tuesday, october 27, 2014 its plan for four months after the October 2014 merger announcement. The court observed that such efforts were “not a sham to convince the FTC that Synergy wanted to enter the market” but instead demonstrated legitimate efforts by Synergy employees who wanted the project to succeed. Further, Synergy had publicly disclosed plans to build two X-ray facilities shortly after the merger announcement, demonstrating that it did not view the proposed merger as an impediment to its plan. The court reasoned that if the proposed merger was the reason Synergy abandoned its plans to enter the U.S. market, Synergy would have stopped working on the project when it entered merger negotiations or immediately after the deal was announced rather than in February 2015. In addition, Synergy would not have cancelled the project right after the FTC expressed concerns over the merger, “as Synergy had to know that doing so would only have solidified the FTC’s position.” The court determined that the failure to obtain customer commitments and the inability to lower capital costs were detrimental to Synergy’s plans and the most significant reasons for terminating its project.

Absent the merger, these obstacles would still prevent Synergy from entering the U.S. market. The court concluded that the proposed merger had “no effect whatsoever” on Synergy’s plans. In early October the FTC stated it would not appeal the district court’s decision and agreed to withdraw the matter from administrative adjudication. Even though the FTC’s challenge was unsuccessful in this case, practitioners should consider potential competition issues when evaluating antitrust risk in mergers. ing market is “rapidly evolving” and introducing new participants. Notably, both Google and TripAdvisor had introduced new online booking services within the past 18 months. Online Travel Merger The Justice Department decided not to challenge Expedia’s proposed acquisition of Orbitz despite concerns about the merger of two of the top three online travel booking providers, because the merger was not likely to substantially lessen competition.

(See DOJ Press Release, September 16, 2015.) Since Expedia had purchased another major player in the industry, Travelocity, just three weeks prior to announcing the Orbitz deal, the Justice Department investigated concerns that the merger would result in only two competitors, Expedia and Priceline, controlling 95 percent of the online travel booking market. After a six month investigation, the Justice Department found no evidence that the merger is likely to result in higher charges for consumers or the companies that list their services with online travel websites. The investigation found that the commissions Expedia charges to airline, car rental companies and hotels are not likely to increase post-merger because many companies either do not list with Orbitz or receive only a small source of bookings from Orbitz listings and, as a result, Orbitz has not had significant impact on Expedia’s commission charges in recent years. Additionally, the Justice Department observed that the online travel book- Auto Parts Conspiracy In the latest charges arising from allegations of widespread bid rigging in a number of auto parts markets, three Japanese executives were indicted for conspiring to rig bids and fix the prices of automotive body sealing products sold to auto manufacturers. (See DOJ Press Release, October 8, 2015.) Automotive body sealing ­ roducts keep out rain, wind p and noises and include trunk lids and door-side weather-stripping among other ­ roducts. p The Department of Justice stated that the price-fixed products were sold to Japan-based auto makers for installation in vehicles manufactured and sold in the United States. According to the charges, the three executives instructed their subordinates to communicate with those at other companies to allocate sales, rig bids and fix prices of body sealing products.

The indictment also alleges that two of the executives encouraged employees to destroy evidence of the conspiracy. Thus far, 58 individuals and 37 companies have been charged with participating in various auto parts conspiracies and have agreed to pay more than $2.6 billion in criminal fines. Reprinted with permission from the October 27, 2015 edition of the NEW YORK LA JOURNAL © 2015 ALM Media Properties, LLC. All rights reserved.

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