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The FTCâ€™s Stacked Deck under Section 13(b): Does CCC Holdings Herald a Return to the S-C-P Paradigm?
Thomas Lambert, Apr 30, 2009
The outcome of the district courtâ€™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 FTCâ€”a move dictated by the D.C. Circuitâ€™s lax standard for granting preliminary injunctions under Section 13(b)â€”the court ended up relying almost entirely on market share percentages. Its reasoning thus hearkens back to the overly simplistic Structure-Conduct-Performance (â€œS-C-Pâ€) paradigm, under which a marketâ€™s structure is deemed to determine the participantsâ€™ 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 (â€œDOJâ€), would ensure that important non-structural factors receive due attention and would thereby enhance the quality of pre-merger review.