80 FR 27961 - Holcim Ltd. and Lafarge S.A.; Analysis of Proposed Consent Orders To Aid Public Comment
FEDERAL TRADE COMMISSION Federal Register Volume 80, Issue 94 (May 15, 2015)
Federal Register Volume 80, Issue 94 (May 15, 2015)
| Page Range | 27961-27970 | |
| FR Document | 2015-11724 |
[Federal Register Volume 80, Number 94 (Friday, May 15, 2015)] [Notices] [Pages 27961-27970] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-11724] ----------------------------------------------------------------------- FEDERAL TRADE COMMISSION [File No. 141 0129 ] Holcim Ltd. and Lafarge S.A.; Analysis of Proposed Consent Orders To Aid Public Comment AGENCY: Federal Trade Commission. ACTION: Proposed consent agreement. ----------------------------------------------------------------------- SUMMARY: The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent orders--embodied in the consent agreement--that would settle these allegations. DATES: Comments must be received on or before June 4, 2015. ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/holcimlafargeconsent online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write ``Holcim Ltd. and Lafarge [[Page 27962]] SA--Consent Agreement; File No. 141-0129'' on your comment and file your comment online at https://ftcpublic.commentworks.com/ftc/holcimlafargeconsent by following the instructions on the web-based form. If you prefer to file your comment on paper, write ``Holcim Ltd. and Lafarge SA--Consent Agreement; File No. 141-0129'' on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. FOR FURTHER INFORMATION CONTACT: James Southworth, Bureau of Competition, (202-326-2822), 600 Pennsylvania Avenue NW., Washington, DC 20580. SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent orders to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for May 4, 2015), on the World Wide Web, at http://www.ftc.gov/os/actions.shtm. You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before June 4, 2015. Write ``Holcim Ltd. and Lafarge SA--Consent Agreement; File No. 141- 0129'' on your comment. Your comment--including your name and your state--will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to remove individuals' home contact information from comments before placing them on the Commission Web site. Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any ``[t]rade secret or any commercial or financial information which . . . is privileged or confidential,'' as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names. If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept confidential only if the FTC General Counsel, in his or her sole discretion, grants your request in accordance with the law and the public interest. --------------------------------------------------------------------------- \1\ In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c), 16 CFR 4.9(c). --------------------------------------------------------------------------- Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at https://ftcpublic.commentworks.com/ftc/holcimlafargeconsent by following the instructions on the web-based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site. If you file your comment on paper, write ``Holcim Ltd. and Lafarge SA--Consent Agreement; File No. 141-0129'' on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service. Visit the Commission Web site at http://www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before June 4, 2015. For information on the Commission's privacy policy, including routine uses permitted by the Privacy Act, see http://www.ftc.gov/ftc/privacy.htm. Analysis of Agreement Containing Consent Orders To Aid Public Comment The Federal Trade Commission (``Commission'') has accepted, subject to final approval, an Agreement Containing Consent Orders (``Consent Agreement'') designed to remedy the anticompetitive effects resulting from the proposed acquisition of Lafarge S.A (``Lafarge'') by Holcim Ltd. (``Holcim''). Under the terms of the proposed Consent Agreement, Lafarge is required to divest to Continental Cement Company (``Continental'') its Davenport cement plant and quarry located in Buffalo, Iowa along with cement terminals and associated distribution assets in Minneapolis and St. Paul, Minnesota; La Crosse, Wisconsin; Memphis, Tennessee; and Convent and New Orleans, Louisiana. The Consent Agreement also requires Holcim to divest its Skyway slag cement plant located in Chicago, Illinois to Eagle Materials Inc. (``Eagle''), its slag cement plant located in Camden, New Jersey and its terminal near Boston, Massachusetts to Essroc Cement Corporation (``Essroc''), and its cement terminals in Grandville and Elmira, Michigan and Rock Island, Illinois to Buzzi Unicem USA (``Buzzi''). Finally, the Consent Agreement requires Holcim to divest to a buyer or buyers approved by the Commission (1) Holcim's Trident, Montana cement plant and two related terminals in Alberta, Canada, and (2) Holcim's Mississauga cement plant located in Ontario, Canada and related cement terminals in Duluth, Minnesota; Detroit and Dundee, Michigan; Cleveland, Ohio; and Buffalo, New York. The Consent Agreement has been placed on the public record for 30 days to solicit comments from interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission will again review the Consent [[Page 27963]] Agreement and the comments received, and decide whether it should withdraw from the Consent Agreement, modify it, or make final the Decision and Order (``Order''). The Transaction Pursuant to a Combination Agreement dated July 7, 2014, Holcim proposes to acquire 100 percent of the existing shares of Lafarge in a transaction valued at $24.95 billion at that time. The Commission's Complaint alleges that the proposed acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, by substantially lessening competition in certain regional markets in the United States for the manufacture and sale of portland cement and slag cement. The proposed Consent Agreement will remedy the alleged violations by preserving the competition that would otherwise be eliminated by the proposed acquisition. The Parties Holcim is a Swiss-based, vertically integrated global building materials company. The company's products include cement, clinker, concrete, lime, and aggregates. In the United States, Holcim currently operates nine portland cement and three slag grinding plants, as well as a large network of distribution assets. Lafarge is a vertically-integrated global building materials company incorporated in France and headquartered in Paris. Lafarge primarily produces and sells cement, aggregates, and ready-mix concrete. In the United States, Lafarge currently operates six portland cement and three slag cement grinding plants as well as numerous distribution terminals. The Relevant Products and Structure of the Markets In the United States, both parties manufacture and sell portland cement. Portland cement is an essential ingredient in making concrete, a cheap and versatile building material. Because portland cement has no close substitute and the cost of cement usually represents a relatively small percentage of a project's overall construction costs, few customers are likely to switch to other products in response to a small but significant increase in the price of portland cement. Both parties also manufacture and sell ground, granulated blast furnace slag (``slag cement''), a specialty cement product with unique characteristics that can serve as a partial substitute for portland cement. Customers add slag cement to portland cement to enhance the physical properties of a concrete mixture. It is appropriate to treat slag cement as a separate relevant product because an insufficient number of purchasers would switch to other products in response to a small but significant increase in the price of slag cement to render such a price increase unprofitable. The primary purchasers of portland and slag cement are ready-mix concrete firms and producers of concrete products. These customers usually pick up portland and slag cement from a cement company's plant or terminal in trucks. Because portland and slag cement are heavy and relatively cheap commodities, transportation costs limit the distance customers can economically travel to pick up the products. The precise scope of the area that can be served by a particular plant or terminal depends on a number of factors, including the density of the specific region and local transportation costs. Due to transportation costs, cement markets are local or regional in nature. The relevant geographic markets in which to analyze the effects of the proposed acquisition on portland cement competition are (1) the Minneapolis-St. Paul, Minnesota area; (2) the Duluth, Minnesota area; (3) western Wisconsin; (4) eastern Iowa; (5) the Memphis, Tennessee area; (6) the Baton Rouge, Louisiana area; (7) the New Orleans, Louisiana area; (8) the Detroit, Michigan area; (9) northern Michigan; (10) the Grand Rapids, Michigan area; (11) western Montana; and (12) the Boston, Massachusetts/Providence, Rhode Island area. The proper geographic markets in which to analyze the effects of the proposed transaction on slag cement are (1) the Mid-Atlantic region and (2) the western Great Lakes region. The relevant markets for portland cement and slag cement are already highly concentrated. For each of the relevant markets, the parties are either the only suppliers in the market, two of only three suppliers, or two of only four suppliers. Entry Entry into the relevant portland cement and slag cement markets would not be timely, likely, or sufficient in magnitude, character, and scope to deter or counteract the anticompetitive effects of the proposed transaction. The cost to construct a new portland cement plant of sufficient size to be competitive would likely cost over $300 million and take more than five years to permit, design, and construct while the expansion of an existing facility would likely cost hundreds of millions of dollars and take four or more years to complete. Building competitive cement distribution terminals is also difficult and time consuming. It can take more than two years to obtain the necessary permits and complete construction of a competitive terminal in the relevant markets. New entrants into slag cement markets face the additional hurdle of having to obtain a cost-effective source for the raw material. There are few domestic sources for granulated blast furnace slag because there are a limited number of active blast furnaces in the United States. Given the difficulties of entry, it is unlikely that any new entry could be accomplished in a timely manner in the relevant markets to defeat a likely price increase caused by the proposed acquisition. Effects of the Acquisition Unless remedied, the proposed merger would likely result in competitive harm in each of the relevant portland and slag cement markets. The merger would eliminate substantial head-to-head competition between the parties in each of these markets and significantly increase market concentration. For many customers in these markets, the merger would combine the two closest competitors for their business, leaving the merged entity with the power to increase prices to these customers unilaterally. Further, because the merger would reduce the number of significant competitors to, at most, two or three in the relevant markets, it would enhance the likelihood of collusion or coordinated action between the remaining competitors by reducing impediments to reaching common terms of coordination and making it easier to monitor and retaliate against potential deviation from a coordinated scheme. The Consent Agreement The proposed Consent Agreement eliminates the competitive concerns raised by Holcim's proposed acquisition of Lafarge by requiring the parties to divest assets in each relevant market. Lafarge is required to divest a cement plant in Buffalo, Iowa and a network of distribution terminals along the Mississippi River in Louisiana, Tennessee, Wisconsin, and Minnesota to Continental. Continental, in turn, will sell its cement terminal located in Bettendorf, Iowa to Lafarge in order to eliminate the competitive overlap that would otherwise be created by its acquisition of Lafarge's Davenport cement plant. Because Lafarge will be [[Page 27964]] able to supply the Bettendorf terminal at a comparable or lower cost than Continental, the transactions contemplated in the Consent Agreement will maintain the competitive status quo in the eastern Iowa market. Holcim is required to divest distribution terminals in Illinois and Michigan to Buzzi. Holcim is further required to divest a terminal in Massachusetts and a slag plant in New Jersey to Essroc and a slag plant in Illinois to Eagle. Each of the identified buyers possesses the experience and capability to become significant competitors in the relevant markets. The parties must accomplish the divestitures to these buyers within ten days after the proposed acquisition is accomplished. The Commission's goal in evaluating possible purchasers of divested assets is to maintain the competitive environment that existed prior to the proposed acquisition. If the Commission determines that any of the identified buyers is not an acceptable acquirer, the proposed Order requires the parties to divest the assets to a Commission-approved acquirer within 90 days of the Commission notifying the parties that the proposed acquirer is not acceptable. If the Commission determines that the manner in which any divestiture was accomplished is not acceptable, the Commission may direct the parties, or appoint a divestiture trustee, to effect such modifications as may be necessary to satisfy the requirements of the Order. Finally, the proposed Consent Agreement requires Holcim to divest to a buyer or buyers approved by the Commission (1) a cement plant in Trident, Montana and two distribution terminals in Alberta, Canada (the ``Trident Assets''), and (2) a cement plant in Mississauga, Ontario and cement terminals in Minnesota, Michigan, Ohio, and New York (the ``Great Lakes Assets''). The divestiture of the Trident plant would eliminate the proposed merger's potential anticompetitive impact on purchasers of portland cement located in western Montana. The two Alberta terminals distribute cement produced at the Trident plant and are included in the Consent Agreement in order to preserve the viability and marketability of the Trident Assets. Holcim's Mississauga plant supplies portland cement into the United States both directly and via terminals located in Duluth; Detroit; Dundee, Michigan; Cleveland, Ohio; and Buffalo, New York. The divestiture of the Great Lakes Assets would remedy the proposed merger's anticompetitive effects in the Duluth and Detroit areas. The Cleveland and Buffalo terminals are included in the Consent Agreement in order to preserve the viability and marketability of the Great Lakes Assets. The Trident Assets and Great Lakes Assets are also part of a larger group of Holcim assets located in Canada that the Respondents have agreed to divest in order to resolve competitive concerns raised by the Canadian Competition Bureau (``CCB''). Commission staff worked cooperatively with staff from the CCB to ensure that our respective proposed remedies would be consistent and effective. The proposed Order provides that Holcim must find a buyer (or buyers) for the Trident Assets and the Great Lakes Assets, at no minimum price, that is acceptable to the Commission, no later than 120 days from the date on which the parties consummate the proposed acquisition. The Consent Agreement also contains an Order to Hold Separate and Maintain Assets, which will serve to ensure that these assets are held separate and operated independently from the merged company and protect the viability, marketability, and competitiveness of the divestiture asset packages until the assets are divested to a buyer or buyers approved by the Commission. To ensure compliance with the proposed Order, the Commission has agreed to appoint an Interim Monitor to ensure that Holcim and Lafarge comply with all of their obligations pursuant to the Consent Agreement and to keep the Commission informed about the status of the transfer of the rights and assets to appropriate purchasers. The purpose of this analysis is to facilitate public comment on the Consent Agreement, and it is not intended to constitute an official interpretation of the proposed Decision and Order or to modify its terms in any way. By direction of the Commission, Commissioner Wright dissenting. Donald S. Clark, Secretary. Statement of the Federal Trade Commission in the Matter of Holcim Ltd. and Lafarge S.A. The Federal Trade Commission has voted to accept a settlement to resolve the likely anticompetitive effects of Holcim Ltd.'s (``Holcim'') proposed $25 billion acquisition of Lafarge S.A. (``Lafarge''). We have reason to believe that, absent a remedy, the proposed acquisition is likely to substantially reduce competition in the manufacture and sale of portland cement and slag cement. As we explain below, we believe the proposed remedy, tailored to counteract the likely anticompetitive effects of the proposed acquisition without eliminating any efficiencies that might arise from the combination of the two companies, is in the public interest.\1\ --------------------------------------------------------------------------- \1\ Chairwoman Ramirez, Commissioner Brill, Commissioner Ohlhausen, and Commissioner McSweeny join in this statement. --------------------------------------------------------------------------- Holcim is a Switzerland-based, vertically integrated global building materials company, with products that include cement, clinker, concrete, lime, and aggregates. Lafarge is a France-based, vertically integrated global building materials company that primarily produces and sells cement, aggregates, and ready-mix concrete. The merged company will be the world's largest cement manufacturer, with combined 2014 revenues of approximately $35 billion and operations in more than 90 countries. Our competitive concerns pertain to specific geographic markets in the United States where Holcim and Lafarge each make significant cement sales. The proposed merger would likely harm competition for the distribution and sale of portland cement, an essential ingredient in making concrete, in 12 local or regional markets. It would also threaten to lessen competition for the distribution and sale of slag cement, a specialty cement product used in certain applications, in two other regional markets. The merger would create a merger to monopoly in some of the challenged relevant markets, while in others at most three competitors would remain post-merger. Absent a remedy, the Herfindahl-Hirschman Index (``HHI'') in each of these markets would exceed 3,400, making every market highly concentrated according to the 2010 Horizontal Merger Guidelines.\2\ The increase in HHI in each market would exceed 900, well above the 200-point change necessary to trigger the Guidelines' presumption that the merger is ``likely to enhance market power.'' \3\ There is no evidence rebutting this presumption. If anything, the evidence suggests that the estimates of market concentration understate our concerns. --------------------------------------------------------------------------- \2\ See 2010 Horizontal Merger Guidelines Sec. 5.3. The threshold at which a market is considered ``highly concentrated'' under the Guidelines is 2,500. \3\ Id. --------------------------------------------------------------------------- In each of the relevant markets at issue, there is evidence that unilateral anticompetitive effects are likely. Substantial evidence demonstrates that, for many customers in the relevant areas, the merging firms are their preferred suppliers and that customers have benefitted from substantial head-to-head competition between the parties [[Page 27965]] in negotiating prices for portland and slag cement. Customers in every single one of the affected markets expressed concern that their inability to play the merging parties off each other would diminish their ability to obtain better prices or other favorable terms. As the Guidelines note, a combination of two competing sellers ``can significantly enhance the ability and incentive of the merged entity to obtain a result more favorable to it, and less favorable to the buyer, than the merging firms would have offered separately absent the merger.'' \4\ In addition, the evidence demonstrates that not all of the remaining suppliers in the relevant markets provide customers with practical alternatives to the merging parties for a variety of reasons, including capacity constraints, lack of distribution assets to supply new customers, and downstream vertical integration.\5\ --------------------------------------------------------------------------- \4\ Id. Sec. 6.2. \5\ For instance, ready-mix concrete producers are often unwilling to purchase cement from their rivals. --------------------------------------------------------------------------- The evidence also suggests that the proposed acquisition would increase the ability and incentives of the combined firm and other market participants to engage in coordinated behavior that would result in harm to consumers. The relevant markets have characteristics that make them susceptible to coordination. They are highly concentrated; the products are homogeneous; overall market elasticity is low; customer switching costs are low; and sales are relatively small, frequent, and usually not made pursuant to long-term contracts. There is also a high degree of transparency in these markets. Competitors are aware of each other's production capacities, costs, sales volumes, prices, and customers. Our concern about the potential for coordinated effects in these markets is heightened by evidence that cement suppliers, including the same global firms that compete in these markets, have expressly colluded in other geographic markets with similar characteristics.\6\ By reducing the number of significant competitors to only two or three, the proposed merger would make it easier for the remaining firms to coordinate, monitor compliance with, and retaliate against potential deviation from, a coordinated scheme. We therefore have reason to believe that the merger may enhance the vulnerability to coordinated effects that already exists in the relevant markets.\7\ --------------------------------------------------------------------------- \6\ See, e.g., Press Release, European Commission, The Court of Justice Upholds in Substance the Judgment Delivered by the Court of First Instance in 2000 Concerning the Cement Cartel, Jan. 7, 2004, available at http://europa.eu/rapid/press-release_CJE-04-2_en.htm (announcing fines of EUR 100 million on cement suppliers for collusion); Press Release, German Federal Cartel Office, Highest fine in Bundeskartellamt History is Final, April 10, 2013, available at http://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2013/10_04_2013_BGH-Zement.html (announcing fines of EUR 380 million on Lafarge, Holcim, and others for collusion); Philip Blenkinsop, Belgian Competition Regulator Fines Cement Groups, Aug. 31, 2013, available at http://www.reuters.com/article/2013/08/31/belgium-cement-idUSL6N0GW05U20130831 (reporting EUR 14.7 million in fines levied by the Belgian Competition Council on Holcim and others for collusion); Press Release, Polish Office of Competition and Consumer Protection, UOKiK Breaks Cement Cartel, Dec. 12, 2013, available at https://uokik.gov.pl/news.php?news_id=10754&news_page=1 (announcing decision of Poland's Court of Competition and Consumer Protection to impose fines of PLN 339 million (~$93 million) on cement suppliers for collusion involving Lafarge and others); see generally Merger Guidelines Sec. 7.2. \7\ See Merger Guidelines Sec. 7.1. --------------------------------------------------------------------------- In his dissent, Commissioner Wright takes issue with our decision to seek a remedy in six markets, going to great lengths to argue that we are improperly relying solely on the increase in market concentration to justify our action, that we are creating new presumptions of harm, that we lack a ``credible basis'' on which to conclude that the merger may enhance the vulnerability of the relevant markets to coordination, and that our action is otherwise inconsistent with the Guidelines. We respectfully disagree with Commissioner Wright's various characterizations of the Commission's statement in this matter. The Guidelines make clear that a substantial increase in concentration caused by a merger continues to be a significant factor in merger analysis because highly concentrated markets with only two or three large firms are more likely to lead to anticompetitive outcomes.\8\ Economic theory and empirical research bear this out.\9\ As a result, we view the evidence in a merger that reduces the number of firms in a relevant market to two or three differently from a merger that only reduces the number of firms to six or seven. Where, as here, a proposed merger significantly increases concentration in an already highly concentrated market, a presumption of competitive harm is justified under both the Guidelines and well-established case law.\10\ --------------------------------------------------------------------------- \8\ Id. Sec. 2.1.3 (``Mergers that cause a significant increase in concentration and result in highly concentrated markets are presumed to be likely to enhance market power, but this presumption can be rebutted by persuasive evidence showing that the merger is unlikely to enhance market power.''). See also Carl Shapiro, The 2010 Horizontal Merger Guidelines: From Hedgehog to Fox in Forty Years, 77 Antitrust L.J. 701, 708 (2010) (explaining that the Guidelines' flexible approach ``certainly does not mean that they reject the use of market concentration to predict competitive effects, as can be seen in Sections 2.1.3 and 5,'' that the Guidelines ``recognize that levels and changes in market concentration are more probative in some cases than others,'' and that ``the Agencies place considerable weight on HHI measures in cases involving coordinated effects'') (emphasis in original). \9\ See, e.g., Steven C. Salop, The Evolution and Vitality of Merger Presumptions: A Decision-Theoretic Approach 11 (Georgetown Law Faculty Publications and Other Works, Working Paper No. 1304, 2014), available at http://scholarship.law.georgetown.edu/facpub/1304 (``[V]arious theories of oligopoly conduct--both static and dynamic models of firm interaction--are consistent with the view that competition with fewer significant firms on average is associated with higher prices. . . . Accordingly, a horizontal merger reducing the number of rivals from four to three, or three to two, would be more likely to raise competitive concerns than one reducing the number from ten to nine, ceteris paribus.''); Steffen Huck, et al., Two Are Few and Four Are Many: Number Effects from Experimental Oligopolies, 53 J. Econ. Behavior & Org. 435, 443 (2004) (testing the frequency of collusive outcomes in Cournot oligopolies and finding ``clear evidence that there is a qualitative difference between two and four or more firms''); Timothy F. Bresnahan & Peter C. Reiss, Entry and Competition in Concentrated Markets, 99 J. Pol. Econ. 977, 1006 (1991) (finding, in a study of tire prices, that ``[m]arkets with three or more dealers have lower prices than monopolists or duopolists,'' and noting that, ``while prices level off between three and five dealers, they are higher than unconcentrated market prices''). \10\ See Merger Guidelines Sec. 2.1.3; Chicago Bridge & Iron Co. v. FTC, 534 F.3d 410, 423 (5th Cir. 2008) (``Typically, the Government establishes a prima facie case by showing that the transaction in question will significantly increase market concentration, thereby creating a presumption that the transaction is likely to substantially lessen competition.''); FTC v. H.J. Heinz Co., 246 F.3d 708, 716 (D.C. Cir. 2001) (merger to duopoly creates a rebuttable presumption of anticompetitive harm through direct or tacit coordination). --------------------------------------------------------------------------- Moreover, despite Commissioner Wright's assertion to the contrary, our investigation went beyond consideration of market concentration and application of the Guidelines presumption of competitive harm and, as noted above, produced additional evidence supporting our belief that the effect of the proposed acquisition would be to substantially lessen competition and harm cement customers in the relevant markets. On coordinated effects, we found numerous characteristics of the market making it vulnerable to collusion. It is particularly troubling that existing cement suppliers have expressly colluded in other geographic markets with similar characteristics. We also examined whether other market factors, such as the possibility of entry or expansion, might alleviate our competitive concerns. The evidence demonstrates the presence of high barriers to entry for both portland cement and slag cement, including significant capital costs and regulatory requirements. Entry sufficient to deter or counteract the likely harm from the proposed transaction would thus be neither timely nor likely. [[Page 27966]] In the face of our competitive concerns, based on what we had learned about the nature and conditions of the relevant markets, the parties proposed divestitures to remedy our concerns in each of those markets. The parties did not comply with our Second Requests. While continued investigation may have produced more evidentiary support for our complaint, including those markets for which Commissioner Wright dissents, we do not think such a course would have been justified. We have ample evidence to support our allegations of anticompetitive harm and had no reason to burden the parties with the expense and delay of further inquiry for the sole purpose of obtaining additional, cumulative evidence. Nor would further inquiry have been a good use of Commission resources. Merger analysis is necessarily predictive. The evidence in this case provides us with sufficient reason to believe that the proposed acquisition is likely to substantially reduce competition, and there is no evidence of countervailing efficiencies that weigh against the remedy. We believe that the public interest is best served by remedying the competitive concerns as set forth in our proposed consent order. Statement of Commissioner Joshua D. Wright, Dissenting in Part and Concurring in Part In the Matter of Holcim Ltd. and Lafarge S.A. The Commission has voted to issue a Complaint and a Decision & Order against Holcim Ltd. (``Holcim'') and Lafarge S.A. (``Lafarge'') to remedy the allegedly anticompetitive effects of the proposed merger of the two companies. I dissent in part from and concur in part with the Commission's decision because the evidence is insufficient to provide a reason to believe the proposed transaction is likely to substantially lessen competition, in violation of Section 7 of the Clayton Act, in several of the portland cement markets identified in the Complaint.\1\ --------------------------------------------------------------------------- \1\ As I explain below, I concur with the Commission as to the Twin Cities, Duluth, western Wisconsin, New Orleans, western Montana, Boston/Providence, the Mid-Atlantic region, and the western Great Lakes region; I dissent with the Commission as to eastern Iowa, Memphis, Baton Rouge, Detroit, northern Michigan, and Grand Rapids. --------------------------------------------------------------------------- The Commission articulates coordinated effects and unilateral effects theories of harm arising from the proposed transaction in all of the fourteen relevant geographic markets defined in the Complaint (the ``Relevant Markets'').\2\ Additionally, and untethered to these two theories of harm articulated in the 2010 Horizontal Merger Guidelines (``Merger Guidelines''), the Commission asserts that mergers, such as the proposed transaction, that reduce the number of competitors to three or fewer are likely to harm competition. The Commission's structural presumption is economically unfounded and inappropriate in the vast majority of Relevant Markets. Furthermore, there is insufficient evidence to support a coordinated effects theory in any Relevant Market and insufficient evidence to support a unilateral effects theory in several of the Relevant Markets. --------------------------------------------------------------------------- \2\ See Analysis of Agreement Containing Consent Orders to Aid Public Comment 3, Holcim Ltd., FTC File No. 141-0129 (May 4, 2015) (``For many customers in these markets, the merger would . . . leav[e] the merged entity with the power to increase prices . . . unilaterally. Further, . . . it would enhance the likelihood of collusion or coordinated action between the remaining competitors.''). --------------------------------------------------------------------------- In those markets in which I conclude the record evidence supports neither a coordinated nor a unilateral effects theory, the Commission relies upon little more than the change in market structure to support each of its allegations. Without particularized evidence substantiating a unilateral effects or coordinated effects theory of harm arising from the proposed transaction, a structural theory alone cannot provide a sufficient basis to establish reason to believe a transaction violates the Clayton Act. It follows, in my view, that the Commission should refrain from imposing a remedy in the markets for which the evidence is insufficient to support either a coordinated effects theory or a unilateral effects theory. I. The Commission's Structural Theory and Presumption Are Unsupported by Economic Evidence The Commission argues mergers that reduce the number of competitors in a relevant market to three or two are unique in the sense that they warrant a presumption of competitive harm and illegality,\3\ but it cannot defend its structural presumption upon the basis of economic evidence or accumulated empirical knowledge. --------------------------------------------------------------------------- \3\ Id. at 3. --------------------------------------------------------------------------- The Commission cites in support of its structural theory and presumption three academic articles written by economists.\4\ Only two offer economic evidence, and the proffered substantiation fails to support the claim. The first is an important early entrant into the static entry literature examining the relationship between market size and the number of entrants in a market, focusing upon isolated rural markets.\5\ It strains credulity to argue that Bresnahan and Reiss's important analysis of the impact of entry in markets involving doctors, dentists, druggists, plumbers, and tire dealers in local and isolated areas, where they find the competitive benefits of a second competitor are especially important, apply with generality sufficient to support a widely applicable presumption of harm based upon the number of firms. Indeed, the authors warn against precisely this interpretation of their work.\6\ --------------------------------------------------------------------------- \4\ Id. at 3 n.9. \5\ Timothy F. Bresnahan & Peter C. Reiss, Entry and Competition in Concentrated Markets, 99 J. Pol. Econ. 977 (1991). While Bresnahan and Reiss is an important early contribution to the static entry literature, it cannot possibly bear the burden the Commission wishes to place upon it. Abstracting from the complexities of market definition was necessary for the researchers to isolate entry decisions. This is possible when studying the effects of entry by a second dentist in a town with a population of less than 1,000, but not in most real-world antitrust applications. The authors of the study make this point themselves, noting that ``whether this pattern appears in other industries remains an open question.'' Id. at 1007. \6\ In earlier research using similar empirical techniques and data--namely, small rural markets--Bresnahan and Reiss plainly reject the notion that the findings should inform views of market structure and competition generally: ``We do not believe that these markets `stand in' for highly concentrated industries in the sectors of the economy where competition is national or global.'' Timothy F. Bresnahan & Peter C. Reiss, Do Entry Conditions Vary Across Markets, 3 Brookings Papers Econ. Activity 833, 868 (1987). --------------------------------------------------------------------------- The second article is a laboratory experiment and does not involve the behavior of actual firms and certainly cannot provide sufficient economic evidence to support a presumption that four-to-three and three-to-two mergers in real-world markets will result in anticompetitive coordination.\7\ Once again, the authors warn against such an interpretation.\8\ --------------------------------------------------------------------------- \7\ Steffen Huck et al., Two Are Few and Four Are Many: Number Effects from Experimental Oligopolies, 53 J. Econ. Behavior & Org. 435 (2004). \8\ Id. at 436 (``The number of firms is not the only factor affecting competition in experimental markets. This implies that there exists no unique number of firms that determines a definite borderline between non-cooperative and collusive markets irrespective of all institutional and structural details of the experimental markets.''). --------------------------------------------------------------------------- Finally, the Commission cites a draft article, authored by Steve Salop, in support of its view that economic evidence supports a presumption that four-to-three and three-to-two mergers are competitively suspect.\9\ The article does not purport to study or provide new economic evidence on the relationship between market structure and competition. Thus, it cannot [[Page 27967]] support the Commission's proposition.\10\ --------------------------------------------------------------------------- \9\ Steven C. Salop, The Evolution and Vitality of Merger Presumptions: A Decision-Theoretic Approach (Georgetown Law Faculty Publications and Other Works, Working Paper No. 1304, 2014), available at http://scholarship.law.georgetown.edu/facpub/1304/. \10\ Nevertheless, to the extent Salop argues in favor of legal presumptions in merger analysis, he clarifies that they ``obviously should be based on valid economic analysis, that is, proper economic presumptions,'' which should be updated ``based on new or additional economic factors besides market shares and concentration.'' Id. at 37, 48. I agree. Additionally, Salop explains that ``[c]ontemporary economic learning suggests that concentration be considered when undertaking competitive effects analysis--in conjunction with other factors suggested by the competitive effects theory--but not treated as the sole determinant of post-merger pricing.'' Id. at 13-14. Notably, Salop does not endorse a distinction between four-to-three mergers or three-to-two mergers and mergers in less concentrated markets that justifies a presumption that the former are anticompetitive; rather, he merely observes that empirical evidence and economic theory do not warrant ``ignoring market shares and concentration in merger analysis.'' Id. at 12 (emphasis in original). --------------------------------------------------------------------------- There is simply no empirical economic evidence sufficient to warrant a presumption that anticompetitive coordination is likely to result from four-to-three or three-to-two mergers. Indeed, such a presumption would be inconsistent with modern economic theory and the analysis endorsed by the Merger Guidelines, which deemphasize inferences of competitive harm arising from market structure in favor of greater reliance upon particularized evidence of changes in post- merger incentives to compete.\11\ --------------------------------------------------------------------------- \11\ See Carl Shapiro, The 2010 Horizontal Merger Guidelines: From Hedgehog to Fox in Forty Years, 77 Antitrust L.J. 701, 707-08 (2010) (acknowledging the role of market concentration in the analysis endorsed in the Merger Guidelines and observing that they place less weight upon market concentration and market shares, instead emphasizing the importance of direct evidence of changes in post-merger incentives to compete and competitive effects). To the extent the Commission relies upon Shapiro's caveat that ``changes in market concentration are more probative in some cases than others,'' Statement of the Federal Trade Commission 3 n.8, Holcim Ltd., FTC File No. 141-0129 (May 8, 2015), they fail to explain why, nor have I been provided any evidence attempting to establish that, markets for portland or slag concrete fit within the subset of cases for which it has been established that there is a reliable a relationship between market structure and competition. I do not quarrel with the notion that such markets exist. We identify them over time using economic analysis, empirical evidence, and accumulated learning. For example, substantial research has identified empirical regularities in the relationship between structure and price in generic pharmaceutical markets. See David Reiffen & Michael R. Ward, Generic Drug Industry Dynamics, 87 Rev. Econ. & Stat. 37 (2005). --------------------------------------------------------------------------- To the contrary, this approach is inconsistent with Agency practice and the letter and spirit of the more economically sophisticated approach adopted in the Merger Guidelines.\12\ Section 2.1.3 of the Merger Guidelines does, as the Commission observes, state that ``mergers that cause a significant increase in concentration and result in highly concentrated markets are presumed to be likely to enhance market power.'' \13\ The Merger Guidelines insure against reverting to naked structural analysis by making clear that the role of market shares and market concentration is ``not an end in itself,'' but rather ``one useful indicator of likely anticompetitive effects,'' and that market concentration is not to be used to ``provide a rigid screen to separate competitively benign mergers from anticompetitive ones,'' but rather to provide one way to distinguish competitively benign mergers from those that warrant closer scrutiny.\14\ To the extent these passages evince an ambiguity in the Merger Guidelines with respect to the minimum evidentiary burden that must be satisfied to support a merger challenge, the Commission should embrace the interpretation more consistent with a modern economic approach rather than with the obsolete and discredited structural analysis of a prior era. --------------------------------------------------------------------------- \12\ Comments of the ABA Section of Antitrust Law on the Horizontal Merger Guidelines Revision Project (June 4, 2010), available at https://www.ftc.gov/sites/default/files/documents/public_comments/horizontal-merger-guidelines-review-project-proposed-new-horizontal-merger-guidelines-548050-00026/548050-00026.pdf (urging the agencies to ``remove the presumption of illegality keyed to the level and increase in the HHI'' because ``[t]he presumption does not reflect how the Agencies conduct investigations [and] is not theoretically warranted''). \13\ U.S. Dep't of Justice & Fed. Trade Comm'n, Horizontal Merger Guidelines Sec. 7.1 (2010) [hereinafter Merger Guidelines]. \14\ Id. Sec. Sec. 4, 5.3. --------------------------------------------------------------------------- Rather than relying upon economic evidence to defend the Commission's structural presumption, the Commission highlights case law supporting a presumption of illegality for mergers to duopoly or that substantially increase concentration.\15\ As a preliminary matter, case law that endorses a wholly structural approach to merger analysis--an approach clearly rejected by the Merger Guidelines--does not constitute relevant economic evidence. Judicial opinions adopting this approach are orthogonal to the proposition in need of economic substantiation: that mergers resulting in three- or two-firm markets are likely to result in coordination. Indeed, one can find a variety of economically dubious propositions adopted in antitrust case law blessed by no less a legal authority than the Supreme Court.\16\ But courts' observations about the relationship between market structure and competition are not relevant to the Commission's adoption of a structural presumption in this case. --------------------------------------------------------------------------- \15\ Statement of the Federal Trade Commission, supra note 11, at 3 (citing Chicago Bridge & Iron Co. v. FTC, 534 F.3d 410, 423 (5th Cir. 2008) and FTC v. H.J. Heinz Co., 246 F.3d 708, 716 (D.C. Cir. 2001)). \16\ For example, well-established case law endorses the economic proposition that mergers that result in post-merger shares of greater than 30% are likely to harm competition, United States v. Philadelphia Nat'l Bank, 374 U.S. 321, 364-65 (1963), and that mergers resulting in post-merger shares of less than 10% harm competition when coupled with a trend toward concentration, United States v. Von's Grocery Co., 384 U.S. 270 (1966); United States v. Pabst Brewing Co., 384 U.S. 546 (1966). --------------------------------------------------------------------------- I therefore find any reliance upon structural changes alone to be economically untenable and insufficient to give me reason to believe the proposed transaction will violate Section 7 in the vast majority of Relevant Markets. II. Coordinated Effects Are Unlikely in Any Relevant Market The Merger Guidelines describe the conditions under which the antitrust agencies will challenge a proposed merger on the basis that it is likely to result in anticompetitive coordination. Specifically, the Merger Guidelines articulate three necessary conditions that must each be satisfied to support a coordinated effects theory: (1) A significant increase in concentration, leading to a moderately or highly concentrated market, (2) a market vulnerable to coordinated conduct, and (3) a credible basis for concluding the transaction will enhance that vulnerability.\17\ Thus, the Merger Guidelines establish clearly that a highly concentrated market that is already vulnerable to coordinated conduct is necessary but not sufficient to support a coordinated effects theory. Critically, the Commission must also have evidence sufficient to provide a credible basis to conclude the transaction will enhance the market's vulnerability to coordinated conduct. Such evidence must evince a change in the post-merger competitive market dynamics and, in particular, post-merger incentives to engage in coordinated pricing. The Merger Guidelines provide the elimination of a maverick firm as an illustrative example of the type of evidence that would satisfy the third condition and warrant a presumption of adverse coordinated effects.\18\ Importantly, the Merger Guidelines explain evidence that a merger will eliminate a maverick is given weight precisely because it [[Page 27968]] changes post-merger incentives to coordinate.\19\ --------------------------------------------------------------------------- \17\ Merger Guidelines, supra note 13, Sec. 7.1; see also Dissenting Statement of Commissioner Joshua D. Wright 3, Fidelity National Financial, Inc., FTC File No. 131-0159 (Dec. 23, 2013) [hereinafter Wright, Fidelity Dissent]. \18\ Merger Guidelines, supra note 13, Sec. 7.1. \19\ Id. Sec. 2.1.5. --------------------------------------------------------------------------- The first and second elements of the Merger Guidelines' coordinated effects analysis are not at issue in this case. The Commission's investigation revealed evidence supporting a conclusion that the Relevant Markets are already highly concentrated and the proposed transaction will increase concentration.\20\ Furthermore, the evidence supports a conclusion that the markets are vulnerable to coordinated conduct.\21\ Nevertheless, the investigation failed to uncover any evidence to suggest the proposed transaction will increase post-merger incentives to coordinate--that is, there is no record evidence to provide a credible basis to conclude the merger alters the competitive dynamic in any Relevant Market in a manner that enhances its vulnerability to coordinated conduct. --------------------------------------------------------------------------- \20\ See Analysis of Agreement Containing Consent Orders to Aid Public Comment, supra note 2, at 2. \21\ See Statement of the Federal Trade Commission, supra note 11, at 2 (describing the characteristics of the Relevant Markets that render them vulnerable to coordination). --------------------------------------------------------------------------- The Commission asserts that the facts that the market is highly concentrated, that it is vulnerable to coordination, and that the merger reduces ``the number of significant competitors to only two or three'' \22\ jointly satisfy the third necessary element that ``the Agencies have a credible basis on which to conclude that the merger may enhance that vulnerability.''\23\ The Commission's analysis can be read in one of two ways. Each is tantamount to the application of a structural presumption for coordinated effects claims involving markets with three or two firms, each is problematic because it adopts an outdated and obsolete structural approach to coordinated effects, and each is in significant tension with the economic approach to coordinated effects embodied in the Merger Guidelines. --------------------------------------------------------------------------- \22\ Id. at 2. \23\ Merger Guidelines, supra note 13, Sec. 7.1. --------------------------------------------------------------------------- The first interpretation is that the satisfaction of the first and second elements of the Merger Guidelines analysis--and particularly the demonstration that the merger significantly increases concentration in an already concentrated market--is sufficient to simultaneously satisfy the third element that the merger enhance post-merger incentives to coordinate. This interpretation renders the third element of Section 7.1 entirely superfluous. The more logical explanation of the third element is that a crucial, additional type of information is required to illuminate how the merger changes the merged firm's incentives to coordinate. The Commission's application completely overlooks the economic relevance of the third element. The second plausible interpretation of the Commission's analysis is that the reduction in the number of competitors in a market is itself sufficient evidence to provide a credible basis that a merger will enhance a market's vulnerability to coordination and thus satisfy the third element of the Merger Guidelines' coordinated effects analysis. Under this reading, the Commission relies upon the fact that the proposed transaction reduces the number of competitors in each Relevant Market by one firm, either from four to three or from three to two.\24\ For example, the Majority Statement asserts that the proposed transaction might enhance the likelihood of coordination by ``mak[ing] it easier for the remaining firms to coordinate, monitor compliance with, and retaliate against potential deviation from, a coordinated scheme.'' \25\ These are generic observations that are true of any merger that reduces the number of firms in a market; they are not particularized to the proposed transaction or to any Relevant Market nor do they establish a credible basis to conclude that post-merger incentives to coordinate will increase. The observation that a market with N firms will, after the merger, have N-1 firms is simply insufficient without more to establish the required credible basis. This is true even when a merger reduces the number of firms from four to three or from three to two. The Commission offers no explanation as to why the Merger Guidelines would go through the trouble of requiring a credible basis to believe a merger will change the market's competitive dynamics that enhances the market's vulnerability to coordinated conduct, in addition to an increase in market concentration, in order to substantiate a coordinated effects merger challenge if the latter were considered sufficient to satisfy both elements. --------------------------------------------------------------------------- \24\ See Statement of the Federal Trade Commission, supra note 11, at 2 (taking the view that a reduction of competitors to three or two firms in the relevant market justify a presumption of competitive harm). \25\ Id. at 2. --------------------------------------------------------------------------- As I have stated previously, ``there is no basis in modern economics to conclude with any modicum of reliability that increased concentration--without more--will increase post-merger incentives to coordinate.'' \26\ Janusz Ordover, in a leading treatment of the economics of coordinated effects, similarly explains that ``[i]t is now well understood that it is not sufficient when gauging the likelihood of coordinated effects from a merger to simply observe that because the merger reduces the number of firms, it automatically lessens the coordination problem facing the firms and enhances their incentives to engage in tacit collusion; far from it.''\27\ Without particularized evidence that the proposed transaction will enhance incentives to coordinate post-merger, I am unable to conclude there is reason to believe it is likely to substantially lessen competition in violation of Section 7. --------------------------------------------------------------------------- \26\ Wright, Fidelity Dissent, supra note 17, at 3. \27\ Janusz A. Ordover, Coordinated Effects, in 2 Issues in Competition Law and Policy 1359, 1367 (ABA Section of Antitrust Law 2008) (``It is quite clear . . . that a reduction in the number of firms and concomitant increases in concentration do not necessarily make collusion inevitable or even more likely, stable, or complete.''). --------------------------------------------------------------------------- III. Unilateral Effects Are Unlikely in Some of the Relevant Markets The Commission alleges the proposed transaction is likely to result in unilateral price effects in the Relevant Markets. Unilateral effects arise when the reduction in direct competition between merging firms is sufficient to create post-merger market power. The Merger Guidelines articulate a variety of potential unilateral effects theories, including merger to monopoly, merger of firms producing very close substitutes in a differentiated products market, merger of sellers competing in bargaining and auction markets, and mergers in homogeneous goods markets making post-merger output suppression strategies more profitable.\28\ The unifying theme of the unilateral effects analysis contemplated by the Merger Guidelines is that a particularized showing that post-merger competitive constraints are weakened or eliminated by the merger is superior to relying solely upon inferences of competitive effects drawn from changes in market structure.\29\ --------------------------------------------------------------------------- \28\ Merger Guidelines, supra note 13, Sec. 6. \29\ See Shapiro, supra note 11, Part III (explaining the Merger Guidelines' unilateral effects analysis, the types of evidence that support such analysis, and the relative analytical weakness of inferences of competitive harm drawn from changes in market structure). --------------------------------------------------------------------------- The potential unilateral effects theories in this case fall broadly within one of three categories. The first category involves straightforward merger-to-monopoly markets. In these markets, the theory of harm is that Holcim and Lafarge are the only two meaningful suppliers for all customers in the Relevant Market. The second [[Page 27969]] category involves markets in which Holcim and Lafarge face some competition, but the proposed transaction will result in a merger to monopoly for a substantial subset of customers and will allow the merged entity to unilaterally increase market prices. The third category includes markets where the proposed transaction will reduce the number of competitors in the Relevant Market to three or two, and the remaining competitors will be unable or unwilling to compete for market share--for example, because of capacity constraints, leaving the merged entity with the ability to unilaterally raise prices. Each of these theories requires particularized evidence sufficient to establish reason to believe the proposed transaction violates Section 7 of the Clayton Act. I conclude the available evidence is sufficient to do so in some Relevant Markets and insufficient in others. Unilateral price effects are ``most apparent in a merger to monopoly in a relevant market.'' \30\ Basic economic theory provides a robust and reliable inference that a merger to monopoly or near monopoly is likely to result in anticompetitive effects. A rational firm with little or no competitive constraints will set prices or choose output to maximize its profits; it can be expected that a rational firm acquiring such monopoly power will adjust prices and output accordingly. No further economic evidence is required to substantiate an enforcement action based upon likely unilateral price effects and to establish reason to believe a merger to monopoly or near monopoly is likely to violate Section 7 of the Clayton Act. This analysis applies to at least one of the Relevant Markets. --------------------------------------------------------------------------- \30\ Merger Guidelines, supra note 13, Sec. 6. --------------------------------------------------------------------------- The analysis is necessarily more nuanced for theories falling within the second category of theories of unilateral price effects. These theories involve Relevant Markets where the proposed transaction would reduce the number of competitors from four to three or three to two, and the market share for the merged entity would not be large enough to infer it would have the power to raise market prices unilaterally. In these markets, particularized evidence is required to establish reason to believe the merged firm will gain unilateral pricing power. In many Relevant Markets, staff was successful in uncovering the required evidence. For example, in some Relevant Markets, there was evidence of a significant subset of customers for whom a sole market participant would be the only remaining acceptable supplier, due either to physical proximity or to some other preference rendering alternatives an unacceptable source of portland or slag cement. The Commission's example of ready-mix concrete producers,\31\ a relevant subset of customers, is an illustrative example here. In some Relevant Markets, the evidence supports a finding that such customers would continue to find their vertically integrated rivals to be an unacceptable source of portland cement, even if the sole remaining vertically unintegrated portland cement producer raised its prices after the merger. In the Relevant Markets for which credible evidence of this type is available, I find it sufficient to create reason to believe the merger is likely to result in competitive harm. Several other Relevant Markets fall into this category. --------------------------------------------------------------------------- \31\ See Statement of the Federal Trade Commission, supra note 11, at 2 n.5. --------------------------------------------------------------------------- In other Relevant Markets, the allegation that there will remain only one acceptable supplier for a significant subset of customers after the proposed transaction lacks evidentiary support. Specifically, in these markets, the record evidence does not indicate that a material number of customers view Holcim and Lafarge as closest supply alternatives or that they view other potential suppliers as unacceptable supply sources and would continue to do so in the face of a post-merger unilateral price increase.\32\ --------------------------------------------------------------------------- \32\ The role of ready-mix customers in the competitive analysis is again illustrative. In some Relevant Markets the available evidence indicates there are some ready-mix customers that purchase from rivals and others that do not, but the totality of the evidence fails to establish the existence of a significant set of customers that view vertically integrated suppliers as unacceptable or would continue to do so in the face of a post-merger unilateral price increase. --------------------------------------------------------------------------- The final category of potential unilateral effects theories, like the second category, also involves Relevant Markets where the proposed transaction would reduce the number of competitors from four to three or three to two, but the post-merger market share would not be large enough to infer it would have the power to raise market prices unilaterally. However, unlike the second category, in these Relevant Markets, it is not customer preference that limits the number of available competitors to one. Rather, in these Relevant Markets, the proposed transaction is effectively a merger to monopoly or near monopoly because alternative suppliers would be unwilling or unable to compete with the merged entity in the face of a price increase. In some Relevant Markets, the investigation uncovered particularized evidence sufficient to establish a reason to believe such unilateral effects are likely, including evidence that other competitors are experiencing, or soon will experience, capacity constraints, rendering them unable or unwilling to compete for market share, or that other suppliers will not constrain the merged entity's prices. Several Relevant Markets fall into this third category. Relevant Markets where the ``reason to believe'' standard is not satisfied lacked record evidence necessary to corroborate any of these three theories.\33\ Indeed, with respect to the Relevant Markets for which I dissent from the Commission's decision, it is my view that the investigation failed to adduce particularized evidence to elevate the anticipated likelihood of competitive effects from ``possible'' to ``likely'' under any of these theories. Without this necessary evidence, the only remaining factual basis upon which the Commission rests its decision is the fact that the merger will reduce the number of competitors from four to three or three to two. This is simply not enough evidence to support a reason to believe the proposed transaction will violate the Clayton Act in these Relevant Markets. --------------------------------------------------------------------------- \33\ One other potentially plausible theory is that customers refuse to sole source their product, and therefore that two or more competitors are necessary to prevent post-merger unilateral effects. There is insufficient record evidence to indicate customers would be unwilling to switch from dual- to single-sourced supply in the event of a post-merger price increase. --------------------------------------------------------------------------- IV. Conclusion Prior to entering into a consent agreement with the merging parties, the Commission must first find reason to believe that a merger likely will substantially lessen competition under Section 7 of the Clayton Act. A presumption that such reason to believe exists when a merger decreases in the number of competitors in a market to three or two is misguided. Additionally, when the Commission alleges coordinated or unilateral effects arising from a proposed transaction, this standard requires more than a mere counting of pre- and post-merger firms. In particular, reason to believe a proposed transaction is likely to result in coordinated effects requires evidence--absent from the record here--that the merger will enhance a market's vulnerability to coordinated pricing, and not just that it takes place in a market that is already concentrated. In the absence of such a particularized showing, the Commission's approach to coordinated effects here reduces to a strict structural presumption [[Page 27970]] unsupported by modern economics and at odds with the Merger Guidelines. Similarly, substantiating a unilateral effects theory requires particularized evidence--also absent from the record here in some Relevant Markets--that a merger will reduce or eliminate competitive constraints, permitting the merged entity to increase prices. Without such evidence, a unilateral effects theory reduces to little more than a complaint about market structure coupled with speculation about the circumstances under which unilateral effects might occur in a post- merger world. The Merger Guidelines contemplate a more rigorous analysis. This is not to suggest the ``reason to believe'' standard requires access to every piece of relevant information and a full and complete economic analysis of a proposed transaction, regardless of whether the parties wish to propose divestitures before complying with a Second Request. Rather, the standard requires only evidence sufficient to establish that competitive harm is likely. Such evidence, although quite minimal--indeed, a handful of facts in most instances--is indeed available in some Relevant Markets in this matter, and it is in those markets that I concur with the Commission's decision. While I appreciate the practical complications of requesting additional information during the course of a merger investigation, as well as the desire to conduct efficient investigations, these important pragmatic considerations do not trump the Commission's primary obligation to collect evidence sufficient to establish reason to believe the merger will harm competition before issuing a complaint and accepting a consent. For the reasons I explain above, I find reason to believe the proposed transaction is likely to result in unilateral price effects, and thus violate the Clayton Act, in the Twin Cities, Duluth, western Wisconsin, New Orleans, western Montana, Boston/Providence, the Mid- Atlantic region, and the western Great Lakes region. I conclude there is no reason to believe the proposed transaction will violate Section 7 in eastern Iowa, Memphis, Baton Rouge, Detroit, northern Michigan, and Grand Rapids; it follows that I believe the Commission should refrain from imposing a remedy in these markets. [FR Doc. 2015-11724 Filed 5-14-15; 8:45 am] BILLING CODE 6750-01-P
![Federal Register / Vol. 80, No. 94 / Friday, May 15, 2015 / Notices 27961
Rather concentration is but one aspect such research has been done in this minimum level of evidence required to
of the inquiry aimed at better market. Accordingly, unlike in generic substantiate a merger challenge. I reject
understanding post-merger incentives to pharmaceutical markets, we have no the view that it should be a standard
compete. The predictive power of evidence to conclude that a simple that should be relaxed because the
market share and market concentration reduction in the number of firms in this merging parties offer a remedy.31 The
data is informed by economic theory market is likely to lead to higher prices Commission is primarily a law
and available empirical evidence. There and lower output. Simply assuming enforcement agency, albeit one that
is no empirical evidence sufficient to such a relationship exists in this market largely conducts it business by entering
establish a generally applicable without any evidence to suggest that it into consents with merging parties.
presumption that mergers that reduce does harkens back to the bad old days Making the consent process more
the number of firms to three or two are of the first half of the 20th century, efficient and predictable is a laudable
likely to harm competition.24 Further, when the structure-conduct- goal; but we must not allow pursuit of
the Commission’s reliance upon such performance paradigm was in vogue. a more efficient consent process to
shorthand structural presumptions To summarize, there are three-to-two distort our evaluation of the substantive
untethered from empirical evidence mergers that give rise to unilateral merits. To do so, as in my view we have
subsidize a shift away from the more effects, and three-to-two mergers that here, risks in the long run reducing the
rigorous and reliable economic tools give rise to coordinated effects. It is our institutional capital of the agency in
embraced by the Merger Guidelines in burden to show that this three-to-two magnitudes far greater than any
favor of convenient but obsolete and merger is likely anticompetitive. The potential cost savings from truncating
less reliable economic analysis. Commission must find sufficient an investigation.
This is not to say that evidence of evidence to support an inference of For these reasons, I cannot join my
changes in market structure cannot ever likely economic harm to consumers. colleagues in supporting the consent
warrant such a presumption. It does The heavy degree of reliance upon a order because I do not have reason to
when the evidence warrants as much. structural presumption in this case is believe the transaction violates Section
The Commission has in certain contexts not sufficient to do so. 7 of the Clayton Act nor that a consent
found reason to believe competition Finally, the Commission and ordering divestiture is in the public
would be substantially lessened based Commissioner Ohlhausen each claim interest.
simply upon a reduction of firms in the that the quantity, and presumably the
[FR Doc. 2015–11721 Filed 5–14–15; 8:45 am]
relevant market. See Actavis plc-Forest quality, of the evidence is not the same
BILLING CODE 6750–01–P
Laboratories 25 and also Akorn-Hi-Tech for investigations truncated by remedy
Pharmacal,26 which both involve proposals compared to cases where a
generic pharmaceutical markets. The full phase investigation is completed or FEDERAL TRADE COMMISSION
Commission was able to draw compared to a completed trial,
conclusions about the relationship respectively.28 While this observation is [File No. 141 0129 ]
between price and the number of firms an accurate description of the pragmatic
in generic pharmaceutical markets reality of conducting law enforcement Holcim Ltd. and Lafarge S.A.; Analysis
because substantial research has been investigations, I do not agree with the of Proposed Consent Orders To Aid
done to establish that such a implication that the quantum and Public Comment
relationship exists.27 Indeed, the cases quality of evidence needed to satisfy the AGENCY: Federal Trade Commission.
in the pharmaceutical industry are the ‘‘reason to believe’’ standard should ACTION: Proposed consent agreement.
exceptions that prove the rule that the turn on whether and when a remedy
Commission needs to do more than proposal is offered during an SUMMARY: The consent agreement in this
count the number of firms in a market investigation. The idea is that we should matter settles alleged violations of
to have reason to believe a substantial ‘‘take into account the need for federal law prohibiting unfair methods
lessening of competition is likely. No predictability and fairness for merging of competition. The attached Analysis to
parties in these circumstances’’ 29 and Aid Public Comment describes both the
24 See Statement of Commissioner Joshua D.
considerations whether it is allegations in the draft complaint and
Wright 3–5, Holcim Ltd., FTC File No. 141–0129
(May 8, 2015).
‘‘appropriate to subject the parties to the the terms of the consent orders—
25 Analysis of Agreement Containing Consent added expense and delay of a full phase embodied in the consent agreement—
Orders to Aid Public Comment 2, Actavis plc, FTC investigation.’’ 30 I fully support the that would settle these allegations.
File No. 141–0098 (June 30, 2014) (‘‘In generic agency identifying opportunities to DATES: Comments must be received on
pharmaceutical product markets, price generally
decreases as the number of generic competitors
lower the administrative costs of or before June 4, 2015.
increases. Accordingly, the reduction in the number antitrust investigations and believe ADDRESSES: Interested parties may file a
of suppliers within each relevant market would there to be ample opportunity to do so. comment at https://
likely have a direct and substantial anticompetitive But attempts to operate a more efficient
effect on pricing.’’).
ftcpublic.commentworks.com/ftc/
26 Analysis of Agreement Containing Consent
law enforcement system must satisfy the holcimlafargeconsent online or on
Orders to Aid Public Comment 3, Akorn constraint, required by law, that there is paper, by following the instructions in
Enterprises, Inc., FTC File No. 131–0221 (Apr. 14, reason to believe a transaction violates the Request for Comment part of the
2014) (‘‘In generic pharmaceuticals markets, price is Section 7 of the Clayton Act. That SUPPLEMENTARY INFORMATION section
heavily influenced by the number of participants
with sufficient supply.’’).
standard sets a relatively low bar for the below. Write ‘‘Holcim Ltd. and Lafarge
27 See David Reiffen & Michael R. Ward, Generic
mstockstill on DSK4VPTVN1PROD with NOTICES
28 See Statement of the Federal Trade
Drug Industry Dynamics, 87 Rev. Econ. & Stat. 37 31 That said, as I stated in Holcim Ltd., I am not
(2005). As an aside, given that we are now ten years Commission, supra note 9, at 3 n.7; see also suggesting the ‘‘reason to believe’’ standard
removed from the publication of this important Separate Statement of Commissioner Maureen K. ‘‘requires access to every piece of relevant
study and over twenty years removed from the Ohlhausen 1, ZF Friedrichshafen AG, FTC File No. information and a full and complete economic
sample period, it might be worth revisiting this 141–0235 (May 8, 2015). analysis of a proposed transaction, regardless of
29 Separate Statement of Commissioner Maureen
question with fresher data if the Commission whether the parties wish to propose divestitures
intends to continue relying upon inferences of K. Ohlhausen, supra note 28, at 2. before complying with a Second Request.’’ See
competitive harm from market structure in the 30 Statement of the Federal Trade Commission, Statement of Commissioner Joshua D. Wright, supra
generic pharmaceutical market. supra note 9, at 3 n.7. note 24, at 11.
VerDate Sep<11>2014 19:11 May 14, 2015 Jkt 235001 PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 E:\FR\FM\15MYN1.SGM 15MYN1](https://thefederalregister.org/doc/80_FR_28055/page/1.svg)
![27962 Federal Register / Vol. 80, No. 94 / Friday, May 15, 2015 / Notices
SA—Consent Agreement; File No. 141– information, like anyone’s Social submit your paper comment to the
0129’’ on your comment and file your Security number, date of birth, driver’s Commission by courier or overnight
comment online at https:// license number or other state service.
ftcpublic.commentworks.com/ftc/ identification number or foreign country Visit the Commission Web site at
holcimlafargeconsent by following the equivalent, passport number, financial http://www.ftc.gov to read this Notice
instructions on the web-based form. If account number, or credit or debit card and the news release describing it. The
you prefer to file your comment on number. You are also solely responsible FTC Act and other laws that the
paper, write ‘‘Holcim Ltd. and Lafarge for making sure that your comment does Commission administers permit the
SA—Consent Agreement; File No. 141– not include any sensitive health collection of public comments to
0129’’ on your comment and on the information, like medical records or consider and use in this proceeding as
envelope, and mail your comment to the other individually identifiable health appropriate. The Commission will
following address: Federal Trade information. In addition, do not include consider all timely and responsive
Commission, Office of the Secretary, any ‘‘[t]rade secret or any commercial or public comments that it receives on or
600 Pennsylvania Avenue NW., Suite financial information which . . . is before June 4, 2015. For information on
CC–5610 (Annex D), Washington, DC privileged or confidential,’’ as discussed the Commission’s privacy policy,
20580, or deliver your comment to the in Section 6(f) of the FTC Act, 15 U.S.C. including routine uses permitted by the
following address: Federal Trade 46(f), and FTC Rule 4.10(a)(2), 16 CFR Privacy Act, see http://www.ftc.gov/ftc/
Commission, Office of the Secretary, 4.10(a)(2). In particular, do not include privacy.htm.
Constitution Center, 400 7th Street SW., competitively sensitive information Analysis of Agreement Containing
5th Floor, Suite 5610 (Annex D), such as costs, sales statistics, Consent Orders To Aid Public Comment
Washington, DC 20024. inventories, formulas, patterns, devices,
manufacturing processes, or customer The Federal Trade Commission
FOR FURTHER INFORMATION CONTACT:
names. (‘‘Commission’’) has accepted, subject to
James Southworth, Bureau of final approval, an Agreement
If you want the Commission to give
Competition, (202–326–2822), 600 Containing Consent Orders (‘‘Consent
your comment confidential treatment,
Pennsylvania Avenue NW., Washington, Agreement’’) designed to remedy the
you must file it in paper form, with a
DC 20580. anticompetitive effects resulting from
request for confidential treatment, and
SUPPLEMENTARY INFORMATION: Pursuant you have to follow the procedure the proposed acquisition of Lafarge S.A
to Section 6(f) of the Federal Trade explained in FTC Rule 4.9(c), 16 CFR (‘‘Lafarge’’) by Holcim Ltd. (‘‘Holcim’’).
Commission Act, 15 U.S.C. 46(f), and 4.9(c).1 Your comment will be kept Under the terms of the proposed
FTC Rule 2.34, 16 CFR 2.34, notice is confidential only if the FTC General Consent Agreement, Lafarge is required
hereby given that the above-captioned Counsel, in his or her sole discretion, to divest to Continental Cement
consent agreement containing consent grants your request in accordance with Company (‘‘Continental’’) its Davenport
orders to cease and desist, having been the law and the public interest. cement plant and quarry located in
filed with and accepted, subject to final Postal mail addressed to the Buffalo, Iowa along with cement
approval, by the Commission, has been Commission is subject to delay due to terminals and associated distribution
placed on the public record for a period heightened security screening. As a assets in Minneapolis and St. Paul,
of thirty (30) days. The following result, we encourage you to submit your Minnesota; La Crosse, Wisconsin;
Analysis to Aid Public Comment comments online. To make sure that the Memphis, Tennessee; and Convent and
describes the terms of the consent Commission considers your online New Orleans, Louisiana. The Consent
agreement, and the allegations in the comment, you must file it at https:// Agreement also requires Holcim to
complaint. An electronic copy of the ftcpublic.commentworks.com/ftc/ divest its Skyway slag cement plant
full text of the consent agreement holcimlafargeconsent by following the located in Chicago, Illinois to Eagle
package can be obtained from the FTC instructions on the web-based form. If Materials Inc. (‘‘Eagle’’), its slag cement
Home Page (for May 4, 2015), on the this Notice appears at http:// plant located in Camden, New Jersey
World Wide Web, at http://www.ftc.gov/ www.regulations.gov/#!home, you also and its terminal near Boston,
os/actions.shtm. may file a comment through that Web Massachusetts to Essroc Cement
You can file a comment online or on site. Corporation (‘‘Essroc’’), and its cement
paper. For the Commission to consider If you file your comment on paper, terminals in Grandville and Elmira,
your comment, we must receive it on or write ‘‘Holcim Ltd. and Lafarge SA— Michigan and Rock Island, Illinois to
before June 4, 2015. Write ‘‘Holcim Ltd. Consent Agreement; File No. 141–0129’’ Buzzi Unicem USA (‘‘Buzzi’’). Finally,
and Lafarge SA—Consent Agreement; on your comment and on the envelope, the Consent Agreement requires Holcim
File No. 141–0129’’ on your comment. and mail your comment to the following to divest to a buyer or buyers approved
Your comment—including your name address: Federal Trade Commission, by the Commission (1) Holcim’s
and your state—will be placed on the Office of the Secretary, 600 Trident, Montana cement plant and two
public record of this proceeding, Pennsylvania Avenue NW., Suite CC– related terminals in Alberta, Canada,
including, to the extent practicable, on 5610 (Annex D), Washington, DC 20580, and (2) Holcim’s Mississauga cement
the public Commission Web site, at or deliver your comment to the plant located in Ontario, Canada and
http://www.ftc.gov/os/ following address: Federal Trade related cement terminals in Duluth,
publiccomments.shtm. As a matter of Commission, Office of the Secretary, Minnesota; Detroit and Dundee,
discretion, the Commission tries to Constitution Center, 400 7th Street SW., Michigan; Cleveland, Ohio; and Buffalo,
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remove individuals’ home contact 5th Floor, Suite 5610 (Annex D), New York.
information from comments before Washington, DC 20024. If possible, The Consent Agreement has been
placing them on the Commission Web placed on the public record for 30 days
site. 1 In particular, the written request for confidential to solicit comments from interested
Because your comment will be made treatment that accompanies the comment must persons. Comments received during this
include the factual and legal basis for the request,
public, you are solely responsible for and must identify the specific portions of the
period will become part of the public
making sure that your comment does comment to be withheld from the public record. See record. After 30 days, the Commission
not include any sensitive personal FTC Rule 4.9(c), 16 CFR 4.9(c). will again review the Consent
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in negotiating prices for portland and number of significant competitors to in a merger that reduces the number of
slag cement. Customers in every single only two or three, the proposed merger firms in a relevant market to two or
one of the affected markets expressed would make it easier for the remaining three differently from a merger that only
concern that their inability to play the firms to coordinate, monitor compliance reduces the number of firms to six or
merging parties off each other would with, and retaliate against potential seven. Where, as here, a proposed
diminish their ability to obtain better deviation from, a coordinated scheme. merger significantly increases
prices or other favorable terms. As the We therefore have reason to believe that concentration in an already highly
Guidelines note, a combination of two the merger may enhance the concentrated market, a presumption of
competing sellers ‘‘can significantly vulnerability to coordinated effects that competitive harm is justified under both
enhance the ability and incentive of the already exists in the relevant markets.7 the Guidelines and well-established
merged entity to obtain a result more In his dissent, Commissioner Wright case law.10
favorable to it, and less favorable to the takes issue with our decision to seek a Moreover, despite Commissioner
buyer, than the merging firms would remedy in six markets, going to great Wright’s assertion to the contrary, our
have offered separately absent the lengths to argue that we are improperly investigation went beyond
merger.’’ 4 In addition, the evidence relying solely on the increase in market consideration of market concentration
demonstrates that not all of the concentration to justify our action, that and application of the Guidelines
remaining suppliers in the relevant we are creating new presumptions of presumption of competitive harm and,
markets provide customers with harm, that we lack a ‘‘credible basis’’ on as noted above, produced additional
practical alternatives to the merging which to conclude that the merger may evidence supporting our belief that the
parties for a variety of reasons, enhance the vulnerability of the relevant effect of the proposed acquisition would
including capacity constraints, lack of markets to coordination, and that our be to substantially lessen competition
distribution assets to supply new action is otherwise inconsistent with the and harm cement customers in the
customers, and downstream vertical Guidelines. We respectfully disagree relevant markets. On coordinated
integration.5 with Commissioner Wright’s various effects, we found numerous
The evidence also suggests that the characterizations of the Commission’s characteristics of the market making it
proposed acquisition would increase the statement in this matter. The Guidelines vulnerable to collusion. It is particularly
ability and incentives of the combined make clear that a substantial increase in troubling that existing cement suppliers
firm and other market participants to concentration caused by a merger have expressly colluded in other
engage in coordinated behavior that continues to be a significant factor in geographic markets with similar
would result in harm to consumers. The merger analysis because highly characteristics. We also examined
relevant markets have characteristics concentrated markets with only two or whether other market factors, such as
that make them susceptible to three large firms are more likely to lead the possibility of entry or expansion,
coordination. They are highly to anticompetitive outcomes.8 Economic might alleviate our competitive
concentrated; the products are theory and empirical research bear this concerns. The evidence demonstrates
homogeneous; overall market elasticity out.9 As a result, we view the evidence the presence of high barriers to entry for
is low; customer switching costs are both portland cement and slag cement,
low; and sales are relatively small, article/2013/08/31/belgium-cement- including significant capital costs and
frequent, and usually not made idUSL6N0GW05U20130831 (reporting EUR 14.7 regulatory requirements. Entry sufficient
million in fines levied by the Belgian Competition to deter or counteract the likely harm
pursuant to long-term contracts. There Council on Holcim and others for collusion); Press
is also a high degree of transparency in Release, Polish Office of Competition and from the proposed transaction would
these markets. Competitors are aware of Consumer Protection, UOKiK Breaks Cement Cartel, thus be neither timely nor likely.
Dec. 12, 2013, available at https://uokik.gov.pl/
each other’s production capacities, news.php?news_id=10754&news_page=1 of firm interaction—are consistent with the view
costs, sales volumes, prices, and (announcing decision of Poland’s Court of that competition with fewer significant firms on
customers. Our concern about the Competition and Consumer Protection to impose average is associated with higher prices. . . .
potential for coordinated effects in these fines of PLN 339 million (∼$93 million) on cement Accordingly, a horizontal merger reducing the
suppliers for collusion involving Lafarge and number of rivals from four to three, or three to two,
markets is heightened by evidence that others); see generally Merger Guidelines § 7.2. would be more likely to raise competitive concerns
cement suppliers, including the same 7 See Merger Guidelines § 7.1.
than one reducing the number from ten to nine,
global firms that compete in these 8 Id. § 2.1.3 (‘‘Mergers that cause a significant ceteris paribus.’’); Steffen Huck, et al., Two Are Few
markets, have expressly colluded in increase in concentration and result in highly and Four Are Many: Number Effects from
other geographic markets with similar concentrated markets are presumed to be likely to Experimental Oligopolies, 53 J. Econ. Behavior &
enhance market power, but this presumption can be Org. 435, 443 (2004) (testing the frequency of
characteristics.6 By reducing the rebutted by persuasive evidence showing that the collusive outcomes in Cournot oligopolies and
merger is unlikely to enhance market power.’’). See finding ‘‘clear evidence that there is a qualitative
4 Id. § 6.2. also Carl Shapiro, The 2010 Horizontal Merger difference between two and four or more firms’’);
5 For instance, ready-mix concrete producers are Guidelines: From Hedgehog to Fox in Forty Years, Timothy F. Bresnahan & Peter C. Reiss, Entry and
often unwilling to purchase cement from their 77 Antitrust L.J. 701, 708 (2010) (explaining that the Competition in Concentrated Markets, 99 J. Pol.
rivals. Guidelines’ flexible approach ‘‘certainly does not Econ. 977, 1006 (1991) (finding, in a study of tire
6 See, e.g., Press Release, European Commission, mean that they reject the use of market prices, that ‘‘[m]arkets with three or more dealers
The Court of Justice Upholds in Substance the concentration to predict competitive effects, as can have lower prices than monopolists or duopolists,’’
Judgment Delivered by the Court of First Instance be seen in Sections 2.1.3 and 5,’’ that the Guidelines and noting that, ‘‘while prices level off between
in 2000 Concerning the Cement Cartel, Jan. 7, 2004, ‘‘recognize that levels and changes in market three and five dealers, they are higher than
available at http://europa.eu/rapid/press-release_ concentration are more probative in some cases unconcentrated market prices’’).
CJE–04–2_en.htm (announcing fines of EUR 100 than others,’’ and that ‘‘the Agencies place 10 See Merger Guidelines § 2.1.3; Chicago Bridge
million on cement suppliers for collusion); Press considerable weight on HHI measures in cases & Iron Co. v. FTC, 534 F.3d 410, 423 (5th Cir. 2008)
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Release, German Federal Cartel Office, Highest fine involving coordinated effects’’) (emphasis in (‘‘Typically, the Government establishes a prima
in Bundeskartellamt History is Final, April 10, original). facie case by showing that the transaction in
2013, available at http://www.bundeskartellamt.de/ 9 See, e.g., Steven C. Salop, The Evolution and question will significantly increase market
SharedDocs/Meldung/EN/Pressemitteilungen/2013/ Vitality of Merger Presumptions: A Decision- concentration, thereby creating a presumption that
10_04_2013_BGH-Zement.html (announcing fines Theoretic Approach 11 (Georgetown Law Faculty the transaction is likely to substantially lessen
of EUR 380 million on Lafarge, Holcim, and others Publications and Other Works, Working Paper No. competition.’’); FTC v. H.J. Heinz Co., 246 F.3d 708,
for collusion); Philip Blenkinsop, Belgian 1304, 2014), available at http://scholarship.law. 716 (D.C. Cir. 2001) (merger to duopoly creates a
Competition Regulator Fines Cement Groups, Aug. georgetown.edu/facpub/1304 (‘‘[V]arious theories of rebuttable presumption of anticompetitive harm
31, 2013, available at http://www.reuters.com/ oligopoly conduct—both static and dynamic models through direct or tacit coordination).
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In the face of our competitive untethered to these two theories of harm focusing upon isolated rural markets.5 It
concerns, based on what we had learned articulated in the 2010 Horizontal strains credulity to argue that Bresnahan
about the nature and conditions of the Merger Guidelines (‘‘Merger and Reiss’s important analysis of the
relevant markets, the parties proposed Guidelines’’), the Commission asserts impact of entry in markets involving
divestitures to remedy our concerns in that mergers, such as the proposed doctors, dentists, druggists, plumbers,
each of those markets. The parties did transaction, that reduce the number of and tire dealers in local and isolated
not comply with our Second Requests. competitors to three or fewer are likely areas, where they find the competitive
While continued investigation may have to harm competition. The Commission’s benefits of a second competitor are
produced more evidentiary support for structural presumption is economically especially important, apply with
our complaint, including those markets unfounded and inappropriate in the vast generality sufficient to support a widely
for which Commissioner Wright majority of Relevant Markets. applicable presumption of harm based
dissents, we do not think such a course Furthermore, there is insufficient upon the number of firms. Indeed, the
would have been justified. We have evidence to support a coordinated authors warn against precisely this
ample evidence to support our effects theory in any Relevant Market interpretation of their work.6
allegations of anticompetitive harm and and insufficient evidence to support a The second article is a laboratory
had no reason to burden the parties with unilateral effects theory in several of the experiment and does not involve the
the expense and delay of further inquiry Relevant Markets. behavior of actual firms and certainly
for the sole purpose of obtaining cannot provide sufficient economic
additional, cumulative evidence. Nor In those markets in which I conclude evidence to support a presumption that
would further inquiry have been a good the record evidence supports neither a four-to-three and three-to-two mergers
use of Commission resources. coordinated nor a unilateral effects in real-world markets will result in
Merger analysis is necessarily theory, the Commission relies upon anticompetitive coordination.7 Once
predictive. The evidence in this case little more than the change in market again, the authors warn against such an
provides us with sufficient reason to structure to support each of its interpretation.8
believe that the proposed acquisition is allegations. Without particularized Finally, the Commission cites a draft
likely to substantially reduce evidence substantiating a unilateral article, authored by Steve Salop, in
competition, and there is no evidence of effects or coordinated effects theory of support of its view that economic
countervailing efficiencies that weigh harm arising from the proposed evidence supports a presumption that
against the remedy. We believe that the transaction, a structural theory alone four-to-three and three-to-two mergers
public interest is best served by cannot provide a sufficient basis to are competitively suspect.9 The article
remedying the competitive concerns as establish reason to believe a transaction does not purport to study or provide
set forth in our proposed consent order. violates the Clayton Act. It follows, in new economic evidence on the
my view, that the Commission should relationship between market structure
Statement of Commissioner Joshua D. refrain from imposing a remedy in the and competition. Thus, it cannot
Wright, Dissenting in Part and markets for which the evidence is
Concurring in Part In the Matter of insufficient to support either a 5 Timothy F. Bresnahan & Peter C. Reiss, Entry
Holcim Ltd. and Lafarge S.A. coordinated effects theory or a unilateral and Competition in Concentrated Markets, 99 J. Pol.
Econ. 977 (1991). While Bresnahan and Reiss is an
The Commission has voted to issue a effects theory. important early contribution to the static entry
Complaint and a Decision & Order literature, it cannot possibly bear the burden the
against Holcim Ltd. (‘‘Holcim’’) and I. The Commission’s Structural Theory Commission wishes to place upon it. Abstracting
Lafarge S.A. (‘‘Lafarge’’) to remedy the and Presumption Are Unsupported by from the complexities of market definition was
allegedly anticompetitive effects of the Economic Evidence necessary for the researchers to isolate entry
decisions. This is possible when studying the
proposed merger of the two companies. The Commission argues mergers that effects of entry by a second dentist in a town with
I dissent in part from and concur in part reduce the number of competitors in a
a population of less than 1,000, but not in most real-
with the Commission’s decision because world antitrust applications. The authors of the
relevant market to three or two are study make this point themselves, noting that
the evidence is insufficient to provide a
unique in the sense that they warrant a ‘‘whether this pattern appears in other industries
reason to believe the proposed remains an open question.’’ Id. at 1007.
presumption of competitive harm and
transaction is likely to substantially 6 In earlier research using similar empirical
illegality,3 but it cannot defend its
lessen competition, in violation of techniques and data—namely, small rural
structural presumption upon the basis markets—Bresnahan and Reiss plainly reject the
Section 7 of the Clayton Act, in several
of economic evidence or accumulated notion that the findings should inform views of
of the portland cement markets market structure and competition generally: ‘‘We do
empirical knowledge.
identified in the Complaint.1 not believe that these markets ‘stand in’ for highly
The Commission articulates The Commission cites in support of concentrated industries in the sectors of the
coordinated effects and unilateral effects its structural theory and presumption economy where competition is national or global.’’
Timothy F. Bresnahan & Peter C. Reiss, Do Entry
theories of harm arising from the three academic articles written by Conditions Vary Across Markets, 3 Brookings
proposed transaction in all of the economists.4 Only two offer economic Papers Econ. Activity 833, 868 (1987).
fourteen relevant geographic markets evidence, and the proffered 7 Steffen Huck et al., Two Are Few and Four Are
defined in the Complaint (the ‘‘Relevant substantiation fails to support the claim. Many: Number Effects from Experimental
Oligopolies, 53 J. Econ. Behavior & Org. 435 (2004).
Markets’’).2 Additionally, and The first is an important early entrant 8 Id. at 436 (‘‘The number of firms is not the only
into the static entry literature examining factor affecting competition in experimental
1 As I explain below, I concur with the the relationship between market size markets. This implies that there exists no unique
Commission as to the Twin Cities, Duluth, western and the number of entrants in a market, number of firms that determines a definite
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Wisconsin, New Orleans, western Montana, Boston/ borderline between non-cooperative and collusive
Providence, the Mid-Atlantic region, and the markets irrespective of all institutional and
western Great Lakes region; I dissent with the customers in these markets, the merger would . . . structural details of the experimental markets.’’).
Commission as to eastern Iowa, Memphis, Baton leav[e] the merged entity with the power to increase 9 Steven C. Salop, The Evolution and Vitality of
Rouge, Detroit, northern Michigan, and Grand prices . . . unilaterally. Further, . . . it would Merger Presumptions: A Decision-Theoretic
Rapids. enhance the likelihood of collusion or coordinated Approach (Georgetown Law Faculty Publications
2 See Analysis of Agreement Containing Consent action between the remaining competitors.’’). and Other Works, Working Paper No. 1304, 2014),
3 Id. at 3.
Orders to Aid Public Comment 3, Holcim Ltd., FTC available at http://scholarship.law.georgetown.edu/
File No. 141–0129 (May 4, 2015) (‘‘For many 4 Id. at 3 n.9. facpub/1304/.
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support the Commission’s Section 2.1.3 of the Merger Guidelines observations about the relationship
proposition.10 does, as the Commission observes, state between market structure and
There is simply no empirical that ‘‘mergers that cause a significant competition are not relevant to the
economic evidence sufficient to warrant increase in concentration and result in Commission’s adoption of a structural
a presumption that anticompetitive highly concentrated markets are presumption in this case.
coordination is likely to result from presumed to be likely to enhance market
four-to-three or three-to-two mergers. I therefore find any reliance upon
power.’’ 13 The Merger Guidelines insure
Indeed, such a presumption would be structural changes alone to be
against reverting to naked structural
inconsistent with modern economic analysis by making clear that the role of economically untenable and insufficient
theory and the analysis endorsed by the market shares and market concentration to give me reason to believe the
Merger Guidelines, which deemphasize is ‘‘not an end in itself,’’ but rather ‘‘one proposed transaction will violate
inferences of competitive harm arising useful indicator of likely Section 7 in the vast majority of
from market structure in favor of greater anticompetitive effects,’’ and that Relevant Markets.
reliance upon particularized evidence of market concentration is not to be used II. Coordinated Effects Are Unlikely in
changes in post-merger incentives to to ‘‘provide a rigid screen to separate Any Relevant Market
compete.11 competitively benign mergers from
To the contrary, this approach is anticompetitive ones,’’ but rather to The Merger Guidelines describe the
inconsistent with Agency practice and provide one way to distinguish conditions under which the antitrust
the letter and spirit of the more competitively benign mergers from agencies will challenge a proposed
economically sophisticated approach those that warrant closer scrutiny.14 To merger on the basis that it is likely to
adopted in the Merger Guidelines.12 the extent these passages evince an result in anticompetitive coordination.
ambiguity in the Merger Guidelines with Specifically, the Merger Guidelines
10 Nevertheless, to the extent Salop argues in
respect to the minimum evidentiary articulate three necessary conditions
favor of legal presumptions in merger analysis, he
clarifies that they ‘‘obviously should be based on
burden that must be satisfied to support that must each be satisfied to support a
valid economic analysis, that is, proper economic a merger challenge, the Commission coordinated effects theory: (1) A
presumptions,’’ which should be updated ‘‘based should embrace the interpretation more
on new or additional economic factors besides significant increase in concentration,
consistent with a modern economic
market shares and concentration.’’ Id. at 37, 48. I leading to a moderately or highly
approach rather than with the obsolete
agree. Additionally, Salop explains that
and discredited structural analysis of a concentrated market, (2) a market
‘‘[c]ontemporary economic learning suggests that
concentration be considered when undertaking prior era. vulnerable to coordinated conduct, and
competitive effects analysis—in conjunction with Rather than relying upon economic (3) a credible basis for concluding the
other factors suggested by the competitive effects evidence to defend the Commission’s transaction will enhance that
theory—but not treated as the sole determinant of vulnerability.17 Thus, the Merger
post-merger pricing.’’ Id. at 13–14. Notably, Salop structural presumption, the Commission
does not endorse a distinction between four-to-three highlights case law supporting a Guidelines establish clearly that a
mergers or three-to-two mergers and mergers in less presumption of illegality for mergers to highly concentrated market that is
concentrated markets that justifies a presumption duopoly or that substantially increase already vulnerable to coordinated
that the former are anticompetitive; rather, he
merely observes that empirical evidence and concentration.15 As a preliminary conduct is necessary but not sufficient
economic theory do not warrant ‘‘ignoring market matter, case law that endorses a wholly to support a coordinated effects theory.
shares and concentration in merger analysis.’’ Id. at structural approach to merger analysis— Critically, the Commission must also
12 (emphasis in original). an approach clearly rejected by the
11 See Carl Shapiro, The 2010 Horizontal Merger
have evidence sufficient to provide a
Guidelines: From Hedgehog to Fox in Forty Years,
Merger Guidelines—does not constitute credible basis to conclude the
77 Antitrust L.J. 701, 707–08 (2010) (acknowledging relevant economic evidence. Judicial transaction will enhance the market’s
the role of market concentration in the analysis opinions adopting this approach are vulnerability to coordinated conduct.
endorsed in the Merger Guidelines and observing orthogonal to the proposition in need of
that they place less weight upon market
Such evidence must evince a change in
concentration and market shares, instead
economic substantiation: that mergers the post-merger competitive market
emphasizing the importance of direct evidence of resulting in three- or two-firm markets dynamics and, in particular, post-
changes in post-merger incentives to compete and are likely to result in coordination. merger incentives to engage in
competitive effects). To the extent the Commission Indeed, one can find a variety of
relies upon Shapiro’s caveat that ‘‘changes in coordinated pricing. The Merger
market concentration are more probative in some
economically dubious propositions Guidelines provide the elimination of a
cases than others,’’ Statement of the Federal Trade adopted in antitrust case law blessed by maverick firm as an illustrative example
Commission 3 n.8, Holcim Ltd., FTC File No. 141– no less a legal authority than the of the type of evidence that would
0129 (May 8, 2015), they fail to explain why, nor Supreme Court.16 But courts’
have I been provided any evidence attempting to satisfy the third condition and warrant
establish that, markets for portland or slag concrete
agencies to ‘‘remove the presumption of illegality
a presumption of adverse coordinated
fit within the subset of cases for which it has been effects.18 Importantly, the Merger
established that there is a reliable a relationship keyed to the level and increase in the HHI’’ because
between market structure and competition. I do not ‘‘[t]he presumption does not reflect how the Guidelines explain evidence that a
quarrel with the notion that such markets exist. We Agencies conduct investigations [and] is not merger will eliminate a maverick is
identify them over time using economic analysis, theoretically warranted’’).
13 U.S. Dep’t of Justice & Fed. Trade Comm’n, given weight precisely because it
empirical evidence, and accumulated learning. For
example, substantial research has identified Horizontal Merger Guidelines § 7.1 (2010)
empirical regularities in the relationship between [hereinafter Merger Guidelines]. (1963), and that mergers resulting in post-merger
14 Id. §§ 4, 5.3. shares of less than 10% harm competition when
structure and price in generic pharmaceutical
markets. See David Reiffen & Michael R. Ward, 15 Statement of the Federal Trade Commission, coupled with a trend toward concentration, United
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Generic Drug Industry Dynamics, 87 Rev. Econ. & supra note 11, at 3 (citing Chicago Bridge & Iron States v. Von’s Grocery Co., 384 U.S. 270 (1966);
Stat. 37 (2005). Co. v. FTC, 534 F.3d 410, 423 (5th Cir. 2008) and United States v. Pabst Brewing Co., 384 U.S. 546
12 Comments of the ABA Section of Antitrust Law FTC v. H.J. Heinz Co., 246 F.3d 708, 716 (D.C. Cir. (1966).
on the Horizontal Merger Guidelines Revision 2001)). 17 Merger Guidelines, supra note 13, § 7.1; see
Project (June 4, 2010), available at https:// 16 For example, well-established case law also Dissenting Statement of Commissioner Joshua
www.ftc.gov/sites/default/files/documents/public_ endorses the economic proposition that mergers D. Wright 3, Fidelity National Financial, Inc., FTC
comments/horizontal-merger-guidelines-review- that result in post-merger shares of greater than File No. 131–0159 (Dec. 23, 2013) [hereinafter
project-proposed-new-horizontal-merger-guidelines- 30% are likely to harm competition, United States Wright, Fidelity Dissent].
548050-00026/548050-00026.pdf (urging the v. Philadelphia Nat’l Bank, 374 U.S. 321, 364–65 18 Merger Guidelines, supra note 13, § 7.1.
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changes post-merger incentives to a crucial, additional type of information leading treatment of the economics of
coordinate.19 is required to illuminate how the merger coordinated effects, similarly explains
The first and second elements of the changes the merged firm’s incentives to that ‘‘[i]t is now well understood that it
Merger Guidelines’ coordinated effects coordinate. The Commission’s is not sufficient when gauging the
analysis are not at issue in this case. The application completely overlooks the likelihood of coordinated effects from a
Commission’s investigation revealed economic relevance of the third merger to simply observe that because
evidence supporting a conclusion that element. the merger reduces the number of firms,
the Relevant Markets are already highly The second plausible interpretation of it automatically lessens the coordination
concentrated and the proposed the Commission’s analysis is that the problem facing the firms and enhances
transaction will increase reduction in the number of competitors their incentives to engage in tacit
concentration.20 Furthermore, the in a market is itself sufficient evidence collusion; far from it.’’27 Without
evidence supports a conclusion that the to provide a credible basis that a merger particularized evidence that the
markets are vulnerable to coordinated will enhance a market’s vulnerability to proposed transaction will enhance
conduct.21 Nevertheless, the coordination and thus satisfy the third incentives to coordinate post-merger, I
investigation failed to uncover any element of the Merger Guidelines’ am unable to conclude there is reason
evidence to suggest the proposed coordinated effects analysis. Under this to believe it is likely to substantially
transaction will increase post-merger reading, the Commission relies upon the lessen competition in violation of
incentives to coordinate—that is, there fact that the proposed transaction Section 7.
is no record evidence to provide a reduces the number of competitors in
credible basis to conclude the merger each Relevant Market by one firm, either III. Unilateral Effects Are Unlikely in
alters the competitive dynamic in any from four to three or from three to two.24 Some of the Relevant Markets
Relevant Market in a manner that For example, the Majority Statement The Commission alleges the proposed
enhances its vulnerability to asserts that the proposed transaction transaction is likely to result in
coordinated conduct. might enhance the likelihood of unilateral price effects in the Relevant
The Commission asserts that the facts coordination by ‘‘mak[ing] it easier for Markets. Unilateral effects arise when
that the market is highly concentrated, the remaining firms to coordinate, the reduction in direct competition
that it is vulnerable to coordination, and monitor compliance with, and retaliate between merging firms is sufficient to
that the merger reduces ‘‘the number of against potential deviation from, a create post-merger market power. The
significant competitors to only two or coordinated scheme.’’ 25 These are Merger Guidelines articulate a variety of
three’’ 22 jointly satisfy the third generic observations that are true of any potential unilateral effects theories,
necessary element that ‘‘the Agencies merger that reduces the number of firms including merger to monopoly, merger
have a credible basis on which to in a market; they are not particularized of firms producing very close substitutes
conclude that the merger may enhance to the proposed transaction or to any in a differentiated products market,
that vulnerability.’’23 The Commission’s Relevant Market nor do they establish a merger of sellers competing in
analysis can be read in one of two ways. credible basis to conclude that post- bargaining and auction markets, and
Each is tantamount to the application of merger incentives to coordinate will mergers in homogeneous goods markets
a structural presumption for increase. The observation that a market making post-merger output suppression
coordinated effects claims involving with N firms will, after the merger, have strategies more profitable.28 The
markets with three or two firms, each is N–1 firms is simply insufficient without unifying theme of the unilateral effects
problematic because it adopts an more to establish the required credible analysis contemplated by the Merger
outdated and obsolete structural basis. This is true even when a merger Guidelines is that a particularized
approach to coordinated effects, and reduces the number of firms from four showing that post-merger competitive
each is in significant tension with the to three or from three to two. The constraints are weakened or eliminated
economic approach to coordinated Commission offers no explanation as to by the merger is superior to relying
effects embodied in the Merger why the Merger Guidelines would go solely upon inferences of competitive
Guidelines. through the trouble of requiring a effects drawn from changes in market
The first interpretation is that the credible basis to believe a merger will structure.29
satisfaction of the first and second change the market’s competitive The potential unilateral effects
elements of the Merger Guidelines dynamics that enhances the market’s theories in this case fall broadly within
analysis—and particularly the vulnerability to coordinated conduct, in one of three categories. The first
demonstration that the merger addition to an increase in market category involves straightforward
significantly increases concentration in concentration, in order to substantiate a merger-to-monopoly markets. In these
an already concentrated market—is coordinated effects merger challenge if markets, the theory of harm is that
sufficient to simultaneously satisfy the the latter were considered sufficient to Holcim and Lafarge are the only two
third element that the merger enhance satisfy both elements. meaningful suppliers for all customers
post-merger incentives to coordinate. As I have stated previously, ‘‘there is in the Relevant Market. The second
This interpretation renders the third no basis in modern economics to
element of Section 7.1 entirely conclude with any modicum of 27 Janusz A. Ordover, Coordinated Effects, in 2
superfluous. The more logical reliability that increased Issues in Competition Law and Policy 1359, 1367
explanation of the third element is that concentration—without more—will (ABA Section of Antitrust Law 2008) (‘‘It is quite
increase post-merger incentives to clear . . . that a reduction in the number of firms
and concomitant increases in concentration do not
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19 Id. § 2.1.5. coordinate.’’ 26 Janusz Ordover, in a necessarily make collusion inevitable or even more
20 See Analysis of Agreement Containing Consent likely, stable, or complete.’’).
Orders to Aid Public Comment, supra note 2, at 2. 24 See Statement of the Federal Trade 28 Merger Guidelines, supra note 13, § 6.
21 See Statement of the Federal Trade Commission, supra note 11, at 2 (taking the view 29 See Shapiro, supra note 11, Part III (explaining
Commission, supra note 11, at 2 (describing the that a reduction of competitors to three or two firms the Merger Guidelines’ unilateral effects analysis,
characteristics of the Relevant Markets that render in the relevant market justify a presumption of the types of evidence that support such analysis,
them vulnerable to coordination). competitive harm). and the relative analytical weakness of inferences
22 Id. at 2. 25 Id. at 2.
of competitive harm drawn from changes in market
23 Merger Guidelines, supra note 13, § 7.1. 26 Wright, Fidelity Dissent, supra note 17, at 3. structure).
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![27970 Federal Register / Vol. 80, No. 94 / Friday, May 15, 2015 / Notices
unsupported by modern economics and GENERAL SERVICES FOR FURTHER INFORMATION CONTACT:
at odds with the Merger Guidelines. ADMINISTRATION Kevin Funk, Procurement Analyst,
Similarly, substantiating a unilateral General Services Acquisition Policy
[OMB Control No. 3090–0205; Docket 2015–
effects theory requires particularized 0001; Sequence 12]
Division, GSA, at telephone 215–446–
evidence—also absent from the record 4860 or via email to kevin.funk@gsa.gov.
here in some Relevant Markets—that a General Services Administration SUPPLEMENTARY INFORMATION:
merger will reduce or eliminate Acquisition Regulation (GSAR;
A. Purpose
competitive constraints, permitting the Information Collection; Environmental
Conservation, Occupational Safety, The Federal Hazardous Substance Act
merged entity to increase prices. and Hazardous Material Transportation
and Drug-Free Workplace
Without such evidence, a unilateral Act prescribe standards for packaging of
effects theory reduces to little more than AGENCY: Office of Acquisition Policy, hazardous substances. To meet the
a complaint about market structure General Services Administration (GSA). requirements of the Acts, the General
coupled with speculation about the ACTION: Notice of request for comments Services Administration Regulation
circumstances under which unilateral regarding the extension of a previously prescribes provision 552.223–72,
effects might occur in a post-merger existing OMB clearance. Hazardous Material Information, to be
world. The Merger Guidelines inserted in solicitations and contracts
SUMMARY: Under the provisions of the
contemplate a more rigorous analysis. that provides for delivery of hazardous
Paperwork Reduction Act, the General
This is not to suggest the ‘‘reason to Services Administration will be materials on an f.o.b. origin basis.
believe’’ standard requires access to This information collection will be
submitting to the Office of Management
every piece of relevant information and accomplished by means of the provision
and Budget (OMB) a request to review
which requires the contractor to identify
a full and complete economic analysis and approve an extension of a
previously approved information for each National Stock Number, the
of a proposed transaction, regardless of
collection requirement regarding DOT Shipping Name, DOT Hazards
whether the parties wish to propose
Environmental Conservation, Class, and whether the item requires a
divestitures before complying with a DOT label. Contracting Officers and
Second Request. Rather, the standard Occupational Safety, and Drug-Free
Workplace. technical personnel use the information
requires only evidence sufficient to to monitor and ensure contract
establish that competitive harm is DATES: Submit comments on or before: requirements based on law and
likely. Such evidence, although quite July 14, 2015. regulation.
minimal—indeed, a handful of facts in ADDRESSES: Submit comments Properly identified and labeled items
most instances—is indeed available in identified by Information Collection of hazardous material allows for
some Relevant Markets in this matter, 3090–02085 by any of the following appropriate handling of such items
and it is in those markets that I concur methods: throughout GSA’s supply chain system.
with the Commission’s decision. While • Regulations.gov: http:// The information is used by GSA, stored
I appreciate the practical complications www.regulations.gov. in an NSN database and provided to
of requesting additional information Submit comments via the Federal GSA customers. Non-Collection and/or
eRulemaking portal by searching the a less frequently conducted collection of
during the course of a merger
OMB control number. Select the link the information resulting from provision
investigation, as well as the desire to
‘‘Submit a Comment’’ that corresponds 552.223–72 would prevent the
conduct efficient investigations, these with ‘‘Information Collection 3090–
important pragmatic considerations do Government from being properly
0205, Environmental Conservation, notified. Government activities may be
not trump the Commission’s primary Occupational Safety, and Drug-Free
obligation to collect evidence sufficient hindered from apprising their
Workplace’’. Follow the instructions employees of; (1) All hazards to which
to establish reason to believe the merger provided at the ‘‘Submit a Comment’’
will harm competition before issuing a they may be exposed; (2) Relative
screen. Please include your name, symptoms and appropriate emergency
complaint and accepting a consent. company name (if any), and treatment; and (3) Proper conditions and
For the reasons I explain above, I find ‘‘Information Collection 3090–0205, precautions for safe use and exposure.
reason to believe the proposed Environmental Conservation,
transaction is likely to result in Occupational Safety, and Drug-Free B. Annual Reporting Burden
unilateral price effects, and thus violate Workplace’’ on your attached document. Respondents: 563.
• Mail: General Services Responses per Respondent: 3.
the Clayton Act, in the Twin Cities,
Administration, Regulatory Secretariat Total Responses: 1689.
Duluth, western Wisconsin, New
Division (MVCB), 1800 F Street NW., Hours per Response: .67.
Orleans, western Montana, Boston/ Washington, DC 20405. ATTN: Ms. Total Burden Hours: 1132.
Providence, the Mid-Atlantic region, Flowers/IC 3090–0205, Environmental
and the western Great Lakes region. I Conservation, Occupational Safety, and C. Public Comments
conclude there is no reason to believe Drug-Free Workplace. Public Comments are particularly
the proposed transaction will violate Instructions: Please submit comments invited on: Whether this collection of
Section 7 in eastern Iowa, Memphis, only and cite Information Collection information is necessary and whether it
Baton Rouge, Detroit, northern 3090–0205, Environmental will have practical utility; whether our
Michigan, and Grand Rapids; it follows
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Conservation, Occupational Safety, and estimate of the public burden of this
that I believe the Commission should Drug-Free Workplace, in all collection of information is accurate and
refrain from imposing a remedy in these correspondence related to this based on valid assumptions and
markets. collection. All comments received will methodology; and ways to enhance the
[FR Doc. 2015–11724 Filed 5–14–15; 8:45 am] be posted without change to http:// quality, utility, and clarity of the
BILLING CODE 6750–01–P
www.regulations.gov, including any information to be collected.
personal and/or business confidential Obtaining Copies of Proposals:
information provided. Requesters may obtain a copy of the
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Document Created: 2018-02-21 10:27:36
Document Modified: 2018-02-21 10:27:36
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Proposed consent agreement. | |
| Dates | Comments must be received on or before June 4, 2015. | |
| Contact | James Southworth, Bureau of Competition, (202-326-2822), 600 Pennsylvania Avenue NW., Washington, DC 20580. | |
| FR Citation | 80 FR 27961 |
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