Swindle

• Both are awaiting hearings

Washington Update/PersonnelWashington Update/Personnel

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Barnett Confirmation HearingBarnett Confirmation Hearing

• Judiciary Committee Hearing on October 6, 2005• Four issues

– Improve merger review process– Monitor telecom/media mergers– Streamline the mass of regulation on international merger control– Investigate collusion in the gasoline market

• No controversy; no confrontation• Confirmation expected soon

Washington Update/PersonnelWashington Update/Personnel

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Mid-Way In Commission’s LifeMid-Way In Commission’s Life

• Hearings CompletedIndirect purchaser suitsState action (Parker v. Brown)Civil remediesRobinson-Patman ActExclusionary conductState antitrust enforcement

• Hearings To ComeCriminal enforcementDual federal enforcement“New” economyMerger enforcementRegulated industriesImmunities and exemptionsInternational antitrust enforcement

Washington Update/Antitrust Modernization CommissionWashington Update/Antitrust Modernization Commission

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Exclusionary ConductExclusionary Conduct

• Witnesses included:MurisPatePitofskyShapiroSalopTom

• Focused on:Refusals to deal and essential facilitiesBundlingLoyalty discounts


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State Action DoctrineState Action Doctrine

1. How to narrow the “clear articulation” prong?2. How to make the “active supervision” prong more coherent?3. Whether to have a “market participant” exception?4. Should any of this be codified?5. Implications for:

Local Government Antitrust Act McCarran-Ferguson Act


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State Antitrust EnforcementState Antitrust Enforcement

PRO’s1. Legitimate exercise of sovereignty2. Competition in enforcement3. Diversity in enforcement4. More enforcement resources

CON’s1. Lack of predictability2. Duplication3. Undue influence of local special interests


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Suggested SolutionsSuggested Solutions

1. Pre-empt all state antitrust enforcement2. Pre-empt all except for hard-core cartel activity3. Pre-empt state enforcement only in merger and monopolization

cases4. EU model for mergers with national significance5. Status quo (with or without mandatory or voluntary federal-state

clearance procedure)


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Mergers & AcquisitionsMergers & Acquisitions

Harry Robins

Will Tom

Izzet Sinan

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FTC Fines Hedge Fund Manager $350,000 FTC Fines Hedge Fund Manager $350,000

• Acquired above $50 M of voting securities in two separate companies.

• The Esperion acquisition was minority stake and purely passive.

• Exposure was in excess of $17 million.

Mergers & Acquisitions/ Hart-Scott-RodinoMergers & Acquisitions/ Hart-Scott-Rodino

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FTC Fines Hedge Fund Manager $350,000: Traps for the Unwary Financial Investor FTC Fines Hedge Fund Manager $350,000: Traps for the Unwary Financial Investor

• An individual can “control” a hedge fund.• The “Investment Only” exemption is unavailable if the investor acquires

in excess of 10% of the company’s voting securities. • An investor is required to aggregate holdings to determine HSR

obligations.• The company may also be fined.

Mergers & Acquisitions/ Hart-Scott-RodinoMergers & Acquisitions/ Hart-Scott-Rodino

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Dairy Farmers of America Dairy Farmers of America

• DFA owned a 50% stake in National Dairy (but did not participate in its school milk business decisions),

• DFA acquired a 50% stake in Southern Belle.• After DOJ challenged the acquisition but before DFA’s summary

judgment motion, DFA agreed to convert its interest in Southern Belle to non-voting preferred.

• District court granted summary judgment to DFA, reasoning that under the revised agreement, DFA did not participate in either dairy’s business decisions, and without control over business decisions, there was no mechanism by which competition would be harmed.

Mergers & Acquisitions/ Substantive US Merger LawMergers & Acquisitions/ Substantive US Merger Law

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• 6th Circuit reversed.• Original agreement

– District court could not disregard original agreement unless DFA met the “heavy burden” of showing that the parties could not revert to the original agreement after the case was over.

– Under original agreement, DFA had enough influence to restrain competition.


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• Revised agreement– Courts may infer anticompetitive effects from control or influence, but may not

infer lack of anticompetitive effects from lack of control or influence.– Each of DFA’s partners had a strong incentive to keep DFA happy because they

had profited from lucrative joint ventures with DFA in the past and would likely have future opportunities to do so.

– DFA’S position as Southern Belle’s financier gave it leverage.


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Evanston Northwestern Healthcare Corp.Evanston Northwestern Healthcare Corp.

• ALJ decision in consummated hospital merger case• Actual anticompetitive effects found in the form of higher post-merger

prices• Nonprofit status found not to prevent anticompetitive effects • Improvements to quality of care found not to be merger-specific• Divestiture ordered


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Evanston Northwestern Healthcare Corp.Evanston Northwestern Healthcare Corp.

• Appeals can be taken to FTC and ultimately to 7th Circuit• Could be significant for future hospital merger enforcement• FTC’s argument that one can dispense with defining a relevant market

by proving competitive effects directly was given the back of the hand• Certain provisions common in consent orders, e.g. giving employees an

incentive to accept employment offers from the buyer of the divested assets, were rejected


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Procter & Gamble/Gillette Procter & Gamble/Gillette

• Approved with minor divestitures– Teeth whitening, adult battery-powered toothbrushes, antiperspirant/deodorants,

rechargeable toothbrushes

• Looked at portfolio effects and category manager roles for the potential to create entry barriers at retail.

• Portfolio effects theory not necessarily dead, but complainants continue to face uphill battle

• 2-0-2 vote.


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Cal Dive Int’l/Stolt OffshoreCal Dive Int’l/Stolt Offshore

• 3-to-2 merger• Market for saturation diving services in the United States Gulf of Mexico• Alleges unilateral and coordinated effects in the alternative• Remedy: divest two vessels and a separate saturation diving system


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DaVita/GambroDaVita/Gambro

• Outpatient dialysis services in 35 local markets corresponding to metropolitan areas or subsets thereof

• 24 markets were 3-to-2 or 2-to-1; other 11 still had HHI>4000 and Δ>800

• Remedy: divest 69 dialysis clinics and terminate two management services agreements


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COMMISSIONER KROES AT FIESOLECOMMISSIONER KROES AT FIESOLE

• Merger system user-friendly: 90% of 250 cases in past year approved• Mostly within one month• Only Gas de Portugal blocked – to avoid incumbent domestic electricity

supplier from taking over potential rival• There were 35 referral cases over 18 month period which avoided 239

national filings• 5% of cases needed remedies

Mergers & Acquisitions/European Merger ControlMergers & Acquisitions/European Merger Control

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MERGER REMEDIES STUDY – 10/21/05MERGER REMEDIES STUDY – 10/21/05

• 233 pages; 84 divestiture and 10 access remedies reviewed• Divestitures: 94% exercising some degree of competitive constraint—

but decreased market share for divested businesses• Access (inputs, infrastructure, IP): limited success—likely to focus

more on access terms in future, particularly costs and payment terms• Also reviewed procedures with a view to improvements

Mergers & Acquisitions/European Merger ControlMergers & Acquisitions/European Merger Control

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Criminal Matters, Multi-jurisdictional Cartel Enforcement, and Follow-on Private Cases Criminal Matters, Multi-jurisdictional Cartel Enforcement, and Follow-on Private Cases

Don Klawiter

Tara Reinhart

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U.S. v. Samsung Electronics CompanyU.S. v. Samsung Electronics Company

• U.S. v. Samsung Electronics Company Ltd agrees to plead guilty and pay $300 million fine on conspiracy to fix prices in DRAM market– Second largest fine ever– Third company to plead guilty in DRAM market

• Hynix $185 million• Infineon $160 million

– Many individuals charged or carved out• 4 Infineon executives convicted• 5 Hynix executives carved out• 7 Samsung executives carved out

Cartel EnforcementCartel Enforcement

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U.S. v. Samsung Electronics Co. Ltd.--CommentaryU.S. v. Samsung Electronics Co. Ltd.--Commentary

• Pace of cartel cases has slowed: This is a big announcement• Power of leniency

– To convert a traditional information exchange case into $645 million in fines and significant jail time

– Investigation changes dramatically after leniency is granted to a party• DOJ is looking increasingly at Far East companies in cartel matters


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Developments in Leniency: Stolt-Nielsen Developments in Leniency: Stolt-Nielsen

• In the first-ever instance of the Antitrust Division revoking amnesty, the Third Circuit will decide whether an amnesty agreement can be enforced pre-indictment.– The District Court found that the Division breached the amnesty agreement and

enjoined the government from indicting the company.– The government is arguing that, as with any other immunity agreement, the

revocation of amnesty can be challenged only in a motion to dismiss an indictment.


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• Two days before oral argument, the Antitrust Division submitted supplemental authorities to the Third Circuit, including an article analyzing the matter in published the day before in the Legal Times.– The article was critical of the District Court’s decision.– Counsel for Stolt-Nielsen responded to the Division’s submission, alleging that,

not only was the article not “pertinent and significant” authority under the appellate rules, but also that the Division “had a role” in creating the article as well as an earlier article that also criticized the District Court opinion.


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• According to the Stolt-Nielsen submission, email correspondence between the authors of the articles and Antitrust Division lawyers substantiate the claim that the government played a role in creating the articles.– Stolt Nielsen obtained the email correspondence through a FOIA request.– The emails show that both authors discussed aspects of the matter and drafts of

the articles with Antitrust Division lawyers involved in the matter.


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• The Third Circuit panel heard argument on September 29– The panel focused a number of questions on the leniency agreement’s promise

that the government “shall not prosecute” the leniency applicant (the “contract theory”) while the Antitrust Division argued that the judicial branch could not stop an indictment from being issued (the “separation of powers theory”).

– Asked whether the government can revoke a leniency agreement after a candidate has performed under the agreement, Antitrust Division counsel responded that leniency still could be revoked if the Division determines that the applicant was not eligible for leniency

• This will be a very important decision. If the Antitrust Division prevails on the “separation of powers” theory, the issue will arise again on a motion to dismiss the indictment.


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Developments in Leniency: Commentary Developments in Leniency: Commentary

• Leniency Is More Difficult to Obtain – And Keep – Than It Once Was– Antitrust Division Now Gives You A “Marker” And Develops The Evidence For

Significant Time Before Giving You A Leniency Agreement– Antitrust Division Seems More Skeptical About Leniency Applications Given The Detrebling

Aspect of New Legislation– Decision in Stolt Nielsen Will Affect Leniency Practice Significantly

• Leniency In Other Jurisdictions Complicates The Equation– Japan Recently Changed Its Leniency Policy to Be Closer to U.S.– Europe Needs A One Stop Leniency Plan Desperately


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Private Cartel Litigation Private Cartel Litigation

• Empagram Cert Petition Filed To Revisit D.C. Circuit Decision• Europe Gets Closer To Private Rights of Action

– Europe Is Moving Toward Damage Actions for Private Plaintiffs– Commissioner Kroes Argues That EU Jurisdictions Should Not Copy U.S.

Approach– The Commission’s “Green Paper” Will Be Issued By Year’s End (Section of

Antitrust Law Will Comment on “Green Paper”)


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Civil Non-Merger and Civil Litigation Civil Non-Merger and Civil Litigation

Mark Edwards

Jonathan Rich

Izzet Sinan

Clay Everett

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Twombly v. Bell AtlanticTwombly v. Bell Atlantic

• Plaintiffs claimed that defendants – local Bell telephone operating companies (incumbent local exchange providers, or “ILECs”) – conspired (a) not to enter each other’s territory to offer local telephone service and (b) to take certain steps to prevent competing local exchange providers (“CLECs”) from competing with the ILECs successfully.

• District Court dismissed. Judge Lynch applied the standard for summary judgment, writing that mere allegations of conspiracy and parallel conduct are insufficient to infer an agreement. Rather, he said that a plaintiff must allege at least one “plus factor” to allege a conspiracy sufficiently.

Civil Non-Merger/Concerted ActionCivil Non-Merger/Concerted Action

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Twombly v. Bell AtlanticTwombly v. Bell Atlantic

• Court of Appeals reversed. The Court held that the Federal Rules of Civil Procedure do not require a plaintiff to allege plus factors in a complaint.– “antitrust complaints [do not] merit a more rigorous pleading standard” than other

complaints.– Plaintiff need not allege plus factors that support the existence of a conspiracy.

Allegations of conspiracy and parallel conduct are sufficient for a complaint.– Plaintiffs might not ever need to show “plus factors” (to support an inference of

conspiracy from parallel conduct) if they prove direct evidence of conspiracy.– Court had sympathy for the defendants’ position that they would be subject to

discovery on the basis of a bare bones complaint, but wrote that only Congress or the Supreme Court could change the standard.

Civil Non-Merger/Concerted ActionCivil Non-Merger/Concerted Action

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IPO Litigation – Billing v. Credit Suisse First BostonIPO Litigation – Billing v. Credit Suisse First Boston

• Plaintiffs alleged that defendant investment banks violated the antitrust laws by agreeing to certain actions that inflated the price of stocks after various initial public offerings. Allegations were that underwriting syndicates conspired to push up prices and forced IPO customers to take actions that pushed up prices.

• District Court dismissed. The Court held that the antitrust laws do not apply. The Court wrote when Congress passed the securities laws, it repealed the antitrust laws for SEC-regulated activity. Because the SEC regulates IPOs, the antitrust laws do not apply to the actions of underwriting syndicates.

• District Court relied on doctrine of “implied repeal,” also known as “implied immunity.” Implied repeal is found when application of the antitrust laws will interfere with operation of the securities laws or subject regulated entities to potentially conflicting rules; in that circumstance Congress must have intended that the antitrust laws do not apply.

Civil Non-Merger/ImmunitiesCivil Non-Merger/Immunities

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IPO Litigation – Billing v. Credit Suisse First BostonIPO Litigation – Billing v. Credit Suisse First Boston

• Second Circuit Reversed. – The Court held that manipulation of the secondary market and forcing buyers to

trade in certain ways would violate the securities laws. – Preventing such “frauds” was one of the Congress’ primary objectives in passing

the securities laws. The SEC could not and has never considered permitting such activity.

– There is no inconsistency with the antitrust laws and there is no reason to believe that Congress did not intend for the antitrust laws to apply. Under those circumstances, there can be no finding of implied appeal.

• Issue for future: Will this holding enable plaintiffs to use the antitrust laws against alleged frauds (committed by more than one entity) in the securities markets?

Civil Non-Merger/ImmunitiesCivil Non-Merger/Immunities

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U.S. Philips Corp. v. ITCU.S. Philips Corp. v. ITC

• Key patent misuse case on application of tying principles to package licensing

• Background:– CD-R and CD-RW pool licensed patents as package– Royalty fees based on number of CD-R/RWs produced; not number of patents

utilized– Several licensees stopped paying royalties– Philips brought trade complaint to preclude importation– Respondents defended by claiming patent misuse

Civil Non-Merger/Intellectual PropertyCivil Non-Merger/Intellectual Property

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• ITC Decision– ALJ: patents were valid and infringed, but bundling of “non-essential” and

essential patents in pool licenses was misuse rendering patents unenforceable– Full ITC affirmed.

• Tying product = “essential patents”• Tied product = “non-essential” patents• Violated both per se and rule of reason standards


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• Fed. Cir.: Per se rule does not apply– Previous per se cases distinguishable

• Unlike “block booking” cases (Paramount, Loew’s), “Philips’s package licensing agreements do not compel the licensees to use any particular technology covered by any of the licensed patents.”

• Unlike cases dealing with tying of “staple goods” (Va. Panel, Senza-Gel) because tying patents, as opposed to goods, “does not bar the licensee from using any alternative technology that may be offered by a competitor of the licensor.”


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• No “forcing”– ITC’s assumption that there was forcing “ignores the reality that the value of any

patent package is largely, if not entirely, based on the patents that are essential to the technology in question.”

• Per se rule would have perverse effects– Patents that are “essential” at the time of a license may later become

“nonessential” due to advances in technology.– Too easy for defendants to interpose meritless defense.


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Package license produces pro-competitive benefits.– Reduces transactions costs.

• Eliminates the need for multiple contracts.• Reduces administrative and monitoring costs.

– Reduces the likelihood of litigation by obviating potential patent disputes.

– Easier to price based on estimate of the “worth to practice a particular technology” than to determine the “marginal benefit provided by a license to each individual patent.”


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FTC Policy re Royalty Discussions in Standard SettingFTC Policy re Royalty Discussions in Standard Setting

• September 23, 2005 Speech by Chairman Majoras at Stanford University– Historically, wary of “price” discussions in the context of standard setting. – New countervailing concerns re danger of “hold up”:

• Standard setting may confer market power on owner of IP rights necessary for a standard.

• After standard is set, IP rights owner may be able to command supracompetitive royalties, leading to higher prices.

• Typically do not know what royalties will be charged until standard is set.• Dell, Unocal, Rambus.


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• Strategies for avoiding “hold up”:– Require parties to agree not to charge royalties for IP rights ultimately included in

standards.– Require IP owners to state their royalty rates up front.– Joint ex ante royalty discussions among members of standard setting

organizations.– These strategies would permit prices/costs to be considered in deciding what

standard to adopt.


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• Chairman Majoras’ analysis: – “Unilateral announcement of price is, by definition, not a collective act subject to

per se condemnation or even review under Section 1 of the Sherman Act, and it is hard to see how announcing one’s price before sale (without more) could amount to exclusionary conduct under Section 2.”

– “We would apply the rule of reason to joint ex ante royalty discussions because, quite simply, they can be a sensible way of preventing hold up, which can itself be anticompetitive.”


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• Chairman Majoras’ analysis, cont’d:– Risk of “buyer power” being exercised is low:

• SSO members may lack buying power.• Competition for inclusion in SSO.• Manufacturers participating in SSO may be willing to offer low cost or even free

licenses in order to gain first mover advantage.– Need to determine, as a first step, whether discussion of royalties ex ante is

“reasonably necessary” to avoid “hold up.”• Consider “whether an uncoordinated series of bilateral negotiations between

patentees and individual would-be licensees would be equally capable of avoiding hold up.”

– Setting output prices in the context of SSO discussions of royalty rates is per se illegal.



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Volvo Trucks North America, Inc. v. Reeder- Simco GMC, Inc.Volvo Trucks North America, Inc. v. Reeder- Simco GMC, Inc.

• First secondary-line price discrimination case to be heard by the Supreme Court in 15 years.

• Raises important questions concerning the application of the Robinson-Patman Act to bid business in which goods are not sold out of inventory.

Civil Non-Merger/Upcoming Supreme Court ArgumentsCivil Non-Merger/Upcoming Supreme Court Arguments

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• The Robinson-Patman Act premises a manufacturer’s liability for price discrimination on there having been (1) a “discriminat[ion] in price” that (2) has harmed “competition” between (3) a disfavored purchaser and a favored purchaser who (4) has “receive[d] the benefit of the discrimination.”– Conventional wisdom has been that no secondary-line violation occurs unless the

disfavored purchaser can prove that it has lost sales to a favored purchaser from the same supplier, and that the price discrimination was the reason why.

– Also generally (but not universally) held that no violation can occur unless both the favored and disfavored purchaser made actual purchases at different prices from their common supplier.


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• Volvo manufactures a line of heavy trucks. Reeder is a former Volvo heavy truck dealer that was terminated.

• Most heavy trucks are custom built to the end user’s specifications.• End users typically solicit bids from several dealers representing

different manufacturers, and the winning dealer then purchases from the manufacturer only after the retail customer has contracted to buy the truck. For most heavy truck sales, only one dealer ends up making a purchase of a truck.

• Reeder produced no evidence of any instance in which it and another Volvo dealer were competing for the same business, purchased the same type of truck from Volvo at different prices, and Reeder then lost the sale.


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Reeder prevailed on its Robinson-Patman Act claim at trial and on appeal to the Eighth Circuit based on the following evidence:

– Reeder had received smaller discounts from Volvo than the discounts Volvo provided to other Volvo dealers in connection with completely separate transactions.

– Volvo offered Reeder smaller discounts than the ones at which Volvo sold to other Volvo dealers in connection with their sales to different retail customers. In none of those instances did Reeder make a purchase from Volvo.

– Volvo twice offered Reeder lower discounts than another Volvo dealer competing for the same bid business, though Reeder was not an actual purchaser from Volvo in either instance. One of those bids was awarded to a non-Volvo dealer (neither Reeder nor the other Volvo dealer was the winner). The other bid was awarded to a competing Volvo dealer who paid a lower price than Reeder was offered.


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• The Supreme Court’s decision will likely resolve these questions:– Must there be two actual purchases at different prices in order to sustain a

Robinson-Patman Act claim, as the language of the statute suggests? Or can such liability arise even when the plaintiff has received a less favorable offer from its manufacturer, but has not actually purchased at that less favorable price?

– Does the Robinson-Patman Act protect competition between a manufacturer’s dealers and the dealers of another manufacturer, i.e., inter-brand competition? In other words, does the Robinson-Patman Act impose a duty on a manufacturer to ensure that a dealer is always purchasing at the same prices as all of its other dealers, even when there is no competition between them?


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• Volvo is also asking the Supreme Court to resolve whether a Robinson-Patman plaintiff should also be required to prove that the price discrimination has caused harm to competition generally, and not just to the plaintiff itself, as the other antitrust laws require.

– Issue not squarely presented below or in the petition for certiorari– Circuit split on this issue– D.C. Circuit vs. Third and Ninth Circuits

• Case will be argued next week (October 31, 2005)


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• In the instance of a tie that conditions a patent license on the licensee’s purchase of a non-patented good, must a plaintiff prove that the patent holder has market power in the relevant market for the tying product or may that market power be presumed?

• To be heard on November 11, 2005.• Earlier Supreme Court precedent established the principle that is being

revisited: “The requisite economic power is presumed when the tying product is patented or copyrighted.” United States v. Loew’s, Inc., 371 U.S. 38, 45-45 (1962) (citing International Salt Co. v. United States, 332 U.S. 392 (1947), and United States v. Paramount Pictures, Inc., 334 131 (1948)).

Illinois Tool Works Inc. v. Independent Ink, Inc.Illinois Tool Works Inc. v. Independent Ink, Inc.


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• Trident, a division of Illinois Tool Works, is the owner of or exclusive licensee under several patents covering an industrial printing technology. Each of two competitors has a rival patented printing technology.

• Trident licenses to OEMs who take a single-use license that requires them to purchase Trident’s unpatented ink as a condition for obtaining its patented inkjet printhead. The license prohibits refilling the ink containers, but does not prohibit the licensee from purchasing containers of ink from third-party manufacturers.



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• Independent Ink is a competing manufacturer of ink. It got sued for patent infringement because it refills Trident’s patented containers with its own ink, despite the terms of the single-use license.

• Because a patent does not foreclose other inventions that serve the same purpose and compete as substitutes in the same market, is such a presumption warranted?



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• The federal antitrust enforcement agencies abandoned that presumption many years ago, and most scholars have observed that the presumption is unwarranted because patents do not necessarily or even usually confer market power on the patent holder.

• Independent Ink argues that the presumption should be preserved because it recognizes that the patents involved in tying litigation are “likely to be unusually valuable and therefore to fall within the select group of patents that realize patent law’s promise of market power.” The presumption imposes the burden of undertaking a costly market power analysis “on the party best situated to address” the competitive effects of the patent, i.e., the patent holder.



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European DevelopmentsEuropean Developments

• 3G INQUIRY REPORT – 09/21/05– favors unbundled sale of rights to avoid output limitations risk– transmission length and timing limitations on 3G content problematic– where the efficiency of joint selling not realized, rights to fall back to individual owners for

exploitation– remedies to ensure exclusive access to premium content does not become anticompetitive

• Car distribution – 09/30/05: dealers can now open outlets outside their geographic territories, including other Member States (N.B. Peugot fined Euro 49.5 mill. for obstructing new car exports from Holland to other Member States -- 10/05/05)

• State Aid: 09/21/05– Consultation paper on measures to establish an improved framework for state aid for

innovation

Civil Non-merger/European DevelopmentsCivil Non-merger/European Developments

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Morgan Lewis Antitrust Practice Morgan Lewis Antitrust Practice

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Key Areas of the PracticeKey Areas of the Practice

• Cartel Investigations and Litigation• Compliance - Domestic and International• Intellectual Property• Consumer Protection• EU Competition Law• Mergers & Acquisitions• Energy• Trade Associations

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Donald C. KlawiterDonald C. KlawiterDonald C. Klawiter is a partner in the Antitrust Practice. Mr. Klawiter’s practice focuses on antitrust investigations and litigation, with special emphasis on international antitrust matters. Mr. Klawiter has substantial experience in defending corporations and executives in antitrust criminal and civil cases. In recent years, he has represented corporations and executives from six continents in grand jury investigations and prosecutions. He has served as international coordinating counsel in many multi-jurisdictional proceedings. Mr. Klawiter has also led internal investigation teams to determine whether a corporation faces serious antitrust risk.

Mr. Klawiter has substantial trial experience in civil, criminal and merger cases, both as a prosecutor and as defense counsel. From 1975 to 1986, Mr. Klawiter held several senior supervisory and litigation positions with the Antitrust Division of the U.S. Department of Justice, including Chief of the Dallas Field Office, and special assistant to the Director of Operations of the Antitrust Division.

Mr. Klawiter is Chair of the American Bar Association’s Section of Antitrust Law and a member of its governing Council.

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John H. ShenefieldJohn H. Shenefield

John H. Shenefield is a partner in the Antitrust Practice. Mr. Shenefield’s practice concentrates on antitrust litigation and counseling. Mr. Shenefield has served as lead counsel in a number of national and regional antitrust litigations. His counseling practice involves issues ranging from mergers and acquisitions to government investigations. He is retained to counsel boards of directors, render second opinions, or act as an arbitrator. Mr. Shenefield also is involved in international antitrust issues and has handled matters before the European Commission and the United Kingdom’s Office of Fair Trading. He is a member of the Antitrust Modernization Commission, created by act of Congress.

Before joining the firm in 1986, Mr. Shenefield held several high-ranking positions at the U.S. Department of Justice, including serving as Assistant Attorney General in charge of the Antitrust Division from 1977-1979, and as Associate Attorney General of the United States from 1979-1981. He also served as chairman of the National Commission to Review Antitrust Laws and Procedures from 1978-1979.

Active in firm management, he has served as chairman of the firm and also of the Antitrust and Trade Regulation Section.

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Harry T. RobinsHarry T. Robins

Harry T. Robins is a partner in the Antitrust Practice Group. Mr. Robins represents clients, including a number of prominent private equity firms, before the Federal Trade Commission and the U.S. Department of Justice, as well as international regulatory agencies, in connection with mergers and acquisitions and joint venture transactions. Most recently, he obtained antitrust approvals on behalf of One Equity Partners (the private equity arm of JP Morgan Chase) in the United States and the European Union in connection with One Equity Partners’ sale of Moneyline Telerate to Reuters plc. Mr. Robins has also obtained antitrust clearances for transactions in a number of industries, including pharmaceuticals, chemicals, financial services, energy, media, book publishing, industrial products and others.

Mr. Robins also handles a number of litigation and counseling matters, including class-action litigation and government investigations. Mr. Robins has extensive experience counseling corporations and trade associations regarding vertical and horizontal price fixing, refusals to deal, price discrimination, standard setting and a host of other antitrust issues. Mr. Robins frequently counsels the Bond Market Association in connection with various standard-setting initiatives.

Mr. Robins is a frequent writer and speaker on antitrust matters. In January 2002, he presented at the Bond Market Association’s Annual Compliance Conference on “Standard-Setting Initiatives for the Fixed Income Industry: An Antitrust Primer.” In July 2004, he spoke at the ABA Business Law Section on “Proposed Changes to the Hart-Scott-Rodino Act Rules.” Most recently, in September 2005, Mr. Robins spoke at an M&A Seminar sponsored jointly by Morgan Lewis and The Westchester/Fairfield County Association of Corporate Counsel on “Antitrust Tips for the M&A Lawyer.”

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Willard K. TomWillard K. Tom

Willard K. Tom is a partner at Morgan, Lewis & Bockius, LLP, resident in our Washington, D.C. office.

Will has had more than twenty-five years of experience in the antitrust field, both in private practice and in government, and has been recognized by his peers by a listing in the 2006 edition of The Best Lawyers in America. In private practice, he has counseled and represented clients in merger and non-merger matters before the FTC, DOJ, state attorneys general, and the courts, as well as in alternative dispute resolution.

In government, Will served in several important management and policy positions and roles: • deputy director of the Bureau of Competition of the Federal Trade Commission • head of the Bureau’s policy office • counselor to the head of the Antitrust Division of the U.S. Department of Justice• one of the principal drafters of the DOJ and FTC Antitrust Guidelines for the Licensing of Intellectual Property

Will has also been an active contributor to the bar and legal community, including as: • former member of the D.C. Federal Judicial Nominations Commission • holder of various positions in the ABA Section of Antitrust Law over the years, including member of the Section Council, co-chair of Merger Process Reform Task Force, chair of the FTC Committee, vice-chair of the Intellectual Property Committee, and editorial chair of Antitrust Law Developments • member of the Council of the ABA Section of Business Law

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Izzet M. SinanIzzet M. Sinan

Izzet M. Sinan is a partner in the Antitrust Practice. Mr. Sinan focuses his practice on European Community (EC) law, with particular emphasis in the area of competition, where he has established a reputation in the mergers and acquisitions field. Mr. Sinan has practiced in Brussels since the early 1980s. He is a member of the EC Competition Policy Subcommittee of the American Chamber of Commerce in Belgium, which he chaired from 1994-1999. In this capacity, Mr. Sinan has been involved in drafting EC competition law legislation, including the merger control regulation, the joint venture guidelines, the know-how licensing regulation, the technology transfer regulation and most recently the rules on horizontal cooperation agreements.

Mr. Sinan provides advice on all aspects of EC competition law across a broad range of industry sectors. He represents clients before the various administrative agencies of the European Commission and Member States, as appropriate, in obtaining antitrust clearance for mergers, joint ventures, distribution/licensing and other agreements; and advises clients accused of antitrust violations. Mr. Sinan establishes antitrust compliance programs for companies and defends clients in cartel cases, including European Commission and Member State "dawn raid" investigations. Mr. Sinan also has experience in EC trade cases (the “external” face of competition law).

Mr. Sinan has written numerous articles on EC competition and trade laws, and spoken at seminars on those subjects. Mr. Sinan was a trainee at the United Nations (Law of the Sea Conferences, N.Y., 1979) and the European Commission (Directorate General for Competition Law and Policy, Brussels, 1982/83). Mr. Sinan was called to the Bar of England and Wales in 1981. He is qualified to appear before the European Court of Justice.

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Tara L. ReinhartTara L. Reinhart

Tara L. Reinhart is a member of the Antitrust Practice. Ms. Reinhart focuses on government criminal and civil investigations, and antitrust litigation. Ms. Reinhart has represented clients in grand jury investigations, including international cartel investigations in the chemical and construction industries. Ms. Reinhart’s background also includes in-depth experience in federal white collar criminal defense, with a number of significant representations in the U.S. District Court for the Eastern District of Pennsylvania that included investigations of health care fraud, tax fraud, mail and wire fraud, conspiracy and racketeering. Ms. Reinhart was on the defense team in United States v. McDade, representing a United States Congressman during an interlocutory appeal to the Third Circuit Court of Appeals and an eight-week jury trial that resulted in an acquittal on all charges of an indictment that alleged conspiracy, racketeering and bribery.

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Mark P. EdwardsMark P. Edwards

Mark P. Edwards is a partner in the Antitrust Practice. His practice focuses on antitrust litigation, particularly cases involving claims of price-fixing, monopolization, group boycotts, price discrimination and violations of state competition law. He also counsels corporate clients on a broad range of antitrust issues, including distribution and pricing practices, dealer terminations and the licensing of intellectual property.

He represents clients from a wide range of industries, including transportation, manufacturing, education, health care, telecommunications and real estate. Mr. Edwards represents plaintiffs and defendants in federal and state court litigation.

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Jonathan M. RichJonathan M. RichJonathan M. Rich is a partner in the Antitrust Practice Group. His practice includes litigation and representation before the federal enforcement agencies, including grand jury investigations, mergers and acquisitions, and other civil investigations. Mr. Rich’s practice focuses on antitrust matters in a variety of industries, with a particular focus on financial institutions. Both at Morgan Lewis and previously at the United States Department of Justice, Mr. Rich has been involved in all of the major government antitrust investigations of the financial markets including inquiries into fixed income joint ventures, the equity options markets, NASDAQ market makers and Treasury auctions. Other recent representations have included matters involving inter-dealer brokerage, foreign exchange, financial derivatives, auctions, performing rights in musical compositions,semiconductors, chemicals, and food additives.

Before joining the firm, Mr. Rich was the Assistant Chief in the Communications and Finance Section of the Antitrust Division of the Department of Justice, where he supervised the Division’s enforcement efforts in financial markets and the bank merger program. He was one of the principal attorneys in the ground-breaking investigation of the United States Treasury securities market, which resulted in settlements of more than $350 million in fines and penalties. Mr. Rich also gained extensive experience with merger and acquisitions while at the Department of Justice. His accomplishments in that area include a principal role on the winning trial team in United States v. United Tote.

Mr. Rich clerked for Chief Justice Robert N. Wilentz of the New Jersey Supreme Court.

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Clay EverettClay Everett

Clay Everett is an associate in the Antitrust Practice Group. Mr. Everett's practice focuses on civil and criminal antitrust litigation and counseling. He has litigated claims under Sections 1 and 2 of the Sherman Act, Section 5 of the FTC Act and numerous state antitrust and consumer protection statutes. Mr. Everett has or is representing clients in a wide variety of industries including pharmaceuticals, medical devices, banking, feed additives, and helicopter services.

Mr. Everett is also active in the Antitrust Section of the American Bar Association. He currently serves as Chair's Assistant and is a member of the Section's Council.

www.morganlewis.com© 2005 Morgan, Lewis & Bockius, LLP. All rights reserved. This update is provided as a general informational service to listeners to this program. It should not be construed as imparting legal advice on any specific matter.

Antitrust Update for In-House CounselAntitrust Update for In-House CounselABA Section of Antitrust Law

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