## Facts

- Computer Associates International, Inc. (CA) agreed in 1999 to acquire Platinum Technology International, Inc. (Platinum) in a transaction valued at about $3.5 billion.
- The parties filed premerger notification under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act).
- The Department of Justice (DOJ) later alleged CA and Platinum coordinated competitively significant conduct during the HSR waiting period through merger-agreement covenants and related practices.
- DOJ alleged the interim covenants limited Platinum’s independent competitive behavior, including pricing and discounting, and required CA approval for certain customer contracts or terms.
- DOJ alleged CA obtained access to Platinum’s confidential, competitively sensitive information before lawful consummation, facilitating premature coordination.
- DOJ filed a civil antitrust complaint in the U.S. District Court for the District of Columbia on September 28, 2001, alleging violations of Sherman Act § 1 and Clayton Act § 7A (HSR Act).
- The matter was resolved through a consent decree; DOJ filed a proposed final judgment and a competitive impact statement under the Tunney Act and published notice for public comment.
- The district court entered the final judgment on November 20, 2002; defendants did not admit liability and the court did not adjudicate the merits.

## Issues

1. Whether pre-closing merger covenants and conduct between horizontal competitors unlawfully restrained trade by limiting the target’s ability to discount and compete, in violation of Sherman Act § 1.
2. Whether the acquiring firm’s exercise of pre-closing operational control and access to competitively sensitive information constituted “gun-jumping” and a failure to observe the HSR waiting-period requirement, in violation of Clayton Act § 7A.
3. Whether the proposed consent decree was in the public interest under the Tunney Act, warranting entry as a final judgment.

## Decision

- The court entered a final judgment by consent after Tunney Act procedures, including publication, public comments, and DOJ’s responses.
- The final judgment required payment of a $638,000 civil penalty to resolve the alleged HSR Act violation.
- The final judgment imposed prospective injunctive relief barring CA and future transaction partners from certain forms of pre-closing coordination and control, including restrictions affecting pricing and customer contracting.
- The decree included compliance-related provisions intended to prevent recurrence of the alleged pre-closing conduct.

## Legal Principles

- Parties to a pending acquisition subject to the HSR Act must remain independent competitors during the waiting period and may not transfer “beneficial ownership” or operational control before lawful consummation.
- Pre-closing covenants may protect asset value and facilitate closing, but provisions that constrain the target’s competitive freedom on pricing, discounts, or customer negotiations can be treated as a horizontal restraint under Sherman Act § 1.
- Early exchange or use of non-public competitively sensitive information, absent effective safeguards, can support allegations of unlawful pre-closing coordination and HSR “gun-jumping.”
- Under the Tunney Act, a court may enter a negotiated antitrust consent decree if the remedy reasonably addresses the alleged violations and serves the public interest, without a trial or findings of liability.

## Conclusion

The action concluded with a Tunney Act-approved consent decree requiring a civil penalty for alleged HSR waiting-period violations and imposing forward-looking restrictions designed to prevent pre-closing restraints on pricing and other competitive decisions between merging competitors.


United States v. Computer Assocs. Int’l, Inc., 67 Fed. Reg. 41,472 (June 18, 2002)