Federal Appeals Court Upholds FTC Order that Found McWane, Inc. Unlawfully Maintained Monopoly in Domestic Pipe Fittings

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The U.S. Court of Appeals for the Eleventh Circuit upheld a Federal Trade Commission Decision and Order finding that McWane, Inc., the largest U.S. supplier of ductile iron pipe fittings used in municipal and regional water distribution systems, unlawfully maintained its monopoly in the domestic fittings market through exclusionary conduct.

“The Eleventh Circuit’s decision affirms that monopolists must compete on the merits rather than resorting to anticompetitive tactics to exclude would-be market entrants,” said FTC Chairwoman Edith Ramirez. “By limiting competition, McWane was able to maintain inflated prices for key components in municipal water systems around the country, costs ultimately borne by cities and taxpayers.”

In its Opinion, the Commission ruled that McWane imposed an illegal exclusive dealing policy on its distributors, which effectively prevented them from buying domestic pipe fittings from new competitor Star Pipe Products Ltd. if the distributors wished to also continue buying the fittings from McWane. McWane’s conduct prevented Star from achieving the sales necessary to compete effectively and threaten McWane’s monopoly in the domestic fittings market. In so ruling, the Commission upheld an Initial Decision by Chief Administrative Law Judge D. Michael Chappell.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., NW, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

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