Agency Investigations

Antitrust issues are more likely to arise in two kinds of industries: one is industries that deal in commodities, because such products are sold based on price. Steel beams, aluminum ingots, or bulk vitamins are examples of commodities where price is the only differentiating factor. There will always be a concern that there is price-fixing and price signaling in such industries and, as a result, antitrust issues can be expected to arise on a recurrent basis.

A second area where competition questions commonly can be expected to arise is in industries that are undergoing restructuring. When an industry is undergoing restructuring, its member companies may respond very differently. Some companies will sell off assets, restructure, and may become involved in other areas. Others will attempt to consolidate in the core industry area. As a result, all sorts of competition issues will arise due to the increase of mergers and acquisitions, joint ventures , licensing and other transactions. In addition, there will be new pricing and distribution issues, and other competitive disputes that will likely result in antitrust litigation.

Regardless of the source of competition concerns, the most important thing to do for a client that is facing questions about an activity or transaction is to let the client know that it is possible to respond effectively if it has a good business rationale for the challenged activity. I tell our clients that if what they are doing makes sense from a business perspective, if they have a good business justification for making the decision, then, nine times out of ten, that reason will be deemed procompetitive. The agency reviewing the transaction or activity will likely conclude, "Yes, that enhances efficiency, that is pro-competitive, and that is allowable ."

If a client can explain with clarity what it was thinking when it made its decision -- why it is proposing to do this joint venture, why it is asking to make this acquisition, why it undertook pricing in that way -- then it will probably be defensible from an antitrust perspective. In many cases, however, the clients decisions have not been clearly thought through. The role we play then is to pull together an explanation, to simplify and clarify what the business wants to do and why it is important to that business and that industry, so that a coherent and compelling legal and business rationale can be presented.