For Your Information: March 12, 2002
The Commission recently published a Request for Information (RFI) seeking companies or individuals (including contractors) to help in the development, deployment, and operation of a proposed national "do-not-call" registry. The registry would consist of a database containing telephone numbers of consumers who contact the FTC and indicate a desire not to receive calls from telemarketers. The RFI was made subsequent to the FTC's January 2002 announcement that, as part of its review of the Telemarketing Sales Rule, the Commission is seeking public comment on the development of a national do-not-call registry. The RFI can be found on the FTC's Web site at: www.ftc.gov/ftc/oed/fmo/procure/requestforinformation.htm. It includes a description of the possible methods of operating the system, the FTC's objectives in developing such a system, and a detailed listing of the information requested from vendors. Replies from vendors are due by March 29, 2002. For more information, contact David Torok, FTC Division of Advertising Practices, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580; phone: 202-326-3075; e-mail: firstname.lastname@example.org.
Publication of Federal Register notices:
The Commission has approved the publication of two Federal Register notices containing amended final rules concerning premerger notification, reporting, and waiting period requirements under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 (15 U.S.C. 18a). The rule changes announced in the first notice were proposed in a Federal Register notice published on February 1, 2001, and include updating examples in Sections 801.4, 801.14, 801.90, and 802.8; amending Section 801.15 to reflect the $50 million threshold and give proper reference to other rules sections; modifying Section 802.2 to remove an exemption for associated agricultural assets; revising Section 802.6(b) regarding federal regulatory approval; restructuring and revising Sections 802.50 and 802.51 to clarify and refocus exemptions for acquisitions of foreign assets and voting securities; and amending the example in Section 802.52 to correctly cite restructured Section 802.50.
As detailed in the second notice, Section 802.21 of the HSR Act has been amended by the revision of paragraph (b), which addresses acquisitions of voting securities up to the next notification threshold by "transitional" filers. Transitional filers are acquiring persons who filed using the 1978 notification thresholds and have met or crossed the threshold for which they filed (or a lower threshold) within a year of the waiting period's expiration, but whose five-year period for making additional acquisitions has not expired. The final rule amends paragraph (b) to restore to transitional filers the original five-year period to make additional acquisitions up to what was the next reporting threshold at the time that they filed, and they may do so without filing another notification, even though they might cross a new 2001 threshold. This rule will be applied retroactively to February 2, 2002, from its date of publication.
The Commission vote to approve the final rules and publish each in the Federal Register was 5-0. A copy of each notice is available on the Commission's Web site at www.ftc.gov. (FTC File No. P989316; staff contact is Karen E. Berg, Bureau of Competition, 202-326-2960; see press release dated January 25, 2001.)
Application for approval of proposed divestiture:
The Commission has received an application from ChevronTexaco Corp. (ChevronTexaco) regarding the FTC's decision and order contained in the consent agreement accepted on September 7, 2001 that conditionally allowed the merger of the two companies. Under the terms of the order, which is available on the FTC's Web site, Chevron and Texaco are required to divest ChevronTexaco's interest in the Discovery Natural Gas System. Through this application, the company has requested approval to sell this interest to Duke Energy Field Services LP. The Commission is accepting public comments on the application until April 12, 2002, after which it will vote on whether to approve it. Comments should be sent to: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580. (FTC File No. 011-0011; Docket No. C-4023; staff contact is Daniel P. Ducore, Bureau of Competition, 202-326-2526; see press releases dated September 7, 2001 and December 18, 2001; and January 4, 2002 and February 8, 2002.)
FTC General Counsel clears up misperception regarding the application of new antitrust clearance agreement to Internet commerce:
Commission General Counsel William E. Kovacic today sought to clear up a misperception regarding the application of the new FTC/DOJ clearance agreement, announced by the agencies on March 6, 2002, to mergers and competition matters involving Internet commerce. Citing paragraph 21 of the new agreement and referencing examples, Kovacic explained that it is the underlying nature of the commerce at issue, and not the fact that the commerce takes place on the Internet, that determines whether the FTC or the DOJ will review the matter. Both the FTC and the DOJ will continue to conduct investigations relating to commerce on the Internet.
Examples of previously conducted investigations that revolve around Internet-based commerce or activity include a proposed joint venture among five automotive manufacturers to operate an Internet-based business-to-business (B2B) exchange that the FTC reviewed in 2000. The B2B venture was designed to provide services for firms in the automotive industry supply chain (see press release: FTC Terminates HSR Waiting Period for Covisint B2B, dated September 11, 2000, http://www.ftc.gov/opa/2000/09/covisint.htm). The agreement announced on March 6, 2002 allocates to the FTC primary responsibility for antitrust enforcement with respect to automobiles and trucks, including related parts and dealers. Thus, Kovacic observed that even under the new agreement, the FTC would retain primary responsibility for reviewing an Internet-based joint venture among various automotive manufactures.
Similarly, in May 2000, the DOJ acknowledged that it was conducting an investigation of a proposed B2B exchange among six meat-packing firms (see letter from Joel Klein, Assistant Attorney General, to Doug Peterson, Minnesota State Representative, May 17, 2000). The new agreement allocates to the DOJ primary antitrust enforcement responsibility for agriculture, including meat products. Thus, under the terms of the new agreement, the DOJ would retain the primary responsibility for review of such a proposed joint venture. Kovacic noted that the agreement does allocate to the DOJ primary responsibility for telecommunications services and equipment, including the Internet backbone.
This area has been the subject of a previous DOJ investigation and consent decree (United States v. Worldcom, Inc., 2001-2 Trade Cas. (CCH) ¶ 73,350 (D.D.C. 2001)).
Paragraph 21 of the new agreement also provides that clearance for matters involving computer-based or computer-related services, regardless of whether delivered via hardware or software, will be decided by considering the underlying nature of the services provided. As an example, Kovacic cited the DOJ's previous investigation into the use of computer reservation systems to signal air fare pricing decisions (United States v. Airline Tariff Publishing Co., 1994-2 Trade Cas. (CCH) ¶ 70,687 (D.D.C. 1994)). Under the new agreement, the clearance decision for this matter would not have been impacted by the FTC's primary responsibility for "computer hardware" products because the relevant industry classification would be "travel and transportation," an industry allocated to the DOJ.
Similarly, Kovacic observed that the FTC's recent investigation into anticompetitive effects arising from a merger involving two firms operating in the integrated drug information database market (FTC v. The Hearst Trust et al., Civ. No. 1:01CV00734 (D.D.C. 2001), www.ftc.gov/opa/2001/12/hearst.htm) would not have been impacted by the agreement's allocation of "computer software" products to the DOJ, because the relevant industry classification would be "healthcare," which the new agreement allocates to the FTC.
Issuance of staff advisory opinion:
Staff of the FTC's Bureau of Competition has advised counsel for Health Access, Inc., d/b/a Viquest, and Pitt County Memorial Hospital (PCMH) that the Non-Profit Institutions Act (NPIA) covers Viquest's proposed purchase of certain vaccines from PCMH's pharmacy, thus exempting these purchases from the Robinson-Patman Act. Viquest is a wellness center that provides occupational health and other services to residents of greater Pitt County, North Carolina. Health Access, d/b/a Viquest, is an affiliate of, and is controlled by, Pitt County Memorial Hospital in Greenville, North Carolina. Both Health Access, Inc. and PCMH are nonprofit corporations exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. Counsel for Viquest previously had asked the FTC if the proposed arrangement would be covered by the NPIA.
One of Viquest's activities is offering vaccines and tuberculin skin tests to employee groups and the general public through its occupational health and community vaccine programs. While Viquest currently purchases the vaccines directly from the manufacturers or wholesalers, in the future it would like to get these materials at cost from the PCMH pharmacy. The vaccines would be used only in Viquest's programs, and all vaccines would be directly administered by Viquest staff members at the patients' work site or at another location.
As detailed in the opinion, which is available on the FTC's Web site, the NPIA exempts from the Robinson-Patman Act "purchases of their supplies for [the buyer's] own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit." Previous Commission and staff opinions have treated nonprofit occupational health agencies and other types of health services providers as eligible entities under the NPIA. Moreover, the FTC has found that the NPIA covers the transfer of supplies, at cost, among affiliated nonprofit institutions, so long as the supplies are purchased for the receiving institution's "own use" within the meaning of the NPIA. The staff letter concludes that Viquest is an eligible institution and that the vaccines would be purchased for Viquest's own use within the meaning of the NPIA. (Staff contact is Judy Moreland, Bureau of Competition, 202-326-2776.)
Copies of the documents mentioned in this release 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. Call toll-free: 1-877-FTC-HELP.