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Amerigroup Corp’s Divestiture will Allow for Competition


Amerigroup Corporation is an American health insurance company owned by Anthem Inc. On August 16, 2021, the US Department of Justice announced that Amerigroup must divest its Medicare Advantage assets, paving the way for increased competition in the healthcare insurance sector. In this article, we will explore the Amerigroup divestiture and its implications for competition in the healthcare industry.

Background of the Divestiture

In 2012, Anthem acquired Amerigroup, a managed healthcare organization that provides health insurance services to low-income individuals. As part of the approval process, the Department of Justice mandated that the combined company must divest some of its assets to ensure that competition in the healthcare sector was not hindered.

In August 2021, the Department of Justice ordered Amerigroup to sell one of its Medicare Advantage plans in Virginia to Inova Health System Foundation to comply with the terms laid out earlier.

Implications for Competition

The divestiture of Amerigroup’s Medicare Advantage assets is expected to increase competition in the healthcare insurance market. It will allow other insurance companies to enter the market and offer more competitive healthcare plans to consumers.

The divestiture also aims to promote competition in the Medicare Advantage space, which provides managed healthcare services to seniors. By divesting its Medicare Advantage plan in Virginia, Anthem will be more competitive, benefiting consumers by offering them greater choice and lower costs.

Benefits for Consumers

The divestiture of Amerigroup’s Medicare Advantage assets is expected to have several benefits for consumers. First, it will increase competition in the market by paving the way for new insurance companies to enter the sector, offering consumers a wider range of options. Second, it will provide consumers with more affordable healthcare through enhanced cost-sharing and alternative coverage models. Lastly, the divestiture will increase the bargaining power of consumers in negotiations with their insurance companies.


The divestiture of Amerigroup’s Medicare Advantage assets is a significant step towards promoting competition and consumer choice in the healthcare sector. The decision will allow insurers to enter the market, which will provide a wider range of options for consumers, leading to lower costs and better healthcare coverage. As such, the Amerigroup divestiture is expected to create a competitive and vibrant market in the healthcare industry.

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


In September 2012, the US Department of Justice (DOJ) announced that AU Optronics Corporation, a Taiwanese electronics manufacturer, had been sentenced to pay $500 million in criminal fines for its participation in price-fixing LCD panels used in various electronic devices. In this article, we will explore the background of the case, the charges and their impact on the electronics industry.

Background of the Case

AU Optronics Corporation is a Taiwan-based company that specializes in the production of flat-panel displays for televisions, computer monitors, and laptops. In 2010, the company, along with other major suppliers, including Samsung and LG, was accused of participating in a scheme to fix prices of LCD panels.

The investigation began in 2006 when the US Department of Justice (DOJ) launched an investigation into price-fixing in the LCD panel industry. DOJ officials discovered that AU Optronics and other major LCD panel manufacturers had colluded to fix prices of LCD panels between 2001 and 2006.

The Charges and Sentencing

In September 2012, AU Optronics was found guilty by a federal jury in California for conspiring to fix prices, rig bids and allocate markets for LCD panels. The company was sentenced to pay $500 million in criminal fines, which is one of the largest fines ever imposed for antitrust violations in the United States.

The DOJ stated that AU Optronics and its co-conspirators met in secret locations to discuss setting prices and allocating sales of LCD panels, which resulted in artificially inflated prices that consumers paid across a range of electronic devices such as TVs, laptops, and mobile phones.

Impact on the Electronics Industry

The impact of this case on the electronics industry was significant. The LCD panel is an essential component in many electronic devices, and the price-fixing scheme meant that consumers were paying higher prices for their electronic devices than they should have been. This case highlights the importance of competition in the marketplace and the dangers of conspiring to fix prices.

The case also sends a clear message to other companies engaging in similar illegal activities. The DOJ has shown that it will not hesitate to prosecute companies that engage in price-fixing and antitrust violations that harm consumers.


The AU Optronics Corporation case shows the importance of antitrust laws and their enforcement in promoting competition and protecting consumer welfare. The $500 million fine imposed on the company for price-fixing is a clear indication of the severity of the violation. It also signals that the DOJ will not hesitate to take similar actions against companies found to be engaging in similar illegal activities. The case serves as a reminder to companies to comply with antitrust laws and avoid engaging in activities that harm competition and consumers.

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

Japanese Freight Forwarder Pleads Guilty to Price-Fixing


On September 19, 2012, a Japanese freight forwarder named Yusen Logistics Co. pleaded guilty to price-fixing charges, becoming the latest company to be targeted by US antitrust authorities. In this article, we will examine the details of the case and its implications for antitrust law.

Background of the Case

Yusen Logistics Co. is a global logistics company based in Japan that operates in various countries worldwide. In 2010, Yusen Logistics and some of its competitors, including K-Line America, NYK Line, and Evergreen Line, along with other freight forwarders, were charged in the US with price-fixing for services provided to customers in the US and other countries.

The conspiracy involved industry executives who conspired to fix the prices for international freight forwarding services by agreeing to various fees and charges. These actions aimed to eliminate competitive pricing for customers and make it more challenging for new competitors to enter the market.

Charges and Guilty Plea

In September 2012, Yusen Logistics Co. pleaded guilty to conspiring with other freight forwarders to fix prices for international freight forwarding services, dating back to at least 2002 until at least 2007. The company was charged with participating in a global conspiracy to allocate customers and routes, rig bids and fix prices. The freight forwarder agreed to pay a fine of $59.4 million and to cooperate with the DOJ throughout their investigation of the industry.

Implications for Antitrust Law

The Yusen Logistics case serves as a reminder of the importance of complying with antitrust laws and the severe consequences of violating these laws. The US antitrust laws prohibit companies from engaging in price-fixing, which stifles competition by eliminating pricing competition for customers.

The case also highlights the global nature of antitrust investigations. Yusen Logistics Co. is a Japanese-based company, and the conspiracy involved freight forwarders from several other countries. This demonstrates that conduct outside the US can still fall under the jurisdiction of US antitrust authorities if it has direct and substantial involvement in US commerce.


In conclusion, the Yusen Logistics case emphasizes the need for companies to ensure they comply with antitrust laws and avoid engaging in illegal price-fixing activity. The DOJ has shown that it will aggressively pursue companies that engage in these activities, regardless of where in the world they are based. The case serves as a reminder to other freight forwarders and companies to ensure they comply with antitrust laws and engage in healthy competition in the marketplace.

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

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