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eBay Entered Agreement not to Hire Intuit Employees

On November 16, 2012, the Department of Justice announced it filed a civil antitrust lawsuit against eBay Inc because it entered into an agreement that denied the recruiting or hiring of Intuit Inc employees.  The Justice Department announced the agreement decreased competition for employment opportunities and denied employees access to better jobs and salaries.  

The lawsuit was filed in the U.S. District Court for the Northern District of California in San Jose.  The lawsuit is asking eBay to disregard the agreement and keep from entering similar agreements with other companies in the future.  The Justice Department filed a similar lawsuit against Intuit earlier for the same charges.  

According to court documents, eBay’s CEO, Meg Whitman, and Intuit’s founder and executive committee chair, Scott Cook, formed and enforced the anticompetitive agreement.  Additionally, the Justice Department claims that Cook was on eBay’s board of directors while he made complaints about the recruiting of Intuit employees by eBay.  

The Justice Department declares that the illegal agreement was enforced from 2006 to at least 2009.  eBay was specifically instructed not to recruit Intuit employees and throw away resumes from Intuit employees.  

Josepha Wayland, the Acting Assistant Attorney General in charge of the Antitrust Division, stated: “eBay’s agreement with Intuit hurt employees by lowering the salaries and benefits they might have received and deprived them of better job opportunities at the other company.  The Antitrust Division has consistently taken the position that these kinds of agreements are per se unlawful under the antitrust laws.”  

The former lawsuit against Intuit included lawsuits against five other companies as well: Adobe Systems Inc, Apple Inc, Google Inc, Intel Corp, and Pixar.  The Justice Department argued all of these companies entered bilateral agreements not to hire and solicit employees.  All of the companies made agreements to discard such bilateral agreements, and the Justice Department is asking eBay to discard any agreements with Intuit as well.  

Source: Department of Justice

Amerigroup Corp’s Divestiture will Allow for Competition

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

AU Optronics Corporation Sentenced to Pay $500 Million

The Department of Justice announced on Thursday, September 20th, 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

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