Barry Diller, who agreed Tuesday to pay the Federal Trade Commission $480,000 to settle an antitrust lawsuit, says he only did so to avoid the cost and time of a trial, and that he did nothing wrong intentionally.
The IAC chairman was accused of violating antitrust laws when he purchased stock in Coca-Cola between 2010 and 2012. Diller said that he made the purchases for himself and therefore wasn't aware of the need to report them to the FTC. He believes he is being "penalized" for "inadvertent paper shuffling," and pointed out that the settlement amounthe agreed to pay was a very small percentage of the amount the FTC originally sought.
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His full statement is below:
"While I do not dispute the facts the Federal Trade Commission chose to selectively highlight in their press release regarding my agreement to pay a fine for the purchase of Coca Cola shares, I was dismayed at what they failed to say. I chose to settle this matter rather than pursue the time and expense of a court challenge because the FTC agreed to accept a small fraction of the fines that their theory, if accurate, would have entitled them to. In fact, I am told that the amount I agreed to pay is one of the smallest percentages the FTC has settled for with respect to purported violations of the HSR Act. I had assumed that the FTC would explain why it agreed to such a small settlement, but since they did not, I feel it is important that the relevant facts are noted.
Firstly, the original infraction cited by the FTC was a technical failure to file by USA Networks in 1998 in connection with a transaction that was initially below the HSR thresholds. Once USA Networks discovered that the transaction value had increased during the process, the company promptly notified the FTC, and filed immediately thereafter at the FTCs' request. In fact, the FTC did not seek to impose any fines or penalties in that matter.
As to the Coca-Cola purchases, I made those in my personal capacity. I was not made aware of the necessity to file, and the moment I became aware, I filed promptly and complied with all regulations – the only infraction was in the timing. I gained no advantage of any kind and there was no harm to Coca-Cola shareholders, nor to anyone else. While I am surely not suffering, one can fairly question the tactics used by the FTC in penalizing individuals for de minimis open market share purchases and inadvertent paper shuffling.
This matter highlights the need for the antitrust agencies to make explicit that officers and directors that choose to align their interests more closely with the shareholders they serve should be subject to higher HSR thresholds. My understanding is that the HSR Act is designed to help our government prevent anti-competitive deals. It is inconceivable that my less than 1% investment in Coca-Cola shares, made as a director of Coca-Cola, could harm competition. Ironically, corporate governance gurus encourage such purchases, while the FTC seeks to deter them through filing fees, delays and fines. I do not know the rationale for the government to penalize such purchases with hundreds of thousands of dollars in HSR filing fees.
I don't want to burden the public with more words on this matter – the only reason for this statement is because I care about good citizenship and good government, and it would be unfair to both not to comment."