Staff of the Federal Trade Commission's Office of General Counsel, the Bureaus of Competition and Economics, and the Midwest Region-Chicago have submitted comments to the U.S. Environmental Protection Agency (EPA) concerning the competitive effects of clean fuels regulations, which require unique gasoline fuel blends (boutique fuels), on the supply and distribution of gasoline. The comment provides reaction to an EPA Staff White Paper that proposes four options for a long-term policy regarding clean fuels.
The FTC staff comment suggests that EPA may wish to perform a "competitive analysis," to reframe certain issues, thus extending and improving the initial analysis. The competitive analysis would be based on the principles outlined in the U.S. Department of Justice and FTC Horizontal Merger Guidelines. In particular, the comment suggests that EPA identify the relevant product and geographic markets based on the same principles the Commission uses. The comment suggests that EPA supplement its initial analysis to examine three possible scenarios or economic effects that changes in regulations may cause in the identified relevant markets. First, changes in the clean fuel regulations may impose costs on consumers by increasing average costs to produce unique gasoline fuel blends. Second, such changes may give rise to conditions that make short-term price spikes more prevalent. Third, changes in clean fuel regulations may create or enhance market power of certain sellers or facilitate its joint exercise by more than one seller.
The staff comment notes that, given the importance of the clean fuels program in reducing air pollution, such an analysis of the three scenarios discussed above is vital to ensure that consumer welfare is maximized - not only by realizing the environmental benefits of the program, but also by obtaining the benefits that competition among sellers will provide to consumers.
This comment represents the views of the staff of the Office of General Counsel, the Bureaus of Competition and Economics, and the Midwest Region of the Federal Trade Commission. They are not necessarily the views of the Federal Trade Commission or any individual Commissioner. The Commission vote authorizing the staff to submit the comments was 5-0. (FTC File No. V020004; staff contact is Michael S. Wroblewski, Office of General Counsel; 202-326-2155.)
Commission approval of report for release:
The Commission has approved the release of its annual report on the Truth in Lending, Consumer Leasing, Equal Credit Opportunity, and Electronic Fund Transfer Acts. The vote to approve the release of the report, which is available on the FTC's Web site, was 5-0. (FTC File No. P024805; staff contact is Carole L. Reynolds, 202-326-3230.)
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.