On November 28, 2012, the Department of Justice ended its concerns over WellPoint Inc’s proposed acquisition of Amerigroup after Amerigroup Corp sold its subsidiary, Amerigroup Virginia Inc.  The Justice Department initially ruled that the merger would significantly decrease competition of Medicaid managed care plans in Northern Virginia since Amerigroup and WellPoint are the only Medicaid managed care plan providers in Northern Virginia.  

In order to settle concerns with the Justice Department, Amerigroup agreed to sell Amerigroup Virginia to Inova Health System Foundation.  The Justice Department closed the investigation immediately after the transaction was completed and reviewed.  

If there was no divestiture, the merger would have created a monopoly in Arlington, Culpeper, Fairfax, Fauquier, Frederick, Loudon, Prince William, Rappahannock, and Warren counties along with the cities of Alexandria, Falls Church, Fairfax and Manassas Park.  Before the merger, WellPoint and Amerigroup competed as providers to physicians, hospitals, and pharmacies.  

Congress usually requires states to provide Medicaid beneficiaries with at least two Medicaid managed companies if the state requires beneficiaries to have managed care plans.  

Acting Assistant Attorney General Renata B. Hesse with the Antitrust Division stated: “The divestiture of Amerigroup Virginia will ensure continued competition in the markets for Medicaid managed care plans in Northern Virginia.  Preserving competition in health care markets is vital to ensuring that consumers receive better and more innovative health care services.”  

Wellpoint has its headquarters in Indianapolis and is currently a licensee of the Blue Cross and Blue Shield Association.  Wellpoint and subsidiaries reported revenues of $60.7 billion 2011 and served over 65 million members.  

Amerigroup is headquartered in Virginia Beach and organizes services for individuals receiving funds from public healthcare programs.  Amerigroup reported revenues of over $6 billion in 2011 and served more than 2 million members.  

Source: Department of Justice

The Department of Justice announced on Thursday, September 20^th, that the Taiwan-based LCD manufacturer, AU Optronics Corporation, was sentenced by San Francisco District Court to pay $500 million for its involvement in price fixing. 

AU Optronics Corporation is a leading producer of the “thin-film” transistor LCD in the world market.  The criminal fine matches the biggest fine ever placed on a company for violation of U.S. antitrust laws. 

The American subsidiary and two of the top executives were sentenced on Thursday as well.  The former president, Hsuan Bin Chen, received three years in prison and a $200,000 fine.  The former executive vice president, Hui Hsiung, received the same sentencing. 

The judge also requires AU Optronics Corporation to print the convictions and penalties in three major publications in both the United States and Taiwan.  The company must list steps it will take after the conviction as well. 

Scott D. Hammond, the Deputy Assistant Attorney General for the criminal enforcement program under the Antitrust Division, stated: “This long-running price-fixing conspiracy resulted in every family, school, business, charity and government agency who bought notebook computers, computer monitors and LCD televisions during the conspiracy to pay more for these products.”  Hammond also reported antitrust cases have increased in the last 5 years, thus have efforts to thwart the cases increased by the FBI. 

The world market for the LCD panels was estimated at $70 billion annually.  Computer manufacturers like Hewlett Packard, Dell and Apple all use the LCD panels. 

The FBI has convicted eight companies in its growing investigation into antitrust.  The sentencing has led to $1.39 billion in criminal fines, and 22 executives total have been charged by the FBI so far.  Collectively, the executives have a combined sentencing of 4,871 days in prison. 

Source: Department of Justice

On September 19, 2012, the Department of Justice announced that the Japanese freight forwarding company Yamato Global Logistics Japan Co. Ltd. agreed to plead guilty and pay $2.3 million in criminal fines for fixing prices for air cargo shipments from Japan to the United States. 

The company is reported to have fixed fuel surcharges and security fees from September of 2002 to November of 2007.  Apart from the criminal fine, Yamato Global Logistics Japan Co. Ltd. has already agreed to cooperate with the Department of Justice in a continuing antitrust investigation. 

Currently, the investigation has led to 14 companies to pleading guilty or agreeing to plead guilty and pay criminal fines totaling more than $100 million. 

Freight forwarders like the one in Japan engage in the delivery of domestic and international goods for customers.  The process starts by receiving, packaging, and preparing the freight.  The freight forwarder then schedules the transportation with providers such as air carriers and prepares shipping documentation. 

According to the Department of Justice, the company in Japan secretly agreed to organize and impose freight forwarding fees.  Scott D. Hammond, the Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program, states, “Consumers ultimately were forced to pay higher prices on the goods they buy every day as a result of the noncompetitive and collusive fees charged by these companies.” 

The company in Japan is charged within violating the Sherman Act.  This maximum fine for the violation of the Act is $100 million for corporations.  The maximum fine can increase if the gain was twice the loss suffered by victims. 

The charges were brought forth by the Antitrust Division’s National Criminal Enforcement Section, the Washington FBI Field Office, and the Office of the Inspector General under the Department of Commerce. 

Source: Department of Justice