Antitrust

S H E A R M A N & S T E R L I N G L L P | 1 9 • a requirement to identify priority custodians within five days of execution of the timing agreement and to make substantially complete document productions from priority custodians at least 30 business days before the parties certify substantial compliance with a Second Request; and • a stipulated temporary restraining order and agreement not to seek a declaratory judgment against the FTC concerning the transaction. The FTC has made clear that it anticipates that future timing agreements will align with the Model. However, parties should be aware that timing agreements do not strictly limit the FTC, and enforcers frequently request (and expect) additional time to review transactions. DISTRICT COURT BLOCKS CRISTAL/ TRONOX MERGER In September 2018, after the FTC sought to block the merger of Tronox Limited's proposed US$2.4 billion acquisition of Cristal's titanium dioxide (TiO 2 ) business, Judge Trevor McFadden of the U.S. District Court for the District of Columbia granted the agency's motion for preliminary injunction, finding that the FTC showed that the proposed transaction was likely to impede competition in North America for chloride- process TiO 2 . 13 I F T H E PA R T I E S ' O W N D O C U M E N T S C O N T R A D I C T T H E I R P R O P O S E D M A R K E T D E F I N I T I O N S O R D E F E N S E S , T H E Y A R E I N F O R A N U P H I L L B A T T L E Noting that the market for TiO 2 has been characterized as an oligopoly dominated by five companies and that there are no substitutes for the product, the Court concluded that the proposed five-to-four transaction would increase concentration in an already concentrated market. The court was further convinced by evidence that the transaction would likely lead competitors to strategically withhold output to avoid price competition. Judge McFadden rejected the parties' argument that competition from Chinese producers would mitigate any potential anti-competitive effects from increased market concentration, finding no indication that entry from Chinese firms would occur rapidly enough to bolster competition. He also found that the parties' internal documents supported the FTC's proposed market definition. The Tronox decision highlights the evidentiary value of contemporaneous, internal documents in merger litigations. If the parties' own documents contradict their proposed market definitions or defenses, they are in for an uphill battle. Moreover, the decision shows that courts will carefully consider the relative likelihood and timing of new entry in merger cases. KEY TAKEAWAYS Antitrust enforcers in the second year of the Trump administration appeared focused on reforming merger review processes and obtaining structural remedies where they allege harm to competition. While some observers expected to see the new administration's appointees pursuing overtly populist or ideological agendas, enforcement has been generally mainstream and predictable, with the notable exception of the more aggressive challenge of the AT&T/Time Warner transaction. However, with the President and leading members of Congress repeatedly calling for more aggressive antitrust enforcement in various industries, we should not be surprised if enforcement during the remainder of the Trump administration reflects the generally heightened profile of the antitrust laws in the public dialogue. 12. U.S. Fed. Trade Comm'n, Timing is everything: The Model Timing Agreement (Aug. 7, 2018). 13. See Fed. Trade Comm'n v. Tronox Ltd., 332 F. Supp. 3d 187 (D.D.C. 2018).

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