The American Bar Association, Antitrust Section, Spring Meeting 1997, FTC and Clayton Act Committees
I appreciate this opportunity to bring you up to date on antitrust enforcement at the Federal Trade Commission. This year's Spring Meeting occurs just before the completion of my second full year as Bureau Director, and it was even busier than the first. Last year was a record setter in merger activity -- 3,087 reportable transactions in FY 1996, compared to the previous high of 2,883 filings in FY 1989. This presented major challenges for the merger program, from the expeditious handling of merger filings, conducting investigations and enforcement actions, and implementing effective remedies. The heavy merger workload also put a strain on our nonmerger activities. It was difficult to find enough resources to cover everything. But we made it through in good shape, thanks to our talented, dedicated and hard-working staff.
Today I would like to review the Bureau's accomplishments over the last year and a half, as well as the antitrust issues that occupied a majority of our time over that period. I will focus in particular on developments since last year's Spring Meeting.(1) I remind you that, as usual, these remarks are my own and do not necessarily reflect the views of the Commission or any individual Commissioner.
REVIEW OF THE MERGER PROGRAM
First, some brief comments about the numbers. As I noted, fiscal year 1996 produced the largest volume of merger filings in FTC history, a total of 3,087 reportable transactions. That was the fifth consecutive yearly increase since 1991, when there were 1,451 filings. That is an increase of 112 percent. The upward trend in merger filings continued during the first half of fiscal year 1997. Filings through the end of March were 14 percent above the total for the first six months last year.
We continue to see many mergers that appear to be motivated by strategic considerations -- not necessarily anticompetitive -- but which require close review because the firms are either competitors or in closely related markets, or both. Some competitors are looking to buy market share, expand product lines, combine R&D capabilities, gain control of important inputs, or achieve integrative efficiencies. Some mergers involve several of these elements, and they may raise competitive concerns in some respects but not in others.
The task of identifying potentially anticompetitive mergers is difficult and time-consuming, because it must be done on a case-by-case basis. It is costly both to us and to your clients. For that reason, we continued our efforts to make the HSR review process more efficient and less burdensome. Prompt clearance of transactions between the agencies remains a priority. And we effectively used the additional time prompt clearance gives us to determine whether a transaction needs further investigation. As a result, we were able to use the second request process more efficiently by limiting its use to the transactions most likely to raise serious concerns. The statistics show progress in that regard. In FY 1996, the ratio of enforcement actions to second requests was 24 to 36, or 67 percent, compared to a ratio of 35 to 58, or 60 percent, in FY 1995. Thus, we did a better job of targeting second requests. In part, that was the result of more complete investigation during the initial waiting period.
We are also continuing efforts to make the HSR process more user-friendly. Our most recent initiative in that regard is to make information concerning the HSR program available on the Internet.(2) Users already can read or download a copy of the HSR Form and Instructions, instructions regarding the filing fee, the Federal Register Notice concerning the ordinary course of business and realty exemptions promulgated in March of last year, and the premerger notification rules. We also provide a link to the 1992 Census of Manufacturers. Soon to come are copies of all formal interpretations of the HSR rules.
We also make available a wide variety of other information through our Web page, including enforcement guidelines and policy statements, announcements of enforcement actions and speeches. Just a few days ago, we added a feature that enables users to submit questions or comments to us via e-mail, right from our Web site, concerning competition issues. As an example of the growth and the power of the Internet, the Commission's Web page received over one million "hits" in March, 1997. Last year at this time, the number was around 200,000 hits per month. We also make extensive use of an older information technology to assist businesses through the HSR process -- the telephone. Last year, we received something on the order of 40,000 phone calls relating to HSR, about half of them involving some aspect of reportability. And we've received good feedback on the responsiveness of the Premerger Office staff. Thus, we're making every effort to make the process as efficient and user-friendly as possible, and to quickly identify the transactions that raise serious concerns.
The 24 enforcement actions in fiscal 1996 included three preliminary injunction actions authorized and 21 consent agreements. In addition, we brought four actions under § 7A for HSR violations and one civil penalty action for an order violation. In the first six months of FY 1997, we had one preliminary injunction action authorized, 12 consent agreements, two transactions that were abandoned in the face of probable enforcement action, and two cases under § 7A.
Looking back over the past decade or so, we see that there has been an up-tick in merger enforcement. We are challenging more mergers in the mid-'90s than we did in the '80s, but this does not reflect a paradigm shift in merger analysis. We are still applying an analytical framework that has its roots in the 1982/84 Merger Guidelines. But we may apply the Merger Guidelines with greater confidence in their consumer benefit.
Some observers apparently see the increased enforcement activity as a sign of a more regulatory era. I disagree. The purpose of merger enforcement is to prevent artificial restraints on competition, not to replace competition with regulation. There is, I agree, greater use today of negotiated resolutions to merger challenges, but consent orders are structured with FTC oversight limited in time and scope. In any event, there are good reasons for settling cases, even when some ongoing oversight by the agency is warranted. First, a negotiated resolution is a much more efficient way of resolving a merger challenge, compared to lengthy, resource-intensive litigation. Second, a negotiated order quickly addresses the problematic parts of the transaction and permits the remainder of the deal to proceed unimpeded. This permits the companies and, ultimately, consumers to benefit from efficiencies that may accrue from the procompetitive aspects of the transaction. An attempt to block the entire transaction would delay the realization of those efficiency benefits. Third, it is sometimes necessary to use an order with some regulatory characteristics in order to achieve the twin goals of addressing competitive problems while at the same time preserving efficiencies to the extent possible. I'll return to that subject when I review what we're doing with merger remedies.
But when we are unable to reach a negotiated resolution that addresses competitive problems in a meaningful way, we are prepared to stand firm and seek a preliminary injunction against the transaction. That occurred a number of times in the past 18 months:Questar/Kern River,(3) Rite Aid/Revco,(4) Blodgett Memorial Medical Center/Butterworth Hospital,(5) Staples/Office Depot,(6) and two other mergers, in the petroleum industry and in cable TV systems, that were abandoned when it became clear that there probably would be an injunction action. Let me describe some of the major cases.
Major Markets and Industries
About 80 percent of the Bureau's merger enforcement resources devoted to the largest investigations(7) were directed to activities in five key sectors of the economy: Health Care and Pharmaceuticals, Defense, Information and Technology, Energy, and Consumer Goods and Services. These market sectors are important not only to the well-being of the Nation's economy and consumers today, but they are also critical for the Nation's future. We also had enforcement actions involving numerous industrial goods and services, in markets totaling billions of dollars of commerce.
Health Care and Pharmaceuticals
Protection of competition and consumers in markets for health care products and services remains a top Commission priority. This is an area where focused merger enforcement can result in direct consumer benefit, both now and for the future. The cases range from huge pharmaceutical mergers, mergers of large drug store chains and hospital mergers. I'd like to discuss a few of those cases.
In Ciba-Geigy/Sandoz,(8) the Commission challenged a $63 billion merger of two pharmaceutical giants that threatened to produce a monopoly in key technologies used in the development of gene therapy products, which show substantial promise for the treatment of various cancers and other medical conditions. This was a case where the pool of potential competitors was very limited, because the merging firms controlled critical patents. The merger therefore would have diminished both the incentives and the ability of other firms to develop competing products. Because of the patent portfolios of Ciba-Geigy and Sandoz, competitors could be blocked from commercial development.
The case is particularly notable in that the loss of R&D competition was the principal focus of our concern, unlike other cases where the loss of R&D competition may be an adjunct to the loss of competition in current production and sales. We worked out a consent order that will preserve competition in this important innovation market, in part by requiring the licensing of certain technology and patent rights to Rhone-Poulenc Rorer so that it would be in a position to compete with the merged firm.
The Ciba-Geigy case illustrates the important role antitrust can play in protecting competition in R&D. This is not new, but it has some gained some prominence -- some would say notoriety -- in recent years. The renewed focus on R&D competition is probably attributable to several factors. First, the Intellectual Property Guidelines,(9) issued in 1995, drew attention to the concept of innovation markets. Second, there has been a substantial amount of recent merger activity in certain markets where antitrust may be particularly important in preserving R&D competition, such as pharmaceuticals and defense. Third, there is an increased appreciation of the importance of preserving incentives for strong rivalry in the race to produce new and improved products in many key markets. Research and development, and innovation, are critically important to the competitiveness of our markets, both domestically and internationally. Moreover, R&D competition is critically important not only in saving dollars in the purchase of new products, but also in saving lives and ensuring our national security.
Our cases will show that we have intervened in innovation market transactions under carefully limited circumstances -- namely, where few firms possess the specialized assets or characteristics needed to compete successfully in the market. It is only in that situation that a merger is likely to result in a substantial loss of R&D competition.
Another significant action in the health sector is Rite-Aid/Revco,(10) where the Commission challenged the proposed merger of the Nation's two largest retail pharmacy chains. This case illustrates the application of the unilateral effects analysis of the 1992 Horizontal Merger Guidelines to a market with network characteristics. The relevant market that concerned us was the sale of pharmacy services to PBMs -- entities that operate pharmacy benefit plans. PBMs typically organize a network of participating pharmacies by contracting with chains and independent pharmacies. Before the proposed merger, the pharmacies of Rite-Aid and Revco could be viewed as potential components of substitutable pharmacy networks, so that if one firm priced its services too high, a PBM could use the other's stores in combination with others. A merger, however, would enable the merged firm to bundle its services, leaving PBMs with fewer, and more costly, alternatives. Since the PBMs' alternatives at the margin would be more costly, the merger would enable Rite Aid to increase the price of its services. The Commission authorized its staff to seek a preliminary injunction against the merger, and the parties abandoned the transaction.
In hospital mergers, we had a setback in the Butterworth/Blodgett case,(11) but we are pressing on with the challenge. The district court found that the merger would give the hospitals market power in two relevant markets, but it denied a preliminary injunction nonetheless. We are appealing that decision, and the Commission issued an administrative complaint to continue the challenge.(12)
Other enforcement actions with major consumer benefit include:
In Hoechst/Marion Merrill Dow,(13) the Commission made final a consent order that ensured competition in a $1 billion market for once-a-day diltiazem, a drug used in the treatment of angina and hypertension. I mentioned the case at last year's Spring Meeting, but it is worth mentioning again. The new entry that was facilitated by the order is working well, and consumers are benefitting to the tune of millions of dollars. We had estimated consumer savings of up to $30 million per year as a result of the new competition, and we're almost half way there already.
In Baxter Int'l/Immuno Int'l,(14) a consent order required divestitures to preserve competition in two markets for blood plasma products and ensure continued research and development. Absent the order, the merger creating the largest manufacturer of plasma products in the world would result in higher prices and lost competition in R&D.
In Upjohn Co./Pharmacia Akt,(15) a consent order maintained competition in the market for new drugs for treatment of colorectal cancer, while permitting the potentially procompetitive parts of this $13 billion merger to go forward. In Johnson & Johnson/Cordis Corp,(16) a consent order maintained competition in the market for cranial shunts used in the treatment of hydrocephalus, a potentially fatal condition affecting infants and children; the remainder of this $1.8 billion acquisition was allowed to proceed.
In Fresenius AG/National Medical Care,(17) a consent order required divestiture to preserve competition in the sale of a chemical used in hemodialysis treatment for patients with kidney disease.
In Tenet Healthcare Corp./OrNda Healthcorp,(18) a consent order will require divestitures to prevent loss of competition resulting from a merger of two acute care hospitals in San Luis Obispo County, California.
In J.C. Penney/Eckerd(19) and J.C. Penny/Rite Aid,(20) two consent orders will require divestiture of 161 drug stores to prevent loss of competition resulting from J.C. Penney's acquisitions of Eckerd Corporation and 190 Rite Aid drug stores in North and South Carolina.
In American Home Products/ Solvay, S.A.,(21) a proposed consent order will prevent American Home Products from gaining a dominant position in three pet vaccines through its acquisition of Solvay, S.A.'s animal health business. The order will require American Home Products to divest intellectual property rights to the three vaccines to Schering-Plough Corporation. The order also requires American Home Products to manufacture and supply the three vaccines to Schering-Plough for 24 to 36 months, while Schering-Plough seeks USDA approval to begin its own production
The defense industry continues to downsize and restructure, causing us to maintain our watch to ensure that mergers will not result in higher costs for U.S. taxpayers and less competition in R&D. We have also been careful not to interfere unnecessarily with the positive, procompetitive aspects of defense mergers. Our staff have maintained a productive working relationship with DOD staff in accordance with the Defense Science Advisory Board guidelines recommended by a task force chaired by FTC Chairman Robert Pitofsky. Recent merger cases that preserved competition and R&D rivalry in defense industries include:
In Boeing/Rockwell,(22) a consent order will prevent Boeing's $3.025 billion acquisition of Rockwell's Aerospace and Defense business from reducing competition and innovation in the markets for high altitude endurance unmanned air vehicles and space launch vehicles, including DOD's Evolved Expendable Launch Vehicle Program.
In Lockheed Martin/Loral,(23) a consent order prevented Lockheed Martin Corporations's $9.1 billion acquisition of Loral Corporation from reducing competition in the markets for the research, development, manufacture and sale of air traffic control systems, commercial low earth orbit (LEO) satellites, commercial geosynchronous earth orbit (GEO) satellites, military tactical fighter aircraft, and unmanned aerial vehicles.
In Raytheon/Chrysler Technologies Holding,(24) a consent order prevented Raytheon Company's acquisition of Chrysler Technologies Holding from reducing competition for the U.S. Navy's procurement of a satellite communications system to be used on U.S. Navy submarines.
In Hughes/Itek,(25) a consent order preserved competition for a critical component of an Air Force anti-missile program. The acquisition involved the acquisition of the Itek Optical Systems Division of Litton Industries by Hughes Danbury Optical Systems, a subsidiary of General Motors.
In Litton/PRC,(26) a consent order prevented Litton Industries' acquisition of PRC Inc. from reducing competition in the U.S. Navy's procurement of Aegis destroyers.
Information and Technology
In the areas of Information and Technology, the biggest news for the year, at least for us, involved Time Warner/Turner,(27) a merger creating the world's largest media company. The case was unusually complex, with issues ranging from market definition, unilateral market power effects, vertical foreclosure effects, and First Amendment implications regarding remedy.
This merger has been in the news many times, but let me briefly describe the relevant facts. The transaction involved three major firms in the cable television industry. Time Warner was a major producer of video programming for cable distribution, including the popular HBO channel. Time Warner also was a major cable systems operator through Time Warner Entertainment, a joint venture with U.S. West. Time Warner proposed to acquire Turner
Broadcasting, another major producer of video programming, including CNN, TNT and TBS. TeleCommunications, Inc. (TCI), the nation's largest cable systems operator, was involved through a major stock interest in Turner, which would have been converted to a substantial stock interest in Time Warner.
The concern about unilateral market power arose from the proposed consolidation of control over Time Warner's HBO channel and Turner Broadcasting's marquee channels, principally CNN, under one corporate roof. The reason for this concern may not be immediately obvious, since HBO and CNN are not direct substitutes from the perspective of individual consumers. Nonetheless, an analysis of the competitive dynamics of this market revealed that a merger of the firms owning HBO and CNN could result in a unilateral exercise of market power. To understand how, it is important to recognize that the immediate purchasers of video programming are not individual consumers, but rather, multi-channel distributors, such as cable system operators, who purchase video programming from a variety of producers and package it for resale to consumers. In effect, the multi-channel distributors assemble a network of video programming. Therefore, the unilateral effects analysis is similar to the one in Rite Aid/Revco, which also involved a network market.
From the distributors' perspective, CNN and HBO are components of substitutable networks. That is, although both programs are commonly carried by a multi-channel distributor, it is not essential that both be carried so long as one of them is included. A network that includes CNN but not HBO is an economic substitute for a network that includes HBO but not CNN, so long as each network includes a sufficient number of suitable complements to be acceptable to subscribers. Consequently, pre-merger, these network alternatives acted as constraints on the market power of CNN and HBO. Thus, for example, if the price of HBO was increased too much, a multi-channel distributor could decide to offer a network that included only CNN and its complements. After the merger, however, Time Warner could bundle HBO and CNN as a package, and take away the multi-channel distributors' option of offering a network that included only one of those channels. Consequently, the merger would increase Time Warner's ability to increase price unilaterally. The Commission's consent order addressed that problem by prohibiting Time Warner from conditioning the sale of one program on the purchase of the other -- i.e., the order prohibits bundling.
The vertical foreclosure concerns in Time Warner arose from the combination of horizontal and vertical relationships. The case illustrates how vertical integration can sometimes result in a bottleneck, denying competitors or potential competitors access to critical inputs. That may be of particular concern in a deregulatory environment, because there can be strong incentives for once-regulated monopolists to try to protect their turf through exclusionary conduct. One way of doing that is by denying access to critical inputs, or by permitting access only on discriminatory terms. That was a central concern in Time Warner.
The proposed merger threatened market access in two ways. First, Time Warner and TCI, two of the largest cable companies in the U.S., would have an incentive to, and could, discriminate against new programmers who might compete with major Time Warner/Turner channels such as CNN and HBO. That would have a serious effect on the incentive and ability of programming rivals of Time Warner and Turner to innovate or achieve access to the market. Second, Time Warner would have an incentive to, and could, use its control over marque channels such as HBO and CNN to deter or disadvantage the entry of new methods of multi-channel distribution -- for example, distribution by telephone companies -- that would compete with Time Warner's downstream cable companies. Without access to those popular channels, competing multi-channel distributors would be seriously disadvantaged.
The Commission's consent order dealt with these problems in several ways. First, it required TCI to divest its interest in Time Warner to a separate company over which it would have no control, so that TCI would have not have an incentive to favor Time Warner/Turner programming over competing programming. Second, it prohibits Time Warner from discriminating in the sale of Turner programming to other multi-channel distributors. Third, the order prohibits Time Warner's cable operations from discriminating against non-Time Warner programming producers.
Probably the most noted aspect of the order in Time Warner is that it requires Time Warner's cable operations to set aside at least one channel for a news service that would compete with Turner's CNN. Even with TCI's interest in Time Warner effectively neutralized, Time Warner could have used its major position as a cable operator to protect CNN's dominant position as a 24-hour news service by denying carriage of competing all-news networks. A news network seeking to enter the market would have had a difficult time reaching a sufficient number of subscribers to be viable without carriage on Time Warner cable. The order addresses that concern as non-obtrusively as possible. Time Warner must make available one cable channel for three to five years, depending on how it chooses to satisfy the requirement. Because of the First Amendment overtones of such a requirement, the Commission left Time Warner free to use its own judgment in choosing the acquirer of the assets and in negotiating the price that it would be paid, subject to some objective criteria that ensured that the second news service would be a significant competitor to CNN.
There has been a great deal of activity in energy markets in the last year and a half. Four enforcement actions that I can talk about by name, involving natural gas markets. We were also gearing up to challenge a merger involving the retail sale of gasoline, but the merger was abandoned when it became clear we were prepared to seek a preliminary injunction. We are also looking at other transactions in the petroleum industry. The completed enforcement actions are the following:
Questar/Kern River.(28) This case was noted in last year's report. It is notable in part as a potential competition case. The Commission's injunction action stopped an acquisition that would reestablish a monopoly over transmission of natural gas to customers in the Salt Lake City area by gaining substantial control over a significant new competitor.
Phillips Petroleum /ANR Pipeline.(29) A consent order will require divestitures to preserve competition among companies engaged in "gas gathering," a system of transporting natural gas from individual wellheads to a processing plant, from which it is transported through large pipelines to local gas distribution companies.
NGC Corp./Chevron.(30) A consent order required divestitures and other measures to preserve competition among firms that operate natural gas fractionation plants that separate out higher-value products such as ethane, propane, normal-butane, iso-butane and natural gasoline from raw mix natural gas liquids.
Dwight's Energy Data/Petroleum Information Corp.(31) A consent order requires licensing of information to preserve competition in the collection and sale of well history and production data. Such data are used by geologists and petroleum engineers to find additional oil and gas reserves and produce from them efficiently.
Other Consumer Products and Services
In the area of other consumer goods and services, Staples/Office Depot(32) is our most visible recent action. The case is notable for the market definition analysis in a differentiated retail market. Both Staples and Office Depot sell a wide range of office products that are available in other stores. Yet, no other stores offer the same combination of price, convenience and other attributes as these two firms. What is the proper market definition in that situation? And how do you do the analysis? We looked at pricing evidence. The evidence showed that in localities where Staples and Office Depot compete head-to-head, their prices are significantly lower than in localities where only one of the firms is present. That tells us a lot about the ability of other firms to offer strong competition to either firm.
What is important about the analysis in Staples is not the conclusion that there is a separate market consisting of office supply superstores, but how we arrived at that conclusion. The market definition question was approached in precisely the way that a long line of cases, and economic theory, teaches that we should: by looking at the evidence on economic substitutability. It was not sufficient that alternative retail sources were available and that consumers could turn to them. The issue was whether those alternative sources would be an effective constraint on post-merger price increases in localities where Staples and Office Depot currently compete head-to-head. In this case, we were able to examine good pricing data across geographic markets. In markets where Staples and Office Depot do not compete, the other retailers have not supplied the level of price competition that we find between two or more superstores. That evidence tells us that those other retailers of office supplies would not prevent Staples from increasing prices in markets where competition from Office Depot is eliminated.(33)
I should also mention First Data/First Financial.(34) It is not a new case, since we reached a settlement before last year's spring meeting, but I'd like to note that we now have a successful spin-off of a new competitor as a result of our consent order, and consumers are benefitting. The order prevented the consolidation of the only two consumer money wire transfer services operating in the U.S. This action saved users of these services, typically consumers who either do not have a regular banking relationship or who are sending money in emergency situations, up to $30 million per year in service fees. This is one of the relatively few cases in which the Commission has used a spin-off as a divestiture remedy, and it appears to be working well.
We also had a number of other merger actions which are described in the separate summary of the Bureau's activities over the last 18 months. Let me briefly mention the markets and cases: food products (General Mills/Ralcorp.;(35) Devro Int'l/Teepak Int'l(36)); supermarkets (The Stop & Shop Companies/Purity Supreme;(37) Koninklijke Ahold/The Stop & Shop Companies(38)); contact lenses (Wesley-Jessen Corp./Pilkington Barnes Hind Int'l(39)); commemorative class rings (Castle Harlan Partners/Town & Country/CJC Holdings(40)); and funeral-related services (Service Corporation Int'l/Gibraltar;(41) Loewen Group(42)).
Industrial Products and Services
The Ciba-Geigy/Sandoz merger, which I've already discussed in the context of pharmaceutical mergers, also threatened to substantially reduce competition and increase prices in the $1.4 billion U.S. market for corn herbicides and the $400 million U.S. market for pet flea-control products. We required substantial divestitures to resolve those problems. Other cases involved Windows-based computer-aided design (CAD) software (Autodesk, Inc./Softdesk, Inc.(43)); refractory products used in industrial furnaces and an ignition source for gas appliances (Compangnie de Saint-Goban/The Carborundum Company(44)); industrial power sources and industrial engine drives used for arc welding systems (Illinois Tool Works/Hobart Brothers(45)); atmospheric gases (nitrogen, oxygen and argon) used in a variety of industrial processes (Praxair/CBI Industries(46)); automobile salvage yard information management systems (Automatic Data Processing/AutoInfo(47)); articulated pistons used in large diesel engines (Mahle GmbH/Metal Leve, S.A.(48)); management information systems and electronic parts catalog for the automotive parts aftermarket (Cooperative Computing, Inc./Triad Systems(49)).
The Bureau continued active HSR enforcement. The premerger notification process established by the Hart-Scott-Rodino Act is a critical part of effective merger enforcement. It enables the antitrust agencies to learn about proposed mergers before they take place and to take appropriate action to protect competition. The agencies' experience prior to the enactment of HSR demonstrated that post-consummation merger challenges often took an excessive amount of time and too often resulted in an ineffective remedy. Accordingly, the Commission closely monitors compliance with the Act and takes strong, appropriate action against serious violations.
Most notable is our February, 1997, action against Mahle GmbH, a German automotive and diesel engine parts manufacturer with businesses in the U.S., and Metal Leve, S.A., a competing Brazilian manufacturer. The companies agreed to pay civil penalties in excess of $5 million dollars -- the highest civil penalty amount ever obtained under the HSR Act for a single transaction -- for their failure to file a premerger notification.(50) We insisted upon the maximum fine from both the buyer and the seller because of the serious, knowing nature of the violation. Mahle also agreed to substantial divestitures of assets to restore competition lost as a result of the merger.
Mahle/Metal Leve was the most recent in a series of actions. In FY 1996, the FTC collected a record $7.65 million in civil penalties from consent judgments for violations of the HSR Act, thereby helping to ensure the integrity of the process established by Congress for swift and efficient review of proposed mergers.
Sara Lee Corporation paid $3.1 million, the largest civil penalty ever for an HSR violation.(51) Three other corporations -- Automatic Data Processing, Inc.,(52) Foodmaker, Inc.(53) and Titan Wheel International, Inc.(54) -- paid a total of $4.55 million. The Commission also issued an administrative complaint against Automatic Data Processing, alleging that its acquisition of AutoInfo was anticompetitive.
We have been paying attention to merger remedies because of their critical importance in accomplishing our mission. Its not enough to identify the mergers that are likely to cause competitive harm and injure consumers. We also need an effective remedy. In some cases, that means an injunction action. But most cases can be resolved short of that. Most remedial orders in merger cases include divestiture of certain assets so that a third party can restore competition that is lost as a result of the merger. In some cases, most notably when the merger is vertical, we may not require divestiture, or only a part of the remedy will be a divestiture. Let me begin with a review of the Bureau's policies regarding divestiture orders, which are the usual and preferred remedy in most cases.(55)
Making Merger Remedies Better and Faster
Last year, I announced that we were taking several steps to shorten the time it takes to implement a divestiture remedy and to increase the likelihood that an order will result in a meaningful divestiture. We have done both. The average time between a final divestiture order and approval of the ordered divestiture has dropped from 15 months in FY 1995 to 7 months in FY 1996; and we expect further improvement this year. In addition, we have expedited our internal review of proposed divestitures. The average time from the filing of a divestiture application to approval of the divestiture by the Commission dropped from four months in FY 1995 to two months in FY 1996.
We have achieved faster divestitures in large part by encouraging respondents to identify a buyer for the divestiture assets at the time the consent decree is presented for provisional acceptance. This "buyer up front" policy accomplishes several things. First, it reduces the time between final order and divestiture approval to zero. Second, it greatly increases our confidence that the buyer will be a suitable one, since we can review its credentials before the order is accepted. Third, it greatly increases our confidence that the divestiture package will be sufficient to be viable and to restore competition. If the package is not sufficient to be viable, prospective buyers presumably would raise that concern. Fourth, a buyer up front limits the amount of time the respondent will have control of the assets, and sharply reduces the danger that they will "waste" in limbo.
We have made much greater use of this approach in the past year. Up-front buyers were identified in about 17 percent of our divestiture orders in fiscal 1995, but thus far in fiscal 1997 are found in more than 85 percent of such consents -- though I should note that few of the fiscal 1997 orders are yet final. Among recent examples are Koninklijke Ahold NV, (56) Ciba-Geigy/Sandoz,(57) American Home Products/Solvay,(58) and Cooperative Computing/Triad.(59) Where up-front divestiture is not possible, we currently seek a divestiture deadline no later than six months from the date a consent agreement is signed by the respondent. In a number of cases, this period has been shortened to four months; examples are the orders in Wesley-Jessen/Pilkington(60) and J.C. Penney/Eckerd and Rite Aid.(61)
In addition to pressing for shorter divestiture times and buyers up front, we also put a good deal of effort into defining the appropriate divestiture package. A buyer up front reduces the risk that we might select an inadequate divestiture package, but it does not remove our obligation to select the right package in the first instance. Our general approach to merger enforcement is to tailor relief as narrowly as possible to remedy identified threats to competition, and to seek relief that focuses on divestiture only of the problematic product lines or business units. In the past, however, some divestiture packages appear to have been too narrow to be saleable. We are placing greater emphasis on making sure the divestiture package we recommend to the Commission includes enough assets to be saleable, bearing in mind that salability is to a considerable extent a reflection of the package's post-sale viability as a competitive force. The most recent example of such a case is the order accepted for comment in Tenet Healthcare/OrNda,(62) where divestiture is to include both French Hospital and Tenet's interest in Monarch Health System, an important "customer" of the hospital.
We also have been making broader use of "crown jewel" provisions, which call for divestiture of a broader group of assets when the initial divestiture does not succeed within the prescribed time. Such provisions increase the incentive for the respondent to sell the initial package during the initial period. They also provide a bigger, and presumably more attractive, package for the trustee to market if the respondent is unsuccessful. Obviously, such provisions can be difficult for staff to negotiate. It is worth reflecting, though, that if a respondent is adamantly opposed to such a provision, that may say something about the viability of the proposed divestiture.
One example of a crown jewel provision is found in the Commission's consent order in Koninklijke Ahold NV, which provided that if respondents did not divest the specified supermarkets, "the trustee may on his or her own initiative, or at the direction of the Commission, divest any additional or substitute supermarkets of the Respondents located in the respective overlap areas and effect such arrangements as are necessary to satisfy the requirements of this Order."(63) Other recent cases with such provisions have included Phillips Petroleum/ANR Pipeline,(64) Mahle GmbH/Metal Leve,(65) Tenet Healthcare/OrNda,(66) and American Home Products.(67) The incentive force of crown jewel provisions is suggested by the fact that no such provision in a Commission order has ever been triggered, to date.
Our divestiture policies have produced some notable successes in maintaining competition in the affected market. For example, inHoechst/MMD, which I've mentioned already, the consent order resulted in the entry of a new competitor, and a new product, within a few months after the order was made final, and consumers were well on the way to an estimated $30 million per year savings on prescriptions for once-a-day diltiazem, a medication for angina and hypertension. In First Data/First Financial, we have a successful spin-off of a going concern in the market for consumer money wire transfer services. In fact, competition was restored even before the spin-off, because the consent order required the business to be held separate and operated as a separate entity pending divestiture. The new company is doing well, and we expect that consumers will benefit to the tune of approximately $30 million per year in lower service charges.
Limited use of non-structural relief
I've been talking about structural relief in merger cases -- divestiture. Let me spend just a minute on non-structural relief. We use non-structural relief only where it is warranted. We're well aware that some kinds of non-structural relief can have regulatory overtones. Orders that are excessively regulatory are not acceptable, and we've rejected a number of proposed orders on that basis. But sometimes non-structural relief is needed to solve a particular problem. For example, suppose a vertical merger causes a bottleneck problem that would block new entry. You could deal with that by blocking the merger. But that raises another concern. The structural relationship that creates the competitive problem can also result in efficiencies. If we want to save the efficiencies, we have to find a way to solve the competitive problem without interfering with the structure. You might consider an access order, or you might prohibit the company from denying access on a discriminatory basis, as we did in the Time Warner(68) case. We won't be able to do that in every case -- the risk may be too great, or the order may be too difficult to monitor -- but we're willing to listen to reasonable arguments.
The use of non-divestiture relief is not a new development. In fact, it goes back many years. The Supreme Court used a non-divestiture remedy in the Terminal Railroad case,(69) where a group of railroads made a series of vertical acquisitions to gain monopoly control over several bridge, ferry and terminal facilities in St. Louis, which previously were independently operated. Competing railroads that were not part of this group needed access to those facilities to get their trains across the Mississippi River at St. Louis. The Supreme Court found a violation, but it declined to order divestiture because the consolidation of the various bridges and terminal facilities was significantly more efficient than the previous structure. Instead, the Court ordered that the outside group of railroads be granted access to the facilities or be admitted into membership in the association that controlled the facilities, on "just and reasonable terms." Such access orders are not without potential problems, and we have to be careful when and how we use them, but we have not ruled them out.
One form of non-structural relief we've used in several cases in recent years is the so-called "firewall," most often to keep competitively sensitive information obtained by one part of the respondent from suppliers or customers away from other parts of the respondent that compete with these parties. We've taken this approach in several defense industry cases, as well as one pharmaceutical case. The effectiveness of such relief has attracted some skepticism, not unreasonably, so we are pursuing a study to determine how well these provisions are working.
Monitoring remedial orders
Monitoring the divestiture process is another important element of merger enforcement. Close monitoring of firms' compliance with FTC merger orders is particularly important because the Commission generally does not seek to block a merger entirely; rather, it tries to craft an order that imposes remedial measures directed to specific competitive problems while permitting the remainder of the transaction to proceed. As a result, merger remedies usually are implemented after a merger takes place, even when a buyer has been identified up front. We want to make sure that it happens. In one recent case, it didn't, and the firm paid the consequences. In January, 1997, Red Apple Companies, Inc. and affiliated persons agreed to a $600,000 civil penalty judgment for failure to divest five Manhattan supermarkets in a timely manner. We are also reviewing other situations where the respondent did not comply satisfactorily with a divestiture order, and we're preparing recommendations for civil penalty actions.
Finally, the Bureau of Competition, together with the Bureau of Economics, is expanding the recent pilot study of the effectiveness of divestiture orders. We received the necessary OMB approval on March 4, and will study a total of 49 divestitures arising out of 36 orders, interviewing buyers, respondents, and third parties, and seeking relevant documents. In addition to this formal study, the Compliance Division has begun a regular divestiture follow-up on a case-by-case basis. This inquiry is directed to recent divestiture acquirers to find out whether the package they acquired was sufficient, whether they are competing as they expected to, and whether there are any problems with the respondent's compliance.
In the area of nonmerger enforcement, we took action against unreasonable exclusionary practices, including retailer-imposed practices; continued enforcement against RPM practices; continued our vigilance over the activities of associations; and stopped a variety of other anticompetitive conduct. Some highlights:
The most prominent case here is the administrative litigation in Toys "R" Us,(70) in which the complaint alleges that the nation's largest toy retailer used its market power to keep toy prices high by extracting exclusionary agreements from major toy manufacturers concerning sales to warehouse clubs.
The case is in litigation, so I cannot discuss it specifically, but I can outline the issues. Suppose a retailer's share of sales is in the 20-30 percent range; that it is substantially bigger than any of its competitors; that it has extracted agreements from each of the major toy manufacturers to limit or condition the supply of hot-selling toys to warehouse clubs; that every toy manufacturer would agree to those restrictions only on condition that the retailer lined up the same agreement from other toy manufacturers; and the exclusionary agreements were not justified by any significant efficiency considerations.
That hypothetical scenario suggests that the manufacturers did not act unilaterally in their own self interest in restricting the supply of toys to warehouse clubs, and that something caused them to acquiesce in the major retailer's demands. That "something" is buyer power.
As in the market definition question in Staples, preconceived notions about the availability of substitutes -- here, the presence of other retailers -- should not dictate a conclusion about whether the respondent retailer is able to exercise market power. Nor should it be assumed that a market share that suggests lack of market power on the selling side necessarily means that the firm also lacks market power on the buying side. As in Staples, the behavior of the market participants should tell us a lot.
In another significant matter, in Montana Physicians(71) the Commission brought its first enforcement action addressing physicians' organizations since the adoption of the revised Statements of Antitrust Enforcement Policy in Health Care(72) in August, 1996. A consent order required two Montana health care organizations -- Montana Associated Physicians and Billings Physician Hospital Alliance -- to cease and desist from engaging in boycotts and other agreements to fix the prices physicians would accept from third-party payers and impede the entry of managed care and other forms of alternative health care financing. The consent order would not prohibit the organizations from operating legitimate joint ventures or from engaging in other conduct permitted by the new Health Care Statements. The Commission found that there were no efficiencies justifying the challenged conduct, which raised prices and reduced the range of options available to consumers.
In American Cyanamid,(73) the Commission challenged an unusual rebate program through which American Cyanamid induced dealers of agricultural chemicals to sell at or above specified minimum resale prices. Cyanamid sold more than $1 billion of these chemicals in 1995. Under the terms of the rebate program, the pre-rebate cost to the dealer was equal to the specified minimum resale price. If the dealer sold the product below the specified minimum price, it received no rebate, so the sale would be at a loss. Obviously, dealers complied with the specified minimum resale price. We believe the scheme amounted to illegal resale price fixing, and the practice was enjoined by a consent order.(74)
Anticompetitive Conduct of Associations
The Commission also continued its close watch over the activities of associations. Associations usually are positive, beneficial organizations. They provide an efficient means of conveying information of common interest to their members, and they are an efficient means of organizing individuals or entities in the pursuit of legitimate objectives. On occasion, however, their activities carry a competitive risk, because members often are competitors. The Commission has a long history of taking action when associations cross the line into inappropriate competitive activities. There were several such cases in the past year.
In California Dental Association,(75) the Commission issued a decision and order finding that an association of California dentists unlawfully restrained truthful and nondeceptive advertising by dentists regarding the price, quality and availability of dental services. The Commission found that the association suppressed information that is valuable to consumers in the selection of a dentist, and harmed consumers by restricting price and non-price competition among dentists.(76)
In International Association of Conference Interpreters,(77) the Commission upheld a ruling by an administrative law judge that the interpreters' association had engaged in a decades-long collusive scheme to fix prices through the use of fee schedules and price-related work rules. However, the Commission dismissed charges that the association had restricted other work practices, finding insufficient evidence that the non-price restrictions were unreasonably anticompetitive.
In Hale Products(78) and Waterous Company,(79) the Commission resolved charges that two manufacturers of fire pumps restricted competition by imposing exclusive dealing requirements on their customers, who were manufacturers of fire trucks. The exclusive dealing arrangements prohibited the fire truck manufacturers from purchasing the pumps of another pump manufacturer. The Commission charged that these exclusive dealing requirements enabled Hale and Waterous to allocate customers, reduce their customers' choice of pumps, and impede the entry of competing pump manufacturers.
In Precision Moulding,(80) the Commission issued a consent order prohibiting the company from attempting to induce competitors to fix or raise prices for stretcher bars used to construct frames for artists' canvases.
ANTITRUST FOR THE 21st CENTURY
I'd like to conclude by talking about another goal that guides our activities, and that is to be responsive to the need for enlightened antitrust enforcement for the 21st Century. There are developments to report there as well.
FTC staff completed a study of multiprovider networks to gain a better understanding of potential procompetitive benefits that may counterbalance concerns about anticompetitive effects. This study led to the issuance, in cooperation with the Department of Justice, of the 1996 Statements of Antitrust Enforcement Policy in Health Care, which revised and broadened the guidance provided in previous health care antitrust enforcement policy statements.
As an outgrowth of the 1995 FTC hearings on competition in a global, high-tech marketplace, FTC and Department of Justice lawyers and economists formed a task force to investigate appropriate ways of improving the consideration of merger efficiencies in the analysis of mergers. As a result of the task force recommendations, the efficiencies section of the 1992 Horizontal Merger Guidelines has been revised to clarify when and how the agencies will consider efficiency claims.(81)
In a nutshell, efficiencies that are merger-specific and cognizable will be considered in the analysis. To be cognizable, an efficiency must be verified and it cannot arise from anticompetitive reductions in output or service. The agencies will not challenge a merger if the efficiencies "are of a character and magnitude such that the merger is not likely to be anticompetitive in any relevant market." The revised Guidelines make clear that this is not simply a matter of comparing the magnitudes of the anticompetitive effects and the estimated efficiencies. Rather, it is necessary to assess how the claimed efficiencies will play out in affecting market behavior. If the other evidence indicates that the potential anticompetitive consequences of a merger are very large, the merger likely will be anticompetitive unless the efficiencies are extraordinarily great.
We have been considering efficiencies in our analysis of mergers for some time already, but the revised Guidelines will add more structure to the analysis and likely will require more information from the parties. But despite the complexities of the analysis, the Commission is committed to striking a reasonable balance between the consideration of bona fide efficiencies claims and the need to protect consumers from increased prices and other harms.
Joint Venture / Competitor Collaborations Project
As another outgrowth of the 1995 FTC hearings on competition in a global, high-tech marketplace, the Commission has authorized its Office of Policy Planning to begin a project to clarify and update antitrust policies regarding joint ventures and other forms of competitor collaborations. At the present time, there are no agency guidelines covering those activities except in certain areas (health care, and intellectual property), and a number of witnesses at the hearings indicated that guidelines could be helpful. The Commission agreed, and directed its staff to explore ways of providing more guidance to the business community. The Bureau of Competition is closely involved in that effort.
As I have already noted, a number of the Commission's enforcement actions in the past year involved some increasingly important antitrust issues: Market access (e.g.,Time Warner; Ciba Geigy); unilateral effects analysis in markets with network characteristics (Rite Aid; Time Warner); innovation markets (e.g., Ciba-Geigy); and the delineation of, and measurement of market power in, retail markets (Staples; Toys R Us).
Fostering International Enforcement Cooperation
Antitrust is becoming increasingly international in scope. The Commission, largely through the Bureau's International Division, cooperates with foreign antitrust agencies to enforce the antitrust laws in cases where the actors and effects may be subject to scrutiny in foreign countries as well as in the United States. Recent examples include transnational mergers like Ciba-Geigy/Sandoz,Mahle/Metal Leve, Fresenius AG/National Medical Care, and Lockheed Martin/Loral, as well as horizontal cartel cases, such asInternational Association of Conference Interpreters (AIIC) and others. In addition, we work with foreign counterparts when U.S. firms attempt to export to foreign countries and find that their export opportunities are blocked by what appear to be anticompetitive practices in foreign markets. Attempts to foster international cooperation also include the following:
The Commission, with the Department of Justice, has been seeking to deepen international enforcement cooperation through the conclusion of a new positive comity agreement with the European Union and agreements under the International Antitrust Enforcement Assistance Act of 1994.
The Commission works within international organizations, such as the OECD, NAFTA, and the FTAA, to promote competition policies and enforcement practices that can be followed by all member countries and are consistent with the goals of maintaining competitive and open markets and enhancing consumer welfare.
At the OECD, both the Commission and the Department of Justice initiated work in the Committee for Competition Law and Policy (CLP) on an agreement concerning cooperation in dealing with hard core cartels. The proposed agreement would call upon member countries to adopt and maintain adequate laws for prohibiting and deterring hard-core cartels and enabling cooperation in enforcement among foreign competition authorities. We are also promoting work in the CLP aimed at determining how to converge certain premerger notification procedures for multi-jurisdictional filings, in order to alleviate filing burdens for companies.
As a result of the WTO Ministerial in Singapore in December, 1996, a WTO working party was established to study issues relating to the interaction between trade and competition policy in order to identify any areas that may merit further consideration in the WTO framework. Both the Commission and the Department of Justice will participate in this work with a view to ensuring that it is conducted in a way that is consistent with the objectives of our antitrust laws and enforcement policies and the sovereignty of our judicial system.
The Commission, with financial support from the Agency for International Development, provides technical assistance to new antitrust authorities in Central and Eastern Europe and Latin America.
In summary, antitrust enforcement at the FTC has been active on a number of fronts, but more important than the numbers are the kinds and quality of the actions we take to make sure that consumers are served by markets that are both competitive and efficient.
1. A separate report summarizing the Bureau's activities over the past 18 months is available to the attendees of this program.
3. FTC v. Questar Corp., No. 2:95CV 1137S (D.Utah 1995) (transaction abandoned).
4. Rite Aid Corp., FTC File No. 961 0020 (authorization for preliminary injunction action Apr. 17, 1996; transaction abandoned Apr. 26, 1996).
5. FTC v. Butterworth Health Corp., 946 F. Supp. 1285 (W.D. Mich. Sept. 26, 1996), appeal pending.
6. Staples, Inc., FTC File No. 971 0008 (authorization for preliminary injunction action Mar. 10, 1997).
7. Those involving 1000 or more hours.
8. Ciba-Geigy Ltd., Dkt. C- 3725 (consent order, Mar. 24, 1997).
9. U.S. Department of Justice and Federal Trade Commission, Antitrust Guidelines for the Licensing of Intellectual Property, reprinted in4 Trade Reg. Rep. (CCH) ¶ 13,132 (Apr. 6, 1995).
10. Rite Aid Corp., FTC File No. 961 0020 (authorization for preliminary injunction action Apr. 17, 1996; transaction abandoned Apr. 26, 1996).
11. FTC v. Butterworth Health Corp., 946 F. Supp. 1285.
12. Butterworth Health Corp., Dkt. No. 9283 (complaint issued Nov. 18, 1996).
13. Hoechst AG, Dkt. C-3629 (consent order, Dec. 5, 1995).
14. Baxter Int'l, Dkt. C- 3726 (consent order, Mar. 24, 1997)
15. Upjohn Co., Dkt. C-3638 (consent order, Feb. 8, 1996).
16. Johnson & Johnson, Dkt. C-3645 (consent order, Mar. 19, 1996).
17. Fresenius AG, Dkt. C-3689 (consent order, Oct. 15, 1996).
18. Tenet Healthcare Corp., FTC File No. 971 0024 (consent agreement accepted for comment, Jan. 28, 1997).
19. J.C. Penney Co. (Eckerd), Dkt. C-3721 (consent order, Feb. 28, 1997).
20. J.C. Penney Co. (Rite Aid), Dkt. C-3722 (consent order, Feb. 28, 1997).
21. American Home Products, FTC File No. 971 0009 (consent agreement accepted for comment, Feb. 21, 1997).
22. The Boeing Co., Dkt. C-3723 (consent order, Mar. 5, 1997).
23. Lockheed Martin Corp., Dkt. C-3685 (consent order, Sept. 18, 1996).
24. Raytheon Co., Dkt. C-3681 (consent order, Sept. 3, 1996).
25. Hughes Danbury Optical Systems, Dkt. C-3652 (consent order, Apr. 30, 1996).
26. Litton Industries, Inc., Dkt. C-3656 (consent order, May 7, 1996).
27. Time Warner Inc., Dkt. C-3709 (consent order, Feb. 3, 1997).
28. FTC v. Questar Corp., No. 2:95CV 1137S (D.Utah 1995) (transaction abandoned).
29. Phillips Petroleum Co., FTC File No. 961 0056 (consent agreement accepted for comment, Dec. 27, 1996).
30. NGC Corp., Dkt. C-3699 (consent order, Dec. 12, 1996).
31. Dwight's EnergyData, Inc., FTC File No. 951 0130 (consent agreement accepted for comment, Dec. 3, 1996).
32. Staples, Inc., FTC File No. 971 0008 (authorization for preliminary injunction action, Mar. 10, 1997).
33. Even looking at the market to include all retail sales of office supplies, the market is still concentrated, and Staples and Office Depot are each other's closest competitor.
34. First Data Corp., Dkt. C-3635 (consent order, Jan. 16, 1996).
35. General Mills, Inc., FTC File No. 961 0101 (consent agreement accepted for comment, Dec. 18, 1996).
36. Devro Int'l plc., Dkt. C-3650 (consent order, Apr. 3, 1996).
37. The Stop & Shop Companies, Dkt. C-3649 (consent order, Apr. 2, 1996).
38. Koninklijke Ahold NV, Dkt. C-3687 (consent order, Sept. 30, 1996).
39. Wesley-Jessen Corp., Dkt. C-3700 (consent order, Jan. 3, 1997).
40. Castle Harlan Partners, II L.P., Dkt. C-3699 (consent order, Dec. 20, 1996).
41. Service Corp. Int'l, Dkt. C-3646 (consent order, Mar. 21, 1996).
42. Loewen Group Int'l, Dkt. C-3677 (consent order, July 30, 1996); Loewen Group Inc., Dkt. C-3678 (consent order, July 30, 1996).
43. Autodesk, Inc., FTC File No. 971 0049 (consent agreement accepted for comment, Mar. 31, 1997).
44. Compangnie de Saint-Goban, Dkt. C-3673 (consent order, June 12, 1996).
45. Illinois Tool Works, Inc., Dkt. C-3651 (consent order, Apr. 23, 1996).
46. Praxair Inc., Dkt. C-3648 (consent order, Apr. 1, 1996).
47. Automatic Data Processing, Inc., Dkt. 9282 (complaint issued Nov. 13, 1996).
48. Mahle GmbH, FTC File No. 961 0085 (consent agreement accepted for comment, Feb. 26, 1997).
49. Cooperative Computing, Inc., FTC File No. 971 0013 (consent agreement accepted for comment, Feb. 25, 1997).
50. Judgment pending.
51. United States v. Sara Lee Corp., Civ. No. 1:96 CV00196 (D.D.C. Feb. 9, 1996).
52. United States v. Automatic Data Processing, Inc.. Civ. No. 96-0606 (D.D.C. Mar. 27, 1996).
53. United States v. Foodmaker, Inc., Civ. No. 1:96 CV01879 (D.D.C. Aug. 13, 1996).
54. United States v. Titan Wheel Int'l, Inc., Civ. No. 96-1040 (May 6, 1996).
55. My colleague George Cary has a more extensive presentation on remedies, which I commend to you. See Merger Remedies, Prepared Remarks of George S. Cary, Senior Deputy Director, Bureau of Competition, Federal Trade Commission, before the American Bar Association, Antitrust Spring Meeting (Washington, D.C., April 10, 1997).
56. Dkt. C-3687 (consent order, Sept. 30, 1996).
57. File No. 961 0005 (consent agreement accepted for comment, Dec. 16, 1996).
58. File No. 971 0009 (consent agreement accepted for comment, Feb. 25, 1997).
59. File No. 971 0013 (consent agreement accepted for comment, Feb. 26, 1997).
60. Dkt. C-3700 (consent order, Jan. 7, 1997).
61. Dkts. C-3721 and 3722 (consent orders, Feb. 28, 1997).
62. File No. 971 0024 (consent agreement accepted for comment, Jan. 28, 1997).
63. Dkt. C-3687 (consent order, Sept. 30, 1996).
64. File No. 961 0056 (consent agreement accepted for comment, Dec. 27, 1996).
65. File No. 961 0085 (consent agreement accepted for comment, Feb. 27, 1997).
66. File No. 971 0024 (consent agreement accepted for comment, Jan. 18, 1997).
67. File No. 971 0009 (consent agreement accepted for comment, Feb. 21, 1997).
68. Dkt. C-3709 (consent order, Feb. 3, 1997).
69. United States v. Terminal Railroad Ass'n, 224 U.S. 383 (1912).
70. Toys "R" Us, Inc., Dkt. 9278 (complaint issued May 22, 1996).
71. Montana Associated Physicians, Inc., Dkt. C-3704 (consent order, Jan. 13, 1997).
72. Reprinted in 4 Trade Reg. Rep. (CCH) ¶ 13,153 (Aug. 28, 1996).
73. American Cyanamid, FTC File No. 951 0106 (consent agreement accepted for comment, Jan. 27, 1997).
74. The investigation was conducted in cooperation with a multi-state task force consisting of 50 states, the District of Columbia and the Commonwealth of Puerto Rico, who entered into their own settlement with Cyanamid.
75. Dkt. 9259 (final order, Mar. 25, 1996) (Comm'r Azcuenaga dissenting; Comm'r Starek concurring in part and dissenting in part).
76. The case currently is on appeal to the U.S. Court of Appeals for the Ninth Circuit.
77. Dkt. 9270 (final order, Feb. 19, 1997) (Comm'r Starek concurring in part and dissenting in part).
78. Hale Products, Inc., Dkt. C-3694 (consent order, Nov. 25, 1996).
79. Waterous Co., Dkt. C-3693 (consent order, Nov. 22, 1996).
80. Precision Moulding Co., Dkt. C-3682 (consent order, Sept. 3, 1996).
81. FTC Press Release, FTC/DOJ Announce Revised Guidelines on Efficiencies in Mergers, April 8, 1997.