UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the matter of

Commonwealth Land Title Insurance Company, a corporation

Docket No.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission ("Commission"), having reason to believe that respondent Commonwealth Land Title Insurance Company ("Commonwealth"), a corporation subject to the jurisdiction of the Commission, has engaged in certain conduct that constitutes a violation of Section 5 of the Federal Trade Commission Act, as amended (15 U.S.C.  45), and of Section 7 of the Clayton Act, as amended (15 U.S.C.  18); and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, pursuant to Section 11 of the Clayton Act (15 U.S.C.  21) and Section 5(b) of the Federal Trade Commission Act, (15 U.S.C.  45(b)), stating its charges as follows:

I. DEFINITIONS

1.  For the purposes of this complaint, the following definitions apply:

a.  "Respondent" or "Commonwealth" means Commonwealth Land Title Insurance Company, its directors, officers, employees, agents and representatives, predecessors, successors, and assigns; its direct and indirect parents, subsidiaries, divisions, groups and affiliates controlled by or under common control with Commonwealth Land Title Insurance Company, and the respective directors, officers, employees, agents, and representatives, successors, and assigns of each.

b.  "First American" means First American Title Insurance Company, its directors, officers, employees, agents and representatives, predecessors, successors, and assigns; its direct and indirect parents, subsidiaries, divisions, groups and affiliates controlled by or under common control with First American Title Insurance Company, and the respective directors, officers, employees, agents, and representatives, successors, and assigns of each.

c.  "Commission" means the Federal Trade Commission.

d.  "Title plant" means a privately owned collection of records and/or indices regarding the ownership of and interests in real property. The term includes such collections that are regularly maintained and updated by obtaining information or documents from the public records, as well as such collections of information that are not regularly updated.

e.  "Title plant services" means providing selected information contained in a title plant to a customer or user or permitting a customer or user to have access to information contained in a title plant.

f.  "Commonwealth Washington DC Title Plant" means the title plant owned by Commonwealth containing information pertaining to real property in the District of Columbia, which was located prior to November 1997 at 1828 L Street, N.W., Washington, DC, including all updates of such information.

g.  "First American Washington DC Title Plant" means the title plant owned by First American containing information pertaining to real property in the District of Columbia.

h.  "First American Capitol Hill Premises" means the premises owned or leased by First American at or adjacent to 605 Pennsylvania Avenue, S.E., Washington, DC.

II. THE RESPONDENT

2.  Commonwealth is a corporation organized, existing and doing business under and by virtue of the laws of the Commonwealth of Pennsylvania with its office and principal place of business located at 1700 Market Street, Philadelphia, Pennsylvania.

3.  Commonwealth is, and at all times relevant herein has been, a corporation whose business is in or affecting commerce as "commerce" is defined in Section 4 of the Federal Trade Commission Act, as amended (15 U.S.C.  44).

III. TRADE AND COMMERCE

4.  The relevant market is the production and sale of title plant services in the District of Columbia. Title plant services are used by abstractors, title insurers, title insurance agents, and others to determine ownership of and interests in real property in connection with the underwriting and issuance of title insurance policies and for other purposes.

5.  The relevant market is highly concentrated.

6.  There are no commercially reasonable substitutes for title plant services in the relevant market.

7.  Entry into the relevant markets is difficult or unlikely to occur at a sufficient scale to deter or counteract the effect of the conduct that is the basis of the complaint.

IV. THE CONDUCT AT ISSUE

8.  At all times relevant herein, Commonwealth has been the owner of a title plant containing information pertaining to real property in the District of Columbia and has been engaged in providing title plant services for its own use and for customers and users including abstractors, title insurers and title insurance agents.

9.  At all times relevant herein, First American has been the owner of a title plant containing information pertaining to real property in the District of Columbia and has been engaged in providing title plant services for its own use and for customers and users including abstractors, title insurers and title insurance agents.

10.  Commonwealth and First American are direct competitors in the production and sale of title plant services in the District of Columbia. There exists no other privately-owned collection of title records for the District of Columbia that is comparable in completeness, accuracy and ease of use to the title plants of Commonwealth and First American.

11.  Beginning as early as 1996 and continuing in 1997, Commonwealth and First American engaged in discussions concerning the consolidation of their title plants in the District of Columbia. In September 1997, Commonwealth and First American executed a letter setting forth their understanding that they would consolidate their respective title plant operations at the First American Capitol Hill Premises. In late November 1997, Commonwealth relocated the Commonwealth Washington DC Title Plant to the First American Capitol Hill Premises, which was also the location of the First American Washington DC Title Plant.

12.  Over a period of several months prior to the relocation of the Commonwealth Washington DC Title Plant to the First American Capitol Hill Premises, Commonwealth acted to terminate existing contracts with customers and users of its title plant. Customers and users of both Commonwealth and First American wishing to obtain title plant services after the relocation of the Commonwealth Washington DC Title Plant were required to execute a form "Interim Plant Use Agreement" setting prices, terms and conditions for such services and reciting that the title plant services were jointly provided by Commonwealth and First American pending formation of a joint title plant entity.

13.  The prices, terms and conditions for title plant services set in the Interim Plant Use Agreement were the same for customers and users of both Commonwealth and First American. For many users, the price for title plant services was significantly higher under the Interim Plant Use Agreement than under their prior contracts for title plant services. The Interim Plant Use Agreement did not permit some forms of title plant access which had been available to customers and users under their prior contracts for title plant services. Customers and users began to be charged for title plant services under the terms of the Interim Plant Use Agreements beginning in early December 1997.

V. EFFECTS

14.  By engaging in the conduct at issue Commonwealth and First American have acted to increase prices and restrict output in the relevant market.

15.  The conduct at issue has had the effect of raising, fixing, and maintaining the price, terms and conditions of compensation paid for title plant services in the District of Columbia, in violation of Section 5 of the FTC Act, as amended, 15 U.S.C.  45.

16.  As demonstrated by the actual effects of the conduct at issue in the relevant market, the effect of a consolidation of the Commonwealth Washington DC Title Plant and the First American Washington DC Title Plant described in Paragraph 11, if consummated, may be substantially to lessen competition and to tend to create a monopoly in the relevant market in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C.  18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C.   45, in the following ways, among others:

a.  by eliminating direct actual competition between Commonwealth and First American in the relevant market; and

b.  by increasing the likelihood that Commonwealth and First American acting in concert can exercise market power in the relevant market.

VI. VIOLATIONS CHARGED

17.  The conduct at issue constitutes a combination, agreement, or understanding between competitors to raise, fix, and maintain the price, terms and conditions of compensation paid for title plant services in the District of Columbia, in violation of Section 5 of the FTC Act, as amended, 15 U.S.C.  45.

18.  The consolidation of the Commonwealth Washington DC Title Plant and the First American Washington DC Title Plant described in Paragraph 11, if consummated, would constitute a violation of Section 7 of the Clayton Act, as amended, 15 U.S.C.  18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C.  45.

IN WITNESS WHEREOF, the Federal Trade Commission has caused this Complaint to be signed by the Secretary and its official seal to be affixed, at Washington, D.C. this _____ day of _______________ A.D. 1998.


By the Commission.

SEAL

Donald S. Clark
Secretary