Agenda included Ryan Quillian’s commentary in an article about proxy advisors in the crosshairs of regulators, including the Federal Trade Commission.
The FTC’s investigation can end in one of three ways, Ryan said. “The three outcomes are they either close the investigation without taking any action, they reach a consent agreement…that resolves the agency’s concerns, or they go to court. Receiving investigative demands from the FTC is a ‘costly endeavor’ for any company,” Ryan added.
While not privy to the specifics of the proxy advisory probe, Ryan said that allegations of unfair methods of competition, if not dismissed, will usually end with a consent decree if settled or a remedy order from a court. These resolutions will typically restrict the conduct that the FTC alleges was anticompetitive. Divestitures, which are when companies are compelled to spin off portions of their business, are usually reserved for consummated merger challenges or monopolization cases where the defendant achieved or maintained its monopoly position via acquisition, Ryan explained.
The timeline of the investigation is unclear, but it is not unheard of for FTC probes to last for more than a year, Ryan said. If it does progress, the FTC can bring the case in its own administrative court or in a federal court, Ryan noted.
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