Under the terms of a final judgment filed today in U.S. District Court, Input/Output, Inc. and The Laitram Corporation will each pay a $225,000 civil penalty to settle government charges that they failed to observe the waiting period required by the Hart-Scott-Rodino Act (HSR) before combining Input/Output's operations with those of Laitram's subsidiary, DigiCOURSE. The HSR waiting period is intended to give the Federal Trade Commission and Department of Justice time to investigate proposed transactions and determine whether a transaction presents significant antitrust problems.
"The law prohibits companies from integrating their operations during the premerger waiting period so that the antitrust agencies can investigate whether a merger risks harm to competition. Input/Output's efforts to control prematurely the operations of DigiCOURSE might have precluded the FTC from getting effective relief if any antitrust problems had been found. This civil penalty serves as a reminder that merging parties cannot combine their businesses until after the HSR waiting period has terminated," said William J. Baer, Director of the FTC's Bureau of Competition.
Input/Output, Inc. is a Delaware corporation based in Stafford, Texas. The company manufactures seismic data acquisition systems and related equipment for ocean bottom exploration.
DigiCOURSE, which is wholly-owned by Louisiana-based The Laitram Corporation of Harahan, Louisiana, is the sole manufacturer of cable positioning systems -- such as acoustic transponders -- that are integral to the effective operation of ocean seismic data acquisition systems.
According to the complaint filed in U.S. District Court for the District of Columbia, Input/Output and Laitram's subsidiary, DigiCOURSE, agreed on September 30, 1998, to merge. While each company filed the required HSR notifications on October 14, 1998, the complaint alleges that Input/Output began to exercise control over DigiCOURSE as early as October 10, 1998, and continued to do so until November 3, 1998, when the companies took steps to stop the premature consummation of the transaction. For example, the complaint alleges that:
The Commission vote to refer the case to the Department of Justice for prosecution and acceptance of the settlement was 4-0.
The proposed consent judgment was authorized by the Department of Justice at the request of the FTC. It was filed in U.S. District Court for the District of Columbia by FTC attorneys who were appointed Special Attorneys to the Attorney General for purposes of filing this civil penalty action. The judgment is subject to court approval.
NOTE: This consent judgment is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Consent judgments have the force of law when signed by the judge.
Copies of the complaint, stipulation, and motion for entry of judgment are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC File No. 991-0027)
(Civil Action No. 1:99CV00912)