Horizontal Merger Guidelines Review Project 6 7 8 Tuesday, December 8, 2009 9 9:05 A.M
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1 1 UNITED STATES OF AMERICA 2 FEDERAL TRADE COMMISSION 3 4 5 Horizontal Merger Guidelines Review Project 6 7 8 Tuesday, December 8, 2009 9 9:05 a.m. to 4:15 p.m. 10 11 12 13 NYU School of Law 14 Greenberg Lounge 15 40 Washington Square South 16 New York, New York 17 18 19 20 21 22 23 24 Reported and Transcribed by: 25 Edward Leto, CSR 2 1 TABLE OF CONTENTS 2 3 Welcoming Remarks 4 Phil Weiser........................... 3 Dean Revesz........................... 6 5 PANEL 1: Working with International 6 And State Authorities 7 Pamela Jones Harbour, Moderator.......10 8 PANEL 2: Market Concentration and 9 Structural Presumption 10 Howard Shelanski, Moderator...........54 11 PANEL 3: Minority Interests and 12 Failing Firm Defense 13 Howard Shelanski, Moderator...........98 14 PANEL 4: Merger Remedies 15 Phil Weiser, Moderator...............140 16 17 PANEL 5: General Discussion and Roundtable 18 Phil Weiser, Moderator...............196 19 20 21 22 23 24 25 3 1 P R O C E E D I N G S 2 - - - - - - 3 INTRODUCTION AND WELCOMING REMARKS 4 MR. WEISER: Let me welcome you all here to our 5 Second Workshop Review of the Merger Guidelines. For 6 those who are new to NYU, I can say that this is a 7 special place for me. I went here for law school and 8 graduated in 1994, and it launched my new career in 9 every way, including my interest in law and economics 10 and my intellectual curiosity for law was very well 11 cultivated here. I've had some wonderful professors 12 and some of them are here today. 13 We have to start by acknowledging Harry First 14 and Eleanor Fox. Where is Harry, and where is Eleanor? 15 They are truly the dynamic duo of antitrust and they 16 bring together expertise that they could have been 17 together on one panel where we discussed the 18 international and state levels of enforcement. 19 For those who don't know about Eleanor's work, 20 internationally, it's pioneering in every sense of the 21 word. It's great to have her here. 22 On that dimension, for those who don't realize 23 that Harry played a critical role in the New York 24 Attorney General's Office heading up the antitrust 25 division, working on the Microsoft case, you'll know 4 1 more about it when his book comes out -- it won't be 2 the first word, maybe it will be the last word on the 3 Microsoft case, probably not, but it will be worth 4 reading. It's worth reading. 5 Harry and Eleanor also run the program here in 6 trade regulation and are hosts today. Nicole Arzt in 7 the back is an organizer extraodinaire. The people 8 from the DOJ who worked on this, also Jeanie Miekel 9 deserves thanks and said, "Do you want me to come down 10 to watch to make sure things are well done?" I said, 11 "No, Nicole is here." We're going to be in great 12 shape. So, Nicole, thank you for your great work. 13 So we have a very simple agenda today. We are 14 looking to be intellectually engaged and to have people 15 from the audience as well as those on the panel provide 16 some thoughtful food for analysis and we are going to 17 have a wonderful menu of sort of courses over the 18 course of the day. For those who didn't see the 19 background, we have 20 questions that we put up on our 20 website. That was the starting point for analysis. We 21 got 37 comments there on the website. Today we're 22 going to chew over all of that with you. We had our 23 first workshop. We got a lot of good thoughts from 24 that experience and we're looking forward to this one. 25 Harry, do you want to say a few words before 5 1 introducing -- 2 MR. SHELANSKI: Well, after listening to Phil, 3 I'm not sure if I work for the FTC or the FDA, or maybe 4 the USDA, but I want to thank all of you for coming. I 5 want to recognize Liz Callison, an economist from my 6 bureau who is going to be responsible for making sure 7 the transcripts of these proceedings are accurate and 8 edited, so watch what you say. This will all be a 9 matter of public record. 10 I really just want to thank everybody for 11 participating. This is a joint effort of the Federal 12 Trade Commission and the Department of Justice. Phil 13 and I are two of the people from the respective 14 agencies running this workshop. We had a workshop 15 earlier -- last week in Washington, which was our 16 kick-off. We have one in Chicago on Thursday. We have 17 one in Palo Alto in January and we will conclude with a 18 final workshop on January 26th in Washington. 19 So those of you who are interested in seeing 20 how these questions get answered from somewhat 21 different angles and perspectives across those 22 different workshops, you'll be able to find a webcast 23 of last week's conference as well as transcripts of all 24 the other ones available for you shortly after each 25 workshop takes place. 6 1 So without further delay, I'd like to introduce 2 Dean Ricky Revesz from the NYU Law School. Ricky has 3 just been a wonderful host and, also, I would say, in 4 many respects, a mentor to many of us. Phil alluded to 5 his time here at NYU Law School as a student. I was 6 not a student here, although my mother was, and I had 7 the privilege of being a visiting professor here last 8 year. I can tell you it is a truly wonderful place and 9 we're grateful to them for hosting this event. 10 Dean Revesz. 11 DEAN REVESZ: Thanks, Howard. I'm delighted to 12 have been invited to give you, like, a minute of 13 welcome, and then I will leave, and the average level 14 of knowledge about the subject matter in the room will 15 rise dramatically as soon as I walk out, -- this feels 16 a little bit like a faculty workshop last year since, 17 as Howard mentioned, both Howard and Phil were visiting 18 professors here, and I used to see them around as 19 colleagues. It's nice to now see them back as 20 exhaulted government officials and the law school who 21 thinks of them as part of the permanent academic 22 families, extremely proud of them. We're also really 23 proud. There won't be any law school that will have 24 more alums as FTC Commissioner, chair of the FTC, John 25 Lebowitz, is one of our alums, and Julie Brill, who has 7 1 just been nominated by the president as an alum as 2 well, so we feel good about that, and hopefully this 3 close relationship will continue. 4 So I was delighted when Harry and Eleanor told 5 me that the Justice Department, the FTC, had decided to 6 do one of their workshops of this sort of five-workshop 7 marathon around the country here at the law school, and 8 I'm really delighted that you are here. 9 Harry and Eleanor are terrific colleagues. I 10 know that our program is in great hands, and I was very 11 pleased when I found out they were going to have this 12 leading role in working with Howard and Phil in putting 13 this together. 14 So if there's anything that any of my 15 colleagues or I can do to make your day better and work 16 more smoothly, let us know. Nicole can pass along the 17 information. We really want it to be a great moment, 18 and thank you very much for being here. It's a great 19 honor for the law school. 20 Thank you, commissioner, for coming and for 21 moderating the next panel. Have a wonderful wonderful 22 day, and I hope great things come out of these 23 proceedings and that our nation will be enriched by the 24 discussion that will take place here today. Thank you 25 so very much. And I guess, Harry, one of the 8 1 organizers, is on the program to say a few words before 2 the first panel. 3 MR. FIRST: Well, you all know that I'm not 4 really an organizer of this at all. It's Howard and 5 Phil. So I want to thank them again and, Nicole, in 6 particular. Bruce Prager said to me that this is even 7 nicer than the conference room at his law firm where 8 the New York State Antitrust Section meets, so I want 9 to welcome you to NYU and to the facilities we have 10 here. 11 I did just want to put in another NYU plug in 12 addition to having Howard and Phil, who we consider now 13 part of the NYU community, which is great. This is -- 14 as those of you who are here, and I see even some 15 former students, current students, a great time for 16 antitrust and a busy time for the law school.