Comments on: Antitrust & Private Equity

By: The Deal Sleuth

The Deal Sleuth — Tue, 20 May 2008 00:41:55 +0000

While the original complaint has been dismissed, an amendment has been filed on the two other outstanding issues: breach of fiduciary duty and insider trading. See http://thedealsleuth.wordpress.com/2008/05/19/watchguard-private-equity-antitrust-litigation-the-sequel/

By: Josh Wright

Josh Wright — Mon, 25 Feb 2008 04:35:11 +0000

I don’t know about “never.” I tried not to say never. Its really early in the development of this line of cases to go out on that much of a limb. The rule of reason case here is very difficult to make out (both in terms of market definition and proving effects in that market). As far as a per se style analysis goes, yes, I am saying one would need some pretty compelling information (“inside” or otherwise) to survive a motion to dismiss.

And yes, I think that this is an area where economic analysis might be especially useful in demonstrating the competitive effects of a particular club deal or series of deals. In fact, it strikes me that this might be an important component of these cases in the future. It strikes me that this kind of evidence will be almost necessary for a “plausible” per se story.

By: David

David — Mon, 25 Feb 2008 04:23:10 +0000

When you say that in a post-Twombly world, “I just don’t know if that kind of evidence is out there. It is certainly tough to get without the benefit of discovery” do you mean that absent a whistleblower (or some other source of “inside” knowledge) that these cases can never get past the motion to dismiss stage? Do you think that there could ever be some sort of economic analysis of a particular club deal that would survive a motion to dismiss?