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Thomas Lambert, Apr 30, 2009
The outcome of the district court’s decision in FTC v. CCC Holdings is not surprising, and an injunction against the CCC/Mitchell merger may well have been warranted. The reasoning the court employed, however, causes concern. By stacking the deck so heavily in favor of the FTC a move dictated by the D.C. Circuit’s lax standard for granting preliminary injunctions under Section 13(b) the court ended up relying almost entirely on market share percentages. Its reasoning thus hearkens back to the overly simplistic Structure-Conduct-Performance (“S-C-P”) paradigm, under which a market’s structure is deemed to determine the participants conduct, dictating market performance. A less deferential standard for granting injunctive relief, such as that applicable to injunction requests by the U.S. Department of Justice (“DOJ”), would ensure that important non-structural factors receive due attention and would thereby enhance the quality of pre-merger review.
