9810108

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

SERVICE CORPORATION INTERNATIONAL, a corporation.

Docket No. C-3959

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act ("FTC Act") and the Clayton Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission ("Commission"), having reason to believe that Service Corporation International ("SCI") has acquired LaGrone Funeral Home in violation of Section 7 of the Clayton Act, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act, 15 U.S.C.  45, and it appearing to the Commission that a proceeding in respect thereof would be in the public interest, hereby issues its complaint, stating its charges as follows:

I. Respondent Service Corporation International

1. Respondent SCI (hereinafter "Respondent") is a corporation organized, existing and doing business under and by virtue of the laws of the State of Texas, with its office and principal place of business located at 1929 Allen Parkway, Houston, Texas 77019. Respondent had sales in 1998 of approximately $2.8 billion.

2. Respondent is, and at all times relevant herein has been, engaged in commerce, or in activities affecting commerce, within the meaning of Section 1 of the Clayton Act, 15 U.S.C.  12, and Section 4 of the Federal Trade Commission Act, 15 U.S.C.  44.

3. Respondent is, and at all times relevant herein has been, engaged in the provision of funeral services in Roswell, New Mexico.

II. The Acquisition

4. On or about May 17, 1994, Respondent acquired the LaGrone Funeral Home in Roswell, New Mexico. Respondent had entered the Roswell area with its purchase of the Ballard Funeral Home on or about February 1, 1979.

III. Trade and Commerce

5. The relevant line of commerce in which to analyze the acquisition is funeral services.

6. The relevant section of the country in which to analyze the acquisition in connection with the provision of funeral services is Roswell, New Mexico.

IV. Entry Conditions

7. Entry into the relevant market is difficult, and would not be timely, likely or sufficient to prevent anticompetitive effects.

V. Concentration

8. The relevant market is highly concentrated, whether measured by the Herfindahl-Hirschman Index ("HHI") or by two-firm concentration ratios. The HHI increased from 5050 to 10,000 because of the acquisition.

VI. Effects of the Acquisition

9. The acquisition may have substantially lessened competition in the relevant market in the following ways, among others:

(a) by eliminating direct competition between Respondent and LaGrone; and
 
(b) by increasing the likelihood that Respondent has been unilaterally exercising and will continue to unilaterally exercise market power;

each of which increases the likelihood that the prices of funeral services will increase and that services to customers of funeral services will decrease. In fact, prices charged for funeral services in the relevant market have already increased substantially.

10. In 1998, the Commission began a formal investigation of the Roswell, New Mexico, funeral services market. On September 28, 1999, Respondent divested the assets of Ballard Funeral Home.

VII. Violations Charged

11. The acquisition described in Paragraph 4 constitutes a violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. 45.

WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade Commission has caused this Complaint to be signed by the Secretary and its official seal to be affixed in Washington, D.C., this twenty-ninth day of June, 2000.

By the Commission.

Donald S. Clark
Secretary

SEAL: