DOJ Retains ERS Group to Evaluate Oracle's Proposed Acquisition of PeopleSoft The Antitrust Division of the U.S. Department of Justice retained ERS Group Special Consultant R. Preston McAfee of the California Institute of Technology to evaluate the likely competitive effects of Oracle's proposed acquisition of PeopleSoft. Professor McAfee and ERS Group economists, headed by Director Michael A. Williams, conducted economic analyses of confidential Oracle and PeopleSoft records in order to evaluate how the proposed acquisition likely would affect prices paid by buyers of high-function Human Resource Management and Financial Management Services software. Professor McAfee testified in U.S. District Court regarding his analyses and findings. ERS Group Assists in Tobacco Growers Class Action Working with attorneys from Howrey Simon Arnold & White, ERS Group Special Consultant R. Preston McAfee of the California Institute of Technology evaluated claims that major cigarette companies and leaf buyers engaged in a price-fixing agreement that allegedly fixed the bids made at tobacco auctions. Professor McAfee and ERS Group economists, headed by Director Michael A. Williams, conducted economic analyses of confidential documents and data in order to determine whether the evidence tended to exclude the possibility that the firms acted in the absence of an agreement. The $1.4 billion settlement ultimately reached in the matter was the second highest antitrust settlement in history. ERS Group Examines Cartel Issues in Vitamins Antitrust Litigation On behalf of a defendant, ERS Group Director Michael J. Doane assisted ERS Group Special Consultant David S. Sibley of the University of Texas at Austin in the preparation of an expert report that critically evaluated the "overcharge" analysis performed by experts representing 140 direct-action plaintiffs. In addition, this report critiqued claims by plaintiffs’ economic experts that defendants began colluding much earlier than the time period for which they pled guilty. DOJ Retains ERS Group to Evaluate Microsoft Settlement Proposal On November 6, 2001, the U.S. Department of Justice (DOJ) and Microsoft reached an agreement on the terms of a proposed settlement. Approval would bring to an end the most closely followed antitrust case in U.S. history. The DOJ retained ERS Group economists to evaluate whether the settlement proposal satisfied the public interest standard of the Tunney Act. ERS Group Special Consultant David S. Sibley of the University of Texas at Austin, assisted by ERS Group directors and staff, submitted a declaration to Judge Kollar-Kotelly on behalf of the DOJ that examined whether the antitrust remedy was sufficient to stop the offending conduct, prevent its reoccurrence, and restore competitive conditions. The terms of the settlement were approved by the court. ERS Group Retained by the FTC to Examine Largest Oil Mergers in U.S. History ERS Group economists were retained by the U.S. Federal Trade Commission to examine the competitive effects of two of the largest proposed mergers in U.S. history: Exxon’s proposed acquisition of Mobil and BP Amoco’s proposed acquisition of the Atlantic Richfield Company (ARCO). ERS Group Special Consultant R. Preston McAfee and Academic Affiliate Kenneth Hendricks were substantially involved in the two merger investigations. Among the many issues addressed in their analyses of these mergers was the effect of buyer power in situations of bilateral oligopoly. This research later led to the development of the Hendricks-McAfee bilateral oligopoly model. In examining the competitive effects of the BP-ARCO merger, ERS Group studied the likely effects of the merger on bidding and exploration and production in the Alaska North Slope and the competitive effects of shipments of Alaskan crude oil to the Far East. ERS Group Economists Assist the DOJ in Evaluating the Proposed Merger of United Airlines and US Airways ERS Group was retained by the Antitrust Division of the U.S. Department of Justice to assist in its investigaton into the proposed merger of United Airlines and US Airways. We defined the relevant city pair markets and conducted an econometric study of the relationship between fares and market concentration, among to other explanatory factors. We also tested for the effects on fares resulting from "multimarket contact", i.e., the change in fares, over and above that caused by market concentration, resulting from the same firms competing in different geographic or product markets. ERS Group Assists Barr Laboratories in Winning Motion for Summary Judgment ERS Group assisted in an analysis of monopolization claims brought by plaintiffs alleging that Barr Laboratories unlawfully acquired monopoly power in the market for a generic drug product. The expert report demonstrated that the plaintiffs' expert had misdefined the relevant market by failing to demonstrate the extent to which other products were effective substitutes. An ERS Group Economist also provided testimony that responded to plaintiff’s claim of alleged damages. ERS Group Assists the FTC in Evaluating the Proposed Merger of Time Warner and EMI ERS Group assisted the Federal Trade Commission in its analysis of the proposed merger of Time Warner and EMI. ERS Group economists analyzed the structure of the market for music distribution and studied contractual relationships between recording artists and music distributors and between music retailers and music distributors. In order to evaluate the ability of a firm to enter and compete against the four major incumbent music distributors, our experts conducted an econometric analysis of the effect of a new release by an artist on that artist’s catalogue sales. ERS Group Assists the DOJ in the Microsoft Antitrust Case ERS Group economists served as consultants to the U.S. Department of Justice in its landmark antitrust case against Microsoft. On behalf of the government, we examined the central question confronting the court: Did Microsoft erect artificial entry barriers (through its bundling and contractual practices) to remove a competitive threat to its Windows operating system, or were its actions explained by economic efficiency justifications? ERS Group Special Consultant David S. Sibley of the University of Texas at Austin, assisted by ERS Group professional staff, submitted a declaration to the court on this topic that provided the economic foundation for the government’s case against Microsoft. ERS Group Quantifies Harm to Intergraph Arising from Intel's Efforts to Coerce and "Punish" Intergraph In 1998, the U.S. Federal Trade Commission charged that Intel illegally used its market power when it denied Intergraph and two other companies continuing access to technical information necessary to develop computer systems based on Intel microprocessors and took other steps to punish Intergraph for refusing to license key patents on Intel's terms. In support of Intergraph's private lawsuit to recover damages, ERS Group quantified profits lost by Intergraph as a result of Intel's actions. An ERS Group Economist also computed the impact of Intel's actions on the "going concern" value of Intergraph's computer systems business unit, which Intergraph was allegedly forced to sell off piecemeal as a result of Intel's conduct. ERS Group Examines Antitrust Issues in Barr Labs Warfarin Litigation On behalf of Barr Pharmaceuticals, Inc., ERS Group was retained to analyze antitrust claims regarding the raw material source in blood thinner warfarin sodium. Plaintiffs alleged that Barr’s exclusive arrangement with a raw material provider unfairly delayed Plaintiffs’ entry into an alleged market for generic warfarin sodium market and gave Barr a monopoly during that period. ERS Group Director Michael Williams and Special Consultant David S. Sibley of the University of Texas at Austin conducted analyses to delineate the relevant antitrust markets and evaluate Plaintiffs’ monopolization claims. The case settled before trial.