On November 26, 2012 the Supreme Court of the United States will hear an important antitrust case where an admittedly anticompetitive merger between two hospitals in Georgia was immunized against FTC action by the application of the “state action” defense first promulgated under the precedent of Parker v. Brown, 317 U.S. 341 (1943)(the Sherman Act does not subject states to liability for anticompetitive conduct within their jurisdiction). Political subdivisions of the a state are not automatically protected by the Parker doctrine, but may under some circumstances be granted immunity if the state generally authorizes the challenged action and the state has a “clearly articulated policy authorizing anticompetitive conduct.
In the 11th Circuit Court of Appeals case of Federal Trade Commission v. State of Georgia, No. 11-12906, the Court of Appeal rejected the FTC’s argument that a merger between two hospitals through the vehicle of a state authorized “authority” violated Section 7 of the Clayton Act which permits the FTC to challenge monopolistic conduct, because of the “state action” defense. The statutory hospital authority for Albany-Dougherty County operated a hospital from 1941 to 1990. Thereafter it created two non-profit subsidiaries and leased the facilities to them, under the name and style of Phoebe Putney Memorial Hospital, Inc. Although the authority has some stated ability to limit pricing as a practical matter PPMH sets its own prices. PPMH controls 75% of its market.
Palmyra Park Hospital, Inc. controls another 11% of the market and provides essentially the same services as PPMH. In 2010 PPMH presented the authority with a plan to acquire the assets of Palmyra, through a $195 Million Dollar loan from PPMH. In 2011 the FTC sought to enjoin the transaction. The 11th Circuit found that the broad powers granted to authorities under Georgia law was such as to render anticompetitive conduct a “foreseeable result” of its statute passed in the 1940s.
Nevertheless, the Georgia legislature must have anticipated anticompetitive harm when it authorized hospital acquisitions by he authorities. It defies imagination to suppose the legislature could have believed that every geographic market in Georgia was so replete with hospitals that authorizing acquisitions by he authorities could have no serious anticompetitive consequences.
The appeals court thus found that the State of Georgia in passing its hospital authority statute clearly articulated a state policy to displace competition. This on the surface seems to be a pretty thin reed upon which a state may immunize anti-competitive conduct by private organizations. If this passes SCOTUS review expect to see pressures to use of state authorized authorities to dance around a host of anticompetitive ventures in the future.
Reading the sensational topic about antitrust and its rules was interesting to know about.
Badevaerelse
Posted by: Lamper | 10/12/2012 at 05:32 AM