Tag: Manufacturing

The FTC filed separate complaints against the three largest U.S. suppliers of ductile iron pipe fittings, which are used in municipal water systems around the United States. The FTC charged that the three companies, McWane, Inc., Star Pipe Products, Ltd., and Sigma Corporation, illegally conspired to set and maintain prices for pipe fittings, and that McWane illegally maintained its monopoly power in the market for U.S.-made pipe fittings by implementing an exclusive dealing policy. Sigma settled the FTC's charges prior to litigation (final order dated Feb. 27, 2012); Star settled soon after (final order dated May 8, 2012).  On 5/9/2013, Chief Administrative Law Judge D. Michael Chappell dismissed charges that McWane illegally conspired with its competitors to raise and stabilize DIPF prices but found that McWane violated the antitrust laws when it excluded competitors from the market for U.S. made DIPF (domestic DIPF). On 5/13/2013, both parties filed notices of appeal of the Initial Decision. On February 6, 2014, the Commission issued a decision finding that McWane unlawfully maintained its monopoly in the domestic fittings market through its "Full Support Program", which foreclosed potential entrants from accessing distributors. The Commission's order bars McWane from requiring exclusivity from its customers. On April 17, 2015, the Eleventh Circuit upheld the Commission's order.

The FTC challenged Graco Inc.'s proposed $650 million acquisition of ITW Finishing LLC from Illinois Tool Works Inc., alleging that it would harm competition in the market for equipment used to apply paints and other liquid finishes to a variety of manufactured goods, such as cars, wood cabinets, and major appliances. In March 2012, the FTC issued an order requiring Graco Inc. to hold separate the worldwide liquid finishing equipment businesses of Illinois Tool Works Inc. and ITW Finishing LLC, while allowing Graco to complete its proposed $650 million acquisition of all of ITW's finishing equipment businesses. The Commission also withdrew its court challenge to the deal. On 5/31/2012, the FTC required Graco Inc., a leader in the worldwide market for key industrial finishing equipment, to sell the worldwide liquid finishing business of Illinois Tool Works Inc. and ITW Finishing LLC under a proposed order, as part of a settlement resolving charges that its $650 million acquisition of several ITW businesses would have been anticompetitive and led to higher prices and reduced innovation for the North American manufacturers who rely on this equipment.

The FTC alleged that starting in 2004 Marker Völkl and Tecnica agreed not to compete with each other to secure endorsements by professional skiers, in violation of Section 1 of the Sherman Act. Specifically, the FTC charges that Marker Völkl agreed not to solicit, recruit, or contact any skier who previously endorsed Tecnica skis, and Tecnica agreed to a similar arrangement with respect to Marker Völkl’s endorsers. In addition, the complaint states that in 2007, the companies expanded the scope of their non-compete agreement to cover all of their employees. The orders settling the FTC’s charges bar each firm from engaging in similar anticompetitive conduct in the future.

The FTC alleges that starting in 2004 Marker Völkl and Tecnica agreed not to compete with each other to secure endorsements by professional skiers, in violation of Section 1 of the Sherman Act. Specifically, the FTC charges that Marker Völkl agreed not to solicit, recruit, or contact any skier who previously endorsed Tecnica skis, and Tecnica agreed to a similar arrangement with respect to Marker Völkl’s endorsers. In addition, the complaint states that in 2007, the companies expanded the scope of their non-compete agreement to cover all of their employees. The proposed orders settling the FTC’s charges bar each firm from engaging in similar anticompetitive conduct in the future.

The FTC challenged Ardagh Group, S.A.’s proposed $1.7 billion acquisition of Saint-Gobain Containers, Inc., alleging that it will reduce competition and result in the two firms – the merged firm and its only remaining significant competitor, Owens-Illinois – controlling in excess of 75 percent of the U.S. markets for glass containers for beer and spirits customers, resulting in higher prices for those customers. The FTC issued an administrative complaint against the two companies, alleging that the acquisition would violate U.S. antitrust law. The proposed acquisition would combine the second-largest manufacturer of glass containers (Saint-Gobain) and the third-largest (Ardagh).The complaint alleges that glass container competitors possess a wealth of information about each other and the glass container industry, and that reducing the number of major competitors from three to two will make it substantially easier for the remaining two competitors to coordinate with one another to achieve supracompetitive prices or other anticompetitive outcomes. The Commission also filed a motion for a preliminary injunction in federal court to preserve the status quo pending the outcome of the administrative trial on the merits.  On 11/3/13, the parties stipulated to a hold separate order in the federal court proceeding.   On 11/8/13 the Commission stayed the part 3 litigation pending settlement discussions. On 4/10/14, Ardagh Group SA agreed to sell six of its nine glass container manufacturing plants in the United States to settle the FTC's charges. The FTC’s settlement order requires Ardagh to sell six of the manufacturing plants and related assets it acquired through its 2012 acquisition of Anchor Glass Container Corporation, along with Anchor’s former corporate headquarters in Tampa, Fla.

The Commission approved an administrative complaint, alleging that a combined Jostens/American Achievement Corp. ("AAC") would control an unduly high percentage of the high school and college rings markets, making it a dominant firm with only one smaller meaningful competitor in both markets.  The Commission charged that the proposed combination of Jostens and AAC would likely have been anticompetitive and led to higher prices and reduced service for both high school and college students who buy class rings.  The FTC also voted to seek a preliminary injunction in federal court to stop Jostens from proceeding with the proposed acquisition of its close rival, AAC.  On April 17, 2014, the parties abandoned their plans to merge.

In the matter of Polypore International/Daramic LLC, the Commission issued an administrative complaint challenging Polypore’s consummated acquisition of Microporous Products in the global market for battery separators, a key component in flooded lead-acid batteries. According to the Commission’s complaint, the acquisition, which occurred in February 2008, substantially lessened competition and led to higher prices in several North American product markets including 1) deep-cycle separators used in golf carts, 2) motive separators for batteries used primarily in forklifts, 3) automotive separators used in car batteries, and 4) uninterruptible power supply (UPS) separators used in batteries that provide backup power during power outages. Additionally, the complaint alleged that Polypore engaged in anticompetitive conduct by entering into a joint marketing agreement with a competitor, restricting the competitor’s entry into the polyethylene battery separator markets. The complaint also charged that Polypore sought to maintain monopoly power through anticompetitive means in several battery separator markets. On 3/8/2010, the ALJ announced an Initial Decision finding that Polypore International Inc.’s consummated acquisition – through its Daramic Acquisition Corporation subsidiary – of rival battery separator manufacturer Microporous L.P. was anticompetitive and violated federal law in four battery separator markets in North America. In an Order filed with the Initial Decision on 2/22/2010, Judge Chappell ordered Polypore to divest Microporous to an FTC-approved buyer within six months after the divestiture provisions of the Order become final. Judge Chappell also ruled that a 2001 joint marketing agreement between Polypore and a rival battery separator manufacturer illegally divided up the markets for particular types of battery separators in North America, and ordered Polypore to amend the agreement to terminate and declare null and void the covenant not to compete. Finally, the Judge dismissed a separate allegation that Polypore engaged in exclusionary conduct in specific battery separator markets. In December of 2010, the Commission voted to uphold in large part the March 2010 Initial Decision, finding that the acquisition reduced competition in three of the four relevant markets, and ordering divestiture. Polypore subsequently filed a petition for review of the Commission's Decision and Order in the US court of Appeals for the Eleventh Circuit. On 07/12/2012, the U.S. Court of Appeals upheld the FTC's Opinion and Order, and on 06/24/2013, the Supreme Court denied Polypore's petition for certioari. In December 2013, the FTC approved the sale of all stock and assets related to Microporous to Seven Mile Capital Partners.