Antitrust Law Daily AB InBev, SAB Miller’s final merger approval incorporates new antitrust consent decree enforcement provisions
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Wednesday, October 24, 2018

AB InBev, SAB Miller’s final merger approval incorporates new antitrust consent decree enforcement provisions

By J. Preston Carter, J.D., LL.M.

The modified final judgment approving Anheuser-Busch InBev’s (AB InBev) acquisition of SABMiller incorporates four new procedural provisions, agreed to by AB InBev and the Department of Justice Antitrust Division, designed to improve the enforceability of the proposed final judgment. According to the parties’ Joint Motion and Memorandum for Entry of Modified Proposed Final Judgment, the United States is seeking to include these four new provisions in all newly proposed final judgments in antitrust matters. In 2016, the Justice Department conditionally approved Anheuser-Busch InBev’s proposed acquisition of SABMiller, subject to the parties’ agreement to divest SABMiller’s entire U.S. business (U.S. v. Anheuser-Busch InBev SA/NV, Case No. 1:16-cv-01483-EGS.).

New antitrust consent decree enforcement provisions. The first new provision in the modified final judgment relates to the burden of proof that would apply if the United States were to bring a motion to enforce the consent decree to seek a finding of civil contempt based on a violation of the decree. The parties’ joint motion explains that under prevailing case law, the standard for proving a decree violation in a civil contempt action is clear and convincing evidence. Proving a civil antitrust violation in the first instance, however, requires the government to meet a lesser preponderance-of-the-evidence standard. The new burden of proof provision aligns the applicable standards of proof by imposing the same preponderance standard for decree violations as for the underlying offense.

The second new provision relates to fee-shifting. The joint motion states that the United States has historically borne the costs of decree enforcement investigations and proceedings. Under the new fee-shifting provision, AB InBev agrees to reimburse the United States for attorneys’ fees, expert fees, and costs incurred in connection with any successful consent decree enforcement effort. The goal of the fee shifting is to encourage speedy resolution of antitrust consent decree violation investigations, and to compensate taxpayers for the costs associated with investigation and enforcement necessitated by the violation.

The third and fourth new provisions relate to the term of the decree. The third provision provides that, if the court finds that ABI InBev has violated the modified final judgment, the United States may apply for a one-time extension of the term of the decree. This is intended to encourage compliance with the decree during its initial term, making the relief in a decree more meaningful and discouraging decree violations.

The fourth new provision would permit the United States to terminate the modified final judgment after five years upon notice to the court and ABI InBev. According to the joint motion, this provision recognizes that market circumstances can change in ways that obviate the need for a consent decree or make its continuation counterproductive—and provides the United States with the flexibility to terminate the decree under those circumstances.

10-year term. Finally, because AB InBev began complying with the proposed final judgment on July 20, 2016, the date the complaint was filed, and has agreed to the new provisions, the parties agreed to modify the term of the proposed final judgment so that its 10-year term begins on July 20, 2016.

This case is No. 1:16-cv-01483-EGS.

Attorneys: David Charles Kelly, U.S. Department of Justice, for the United States. Christine Anne Varney (Cravath, Swaine & Moore LLP) for Anheuser-Busch InBev SA/NV. Janet L. McDavid (Hogan Lovells US LLP) for SABMiller PLC.

Companies: Anheuser-Busch InBev SA/NV; SABMiller PLCNews: AcquisitionsMergers Antitrust AntitrustDivisionNews

MainStory: TopStory Antitrust AntitrustDivisionNews

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